DAVIS FOOD COOPERATIVE, INC.

BOARD OF DIRECTORS

MEETING MINUTES

April 7, 2008

Call to Order

The regular monthly meeting was called to order at 7:03pm at the Davis Food Co-op Conference Room, 620 G Street, Davis, California, by Darius Pazirandeh, President.

Roll Call:

Directors Present: Janie Booth, Julie Cross, Lucas Frerichs, April Kamen, Darius Pazirandeh, Doreen Pichotti, Steve Reynolds, Joy Rowe, Jack Young

Directors Absent: Danyal Kasapligil

Staff Present: Beth Tausczik, Kenna Krueger, Doug Walter, Eric Stromberg, Seth McOmber

Guests Present: Mike Ulrich

Roles:

Facilitator: April Kamen

Time Keeper: Jack Young

Notetaker: Mandy Dawn Kuntz

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: Joy: Member asked if member donations to DCCF were matched by DFC last year? Eric: Yes.

Mike: Customer complained that desired food was often understocked and was going to report it to the Board. No Board Member notified.

7:10pm More Members enter to represent the Tri-Coop on campus: Christine Perkins, Individual Member, Davis Student Coop; Liz Fitzgerald, Davis Student Coop; Roxanne Sarraille, Agrarian Effort; Natalie Yahr, Agrarian Effort; Alexa Sommers-Miller, Agrarian Effort, Individual holder; Jessica Schmidt, Davis Student Coop; Patrick Fitzsimons, Agrarian Effort; Amanda Ornellas, Agrarian Effort (shareholder); Raven Keller, Davis Student Coop; Sarah Raridan, Davis Student Coop; Jay Erker, Agrarian Effort, Individual.

Tri-Coop representatives read a letter complimenting DFC on their support of the Tri-Coop, emphasis on sustainability, community involvement in renovation, and their hope for the continuation of these practices and of community involvement as DFC revises the DFC ends and global statements. They thank DFC for working transparently and Board thanks the Tri-Coop for their interest and support.

Motion: Darius moved to put the letter and signature into the minutes.

Julie seconded.

Vote: Motion is adopted unanimously.

(Letter attached hereto as Attachment A.)

Announcements: none.

Consent Calendar

Presented: Consent Calendar Items

Retained by unanimous consent:

1. March 3 & March 10, 2008 Minutes (Julie)

3. Treasurer’s report (Janie)

4. Draft Board budget 08-09 (Janie)

5. CCMA prep (Julie)

8. Draft 2008-09 Board Calendar (Julie)

9. Accept GM’s B5 – Investments report (Eric)

11. Accept GM’s B7 – Emergency Management report (Eric)

12. Accept GM’s B9 – Member Relations report (Eric)

15. Third Reading: GP4 President's Role (Doreen) (corrected from 5 Task force Principles)

19. Motion: include member – owner comments declaration of interest as part of rules of order (Julie)

20. First reading: B12 (Julie)

21. First reading: B13 (Julie)

22. Motion: consolidate task forces (darius)

23. Annual meeting update (Doreen)

Removed by objection:

2. Task force reports (Joy)

6. modify elections task force authority (Darius)

7. GP8 monitoring report – Board Renewal & Continuity (Steve)

10. Accept GM’s B6 – Asset Protection report (Eric)

13. Recommendation – Board Admin Assistant (Eric)

14. Third reading: B2(I) treatment of Staff (Eric)

16. First Reading: Rules of order/written consent (Julie)

17. Form Board Training Task Force (Darius)

18. Set date of Board Training (Darius)

24. Online survey update (Doreen) (postponed)

Item #15, Third Reading: GP5 Task force Principles (Doreen) was corrected to read “GP4, President’s Role"

Motion: Darius moved to adopt the consent calendar as amended.

Doreen Seconded.

Vote: Motion is adopted unanimously.

Agenda Review

Amend Agenda by adding

2. Task force reports (Joy)

6. modify elections task force authority (Darius)

14. Third reading: B2(I) treatment of Staff (Eric)

16. First Reading: Rules of order/written consent (Julie)

17. Form Board Training Task Force (Darius)

18. Set date of Board Training (Darius)

to New Business

7. GP8 monitoring report – Board Renewal & Continuity (Steve)

10. Accept GM’s B6 – Asset Protection report (Eric)

to monitoring reports

13. Recommendation – Board Admin Assistant (Eric)

to 7.4

Motion: Julie moved to adopt the agenda as amended.

