DAVIS FOOD COOPERATIVE, INC.

BOARD OF DIRECTORS

MEETING MINUTES


June 6, 2011

Notice of Closed Session


A special meeting of the Board was called to order by Stacie Frerichs at 6:30 pm. This session was closed to guests pursuant to Board Policy GP6(D), which requires discussions concerning issues of a sensitive nature be held confidentially.


Directors Present: Janie Booth, Julie Cross, Sam Citron, Theodora Consolacion, Stacie Hartung-Frerichs, Desmond Jolly, Steve Reynolds, Kevin Wolf, Frank Fox


Call to Order


The regular monthly meeting was called to order at 7:10 at the Davis Food Co-op Teaching Kitchen Conference Room, 537 G Street, Davis, California, by Teddy Consolacion


Roll Call:

Directors Present: Janie Booth, Julie Cross, Sam Citron, Theodora Consolacion, Stacie Hartung-Frerichs, Desmond Jolly, Steve Reynolds, Kevin Wolf, Frank Fox


Directors Absent: Dina Biscotti


Staff Present:


Guests Present: Sarah Palmer, Ben Pearl (at the midway point)


Roles:

Facilitator: Teddy Consolacion

Time Keeper: Julie Cross

Notetaker: Nathan Milos


The Secretary determined that notice of the meeting was duly provided as required by Bylaw Art. VIII §6(C), and that a quorum of Directors was present under Art. VIII §6(B).


Member Comments:


Stacie: I have a collection of comments from members. One member informed me that the stools at front of store are uncomfortable and discriminate against old and young people. Another member asked for more cranberry nut muffins. A third member said he doesn’t agree with our politics but joined for the buffalo meat alone.


Desmond: I was at the annual meeting and one member owner said to me – there are a lot of people she knows who don’t understand the Co-op and don’t shop there as a result. They think the shares are a penalty for shopping there. Also I observed one Co-op employee arguing with a member for an extended period of time. The member complained that at a recent visit to the Co-op one of the staff members told her he was too busy to cut salmon. The young man who represented himself as an employee at the annual meeting argued with her for a half an hour [about the correct course of action for staff members to take in such situations].


Julie: I want to note on the record that employee was there as a member; he was not there as an employee.


Steve: I think the staff did a good job facilitating the annual meeting. I think it was smoother than last year and people are getting used to it; we get a lot more interaction than when we were at the park.


Frank: People were impressed with the savings on the lights.


Announcements:


Julie: We have another board meeting scheduled for this month at 6:30 on June 20th. It should be a very short meeting. The first half will be about accepting the election results.


Stacie: Do we know when the pool party is?


Julie: The pool party will not be a pool party; it would have been too costly. We’ll have a BBQ Thursday July 28th in the early evening at the Co-op.


Desmond: Has this been done before?


Julie: We’ve had pool parties for employees but not the members.


Janie: Eric is on a trip with Equal Exchange to Peru. They visit some of the small farms and network with the communities there.


Stacie: I noticed the Co-op put it on Facebook today: follow our General Manager!


Agenda Review


Amend Agenda by


Stacie: I would like to remove 3.5; I would like 5 of those minutes added to 4.2

Steve: Remove item 3.2

Kevin: Remove item 3.4


Julie moves to adopt the agenda as amended

Kevin seconds

Motion carries unanimously


3.1. BGM4 - Monitoring GM Performance

Teddy: I hope people had time to read it before I handed it to you. BGM4 is a meta-review: it evaluates how we evaluate the GM. That’s problematic in terms of timing. From what I can tell it hasn’t been reviewed in the past. The first part, which asks if we are using monitoring reports, is in compliance. The second part says we can acquire monitoring data through internal reports, a third party, or a board inspection. I said we were in compliance because we receive monitoring reports and a report from Gilbert and Associates. Dina asked, “What is a board inspection?”


Steve: One board inspection would be when we commission an audit of the incorporation or of the 401k, and then there are informal inspections when we enter the store.


Julie: I think Janie did an inspection of B11.


Janie: No I always took the General Manager at his word. I did attend meetings with the construction firm.


Stacie: Is Gilbert and Associates direct inspection or is it third party?


Frank: Inspection seems to indicate something specific.


Sam: I think of inspection as a statutory right. Any member can examine the books. For instance when I was researching the boycott, I looked at old minutes to see if we had taken a stance on apartheid.


