DAVIS FOOD COOPERATIVE, INC.

BOARD OF DIRECTORS

MEETING MINUTES

May 5, 2008

Call to Order

The regular monthly meeting was called to order at 7:01pm 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, Danyal Kasapligil, Darius Pazirandeh, Doreen Pichotti, Steve Reynolds, Joy Rowe, Jack Young

Directors Absent: n/a

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

Guests Present: Stacie Frerichs, David Thompson, Kevin Wolf,

Michael Ulrich (arrived at 7:27pm)

Roles:

Facilitator: Lucas

Time Keeper: Julie

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: David Thompson presented copies of a letter from former DFC Board members and himself regarding issues from last election and this one. David acknowledges that he has received some answers, but requests more complete answers within 30 days or mediation.

Kevin Wolf shared his objection that the GM addressed the possibility of a second store in the DFC newsletter - the issue on which Kevin is basing his Board campaign. Kevin cited the July 15 Davis City Council vote and market analysis. Kevin demanded that the Coop pay for a mailing to rebut the GM's column or give Kevin the DFC Member mailing list and lift the rules on candidate spending so he can send his own mailing.

Announcements: None.

Presented: Consent Calendar Items

Retained by unanimous consent:

1. April 7, 2008 Minutes (Julie)

2. Task force reports (Joy)

3, Treasurer’s report (Janie)

4. CCMA prep (Julie)

7. BGM3 monitoring report – Accountability of the GM (June)

8. Accept GM’s B4 – financials report (Eric)

10. Online survey update (Doreen)

11. report on Board Admin Assistant (Joy)

13. Annual meeting update (Doreen)

14. Second Reading: Draft Board Budget 2008-09 (new business)

16. Technology cheat sheet force update (Joy)

17. Member Capital Task Force Report (Darius)

18. Motion: regarding board training (Darius)

Removed by objection:

5. GP8 monitoring report – Board Renewal & Continuity (June)

6. BGM2 monitoring report – Delegation to the GM (June)

9. Election Committee report (new business)

12. Second Reading: Rules of order/written consent (June)

15. Second Reading: Draft 2008-09 Board Calendar (new business)

19 Motion: adopt changes to three readings in rules of order (withdrawn)

Darius noted a correction on item 17 – the total cost of loans will be about 5.7 million.

Motion: Doreen moves and Joy seconds to adopt the consent calendar as amended.

Vote: Motion carried unanimously.

Agenda Review

Amend Agenda by adding:

8.3 Appointment of Doreen to interview committee for Board Assistant

8.4 Public discussion of request for mediation

9.2 Closed session discussion of past mediation sessions

Darius wishes to discuss the election issues, to ensure a fair election, and to move forward.

and deleting the discussion of Q&A at the member meeting

Motion: Julie moves and Jack seconds adopting the agenda as amended.

Motion carried unanimously.

Michael Ulrich enters 7:27pm

Policies

Presented:

4.1 B11 – Pachamama I/C

Lucas: Heard of possible Pachamama coffee kiosk; would like to be informed and able to comment. An e-mail would be nice. Eric: It's still in the discussion stage, but desire for information understood. Darius: Need specific guidelines so Eric knows when to share. Doreen: Dollar guideline to inform? Formal RFP (request for proposal) process? Lucas: Lucas is working on more specific language.

4.2 GM report – “what would it take to expand”

Darius: Report helped Darius to identify the questions and big issues. Jack: Kenna's reports possibly paying off the loan in 7 years; then profit can be given as dividends, used to reduce prices, or invested in another project. Time to think about our long term vision. The Bozeman Coop suggested using a local consultant who knows the area, what might work - a small store, one the same size, outside Davis? Need task force now; can work for three or more years before able to act. Eric: If DFC can't break even, we need to question moving forward. Darius: Brainstorm more possibilities: help others, all organic store, etc. Kevin: City of Davis is doing a psychographic analysis. Survey Coop Members, find out what they buy and what they might buy in a West Davis store. West Davis store would mean less driving, pollution, an increase in the sale of local foods. Darius: Kevin can be on the task force.

Motion: Darius moves the formation of a task force to explore in detail another location or other services.

Steve seconds

Comments: Doreen: Other services to be defined by the task force. Kenna: We need to grow with the current renovation and our current debt. We may need permission from Union Bank for further expansion. Jack: This would be long-range planning, for years out. Eric: Agreed. Takes years to plan new stores. Need organizational readiness and commitment to act in the future. Darius: Member capital would take priority. Steve: This desire to plan is an expression of confidence in Kenna’s abilities. We may use the time to run through multiple ideas. Board agrees to call it the Expansion Planning TF and name Steve the interim leader.