April seconded.

Vote: Motion is adopted unanimously.

Monitoring Reports

4.1 Discussion: Any issue or thoughts regarding GM or Board monitoring

Jack: Asset protection – The building is our biggest assets and we don’t own the back corner. We’re not in compliance due to a title issue. Eric – The title is fine. The main building is on our land; the addition is on theirs. Worst case scenario, the owners decide to use that part of the building. If we can't purchase the land, we won't improve the addition. Eric has a tentative meeting on April 16 to sign the purchase papers. Julie: Policy, as it is currently written, doesn't include the building. Should be rewritten.

Motion: Julie moved to accept GM B6 Asset Report.

Doreen seconded.

Vote: Motion is adopted unanimously.

4.2 – 2.1.7 GP8 monitoring report – Board Renewal & Continuity (Steve) (moved from consent)

Discussion: Steve: Has list of people he’s contacted regarding running for board and there is an article in newsletter. Julie: Lis Harvey and Ray Frank attended "Drinks with the Directors" and Mike Ulrich (present) is also considering running.

Tabled until May.

Darius: It's important to remind people that even if they don't run - or they run but aren't elected, that there are other important ways to be involved. Need to recruit year-round instead of the last-minute scramble.

5.1 Discussion: Board Continuity– (General discussion and specific items)

6.1 Discussion: Linkage – General discussion and specific items

Doreen: Annual member meeting coming up. Darius: Kudos on writing out and sharing of goals. April: Suggested sending out table topics to Coop leaders so that they can participate.

Unfinished Business

Presented: Darius presented 7.1.1 Motion: adopt new food ends

Discussion on 3 motions: Darius: April has done work on this. Julie: Uncomfortable with “Affordable” as subjective term. Darius: This will replace only part of the Ends section. Doreen: Can add more later. Important not to have overpriced food. Darius: Agree on a concept before settling on a word. Replace old E1 Food Ends; can also change order. Kenna: Hears from shoppers, “I would like to buy organic more often, but I can't afford to.” Steve: Value for money. Coop also needs to be a place to go without a lot of money. Doreen: Separate cost from E1 and put in a later item. Julie: B12 – mention affordability, WIC, etc. April: Affordability can be addressed in boundary statement. Doreen: Ends should be linked to boundary statement, passed concurrently. Suggest for E1: “People have access to healthful, high quality food.” Julie: Coop plays a role in the cycle of food and has a responsibility to family farmers. Darius: Write Ends to include affordability and inclusion of family farm produce. Beth: Market rates and values are objectively measurable. Janie: At the retreat we met with David who said to make our Ends visionary, a 10+ year plan. Doreen: Leaders in trying to reduce price of organic and local – make it “accessible.” Our global ends statement is visionary. Lucas: We are already watering own our visionary ends. Steve: “Improve access to” implies helping suppliers and consumers. Doreen: Access is cost, location, education, and more. Add superlatives? Julie: Hesitant to add superlatives, which are subjective, Ex. "healthiest." Also, people have access, not “members.” Darius: For each item we need to ask, for all people, or for members? Joy: Ends need to be about the future; this wording is no different from what is currently offered. Doreen: Current statement is visionary because Coop can still improve on this end. Darius: We pulled out a lot of stuff and put it into B11 & B12. We can look to them in 20 years and say we accomplished something. End: what good are you doing, for whom, at what cost with as few verbs as possible.

Motion: Julie moved to adopt “1.5 Food: a. People have access to healthful, high quality food.”; delete policy E1.

Doreen seconded.

Vote:.

In Favor: Janie, Lucas, April, Darius, Joy, Jack, Doreen

Opposed: Steve

Motion carried

Presented: Darius presented 7.1.2 Motion: direct GM to report on new food ends in June

Motion: Julie moved that the GM shall report on new end policy 1.5.a in June

Jack seconded.

Discussion: Beth: We will only have time to make benchmarks and interpret them. Darius: You will be able to work with task force too.

Vote: Motion carried unanimously

Presented: Darius presented 7.1.3 Motion: change Food Ends task force

Motion: Darius moved to change Food Ends task force as follows:

call monthly meetings with staff; to work with staff to develop appropriate monitoring standards as discussed at the 2008 Winter retreat which meets the standards set forth in policies GP, BGM2, BGM4 and End 1.5; to monitor progress as set forth in past E1 monitoring reports; and to generally exercise fiduciary duties within the scope of end policy 1.5.

