DAVIS FOOD COOPERATIVE, INC.

BOARD OF DIRECTORS

MEETING MINUTES


September 10, 2007


Call to Order


The regular monthly meeting was called to order at 7:04pm 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, Debbie Eernisse, April Kamen, Danyal Kasapligil, Darius Pazirandeh, Doreen Pichotti, Steve Reynolds, Jack Young


Directors Absent: Lucas Frerichs, Joy Rowe


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


Guests Present: None

.

Roles:

Facilitator: Doreen Pichotti

Time Keeper: Debbie Eernisse

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: no members present


Announcements: Darius announced that he’d received a catalog for the Provender Alliance conference, and that the GP Reports had been inadvertently left out of the packet – copies available now for those who need them.

Deb announced that the next outreach event is the R&R Dinner on September 20th; Sept 29 followed by the membership drive, pass out popcorn & encourage signing up as Members, 11am-3pm. We have new Coop director buttons to wear. Also, instead of Alumni Events for Board, we plan to offer volunteer thank-you events to include all past and present volunteers.

Steve announced that 2 Mondays before each meeting, he will plan a get-together dinner for Board – that may be next Monday


Consent Calendar


Presented: Consent Calendar Items

Retained by unanimous consent:


Removed by objection:


Motion: Doreen moved to adopt the consent calendar as amended

Julie seconded

Vote: Motion is adopted unanimously.

Agenda Review


Darius offers motion to add 50 minutes to discuss the renovation financing tonight as part of 5.1

Second: Deb

In favor Debbie, Julie, Danyal, Darius, Steve, April

Opposed Jack, Janie, Doreen

Motion carries


Amend Agenda by

Added Motion to revise the renovation plan at 4.6

Added Approval of August 2007 minutes at 6.8

Added BGM 1 at 6.9

Added Pachamama letter at 6.10


Motion: Julie moved to adopt the agenda as amended

Deb seconded

Motion carried unanimously


Reports


Presented: General Manager's Report

Eric Presented reports on:

B4: Budgeting & Financial Condition And Budget narrative

B4: Patronage Refund update

B8: Customer Service

E5: The co-op is a good place to be.

B11: Modifications to Phase 2 plan


Discussion: B11 Eric wants permission to include duplex as part of renovation. Use it for non-retail.

Darius: Add column to budget to actual section of financials include “why” big change in cost? Eric: sure, quarterly. Kenna: Itemized if $3000 or more.


Darius: B8 report, Customer Service, will include in next report, not policy change. Doreen: on B8, written suggestion box comments – not many


Doreen: Online Member survey 2008: Report results at next annual Member meeting? Seth: possible, but a strain.


Deb: B8 Really liked Eric’s description of value. Why not have 11% sale? Need to talk about in terms of staff kindness & renovation, Seth says it can go in Oct Newsletter.



Presented: 4.3 Darius presented an interpretation of the meaning of non-acceptance of a report of compliance

Darius: Policy change to monitoring. Last month Board rejected report of compliance, which means to Darius implication of non-compliance. Our agreement with Eric talks about monitoring; when the board or GM rejects report, there is obligation to “get back to compliance.” Julie: 2 standards. Board rejects interpretation by one board member of board policy, VS GM is in disagreement with Board. Doreen: or compliance not demonstrated, lack of info is same as non-compliance. Steve: Non-compliance isn’t necessarily about agreement, but about feedback, maybe assumptions budget built on are off. Valuable info. Doug: If a report does not have enough data to demonstrate compliance, it is non-compliant. Doreen: if data isn’t there, can’t comply. Steve: need to look at what kind of non-compliance; losing the money is important


Motion: Doreen accept GM report as presented

Julie seconded

Motion carried unanimously


Presented: Darius presented 4.5 Motion: accept GP, GP1, GP2, GP6 & GP7 reports (Do it as five separate motions)

Discussion: Darius: Jack’s comments and my response should be attached to the applicable report.


