BELFAST COOP BOARD MEETING – January 28, 2009 Final
PRESENT: Jeanne Gail, Allen Ginsberg, Bindy Pendleton, Kip Penney, Phil Prince, Jerry Savitz, Paul Sheridan, Zafra Whitcomb. Absent: Russ Barber, Wayne Kraeger, Debbi Lasky, Peri Tobin, Jerome Weiner. Staff: Chris Grigsby, Joe Jordan, Mylisa Vowles. Member: Patty Pendergast.
FACILITATOR: Allen. Scribe: Paul. Timekeeper: ____. Vibewatcher: ____.
2009 FINANCIAL REPORT: presented by our accountant, Mike Nickerson. Total assets are up over 2008, with total liabilities down over 2008. He saw a nice reduction in notes payable. There was more member equity, showing more involvement of members. We have a healthy total equity. Net sales were down in 2009 over 2008, but the cost of sales decreased even more. The gross profit increased in both dollar amounts and in percentages. Labor costs were up a bit. As to net profit from operations, 2008 was considered a banner year, and 2009 was even better. He was very impressed with the deli/café’s performance, showing good management and control of ingredients and wastage. Members seem to be using their patronage dividends. There was an impressive increase in net cash from operating activities. He was pleasantly surprised to see much less usage of loan proceeds and that we paid much more of our outstanding debt.
Question: should we be considering a full audit? No—save the Co-op’s money. Only if we were going after a large loan or grant would we need an audit. Perhaps a less-than-full audit, to compare with other groceries/co-ops of similar sizes. This type of audit would be of selected areas, such as inventory, labor, and our system of internal controls. He suggested we shop out our current loans and consolidate with a loan at a lower interest rate—something managers say is now ongoing.
Our Ratio Analysis: “Liquidity:” current assets are 1.5x our current liabilities which shows very good solvency. He saw a great year-to-year improvement in our “Quick” ratio, and the same with our “Basic Defense Interval.” Improvement was seen in almost every category for inventory turnover, and this info can also be useful to department managers. The percentage increase in labor costs can also be attributable to low employee turnover; experienced, efficient staff, who have remained with us but have also received wage raises. We also had two months of paying five GM’s during the training period in 2009.
We have a good asset mix, with inventory and receivables planing off while cash (and cash equivalents) are rising. Total debt decreased 10.9% from 2008 to 2009. Departments who sell items that might be considered “discretionary spending” (such as wine and beer, cheese, and HABA) had decreased sales, but not by that much.
Kudos are due to Rosemarie, Accounts Receivable, and the whole financial department for their attention to detail, which ensures our survivability in a business with razor-thin margins.
Mike’s biggest advice was to focus on our debt, and focus on our inventory (of which we are keeping almost daily track, as well as utilizing an outside contractor for periodic inventories); also watch our Accounts Payables and get discounts for early payment.
ANNOUNCEMENTS: none
MINUTES: of Dec. 17, 2009 were accepted as corrected: under Board Development, the spelling for Carol Carriuola. Four dollar amounts were removed for web distribution. Both versions were accepted, 7 Yes, 0 No, 1 Abs.
GENERAL MANAGEMENT TEAM (GMT) REPORT: written report was received. Questions/comments:
- A discussion and report is needed on WIC program participation.
- Solar panels are not an option for us. An official letter is forthcoming from the Revision Energy with details. A reminder that gratis audits are available from Central Maine Power.
- We now lease a color copier.
- On deli furniture, suggestion made to consider in future a few smaller round tables for better traffic flow and use of the space—notice the number of one or two diners versus the number of foursomes at round tables. Also please refinish tabletops on an as-needed basis, otherwise these are unappealing.
- The Patronage Dividends will not be mailed with the Annual Meeting notice/ballots; we are not required to mail these. We are required to post an Annual Meeting notice in the store, and post written notice of the Dividends (except for out-of-state members). Possibility that Patronage Dividends can be added to computer system, and notices e-mailed. We can also distribute the dividends in-store, with the amounts showing on the bottom of members’ receipts. GMT to work out details with the MOC. Question; what of members who do not come into the store for three months?
FINANCE COMMITTEE: is proposing a 2% Patronage Dividend on member sales to be returned to members. We have some ‘profits,’ and plan to distribute some with the remainder held in equity in the store, in the names of the individual members. Co-op is allowed to retain up to 80% and is only required to distribute 20%. Approved, 8 Yes, 0 No, 0 Abs. The plan is to remove money from our savings account (yielding low interest) and pay down 6-7% debt. We will also have to look at refinancing a balloon payment due in 2013.
MEMBER COMMENTS: Patty Pendergast spoke of her personal co-op experience. She sees big differences in the last three months in terms of friendliness, sales, management. Also: a mailing (annual meeting, dividend, etc.) might make sense to communicate quickly with membership, but if handed to members it has the value of personableness.
BOARD DEVELOPMENT AND ELECTIONS COMMITTEE: did not receive many replies from the board on the subject of facilitator. Debbi is hoping that Deb Burwell is still available. Pivotal will be return of a short survey from board members, needing prompt return. A phone call during the meeting elicited Feb. 13th as the date for the retreat, starting at 9 AM, possibly at Troy Howard school.
MANAGEMENT OVERSIGHT COMMITTEE: board adjourned into Executive Session. Re-adjourning, the board voted to remove the three General Managers from probation, 7 Yes, 0, No, 0 Abs. All are happy with the good job being done.
HOMEWORK: prompt return of survey for retreat.
NEXT MEETING: Thursday, Feb. 25, 2009, 6:30 PM at Waterfall Arts, with Allen facilitating.