Teddy: On Part 3 I found us in non-compliance – we do use any reasonable interpretation from the General Manager, but I don’t think we’ve ever assessed the General Manager on Policy Governance skills. And that is written in here specifically. And if we see the actual rating, we see a bit of a dip here. I felt we weren’t explicitly taking Policy Governance skills into account.


Janie: We have talked about benchmarking – that’s a policy governance skill I guess. I don’t know in terms of other policies. Were we implicitly measuring policy governance skills?


Kevin: We need to have the General Manager’s help more in this area. We don’t evaluate him on policy governance skills and we should. I agree that it’s not in compliance as written.


Julie: I think we need to write into this how we’ll measure the General Manager’s policy governance skills.


Stacie: We could add a question to our surveys about policy governance skills.


Teddy: I believe we are on schedule with all of our reporting. Then with E, we had a problem of timing; we’re asking how are we going to review the General Manager before we review the General Manager. When I posed the question of how we’ll use the minutes to assess policy governance skills, Stacie didn’t know.


Julie: We used the minutes last year for reviewing the General Manager, so I put a 5.


Stacie: We used the minutes, but I don’t think we used them to evaluate the policy governance skills of the General Manager.


Kevin: I thought it meant we looked through the minutes to see how many problems we had on particular issues.

[Teddy reads her recommendations.]


Julie: I move that we accept this report and put this on the agenda for the August meeting.

Sam seconded.

Accepted Unanimously


Stacie: Can we also put on the calendar to move the GM evaluation to May?


Kevin: I think that there are probably other Co-ops who evaluate their General Manager on policy governance skills; we might look at them for a method.


3.3. GP6 - 2nd reading.

Kevin: I think this should be reviewed at the next board meeting to train the new board members. I propose that we approve the form tonight and delay discussion of the policy until next meeting so the new board members see it.


Steve: I think that timing is good.


Kevin: My change is minor: it adds “personal relationships.” Without it, it looks like the only possible conflict of interest is legal or financial. So, by moving this wording to the top, there’s no way they can miss it.


Sam: Can you give an example of a potential issue?


Kevin: What if you were lifelong friends with the General Manager, and in the future s/he has a sick child and you decide the General Manager ought to get a big raise. You can still argue for the General Manager’s raise, but you let everyone know that you’re a lifelong friend of the General Manager.


Janie: Who do we submit comments to then?


Kevin: Sam.


Julie: If anyone has significant changes, can you send them to the whole board?


Desmond: This seems pretty standard to me, is it Sam?


Sam: The personal relationships aspect is the only thing that’s pushing new ground, but I think the example Kevin gave is a kind of personal relationship that ought to be exposed. It’s fairly standard. It doesn’t really depart from other such forms.


Janie: Who would you see as being the person responsible for collecting these?


Sam: The secretary collects this and submits it to the legal committee or to counsel.


Janie: This is something we could discuss over email.


Stacie: My other comment is, “is this a public form?” Do we rely on the legal committee to report these conflicts at the appropriate time?


Sam: That’s a good question, because there is a confidentiality aspect as well. The legal committee will determine whether it rises to the level of something that needs to be disclosed, or if another remediation plan must be followed, or whether someone must recuse themselves from a particular vote.


Kevin: I don’t care to put this to the entire membership, but if someone has a conflict of interest why shouldn’t all of the directors see it.


Steve: I can give you one reason. As a bankruptcy lawyer, I wouldn’t want to disclose my clients.


3.7. Motion(s): Adopt revised Ends Statements.

Stacie: So, I’m pleased to bring you what I hope will be the culmination of the Ends task force. There are two versions of the Ends, what we had got to as a task force, and some wording from Michael Healey. There was some discussion about these over email. I could make the motion and see where we go from there.


Stacie: I would like to move to accept Michael Healey’s ends with one change striking “Davis” from the second half of the first sentence.

Julie second

Motion Passes Unanimously


Kevin: It says, “our community,” and I’m wondering if we want to say, “our communities.”


Julie: I don’t want to spend the next five years explaining that.


Janie: Do we want to say “Cooperative” instead of “Co-op”?


Steve: Yes.


New Ends Statements:


The Davis Food Cooperative exists so that our current and future
member-owners and other people in the community have:

1. A thriving, cooperatively-owned business;
2. Access to healthful, sustainable, higher quality, and locally grown
and produced foods;
3. A retail store that satisfies customers;
4. An improved environment and a more sustainable food systems; and
5. Education that leads to informed choices about health, food systems,
the environment and cooperatives.