Motion: Darius moved to accept GP report as presented

Julie seconded

Motion carried unanimously


Motion: Darius moved to accept GP1 report with Jack’s comments & Darius ‘s response

Steve seconded

Motion carried unanimously


Motion: Darius moved to accept GP2 report with Jack’s comments & Darius’s response

Julie seconded

Motion carried unanimously


Motion: Darius moved to accept GP6 report as presented

Julie seconded

In Favor: Janie, Julie, Debbie, April, Danyal, Darius, Doreen, Steve

Abstained: Jack

Motion carried


Motion: Darius moved to accept GP7 report with Jack’s comments & Darius’s response

Julie seconded

In Favor: Janie, Julie, Jack, April, Danyal, Darius, Doreen, Steve

Abstained: Debbie

Motion carried


Unfinished Business

Darius moved that the GM is authorized to modify the Master Renovation Plan to include changes to the duplex

Steve seconded

motion carried unanimously

Darius: Hot button issue with neighbors?


Presented: 5.1 Eric presented options for financing of Phase 1 of renovation and the Staff recommendation that the Board accept the Union Bank Financing.

Discussion: Darius: 3 factors favor Union Bank, fluctuating interest rates, why these numbers? Kenna: Risk assessment, can’t say what they’ll be, plan for worse conditions so you know you can live with it. Darius: Are you saying these numbers are a real risk? About how much could we be looking at? Want to value coops, what is value we lose by going with Union? Kenna: Ex) Projections made, cash flow surplus, raise share limit could bring in money too. At 5 year point could have $1 mil, pay off principle. Coop bank would penalize us, Union wouldn’t. Darius: NCB might cost us $100,000 extra? Yes. Steve: Bankruptcy is rampant – don’t expose ourselves to the risk. Can refinance Union Bank loan if better rates come up. Question: Union want to bundle everything? Kenna: Yes, to get money interest free, all of it with them, including checking account. Jack: What is company line when asked about dealing with Union Bank who has a bad rap? It’s the numbers? Kenna: He wants to stay with Coop who loaned us the money when no other offers, also First Northern, but despite effort, no other possible offers. Nice people, branch in Davis. Global, sorry need to do things which make sense financially. Eric: encouraged NCB & First Northern and they chose others instead of offering good deal to us. Julie: Room for negotiation with NCB? Eric: No. Appeal to First Northern, you will lose our checking account. Julie: Can have special meeting if new proposal seems viable. Janie: FDIC coverage only $100,000 for $1mil checking account – problem? Eric: Yes, it’s a risk. Doug: We have to do it, no choice. Kenna: we look at ratings. Janie: Tax write-offs from real estate interest? Not helpful. Doreen: helpful to directors to have talking points cheat sheet? Steve: This was important, we considered it, these were the alternatives. Eric: will do.


Break 8:15-8:30pm


Debbie: What are we willing to give up to stay local? Eric: Say, match this offer, or come close. Kenna: We’re not benefiting FNB as it is. Darius: We spend a little extra to buy organic, but the cost of the risk is $500,000 in 5 years. Could reinvest that money in our community, donate it, give it to members to do good things. That is how we could talk about it to members. Cost is too high. Doreen: Jack’s suggestions of smaller loans to local or Coop bank? Kenna: Union is package deal. Eric: Ex) 2 banks fought and couldn’t work with both. Jack: River City and other smaller Sac area banks. Kenna: We have already started construction. Eric: Phone, sure, but time is the issue. Kenna: Loan people can turn it around fast, ask. Steve: In short term, rates are going down. Darius: Important to make decision tonight.


Motion: Julie moved that the GM is authorized to accept the Union Bank financing package for the $640,000 equipment and 3.3mil real estate loan pending legal review, provided that the Board will consider alternate financing proposals recommended by staff until Sept 17.

Darius seconded


Discussion: Darius: Authorizing conditional upon further research or if you want, you can sign tomorrow? Eric: Conditional on some further research. Won’t sign until legal review by lawyer.


In Favor: Janie, Julie, Debbie, Danyal, Darius, Doreen, Steve

Opposed: Jack

Abstained: April

Motion carried


Presented: Darius presented a follow up on non-compliance for equal access for the flyer

Discussion:


Motion: Darius moved that the General Manager is directed to create policy for staff to guide them in future elections. This policy will outline what a reasonable interpretation of Article IX, section7(C)


“Equal access. Proponents and opponents of any ballot measure shall have equal and reasonable access to publicity. All candidates shall have equal and reasonable access to publicity from the date of their candidacy onward.”


The General Manager is directed to present this policy for Board inspection and approval within the bounds of Board policies, bylaws, and the outcome of the monitoring of this issue in August 2007. The General Manager will also revise Election Policy 2.6. A report on this will be due in December.

