Board of Directors Meeting Minutes: August 2022

Brattleboro Food Co-op Board of Directors  August Meeting Minutes

Monday, August 1, 2022

Directors Present: Calvin Dame, Judy Fink, Denise Glover, John Hatton, Michele Meulendyk, Jerelyn Wilson, and Johanna Zalneraitis. Staff, Shareholders and Others Present: General Manager Lee Bradford, Finance Manager Ken McGee (Zoom), Board Administrator Sarah Brennan, shareholders Sheila Adams (Zoom), Anneka Kindler [arrived after Shareholder Input]

President Jerelyn Wilson called the meeting to order at 5:16 pm.

1. Welcome/Norms Jerelyn welcomed guests. She called attention to the Board’s communication norms, which are in the Board packet and are provided to guests.
2. Shareholder Input Sheila Adams introduced herself: she is a former employee. She reports that she has heard only good things about Lee in her conversations with staff. She thanked the Board for its work.
3. Board Minutes Judy moved, and Michele seconded, to approve the July 11, 2022 minutes. Discussion: none.
   The motion carried with one abstention (Calvin).
4. GM Monitoring Reports
   1. Denise moved and John seconded that the Board approve the monitoring report for B.4 Asset Protection. Reminder: this had been tabled pending some clarification questions about contracts that Lee had, which were addressed at the July meeting. Discussion: Jerelyn appreciated the comment about legal counsel being retained as appropriate. She noted that this policy has since been updated per the decisions made in the July meeting.
      The motion carried unanimously.
   2. Judy moved and Michele seconded that the Board approve the monitoring report for B.2 Financial Condition and Activities. Discussion highlights:
      1. Report style: Lee has provided a more focused, less detailed summary of financial information; the full financials are available on the Board’s website. Jerelyn hopes that Board members will be able to describe how we’re doing compared to our plan, how we’re doing compared to last year, and what that means for the health of the Co-op.
      2. Overall: Sales volume and operating expenses were in a good place, but supply chain problems continue to affect us. We were understaffed at the time of this report. FY23 Q1 operating expenses will be higher, because we’ve since hired for many positions and we have implemented the compensation adjustment. Sales and Cost of Goods were almost a wash, which was encouraging.
      3. Cash and loans: We have between 32 and 35 days of operating expenses in cash. We have paid down a significant amount of shareholder loan debt – about $600,000 remains. Our income is positive and we are contributing to our cash position.
      4. Taxes: Lee is reporting on sales and employment taxes, in addition to income tax.
      5. Debt ratio: Thanks to Ken’s efforts, our debt to equity ratio is now in the same range as other co-ops (they are 1.7:1, we are 1.69:1). This is a huge accomplishment.
      6. Net profit: We will have an end-of-year profit of about $545,000. A large part of this is due to a combination of lower wages, and renegotiated health insurance expenses.
      7. Margins: The total margin as a percentage of sales was 35.96%; we had planned for 36.93%. Lee noted that we are automating our price update process, which will enable us to act more quickly on them.
      8. Business disruption compensation: We are engaging with NCG and UNFI about the impact on us of their labor issues; we end up having to source items elsewhere with less favorable pricing, plus we don’t get the rebates from ordering from UNFI. They will be providing us with “business disruption compensation” as a result.
         The motion carried unanimously.
   3. Denise moved and Johanna seconded that the Board approve the monitoring report for B.3 Relationship to Employees. Discussion:
      1. Overall: the list of five areas to focus on was helpful.
      2. Turnover: We had a ton of turnover in the Deli and the Front End, where some is to be expected, as we have seasonal and high school employees there.
      3. Retention: We are addressing this via the compensation adjustment, and improving the orientation and onboarding experience, particularly in the Deli. We expect to see an improvement in turnover rates.
      4. Benefit enrollment: enrollment in health insurance seems low. And our 401(k) match of 1.5% is not compelling.
      5. Shareholder enrollment: This seems healthy.
      6. Staff Survey: Lee’s overall assessment is that we are trending in the right direction, and there is still lots of work to do. He is encouraged by the positive relationship with the Union and that survey respondents are feeling supported by their managers.
      7. State and federal laws and regulations: This should be focused on employment-related law; the detail about labeling requirements can be omitted in future reports.
         The motion carried unanimously.
5. Board Monitoring Reports
   1. D.12 Management Succession: Judy moved and Denise seconded that the Board approve the monitoring report for D.12 Management Succession. Discussion: The procedure for hiring a GM is documented on the Board’s website. We used it in hiring Lee.
      The motion carried unanimously.
6. GM Updates Lee shared updates since the packet went out. Highlights included the following:
   1. Hiring: We have done a lot of this recently, using re-worked job ads. Our new maintenance person is blazing through a backlog of items. The Deli is fully staffed for day shifts. Our new Shareholder Services Coordinator is great. We have a Supplies Buyer getting us organized and Produce is looking a lot better being fully staffed, which helps sales.
   2. Plumbing issues: The challenge is connecting with contractors. The community kitchen needs new walls and cabinets. We’re still waiting for a plumber to install a backflow preventer so that we can use our drain. Insurance and the Windham and Windsor Housing Trust will help absorb some of these costs. We have a slow leak over aisle 3.
   3. Community relationships: With the exception of conversations with the Retreat Farm, the other community connections have come about as part of the regular business. We will continue those conversations.
   4. Retreat Farm: We are in the ideation/exploratory conversations phase about partnering with the Windham Foundation/Retreat Farm. The key thing would be how to focus any effort such that we don’t cannibalize sales at 2 Main Street. A number of options are under consideration: bakery/deli, specialty foods, a café… Lee is enthusiastic, but not blindly so. Nothing that has happened thus far is confidential, as we are still getting an agreement of understanding of how the relationship might work.
7. GM Quarterly Check In Discussion: we continue to struggle with the facilities issues.
8. Strategic Conversation What are the potential futures of the Brattleboro Food Co-op? Jerelyn stated that our job as the Board of Directors is to think into the future: if we can imagine it, it’s more likely to happen, and if we don’t imagine it, the future will happen to us.

