First Alternative Board of Directors
Meeting Minutes
Tuesday, April 18, 2006

 

Board Members present: Joanne McLennan, Chris Bentley, Margaret Jack, Colin King, Max Jones, Steve Albright, Toni Hoyman, Dave Hockman-Wert, and Esther McEvoy (7:40pm)
Board Members absent: None
Staff present: Michele Adams, Josh Curtis, Cheryl Good, Dana Allen (9pm)
Board Advisor: Marcia Shaw
Consultants present: None
Owners present: None
Scribe: Kevin Oder

 


President Joanne McLennan opened the Board meeting at 6:40pm.

I          Owner Comment: 

  • None
II        Approval of Consent Agenda:

Motion 04-2006 (#1) Motion to adopt the consent agenda items as written including: 1) approval of March Board meeting minutes, 2) approval of April Board agenda, 3) approval of committee meeting minutes, 4) approval of GM report, 5) approval of Document to Increase Line of Credit, 6) approval of renewal of Board Advisors, and 7) approve the 2006 Election Committee as submitted by BDC.
M/S Max/Dave Motion passed 7-0-0

III        Approval of Minutes:
· Approved with Consent Agenda
Discussion
· On line 62, add punctuation to the sentence to read "Going into the future, the finance committee also has concerns over the growth trend, since the beginning of 2006, falling short of budgeted targets.
· On line 84, add "My" to the beginning of sentence.
· Line 93 bring out to the margin - "no bullet"
IV        Announcements and Affirmations:
· Thanks to BDC for the Board Appreciation Dinner
· Joanne encourages board members that have the time to attend the new board orientation. There's a lot of good refresher information that's given at that training.
· Marcia has recently attended a Carver training on policy governance.
· The ice cream social was a good opportunity to meet with owners and shoppers. It would be good to plan similar opportunities for the Board in the future, but it would be better not to schedule it on such a busy shopping day as owner sale day.
V        Board Calendar and Timeline
· The Owner Meeting is not listed on the calendar, but another event appears to be on the meeting room calendar for that day. Michele will look into the conflict to see which event needs to be rescheduled.
VI        Questions/Comments on Committee/Meeting Reports
Board Development Committee: All the Board members would like to go on the store tour for new members.
Executive minutes: No questions
Finance minutes: No questions
Owner Relations: None submitted
VII        Questions or Comments: Monitoring reports submitted by the GM
Questions or Comments:
· Is the coop information booklet available now?
It is available now. It's training for staff, but a copy can be sent to the Board.
· Are we price competitive? Is there a way to quantify it based on an average shopping basket?
We are. It varies on an individual item basis, but we are completive overall. We do a monthly price comparison on items selected by the buyers.
· Could you compare a standard basket every month to see the trend is for that particular mix?
The buyers don't do the same items every month.
· If the perception is that we're priced high, we need to have a way to manage that.
· A consumer is going to have a basic selection of staples that they're comparing prices on each shopping trip.
· The Board could ask the GM to do a market basket survey on a specific schedule that she then reports back on and through a policy.
· The Board could make a policy that the coop shouldn't be over by x percent compared to the competition.
· I don't think it's our business to look into month to month, but it would be good to share our price competitiveness with our shoppers via the Thymes.
· The perception is that we are expensive. How do we compare to Safeway & Fred Meyers on some of our high moving items that we all sell?
· I was in a Whole Foods and noticed that they had signs all over talking about their green building, customer service, and other things coops are known for and make a big splash about it. We should be making sure that our customers are aware of these things about us as well.
· I see this information as being important to the Board. Making sense of the data and giving them knowledge and experience helps them with their future decisions around strategic planning.
General discussion regarding the GM Report, it's function outside of the policy reports, and the information that could /should be relayed in it.
VIII       Monitoring Report L-5 (Staffing & Staff Treatment) / Admin Report
HR Manager, Cheryl Good, is here to help answer questions the Board may have on the staff survey.
The L-5 statement was incorporated into the proposed Admin policy proposed by the Calendar Committee as an example of how the new policy reporting would look. It's a large chunk of information, but it was good to report on all the related policies at once.