Julie Seconds

Discussion: Doreen: Access to mailing list at individual expense. Need definition. 3rd Paragraph: GM will also revise election policy . . . . No due date on this. Doug: New member drive, staff training, other election policy changes needed. End of fiscal year & patronage refund, no draft before Dec.; need by Dec.

Motion Passes Unanimously




Presented: Jack presented a request that the Board review the GM’s file

Jack moved that the Board authorizes a regular, routine review of the General Manager’s personnel file in a closed session in October 2007. In future years, the Board will conduct a routine review of the General Manager’s file in a closed session in the first regular Board meeting of the Board cycle. This review is pursuant to “at need basis” based on the formation of a new Board as a new “supervisor” of the General Manager. This authorization will not be construed to: A) authorize any individual director to review the General Manager’s file at other times without full Board approval; or B) authorize routine inspection of the General Manager’s file at other times during the year without a specific need such as misconduct. Staff Directors will not participate, and DFC policy for file review will be followed.

Steve seconded


Discussion: Julie: I’ve never reviewed a staff member’s personnel file. I am opposed. Doreen: Add staff directors not participate, no copies made. Jack: Within the coop preexisting policies, revise to state no copies, not beyond room, etc. Doreen: Do in Oct.? Darius: Getting opinion from our lawyer. Still waiting. She asks if there is another way of getting what we want. Jack: continue with vote. Darius: will contact Personnel attorney. Darius will vote for it, but will look for future lawyer opinion. Debbie: Can’t believe we’re voting w/o lawyer’s opinion? Steve: Board’s job is to monitor GM. Julie: To what purpose is reviewing file with benefits, medical, no written performance reviews? Not a logical argument.


In Favor: Jack, Steve, Darius, Doreen

Opposed: April, Danyal, Julie, Debbie

Abstained: Janie

Motion failed


Darius: Should I follow-up with lawyer? No, why pay fees.


New Business

Presented: Darius presented 6.1 Motion: Form Winter Retreat Task Force and Set Date

Discussion: Darius: Asking for volunteers for leading task force. No takers. Planning all aspects of winter retreat. Put together agenda, Policy Gov presenter, dinner, location, all day. Jack: Will lead.


Darius moved that a “winter retreat task force” with Jack as lead is hereby formed with authority to plan all aspects of the winter retreat to be held in February. The task force is authorized to spend $1500. The Task force must present a plan for review and approval at the December 2007 meeting.

Julie seconded

Motion carried unanimously


Presented: Darius presented 6.2 Motion: Certify member boycott request pursuant to GP10; Direct General Manager to respond by October Board meeting

Discussion: Steve: Story in NY Times story, Chiquita self-reported, paying off thugs so their people won’t get hurt. Doreen: We are not supporting boycott, but certifying that member did follow the process.


Darius moved that the Board certify the member boycott request for Chiquita bananas submitted by Michael and Teresa Leonard pursuant to GP10; Direct General Manager to respond by October Board meeting

Janie seconded

Motion carried unanimously


Presented: Darius presented 6.3 Motion: Assign directors to monitor reports; accountability


Discussion: Darius: Because half of our reports weren’t finished last year


Darius moved that each Director (except Darius and Lucas) will select one GP or BGM policy to monitor. If a director does not choose a policy to monitor, the president will chose one for that director. Each director is required to monitor – failure to present an acceptable monitoring report for a scheduled period will be treated as an unexcused absence for the purpose of removal of directors. The reason for this is that monitoring our own performance and compliance with our own rules is an aspect of due diligence required by Policy GP7, our bylaws, and California law. Any director who fails to do their duty thereby harms the Board as a whole.

Julie seconded

Motion carried unanimously


Darius moved that at the period for reporting, the Director for that Policy will put forth a “reasonable interpretation” of that policy and as much of a monitoring report as possible. If there was a report in previous years, the director should compare and contrast as much as possible. In cases where a true report would be difficult because data was not collected, the Director will outline what data will be collected in the coming year for the next report. The Director may also suggest changes to the policy. The Director will report if the Board is in compliance, broken down by subsection of each policy. If the Board is not in compliance, the director must present an action plan or policy change suggestion. Any lack of report on a particular policy or subsection of policy will be deemed non-compliance.