   Discussion highlights:

   1. We will be seeking shareholder input on our thriving future at the Annual Meeting.
   2. Strengthening relationships with other community/food focused entities: Everyone Eats, farmers markets.
   3. Develop our charitable giving strategy: should we give more money to fewer food-focused organizations (rather than lots of small contributions to anyone who asks)
   4. Resilience hub: in the face of climate disruption, with emphasis on equitable access to food. Be part of the process of funneling resources to those in need in times of crisis. One inspiration: libraries now lend tools.
   5. Open another location: One possibility: Separate the value and the high end in different locations, providing unique customer experiences in each one. One location could entail us buying natural foods in big lots.
   6. Help spawn other types of co-ops. Performing arts, daycare, community/co-working kitchen.
   7. Expand our own service offerings. Hanover has a co-op gas station/auto repair shop. Wheatsville Co-op has spun off other businesses.
   8. Merge with or otherwise help strengthen the Putney and Springfield co-ops: they could benefit from our infrastructure.
   9. Shareholder engagement: Change our model to reward any activity that strengthens the community. Survey while we table. Use our email lists and social media. Survey folks who register for annual meeting. Figuring out how to target, communicate, and engage with upcoming generations is going to be key.
   10. Next steps: We need to springboard this conversation to the next level. There are people out there focused on these things on a full-time basis: if you know of someone on the cutting edge of any of these topics, or are aware of podcasts, blogs, etc., please share it.
9. Board Committees
   1. Board Member Recruitment Committee:
      1. Recruitment tool: Denise, Jerelyn, Judy, John, and Johanna were open to either a panel discussion, or recorded interviews. Some felt a panel would be more dynamic. We could build a repository of these over time. Judy will move this forward with a core group.
      2. Elections: We have five open seats: three are 3-year terms, two are one-year terms. The latter could also be appointed before elections. Denise and Anneka are running. Three others have expressed interest (Gary, Ken, Mary) but have not yet submitted materials. Two incumbents (Calvin, Michele) have not announced their plans.
   2. Annual Meeting planning: Rather than arranging online breakout groups among shareholders, we will have a guest panelists whose conversation will build on Lee’s presentation on the evolution of our Ends policies and our business strategy going forward. Shareholders can respond and ask questions in the chat window. We want attendees to learn something about the direction of the Co-op, how the Ends play into that, and to know and have confidence in our new GM. We will keep the conversation going in the monthly cafés. Next steps: let Judy or Jerelyn know if you have an idea for a big-picture panelist.
   3. Community/Shareholder Engagement: Jerelyn noted that the gathering of member of other boards won’t happen until at least September. Jerelyn was inclined to reach out to Executive Directors; John and Calvin suggested reaching out to Board Presidents.
10. What Would You Tell a Shareholder? Board members and guests shared what they would tell a shareholder about this meeting. These comments are shared in the staff newsletter and in Food for Thought.
11. Meeting Closing: Board members shared their responses to the question “how did the meeting go for you”.

Respectfully submitted,

Sarah Brennan, Board Administrator

Archive of past Meeting Minutes