Questions/Comments regarding the proposed Admin policy format:
· It seemed odd to have treatment of staff and financial information in the same report.
· It was grouped by "internal" issues, but some of the groupings may be illogical and maybe we need to make more than four groupings.
· Some of the information is defining terms in the policy
· On page 43, future ideas & strategies, review the possibility of cameras, why is that in financial information.
· It was referenced based on the pros & cons of the financial investment.
· This was a trial of this report and is more than just the L-5 statement. What are the pros & cons of this format?
· I like the format of the dreaming together with the statements. I have reservations about losing the language included in those specific statements.

Questions/Comments on L-5:
· On changing Staff discounts, I'll be interested as to how the employees decide this issue.
· Our policy is vague and weak regarding participation in decision-making. This is the only place in a policy that addresses a whole sentence in our mission statement. There doesn't seem to be anything in this report that actually addresses our mission statement. There aren't any standards for what a democratic workplace means. If that sentence means anything, we have to decide that as there isn't a standard to follow. We are a conventional workplace, while we're run much better than most conventional workplaces, that doesn't differentiate us in terms of a cooperative workplace.
· Being a worker here, what would you like to see implemented that you would identify as a cooperative workplace practice?
o If I knew of a model I liked as an example, I would bring it up. I think we should be clear with our owners as to how our coop works internally just so there is clarity.
· Are there things you think we do that represent this model?
I think we are different than other conventional workplaces.
The HR departments of many different coops are coming up with lists of best practices even though we're all very diverse. There are some good things happening at other coops and there are many things we do well. We don't have them written down, though. We're working on that.
· It makes it easier when the things are written down and can be referenced.
· The key questions that keeps coming up in the executive summary of the staff survey is that communication between staff and management, while improved, is still considered below average.
One of our frustrations is with staff participation. At the last staff forum, only four people came. Some people don't really care and others think nothing is enough. We're thinking of other avenues that can be developed to continue to improve our communications.
The managers haven't reviewed this report yet and that will be the beginning of the process to make a strategy for next year.
· The report integrating all of the data was very helpful. The employee benefits have improved.

General discussion of the purpose of the governance policies, the GM's role in reasonably interpreting them & reporting on that interpretation, and what is the Board's role in revising the policies to achieve a different interpretation for the next reporting cycle.