4.1. May/June linkage events

Julie: Linkage last month was the annual meeting. Everyone came. Thank you.


Our event this month, Volunteer Fair, was indoors because it got rained out. Yolo Hospice called today and thanked us; they got three new volunteers.


In July we will not have a pool party; we will have a BBQ and bounce house. I hope some directors will come and stand near the bounce house.


We will provide the food. We will not provide alcohol.


4.2. Annual Meeting wrap-up.

Stacie: I wrote a brief statement in the packet. I will start by thanking everybody for attending. I did want to commend staff. They did a phenomenal job. We had almost exactly the right amount of food. I want to move to thank Julie Loke. She spent her entire Saturday cooking. Our entire food and drink cost was $660 and we served 115 people. We had less waste than last year because we purchased plates from SPCA. And we gave away $330 to charity. We had roughly 115 adults attending the meeting. We have all of the survey results; they are quite positive. The last thing I want to talk about is we did get comments from members. Those are actually in the stuff that I’ll send out. I’m proposing that we – and this was Julie’s idea – put this on the August agenda as our reading. We might be able to assign people to write articles based on the comments.


Janie: I thought the meeting went really well. I think it was the seventh one I attended. I thought it was the best one yet.


Stacie: Thanks Steve for being the MC.


Janie: The PA system sounded much better than last year.


Stacie: I would like to move that the board express their thanks to Julie Loke for preparing the food for the annual meeting.

Steve seconds

Motion Passes Unanimously


4.3. Discussion on future of member loan program.

Steve: The member loan program has kind of been languishing. It was put on the backburner while we waited to see what happened with Trader Joe’s. Kenna’s not here, but he’s expressed his negative conservatism regarding the loan program. He doesn’t want to agree to pay loans back in three years. I looked at other Co-ops that had loans out at 7 or 10 years. I think we should move forward with a member-loan program. We need to run the numbers and make sure we don’t build ourselves into a cash crunch. But I think this meets so many of our goals all at the same time.


Julie: I think it’s a good time to ask Kenna to run numbers for us.


Janie: I see staff’s point of view. Do we need to require that staff report on this or can we just ask them?


Stacie: I kind of agree, but I don’t know about our next step as a board.


Steve: I say we just direct Eric to make a proposal. I want Eric’s feedback, because he knows the models better than we do.


Julie: It is up to us to put it on the agenda.


Sam: As much experience as Eric has, has he done a member capital project before? It sounds like we’re groping for leadership and direction. Traditionally these things are directed by financial specialists at outside agencies. We should be cognizant of our own limitations and our own need for direction. I think possibly the way to go is through an outside party.


Desmond: I want to endorse Sam’s thoughts, if not his suggestion. If we want to charter someone to do a feasibility account, I think that’s a good idea. But every time Kenna has reported on it, he’s expressed concern.


Stacie: When we started down this path, Eric did go to an outside consultant who had done numerous member-loan programs. I believe that Eric was going to work with her through all the paper work. I think we need to balance Kenna’s concerns. But I think some of the numbers they were getting were based on much shorter-term loans than we’re discussing.


Janie: I think we should ask for a report from Kenna or Eric.


Sam: I think the timing is very appropriate. We last discussed it before Trader Joe’s opened. Now we’ve seen the lay of the land.


Steve: With all due respect to Kenna’s position, if he wants to do policy, he should run for the board. I suggest we ask Eric to provide us a model at the August meeting. I think it’s time for an up or down vote. Autumn seems to be a lovely time to roll out a program.


Steve: I move to direct Eric to provide us with a model for a member capital program at the August meeting.

Stacie second

Motion Passes Unanimously


Break 8:18; reconvene 8:32


All directors return save Frank


Consent Calendar


Presented: Consent Calendar Items


Retained by unanimous consent:

Removed by objection: none

Motion: Julie moves to adopt the consent calendar as amended

Kevin seconds

Vote: Motion is adopted unanimously.


Janie: I like the format of our task force report compilation



6.1. Proposal of alternative to all-day retreat.

Janie: I propose to forego the all-day retreat and parcel out the different portions of the retreat to the continuing directors to train the new directors. We could still have the social aspects.



Frank reenters 8:34



Desmond: Where would the mini sessions occur?