Julie seconded.

Vote: Motion is adopted unanimously.

Presented: Darius presented 7.2 Second Reading of New Ends

Darius tried to incorporate everyone's comments from e-mail. April: Likes the inclusion of all comments for a thread throughout. Keep building on the Word document? Lucas: It's not yet time to open the discussion to others beyond the BOD.

Recess at 8:21pm; reconvene at. 8:37pm

Presented: 7.3, 7.3.1, 7.3.2: Lucas & Jack presented on alternative financing and the bylaws.

Lucas: Terese, the DFC attorney, is working on updating the bylaws for a 21^st century California Coop. We held task force meetings in February and on April 2 on alternative financing, henceforth known as “Member Capital.” Doreen: The general bylaws change is not on the ballot and there is no proposed special election. Jack: Explained handout – 3 basic scenarios attempting to incorporate everyone’s comments. Document makes financial assumption that these certain things are in place now – though they are not. The renovation is $6 million once the interest ($2 million) is calculated in. Option 1: We are in unique position as a Coop because we can raise member shares to $400, then to $500 the next year. The way in which it’s done will allow it to succeed or fail. We need to mind interest expense and cash flow. Union Bank can fund us, but compared with our alternative, using a bank is expensive. Julie: There is no calculation of the expense of these programs or of Union Bank's loan fees. (To be filled in by Kenna) Jack: Jack assumed between ¼ and 1/3 of members go up to $400. We have bylaws for scenario 1, but need to file paperwork with Dept of Corporations (DOC). Cash flow is principle and interest – total outflow. Eric: This doesn't reflect the equipment loan. We plan to pay it down faster. Jack: The e-mailed version was better. This chart is purely for conceptualization. Using the Member capital plan means almost an $800,000 savings. There would be a tax write off of from interest, but member capital is untaxable money. Option 2: Ask members for loans, as done by Briar Patch and many others. Ex: Offer up to 4% interest, but tell members they can loan to us for as little interest as they like. Jack made a rough estimate based on an analysis of other coops. The recession may help us, as we can offer interest as high as or higher than a bank. DOC permit needed. We have Briar Patch's loan paperwork to reference. Julie: Member perspective – unsecured loan. Doug: DFC could lose credibility. Doreen: Pros and Cons: Please include this con in the analysis. Also, Option 1 could lead to the loss of some members. Janie: Con – staff shift in focus; administrative costs. Jack: Option 3 – Assets are what you own; Debt is the portion owned by others; Equity is what you really own. Offer additional non-voting shares – preferred stock – to fully paid-in members; preferred shareholders are further up the line if DFC goes under. This is financially beneficial for us because it improves our dept/equity ratio. Requires DOC and SCC permits. People assume they'll keep it a long time and cashflow recycles for longer. Option 4: Blend plans for the best scenario: increase A shares and establish an additional class of shares (preferred). We need to limit sale of preferred stocks and establish rules about withdrawing investment. Ex. To withdraw A shares the capital needs to be available. There is a CCMA growth and capital workshop.

Presented: 7. 4 Joy presented a discussion of the Board Administrative assistant

Eric and Jim to consult with lawyer. Cannot hire on contract. Must be Coop employee, supervised to limit legal liability. Comply with labor laws. Steve: Lease an employee from 3^rd party – the 3rd party pays the employee, pays workers comp, withholding, etc. Eric: Caution – no control over who they send, the hiring process, scheduling, how they do their work, and when. No supervision. Possible high turnover. Julie: Liked Joy’s report but admits to being conflicted as this hire would be such a burden off Julie’s shoulders. Darius: There would be 2 supervisors: a Board person to supervise substance, a Staff person to make sure the assistant is on time, etc.

Motion: Lucas moved to direct the GM to move toward hiring a BOD Administrative Assistant.

Doreen seconded.

Discussion: Jack: Under Policy Governance, BOD supervises GM, not Membership Director, who supervises this assistant. Julie: All things go through GM. Darius: Concerned about scenario in which we have a "bad GM" who would block things from the agenda. Janie: "Bad GM" scenario feels unnecessarily extreme. Doreen: Try it, see how it works. Julie: Now Darius writes agenda, GM not involved. "Bad Board President" is the real danger. Steve: With employee leasing agreements you tell the company, "We want you to hire X," and they do. If that doesn’t work, we can change it.