Motion 04-2006 (#2) Motion to accept the Admin report, which encompasses L-5. M/S Max / no second
Discussion:
· Process question, are we accepting the L-5 monitoring report or the entire sample report on an Admin policy that hasn't been accepted into practice yet?
· This isn't a policy we have for approval yet.
Motion 04-2006 (#3) Motion to approve the L-5 monitoring report as submitted. M/S Steve/Dave Motion passed 7-0-1
IX        Draft Policy Review:
Joanne didn't get comments from everyone on these new policies. She's put together the comments she received into one document. There were concerns about the transition between the old policy structure and the new one.
· Getting at the question of transition. One possibility is to take the draft and work with it for the remainder of the year having Michele report as outlined. Or we can say we like the policy but it's not ready yet, we work on it, and say we'll start it at such & such a date. Or we can just throw it out and stay with the old system. I'd like to start with the process / transition question.
· I'm looking at all of these existing policy statements and I'm wondering at the history of how they came together.
o They were put together in a policy governance committee over the course of three years.
· I've only been looking at these for the last year and it seems like a a duplication of effort for everyone to go through this individually.
· I wanted everyone to judge for themselves what was superfluous and what has value in the existing policies.
· But do we each need to take the time to do this. I would think the proposal would come from the calendar committee stating the new policy and detailing what was changed or left out and why.
· That was done by referencing where each piece of the draft policy was lifted from the existing policies.
· My experience in writing one of these policies a year ago was that it took us about five months to get to a final draft for the board to discuss and adopt. On the basis of that experience, I would recommend that we be very careful about throwing out any of the language that was carefully thought out before.
· What's supposed to happen with policies is that they get discussed, once a month, and then they get refined and rewritten based on the GM reports. I'm uncomfortable throwing out all of that language without the Board reviewing the policy changes. Did the policy elicit the information from the GM in the policy report that the Board wanted?
· I think the duplications and omissions can be caught this way. It would be good to have someone go through the existing policies and draft and be clear what was left out.
· Do you have a better handle on the policies after having gone through them in this fashion?
· It was useful, but looking for what's left out was very time consuming. It would be more useful to have had it laid out.
· The calendar cycle seems to work well. I thought we were going to use the calendar as a start and then work the policies into them rather than all at once.
· The intent was to see if we could get this in place with the new policies and calendar cycle when the new board starts in May.
· The point of all of this is to make room in our year to focus on strategic directions and long range planning. These policies came from different sources and the language was lifted from different places and there was no experience with what level of detail was needed. My notion of what this review would be like was to go through the existing policies and lift what was important to each director and make sure it's still there. My expectation is that once the policies look reasonable, we could go forward, have the GM report on them, and then review the policies to improve them annually, but only for a small period of time during the year. We've been focusing more on the new policies to get them in place so we could transition to the new calendar cycle.
· If the GM was going to always stay the same it might be okay as she has the policy reporting cycle down pretty well, but the policies have to direct the future and the reality is we won't always have the same GM. Switching it over and getting rid of the redundancy and streamlining the process is great, but I feel like a lot of critical information is getting left out. What would a new GM think about the policy, is it specific enough for the GM to interpret the way the Board intends?
· My model was to keep the language loose, knowing that last year's report is a precedent for what the GM says she plans for change during the next year and then to evaluate the GM based on how those changes were carried out.
· But would a new GM take the prior GM's model and report on it?
· Where do we want to go with this from here with the new board coming next month?
· Can we accept the rearrangement of the calendar without accepting the rewriting of the policies?
· How would we do the policy review in four months if the policies were to be rewritten during that time?
· The board can adopt this working document as a starting place for the board to work from to add back something that was left out and by a year later, it would be rewritten to the board's satisfaction.
· I'd like to use these as a working draft, but I'd like to see all of the policy language that wasn't included to decide if we needed it or not. I'm not comfortable with getting rid of the policies since I've only seen them once.
· Can we agree that the grid the calendar committee came up with has about 80% of what we need and we can use it as a framework to work from?
· I think one person can go through the policies and list the missing language for reference.
· Joanne offers to take it on as her project to put all of this together. We can go forward if we can accept this is the system to go forward with.
· Are we ready to vote?
· No. I'd like to point out that the new board is coming and is going to get the current annual planning calendar and policies in it and that's where they'll be starting from. Our current calendar is out of date. If we decide tonight that we're going to do this, how is this going to get to the new board members in time for their orientation early next month.
· I think it's a waste of time to have them look at the old system and then immediately change it. It would be better to go with this from the beginning.
· I would move that we implement this for a year trial and teach the new system to the Board and the old board keep the connection between the new board and the old policies.

Motion 04-2006 (#4) Motion to support the calendar and the new policy format with the old L statements as a comparison process tool. M/S Toni/Max
Discussion:
· I speak against the motion as presented. It does not address the specific language changes. I feel strongly that just dropping the existing L statement language would be a serous mistake. To just drop it and adopt the vagueness in the proposed new language leaves us in a position with no specific guidelines in the presence of any potential new general manager. I support the idea of adopting a different calendar, but the motion as stated doesn't say that's all we are doing.
· I'm not comfortable to vote because I feel that this particular decision needs to be a consensus decision rather than a simple majority. I'd like to hear more from others so we can see what their sense is about what we're proposing. I don't see this as a proposal to drop the existing statements. I see it as a proposal to rearrange them into a new calendar. I would hate to vote on something and find out later everyone had a different interpretation of the motion.
· I like the idea of rearranging the calendar and getting rid of the redundancy and not getting duplicate reports. I have a lot of concern about the specificity about what wasn't in the draft, though. I think that we need to be clear about what we expect and I feel this assumes a lot.
· I can't support the draft as presently written, as there are too many holes. I don't see any reference to the M statements. I support the concepts of changing & streamlining, but I don't think we're ready.
· The M statements are a different set of policies that happen at the end of the year. I like the suggestion that this draft the skeleton holding all of this together. Are these things measurable? I would resist the idea that there's some secret knowledge in the existing policies that needs to be treasured. Just look at the policy and decide if it says what you want it to say. I would like to see the board have more confidence in their own common sense.
· I don't think we're throwing the policies out, but I do think the way this is presented makes more sense.
· I don't understand the link between the calendar change and the policy change.
· My concern is that we get something done tonight on the calendar cycle for the new board, but I don't see why the policy changes have to be done now.
· If we stay with the current policies, then we can't use the new calendar system. They're two different parts, but they're tied together. I'm concerned about how this is going to work.
· Is there still going to be a calendar committee if this doesn't get passed tonight?
o If we still need one.
Motion fails 2-6-0
· I heard that there was consensus about the concept but there were concerns about the format and process.
· I might have voted in favor if I could see in my mind how the next month would proceed and what would be going into the new board's manual next month and what BDC's responsibility would be to train the new board members at the orientation.
· I propose that we look at the current policies in a list format, using Max's determination, without the preamble and where it's being proposed to go, what time of the year that would be reviewed. That would make it easier to go through.
· I think we should list every policy statement and where it ended up (or if it was left out).
· Who does it, when do we start, do we make a committee?
· Joanne could take the work submitted to her this last month and take this on as a project to get back to the Board with in the next few months.
· Dave & Chris volunteer to be on an ad hoc committee to carry this forward
Motion 04-2006 (#5) Motion to take the existing 2005 calendar and update it and start it in May 2006 when the new board comes on as a natural starting place and form a committee that will take that concept and work on it so that we would have a new calendar and policy to work with beginning of May 2007. M/S Steve / Max
Discussion
· The calendar doesn't need a motion as it's normal to update it annually, but forming the committee does.
Agreed to withdraw the motion and revise it.

