Board of Directors Meeting Minutes: October 2022

Brattleboro Food Co-op Board of Directors September Meeting Minutes

Monday, October 3, 2022

Directors Present: Calvin Dame, Judy Fink, Denise Glover, John Hatton (via Zoom), Michele Meulendyk, and Jerelyn Wilson. Directors Absent: Johanna Zalneraitis. Staff, Shareholders and Others Present: General Manager Lee Bradford, Board Administrator Sarah Brennan, shareholders Deb Tramposh (via Zoom), Pamela Corkey, Ken Fay, Vanessa Vadim, Anneka Kindler, and Sheila Adams.

President Jerelyn Wilson called the meeting to order at 5:15 pm.

1. Welcome/Norms: Jerelyn welcomed guests. She noted there would be two executive sessions at the end of the meeting. She noted there the Board currently has seven members out of the nine called for in our bylaws; two of the five open seats are to fill those vacancies. Jerelyn acknowledged the communication norms and invited all present to reflect on them. These are included in the Board packet and are provided to guests.
2. Shareholder Input:  Guests introduced themselves.
   • Sheila Adams, a former Co-op employee, comes to a lot of Board meetings.
   • Ken Fay is running for the Board.
   • Pamela Corkey is our Shareholder Services Coordinator and may be running for the Board.
   • Vanessa Vadim is a small-scale farmer who lives in Putney and is running for the Board.
   • Anneka Kindler lives in Brattleboro and is a prospective Board candidate as well.
   • Debora Tramposh (present via Zoom) was inadvertently omitted from participating in introductions.
3. Board minutes: Judy moved, and Denise seconded, to approve the September 12, 2022 minutes.
   Discussion: a few clarifying edits were requested.
   The motion carried unanimously.
4. GM Monitoring Report: Denise moved and Michele seconded that the Board approve the monitoring report for B.7 Communication to Board.
   Discussion: The interpretation statement regarding material changes is helpful, and Lee is diligent and precise in his communications. Jerelyn noted that she meets with Lee weekly. The motion carried unanimously.
5. Policy Update:
   1. Judy moved that Policy B.3 – Relationship with Employees, provision B.3.1.D, be amended to read “Provide for fair and thorough handling of grievances, including a mechanism for employees who witness wrongful conduct to report it without fear of retaliation.” (New text is shown underlined.)
   2. Discussion: Lee stated that a new draft policy addressing the mechanism above has been shared with union stewards. It has been referred to as a whistleblower policy, but will not be referred to as such in the employee policy manual. The grievance process will continue to be used for most day-to-day operational concerns. The new policy is for employees not covered by the union contract, as well as for any employee regarding allegations of illegal or unethical behavior happening at the management level.
   3. The motion carried unanimously.
6. Board Monitoring Reports
   1. Michele moved, and Denise seconded, to approve the monitoring report for D.3 – Code of Conduct.
      Discussion: Jerelyn stated that this policy is our reminder of what standard we are holding ourselves to, and sets the tone for the way in which we agree to operate. She added that with respect to provision 3.2, “un-conflicted loyalty” is relevant in the case where the Board includes a staff director who is also a union steward. They would need to recuse themselves in certain scenarios. All Board members are responsible for representing all shareholders (staff directors represent shareholders – not staff). The motion carried unanimously.
   2. Judy moved, and Michele seconded, to approve the monitoring report for D.11 – Board Audit Requirements.
      Discussion: Lee shared how we conduct an annual audit of our year-end finances and put that contract out to bid every three years.
      The motion carried unanimously.
7. Patronage Dividend
   1. Context: Jerelyn stated that our plan is to discuss patronage dividends at this meeting, and vote on it when the Board is ready, either this month, or next. Lee noted that the PPP loan forgiveness gave us a boost last year. We were seen as a trusted space and partner in the last two years, and added 600 shareholders. We were expecting a greater dip back to the mean last year. Instead, we’ve seen that the lift the Co-op experienced during the pandemic has not abated. He added that we are seeing some regression in that our basket size is shrinking again, as our shoppers make more frequent trips.
   2. Comparison to last year: Last year, we declared a dividend of $600,000, deferring $480,000 and paying out $120,000. This year we propose declaring a dividend of $475,000, deferring $380,000, and distributing $95,000 to shareholders. This proposal reflects the maximum dividend we could declare, based on our shareholders’ contribution to our revenue. It also aligns with our tax obligation, as without this dividend, we would be liable for the equivalent amount in federal taxes.
   3. Debt and Taxes: We used a lot of the PPP loan to pay down debt. Our mortgage is still about $3.5 million, for which we have a pretty aggressive payment plan. Lee would need to check with Ken McGee to see if paying down debt would reduce our tax liability.
   4. Expectations: Lee stated that he wants shareholders to expect a dividend every year. It’s a benefit of being a business owner.