Stacie: They could occur wherever they need to occur. They could be in the teaching kitchen. The only one that needs to be at a board meeting is Duty of Care.



Julie: Let’s see what Sarah thinks.



Sarah: An all-day session or 6 or 7 mini sessions? It might be easier to absorb the information in several smaller sessions.



Julie: As chair of this task force, I’d be happy to keep track of who is willing to teach what.



Janie: There’s a lot of information on our board website as well.



Steve: I’m afraid that the all day retreat is a huge slug for the new board members. For the old board members, I’m getting really sick of that room. I think new board members need to recognize that it takes at least a year before you’re comfortable.



Stacie: I don’t hear any disagreement; speak up now.



Sam: Julie, you are the task force chair for the board training. For me personally, I didn’t start to understand policy governance until I started to read policy governance books. I think that people, upon joining the board, should be encouraged to read these books. I think early and frequent discussion of these topics will get them up to speed. I still feel I’m just beginning to figure it out.



Janie: If we did these mini-sessions, any board member who wanted could attend.



Steve: There is one part I think is really important and that’s the social dinner. It’s fun to do, but it also makes us a more effective board. And I’m willing to offer my house on the 22nd.



Julie: I’ll be working at or attending cLips of Faith on the 22nd. (Stacie concurs.)



7.2. Further discussion of Strategic Plan timeline (B4).

Desmond: I had suggested when Eric was here that a three-year planning cycle for strategic planning was perhaps a more effective timeline than a five-year. Steve and Stacie had raised some concerns, and I think your objections were that a three-year strategic plan eliminated long-term planning. Strategic plans that are projected too far out are put on a shelf. You set up goals and measures. Three years is an appropriate amount of time to determine if you’ve arrived there or not.


[Desmond discusses a schematic in a handout]


You update a strategic plan annually, and develop a budget based on your strategic plan. Your budget is supposed to help achieve your strategic plan. Particularly with our competitive market place that is changing so quickly, we need to be nimble in our management. So, I’m suggesting a three-year plan. You can still have a 5- year or 10-year vision.


Janie: Do you think the next step would be to bring a 1st reading in August?


Julie: I don’t often disagree with Eric, but I was kind of taken with Steve and Stacie’s arguments. I don’t necessarily want Eric spending time making a five-year budget, but I still want Eric to think about where we’ll be in five years.


Stacie: What we’re all struggling with is that we don’t have the exact changes you’re proposing to look at. We can have a better discussion then.


7.3. Formation of Insurance Review task force.

Steve: This comes a little bit from Sam’s questions and thoughts about the ID insurance. It probably wouldn’t be a bad idea for a task force to look at all of our insurance policies. I’d be interested in doing it; Sam’s interested in doing it.


Julie: I agree with you that it’s an interesting topic, but you haven’t tied it to a policy.


Stacie: Just call it the B6 review task force.


Julie: Typically our charters say the scope and how much you’ll spend


Steve: I don’t think we’ll spend any money.


Steve moves to charter a task force to review compliance with B6 through the lens of DFC Co-op insurance policies to be reported in September. No authority is given to spend money.

Desmond seconds

Motion Passes Unanimously


7.4. Picnic Day sales update per Stacie's request.

Stacie: I don’t have anything prepared to talk about this. I had asked for the Picnic Day sales. Basically I wanted an FYI informational. I don’t know if anybody else cared besides me. My analysis is that sales were similar to most other days in April. That was basically it.


Steve: My comment is, “it’s always reassuring when you ask a question like that out of the blue and management clearly has a handle on it.”


7.5. Election Update.

Desmond: Basically there is nothing unusual: 600 people voted; we expect another 200 plus ballots by the 10th. We will count ballots on the 12th.


Steve: I would suggest anybody who hasn’t, go and observe the counting.


Julie: It would be quicker if you helped us count instead of just observing.


Steve moves to thank Kevin and Teddy for their service

Sam seconds

Motion passes unanimously


Meeting Evaluation


What Went Well?


Janie: I apologize for getting all these times wrong.


Desmond: Thanks to Teddy


Upgrades


Next Meeting –

Facilitator: Steve

Time Keeper: Stacie

Recorder: Nathan


There being no further business to come before the meeting, it was adjourned at 9:02 p.m. by a motion made by Julie, seconded by Steve, and passed unanimously.

.




/s/ Julie Cross, Secretary


__________________________________ ______________________

Secretary, Davis Food Cooperative, Inc. Date Approved