Janie seconded

Motion carried unanimously (Jack absent)


Presented: Darius presented 6.5 Motion: form West Davis Task Force

Discussion: Julie: Effectively voting to give money and GM time to provide competition to us. We’ve already done 3 studies. Danyal: Already done this. Doreen: Don’t feel there’s a possibility. Maybe in the future, but not during the renovation, create hope for unrealistic possibility. Darius: We said not now 9 months ago. We’ve done some of what we needed to do during renovation. Now it’s time to pay attention to this request. About member linkage. At least send someone to their meeting to represent the board. Do 3 authorizations as separate motions? Janie: Small vocal groups needs to be balanced against rest of membership. Jack: 77 people showed at West Davis meeting. Don’t think they’ve been listened to. Doreen: If there is board interest, go in with long range plan. Eric: Long term – not this shopping center. Different location, maybe. Steve: will lead task force. Pursue out of sense of member linkage. Lake Blvd has failed 3 times. Landlord doesn’t want to keep it as stores. Doesn’t make sense in 2008, but there are coops with similar size with 2 stores. Julie: We have trouble speaking with one voice. I don’t feel this resolution and this task force will lead us to speak with one voice.


Darius: Amending motion – frame this as member linkage and Strategic planning. Darius will rep. board if no motion. Darius, a board member needs to have more than to be accountable without guidelines – esp. when there isn’t consensus.


Darius: Withdraw motion, and substitute motion


Darius moved that a “Strategic planning task force” with Steve as lead is hereby formed with authority to spend $1000 to understand what the Board’s duty regarding strategic planning is and to create a plan for bringing the Board in compliance with that duty. The Task Force shall present a plan regarding West Davis issue at the November meeting.

Julie seconds.

Motion carried unanimously



Presented: Jack presented 6.4 Motion: directors pay for 2007 election flyer

Discussion: Doreen: in hindsight, all is 20-20. Mailer for election & postcard seemed fine, next mailer seemed extraneous. But at time, it felt important to communicate more with members, comprehensive. Letters, articles, ads, website, etc. Also consulted attorney. Felt obligation to communicate unanimous decision to members. Don’t feel the need to punish selves retroactively. Julie: Decision was made in good faith. I’m offended by this motion. Steve: My intention is not to punish. But we don’t want to make this decision again. Hurt member linkage. Avoid future mistakes. Jack: Berkeley Food Coop ran into ground by board. Use corporate funds to support agendas. Over the top. Mailer caused some members not to vote for initiative. April: Could have been a more pro-active motion, not stated as reprimand. Darius: overtime. Call Jack, keep discussion going beyond meeting. (Lucas arrives 9:37.) Debbie: Hears all parties. Other ways to go about this. Rewrite policy instead of this motion. Doreen: Yes, avoid in the future. The money is reasonable for good advertising. Darius: Call the question.


Jack moved that Pursuant to DFC election policy (2.6) Use of Mailing Lists. The Board will direct staff to grant candidates, or proponents or opponents of ballot issues, access to the Co-op’s mailing list in conformance with California Corporations code Sec. 12600. Mailing material to the membership for such a person shall be at that person’s expense.

And whereas the DFC board spent approximately $5,793.35 of DFC funds for the renovation mailer in May of 2007. The 2006-2007 DFC Board members and alternates (Winston Berger, Daniel Berger, Julie Cross, Jared Davis, Deborah Eernisse, Lucas Frerichs, Danyal Kasapligil, Darius Pazirandah, Ben Peal, Doreen Pichotti, and Joy Rowe) are asked to voluntarily reimburse the DFC $526.67 each.


Steve seconded

In Favor: Jack, Steve

Opposed: Janie, Debbie, Julie, Lucas, Doreen, Danyal, Darius

Motion failed


Presented: Jack presented 6.7 Motion: modify Bylaws Task Force authorization to allow $3,000 rather than $10,000.

Discussion: Julie: worth spending money to get good opinions on legal documents, even if we don’t go as high. Jack: how much already? Darius: 3-5 thousand. Lucas: Hit limit, then come back? Darius: If emergency, I’ll take flack. Doreen: Couple big bills. Force you to get est. in for meeting. Jack: Big deal ‘cause already spent $5000. Lucas: seeing a pattern that past managers & board went astray and need to be reigned in. Jack: That’s interp. Darius: No task force gets $3000 w/o budget list, proposal. Lucas calls question.