Motion 04-2006 (#6) Motion to form a committee to work further on the calendar committee's proposal for a new board-planning calendar to be ready for May 2007. M/S Steve / Max Motion passes 8-0-0.
X        Board Mentors
All volunteer - BDC will assign
XI        Board Self-Evaluation
Marcia passed out the board self-evaluation results with the rank ordering. There are four questions posed at the end of the evaluation. Please email questions to Marcia

XII        Proposed Evanite Property Purchase
Presentation by the GM and Finance Manager of the potential purchase of the property that we currently lease from Evanite, which includes our annex building, meeting room, and parking lot. Looked at the photos of the current property lines between what we own and what we lease. This property would be available as a package deal with the sale of the submicro property behind the coop for development. Went over the advantages to owning the property instead of leasing it. Went over the improvements that Gary Fuerstein of Endex envisions for the submicro property. Evanite will not sell either piece of property unless both pieces are sold at the same time.
Questions / Comments
· My issue with expanding in this spot is traffic access.
But we're already committed to a long-term lease where the lease payments are more than the loan payments would be.
· Does this capital purchase impact our debt to equity ratio and our ability to borrow?
It would make the debt to equity worse, but there are many different measures that the bank looks at. The bank is very excited about this proposal as it improves our assets. We'll also be able to restructure our overall debt and get a better fixed-rate loan on the property overall which will make our payments less. It will have a positive impact on our cash flow, as our monthly payments will be reduced.
The appraisal for the potential purchase was done without our improvements, so it will immediately be worth more than we paid for it.
What the GM is looking for from the board tonight is to decide that this is the path the board wants the GM to pursue. It's not a final decision to purchase.
· How does the insurance cost work, are our improvements insured now and, if we buy, does it impact our insurance costs?
Under our current lease, we're required to carry the insurance, so it won't increase our insurance cost. We also already pay the taxes on the property as part of our lease agreement.
· What about the potential for flood?
This property is above the flood plain but it would be up to the bank to decide if we need to carry flood insurance.
· We should look at the value of our current property and what would the value be with the two properties together as a whole. It seems that the new property as one chunk would be worth more than just the extra purchase cost.
There are things that still need to be investigated:
· Appraisal of the property as a whole.
· Zoning for the whole property.
· Will the city allow us to make this one lot?
· Need a level 1 environmental study

Motion 04-2006 (#7) Motion to approve the intent to purchase the evanite property subject to environmental studies, property appraisal, and financial feasibility. M/S Joanne/ no second
· I would amend to approve Michele to enter into a contract to purchase the property contingent upon examination of the details of the purchase.
· I have concerns about this location and the access problems we have here. Do we want to trap ourselves with this purchase?
· We have to look at does it make us more or less trapped with the property we have now and a long-term lease or with the properties owned together. Which situation is of more value if we wanted to sell and relocate in the future?
· It's also possible that if we make changes to the property to its needs change, then ODOT might agree to change the traffic controls and access.

Motion 04-2006 (#8) Motion to approve Michele to enter into a contract to purchase the Evanite property contingent upon examination of the details of the purchase Chris/ Colin
Discussion:
· Do we want a timeline in the motion?
· Doesn't seem to need a specific time-line.
Motion Passes 8-0-0

 


Meeting Adjourned: 10:40pm