   5. Discounts: Jerelyn stated that as we move toward changing discounts to support people in need, as opposed to everyone, it’s healthier for the organization, and better for those in need. If shareholders are getting a dividend every year, they will feel differently about discounts being decreased or removed. Lee added that we have a real opportunity to concentrate our resources to have a significant impact in more focused areas. We currently dilute our impact in how we manage Round Up for Change and other charitable donations. By remaining economically healthy, we can be an engine that provides resources to people in need of access to healthy foods. It doesn’t seem financially smart to be giving discounts that aren’t based on the financial health of the Co-op at that time.
   6. Vote: Judy moved, and Calvin seconded, that the Board declare a FY22 patronage dividend of $475,000 as presented in Lee’s 9/27/22 memo to the Board.
      Discussion: no further discussion. The motion carried unanimously.
8. GM FYI: Lee shared updates since the packet went out.
   1. On the people front, we are making changes to improve the accessibility of our 401(k) program by allowing employees to contribute sooner.
   2. On the physical plant side, we have reached out to UNFI to get a refrigerated truck on short notice in the event of a power outage projected to last more than 6 hours. A backup generator sized to our refrigeration would be approximately $60,000.
   3. On the process front, Buzz Schmidt at the Retreat Farm is engaging resources to help us understand what a successful partnership might look like. We’ll have more detail in the spring.
9. Strategic Conversation: How do you know you’re in a co-op?
   1. Ambiance: While this is no longer the case, the characteristic B-vitamin smell of a natural food store’s bulk department. The coziness of the space. Leisurely pace. Non-corporate look and feel. Signage referring to local vendors/producers. The ready availability of grab-and-go with sesame noodle sauce, and the GM wearing a baseball hat.
   2. Economic model: Any natural food store can achieve the ambiance mentioned above. The ownership structure sets co-ops apart. This can be seen in signage referring to Ends policies, the Board of Directors, or cooperative principles; and in being asked for your shareholder number at check out.
   3. Communicating our impact: The overall impact of co-ops sets them apart: how can we front and center this? Can we signal the stats from the “Consumer Co-op Impact by the Numbers” hand-out more when you walk through the door, in a welcoming but not overbearing way? Can we write about these things for The Commons? We can use information like this to help people understand how we employ more people, contribute to the local economy more, and have a more positive environmental impact. Many shoppers are willing to spend a bit more knowing our greater impact.
   4. Examples: Staffing (9.3 co-op jobs per million in sales, vs 5.8 jobs at conventional grocers) can be seen in unstressed, good energy: our staff has the time to create a connection with our shoppers. Local products: Conventional grocers will typically have local produce, but we have local products throughout the store.
   5. Dividends: The notion of “if I’m part of it, I make money” is accessible to people raised in capitalism. When we think about getting broader acceptance, it’s important to be a successful business. Dividends go right back to shareholders, who put it back in the community. It’s an important feedback loop. We need to spawn and foster the co-op economic model
10. Board Committees
    1. Board Member Recruitment. We have 7 applications for 5 seats, and we are aware of two other potential candidates. The letter we sent shareholders paid off!
    2. Community and Shareholder Engagement: The committee has been focusing on developing the questions for strategic conversations at the Board meetings, and questions to pose at the annual meeting.
    3. Annual meeting: The Board and guests engaged in a discussion about the candidate statement of interest form. The upshot is that we will not be publicizing candidate photos, or sharing their responses to the education and employment questions, because they are not relevant to Board service, and we want to minimize the chance of unconscious bias affecting peoples’ votes. Incumbents will be identified as such. We should consult with our DEI consultant on this going forward.
11. 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.
12. Executive Session: Board Appointment
    1. At 7:17, Calvin moved and Michele seconded to enter Executive Session for the purpose of considering appointing Pamela to the Board. Sarah and Lee were present in addition to Board members.
    2. At 7:45, Michele moved and Denise seconded to exit Executive Session.
    3. The Board encourages Pamela to run for a Board seat in the election. Should she prefer one of the one-year terms, she should contact Sarah.
13. Executive Session: GM Compensation
    1. At 7:46, Judy moved and Calvin seconded to enter Executive Session for the purpose of discussing Lee’s compensation proposal to the Board. Present: patron-directors (John, Jerelyn, Calvin, Michele, Judy) and Lee, during initial discussion.
    2. At 8:02 pm, the Board came out of executive session (details of motion/vote to do so not recorded).
    3. John moved that the Board approve the GM compensation proposal for Nov 2022 – June 2024. Michele seconded. The motion carried unanimously.

The meeting was adjourned at 8:12 pm.

Respectfully submitted,

Sarah Brennan, Board Administrator

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