Motion carried unanimously.

Board Continuity

Discussion: 5.1 Board Continuity

Steve: Currently planning July Board retreat for new Board. Social time on the Friday night. E-mail your ideas about the second half of Saturday to Steve.

7:55 David leaves.

Linkage

Discussion: Doreen - Discussion tables at the Annual Meeting

Doreen: Logistics – these tables are not to answer questions, but to engage attendees and to identify a range of opinions. Each table will have a facilitator and a note taker. Julie will call time at 15 minutes. Then shift to another table to gather a wider range of opinions. The questions will be posted on stands at each table. These questions and the gathered opinions are them passed along to task forces. Can invite members to continue these discussions and can start new ask forces if issues are raised. Julie: Ask about expansion, not just about a second store. Move discussion to e-mail. Doreen: Candidates can give a two minute statement at the meeting.

Unfinished Business

Kevin returns 8:05

Presented: 7.1 Discuss: New Ends

Doreen: Ends with thread of changes suggested by Board. Darius: Focus on Global Ends tonight - as is without including 1.5 (last meeting adopted 1.5 to replace E1). Julie: Really liked definition of foodshed. April: “Leader” is vague. Jack: Foodshed makes people take notice. Doreen: Member input? Janie: Need way to quantify member input. Lucas: Did not take it to members last time. Kevin: Suggests: "We are a leader in 'creating' a foodshed." Darius: Policy Governance means not direct to members. Janie: representing member values is the Board's job. Darius: Follow Policy Governance and educate members. Doreen: can obtain member opinions with qualitative approaches, such as focus groups or interviews with opinion leaders, versus quantitative surveys. Qualitative approaches identify the range of opinions that exist, incite new ideas, provide a means for member input and improve member linkage. Jack: The Ends need to give management something to work with. Lucas: It's a living document, ready to adopt as is. Joy: Nothing here I disagree with or can’t defend in public. Julie: David Ball’s comments read and agreed with. Julie will type up the changes; Board will vote after the break.

Recess at 8:30pm; reconvene at 8:45pm

7.2 Motion: Jack moves and Lucas seconds accepting these ends to replace the previous ends and directing Eric to make interpretations.

1. Global Ends Statement We are a leader in our foodshed.

1.1 Cooperative Principles: Internationally recognized Cooperative Principles guide our actions

1.1 (a) DFC is a leader in supporting and developing cooperatives.

1.2 Owner involvement: Owners lead, support, and guide DFC.

1.2 (a) Owners participate economically

1.3 Community: Other community groups are supported.

1.3(a) Members are enriched and connected through welcoming and positive social interaction.

1.4 Environment: Sustainable environmental and agricultural practices inform our product sourcing and business operations.

1.5 Food People have access to healthful, high-quality food.

1.5(a) We are the best source of locally grown and produced food products.

1.6 Finances; We maintain financial stability allowing for expansion, retained earnings, and patronage refund.

1.6(a) Owner’s economic participation contributes to financing capital needs.

1.7 Education: Our customers and community are able to make informed choices.

Motion carried unanimously.

Discussion of B12 & B13 moved to June.

New Business

8.2 The 08-09 Calendar

Steve: Hire accountants to review our process. Need them to observe in Sept. Suggest hiring in June. Darius: on agenda for June.

Julie agrees with Doreen's suggestion to move January 2009 meeting to the 12th.

8.3 Motion: Joy moves to add Doreen to the Hiring Team for the Board Administrative Assistant.

Julie seconds

Darius: Eric, Joy and Doreen to do interviews; if later Doreen is no longer on the Board, will assign different person.

Motion carried unanimously.

Presented 8.1 Election (Task Force) Committee report/ Election Update

Steve: References memo from Doug (2.19). Kevin wants to make two changes to his online candidate statement - to change a word and add his e-mail. Should we care if statements are changed? Eric: Our attorney, Therese cares. Danyal: Leave it. You get one chance to make your statement. Janie: Given the opportunity, more candidates would make changes. Is this a door we want to open? Julie: Kevin is afraid he will be perceived as insensitive; add a footnote? Doreen: In the future if someone doesn't add their e-mail, ask them for it. What if everyone wants to add footnotes? Don't want to offer that opening. Doug: Declaration of candidacy form is clear. Kevin: Wants to share that the Board told him he could not change his online statement. Lucas: Wants Kevin to be clear about the reasons he was told no. Darius: Kevin’s letter to The Davis Enterprise implies that the DFC Board took out a loan without doing the supporting work. Darius wants his frustration heard. That said, suggests delegating to the Election Task Force the authority to take care of problems and report back to the Board. Doug: Bylaws say that statements submitted before the deadline will be included.