Jack moved that the authorization for the Bylaws Task Force be reduced from $10,000 to $3,000

Debbie seconded

In Favor: Jack, Darius, Doreen, Deb

Opposed: Julie, Lucas, Steve

Abstained: Janie

Motion carried


Presented: Approval of Minutes – August 2007

Corrections: Page 2, Motion: Janie nominated Julie

Page 11, Darius was opposed, therefore motion failed

Darius: remove Attachment A Letter. Don’t want to attach letters to minutes. Jack: I read it into record. Darius: I’ll drop it and think about it.


Doreen moved that the August minutes be approved as amended

Julie seconded

Motion carried unanimously


Presented: 6.9 BGM1

Discussion: Darius: There was alleged impropriety by GM; board pres. Went to staff to investigate. Controversial. Concern: this reads as though directors can’t go to staff or GM. Julie: Investigation was director saying do this. Delete second to last sentence. Lucas: will revise and resubmit.


Presented: Eric presented a letter from Pachamama Coffee requesting a 20 minute presentation at the October meeting requesting a loan from DFC

Discussion: 6.2 Pachamama Coffee Coop – Davis based owned by farmers in Cent & S. Amer. Requesting help for starting capital. Read letter and put on for next month. 20 min? Doreen: Too long? Decide without presentation, letter only? Eric: Don’t think they desire presentation. Lucas: precedent says presentation. Jack: 20 min is too long. Send proposal to management, summarize & send to board. 5 min for questions. Steve: 20 min too long & too short for analysis. Julie: This organization meets at least 3 of our ends. Meet at 6:30? Janie: Provide with materials, then Q&A. Doug: Thaleon will go to a lot of trouble. Positive step, 20 min presentation not good use of board’s time. Darius: get info, do homework outside meeting, debate here. Spend meeting time to argue.


Darius moves to have presentation outside meeting & put loan request on agenda in Oct.

Danyal seconded

Motion carried unanimously


Presented: 7.1 Discussion of alt funding.

Discussion: Doug: Raising max shares means educational challenge. Will be objections. Phrasing has problems. Always hated class B shares, member loan prog., but can do it. Optional makes it less of a challenge. 2300 $300 members, some may object. Julie: Class B shares would get more $, do this first? Jack: Debt financing member loans are for short term use, ex) equipment loans. Equity is long term, doesn’t go away, like debt. Julie: Harder to sell class B shares? Jack: Raise member shares (don’t cost us). Not an either or. Eric favors class B shares. Eric: Sac raised member shares & people resigned. Doreen: People are sensitive. Jack: Members voted before 2003 to raise to $400. Doug: But vote was really an “if this, then we’ll raise shares”; 1999? Doreen: Need to assess current climate among members. Seth: put this on survey currently being composed. Keep communication going through newsletter. Do one at a time. Darius: Ask membership what they think. Board has authority to waive requirement to invest more shares. Liberally grant waiver, make it binding on future boards. Doreen: still $20/ year. Steve: Can offer opt out option. Maybe get more money at end of the year if paid up. Like class B. Rich community. Beth: If raise, one time opt out for already at $300, not for new people. If not fully paid up, no opt out option. Lucas: Sac food coop was forceful. Pay it now, not $20 a year. Jack: need task force eventually.


Presented: CCMA review. Doreen: Beneficial, feel part of larger movement. Great workshops. Key points: strategic planning at every meeting, Lawrence Kansas online survey very successful, Superwork facilitator for every meeting (not involved in discussion), inviting specific people to attend annual meeting – people who showed interest, organic valley passed out a new food pyramid. Lucas: number of young people great. Young people starting new coops around country, willingness of est. coops helping new ones. Julie: Encourage people here to present. Same presentations over and over. Amy on newsletter perhaps? Ethical responsibility workshop great. Debbie: half meeting strategic planning. Lots of coops don’t have superworkers. Organic Valley – really impressive. Pres. Asked each person if prepared. Doug: sense of movement, valuable. Workshops, consumer research findings really interesting. Portland this year, close. Second week of June, (12, 13, 14) 2008.


Meeting Evaluation


What Went Well?

Doreen: kept well to agenda despite tough stuff Debbie: take 30 seconds to say it was good. Julie: don’t need to record it.


Upgrades


Next Meeting –

Facilitator: Julie

Time Keeper: Lucas

Recorder:


There being no further business to come before the meeting, it was adjourned at 10:30 p.m. by a motion made by Julie , seconded by Darius, and passed unanimously.




/s/ Julie Cross, Secretary


__________________________________ ______________________

Secretary, Davis Food Cooperative, Inc. Date Approved



September 2007 Minutes Approved