Move to Amend Motion: Darius moves that the Board authorize Joy to work with Eric to begin the hiring process for Board Administrative Assistant.

Jack Seconds.

Doreen: GM can delegate supervision to the Membership Director. Joy please flesh out recommendation of how BOD would interact with Assistant. Doug (Membership Director): Not attached to supervising this person. General agreement that the Board Assistant reports to Membership Director, not GM.

Vote: Motion is adopted unanimously.

Julie will take lead of Membership task force from Doreen.

Items from Consent Calendar:

2.1.6 modify elections task force authority (Darius)

Modified: "the elections task force is authorized to review and approve the 2008 Election Materials, and to serve as the Board's part of the team of persons providing an impartial analysis of measures to be voted on, per Bylaws, Art. IX, Sec 6. (C)(4)(a). The team will consist of the task force and staff."

Motion: Darius moves to modify as indicated.

Julie seconds.

Vote: Motion is adopted unanimously.

2.1.14. Third reading: B2(I) treatment of Staff (Eric)

Motion: Darius moved to adopt B2(I) treatment of Staff

Jack seconded.

Vote: Motion is adopted unanimously.

2.1.16. First Reading: Rules of order/written consent (Julie)

postponed until May

2.1.17. Form Board Training Task Force (Darius)

Motion: Darius moves to Charter the 2008 Board Training Task Force with Steve as lead with the following authority: “to plan and execute a Board Training on a Saturday in July 2008 for the benefit of new and continuing Directors and interested Members. Has authority to use staff, volunteers and funds up to $3000.

Jack seconded

Vote: Motion is adopted unanimously.

New Business

n/a

Next Meeting –

Facilitator: Lucas

Time Keeper: Julie

Recorder: Mandy Dawn Kuntz

There being no further business to come before the meeting, it was adjourned at 10:00 p.m. by a motion made by Darius, seconded by Julie, and passed unanimously.

/s/ Julie Cross, Secretary

__________________________________ May 5, 2008_______________

Secretary, Davis Food Cooperative, Inc. Approved

Attachment A to the minutes of the Davis Food Co-operative for April 7, 2008:

Letter from the TriCoops

April 7, 2008
To Whom It May Concern:

       Members of the UC Davis TriCooperatives played an instrumental role in forming the Davis Food Co-Op and current-day co-opers remain firmly involved as Food Co-Op community members, volunteers, customers, and informal publicists.  As a whole, the Campus Tri-Cooperatives purchase more from the Davis Food Co-Op than any other household, and taken individually, each house ranks within the top ten biggest purchasers.  Likewise, the Food Co-Op plays an essential role for the TriCooperatives, supplying food, education, employment, and a model for cooperative business.
       As a community, the TriCooperatives attempt to consider all of the impacts of our buying decisions.  We choose to support the Food Co-Op because we recognize that when we pay for a product, we support the ethical, social and environmental impacts of that product and we have impacts of our own.  Chief among our values is sustainability.  We noticed that you have removed explicit emphasis on sustainable environmental practices from the "Environment" section (1.4) of the Ends statement.  We believe that these discontinued lines have historically leant important direction to the Food Co-Op's policies.  We trust that their spirit, if not their language, will exist explicitly elsewhere in the final revision, but if it does not, we would like to know why.  Additionally, the shift from striving to "lead the foodshed" to striving to "lead in providing retail food options, education, and community events" disconcerts us because we believe the original wording conveyed the admirable ultimate goal of serving the needs of this community, while the latter de-emphasizes community food supply and brings to the forefront the purpose of monetary exchange. The fact that the Food Co-Op doesn't blindly seek profits for profits' sake and instead turns profit by utilizing business practices that benefit the larger Davis community elevates it from the level of other corporate food suppliers many criticize.  We believe that a Global Ends Statement can only be effective if it reveals ultimate goals.
       We value this opportunity to voice our opinions and we hope you will consider not only our input, but that of other community members.  We appreciate the transparency and receptivity you have demonstrated during the store's physical renovation process and we expect that you will demonstrate equal transparency and receptivity during this philosophical renovation.

Sincerely,