Motion: Jack moves to modify the authority authorize of the Elections Task Force: The elections task force is authorized to review and approve the 2008 Elections 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. The task force is authorized to make decisions on all 2008 election relate issues and speak for the board on such issues. The Task Force will notify the Board of all actions taken within 24 hours. The Task Force has no authority to spend Coop funds.

Darius seconds

Motion carried unanimously.

Further Discussion: Darius: Eric says that Therese says the member list is protected. Can send mail on behalf of, but cannot share the list. Eric: Give summary of Therese’s comments: Making exceptions to the election process is unwise. State law (12.600 of corporations code) requires 5% of verified shareholder signatures to release the mailing list, which means coordinating with a third party mailing house. Jack: Coop could send out an informational piece about West Davis - pros and cons; not about Kevin’s campaign. Kevin: That would help to satisfy Kevin's request. Julie: Kevin made a demand but has no signatures. Kenna: What message would that send? Why refute Eric’s report, backed by years of data? What precedent does this set? Would future campaign platforms then limit the GM's right to express an opinion in the newsletter? Joy: Bylaws need to reflect the corporate code. Jack: Proponents of a West Davis store may feel shut down. The Expansion TF can help to get word out and invite people to join the process. This is an issue for education, not this election. Darius: Kevin has no right to demand the mailing list. Anyone can print an article in the newsletter or be part of a task force. This is not unequal access. Steve: We should encourage the GM to write timely columns that address member conversation. Don’t think Kevin is disadvantaged; it's an opportunity for him to interest people in the election. Julie: Eric’s article lists ways a second store could be made possible. Kevin wrote a letter to the Enterprise, which has a large readership. A pre-election mailing risks being an expensive ($8000?), brightly colored, but ill-written piece.

Doug: 366 verified signatures of shareholders are needed to receive the mailing list. There are many issues of concern to members - carrying coke, which communities to focus on serving, etc. - not just a West Davis store. A mailing would be partisan. Past newsletters have also featured article topics relevant to candidate statements. Also, articles are written two months in advance - before candidates even announce a bid to run. Kenna: Mailing pros and cons about a second store makes something not even on our current timetable seem imminent. Kevin: Was the GM aware that a second store might be an election issue? Eric: Yes. Janie: Haven’t heard about this in the last year on the Board; not pressing. Doug: The Board does not need to take action. Eric: Talk to Therese before deciding on action. Doreen: If it's likely to be an election issue, why not talk about it? We didn’t even know who would run. Lucas: I will not be held hostage by the demand of a decision tonight, especially without talking to our attorney. Lucas: The Election Task Force will have timely response for Kevin.

8.4 Public Discussion on Mediation Request from David

Motion: Lucas moves to direct Darius to take steps toward mediation.

Jack seconds

Discussion: Darius: Talking about the election will be good. Let's start: who would represent each side? Julie: Before starting mediation, need to establish goals: desired outcomes. Also, Julie only want to mediate with DFC members, not the public. Doreen: Friendly amendment – look into the option to mediate, not promise to do so. Lucas: Not willing to accept amendment. Darius: City of Davis offers free mediation. Steve: This is a multi-step process, possibly a pre-litigation step. Kenna: Ask Therese. Julie: A discussion of potential lawsuits requires a closed session.

at 9:50pm Julie moved to adjourn to closed session to continue the discussion.

Danyal seconded

Motion carried unanimously.

Notice of Closed Session

A closed session was held from 9:50 pm to 10:10 pm pursuant to Board Policy GP6(D), which requires discussions concerning issues of a sensitive nature be held confidentially.

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

Directors Absent: n/a

Staff Present: Eric Stromberg

The closed session was adjourned to open session at 10:10 p.m.

There being a motion before the board at the time it adjourned to closed session, the vote was called on the following question:

Motion: Lucas moves to direct Darius to take steps toward mediation.

Jack seconds

Motion carried unanimously.

There being no further business to come before the meeting, it was adjourned at 10:15 p.m. by a motion made by Julie, seconded by Lucas, and passed unanimously.

/s/ Julie Cross, Secretary

__________________________________ __June 2, 2008__________________

Secretary, Davis Food Cooperative, Inc. Date Approved