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Wheatsville Board of Directors

July 8, 2005 Monthly Minutes (Approved)

Present: Johnny Livesay, Jimmy Robertson, Colin Borchert, Ryan Vanstone, Shari Holland, David Pease, Jane Kurzawa Cravey, Rose-Marie Klee
Absent: Bob Kinney
Also Present: Dan Gillotte- General Manager, John Perkins- Financial Manager, Shri Yannam- Future Board nominee, Maria Vilaboy- Fundraising Coordinator

Meeting brought to order at 6:10 pm

Agenda Items:

• Approve June 3rd minutes, talk about renovation and meet fundraising coordinator Maria Vilaboy,
• approve final version of expansion plan and member financing program,
• formally adopt policy governance as a board tool and create calendar,
• approve the budget for FY 2005-06,
• talk briefly about the CCMA meeting,
• monitor GM policy D14 (Expansion and Renovation Policies),
• receive the GM monitoring reports, board meeting self-evaluation

Open Time:

• Although there were no visitors requesting open time, the board decided to talk about a few things with Dan informally.
• Jane queried Dan as to how to handle suggestions/comments she had. Dan said he prefers getting it via email, or at the store, as a member. Also, the floor managers can help you with any questions or concerns. As said in the Gessner sessions, don't expect an outcome to anything you say in this capacity.
• Shari noted her disappointment at the "bicycle" issue of the Breeze a couple months back. She said that it was strange, since we're going through a huge expansion project and are about to ask people for money, that we spent almost a whole issue on bikes. This started a small discussion as to what the Breeze is. Is it a board tool for communication/member linkage? Rose-Marie commented that she wanted the board to submit more to the Breeze. Dan said that the bike issue is only once a year for Bike Month, and he likes it and thinks it is appropriate.
• Jane announced that Shri has agreed to run for the board. Ryan said that he is planning on running again, so that means we are now covered, but Jane is still trying to get another nominee or two.

HOUSEKEEPING:

Agenda Review: No changes were made to the agenda at this time.

Announcements: None

Approval of Minutes:

• The board suggested no changes to the June 3rd minutes.
• Jane moved to approve the minutes, Rose-Marie seconded. The motion passed 8-0-0.

GOVERNANCE:

Renovation, Lease Negotiation, and Fundraising--6:22 pm

• Maria Vilaboy, the fundraising coordinator for the expansion project, was present at the meeting, and introduced herself to the board.
• Maria and Dan talked about the recent email they received from Zach Brady, a co-op attorney, about our member loan drive. He delivered the unfortunate news that, in his legal opinion, Wheatsville must either register the loan drive with the State Securities board or restructure the program into an investor share or "preferred stock" program.
• Shari asked how long Zach had been working with us. Dan replied since April, and only discovered this problem last week.
• Jimmy wondered if we could do the registration ourselves. Contact someone in the State Securities office (which is probably in Austin) and figure out how to do it.
• Jane reminded the board that there is always option 2. Shari replied that we don't yet know what bylaws need to be changed to do this. And even then, we'll need 400 votes in the next election, which is a delay of at least 3-4 months.
• Shri asked if there were a limit to the investor shares option. Jimmy and Dan replied that we could sell $100 shares up to a million dollars. Also, there'd have to be fixed return rates on the investor share plan, instead of the flexible options offered in our member loan program plan.
• In weighing options 1 and 2, Colin felt like there might be a psychological difference between a member loan drive and an investor share drive. The former is more grassroots, and highlights community and our need.
• Maria went over the details of cashing in the existing investor shares and converting them into member loans. She reported $18,000 promised already, and she has only gotten a hold of 5 of the 18 members with investor shares. She reported a very positive attitude so far from the members.
• As for the member loan drive, they have 500 people picked, based on criteria such as oldest active members, top shoppers, top donors in the past, etc. Those 500 people will receive a letter about the renovation/expansion and the member loan drive, and then will receive calls.
• Jane asked Maria if she could explain any self-evaluation safeguards they have put in place during the calling process. Maria said they'd evaluate every 10 calls or so to note what works well and what doesn't, but that she's already been doing that with the investor shareholders and plans to do it constantly throughout the calling.
• Maria talked about the "Imagine" signs being placed around the co-op, to further excite and educate members as they're shopping.
• As for the staff, Maria explained that an FAQ on the renovation, expansion, and loan drive has been handed out to the staff so they'll be able to adequately ask member questions.
• The board went into executive session at 6:50 PM to talk about the lease negotiations. All discussion in executive session is confidential and not included in the minutes. At 7:05 the executive session was ended.
• Dan handed out a very preliminary schematic made by Antenora Architects, and discussed some of the features they had been talking about. Ryan had some concerns about the back area, and would it be enough. Dan said not to trust the numbers on those drawings. He said the space would definitely not be less than it is now. He said it also wouldn't increase that much, but it will be organized and distributed better.
• Jimmy felt like the preliminary designs are not pedestrian friendly enough. He would like to see the store being approachable from the sidewalk.

Note: The agenda item on approving the final expansion plan and member financing program has been postponed for one month pending investigation into how we will handle the legal aspect of the member loan drive.

Formally Adopting Policy Governance as a Board Tool--7:20 pm

• Shari moved to adopt policy governance. Rose-Marie seconded. 8-0-0.
• From there the board began discussion on how to tackle all the revision work necessary on the policy to make it compliant with policy governance, as well as internal monitoring of the board policies on a calendar.
• There are 3 A policies, which are "ends policies" and deal with the big picture vision of the board and co-op. There are 12 B policies, which guide the board on how to govern. We should start there.
• After considerable discussion on the time limitations at the present meeting as well as limitations at the next board meeting, it was decided that the Policy Committee would meet a few times and get things organized, and then the board would have a special meeting in August a week after the regular board meeting. It will be 2 hours long; 1 hour spent on developing policies, 1 hour for other things.
• The regular board meeting will be on August 4th, and the special meeting will be on August 11th from 6-8 PM. The Policy Committee consists of David, Shari, Johnny, and Colin.

Approving the Budget for FY 2005-06--7:37 pm

• Dan talked a bit about how he projected the labor costs. Dan queries the management on what they think the costs and labor will come out to, and then John and Dan evaluate their figures. Since projections can be difficult due to the renovation and construction, Dan told the management team to project without considering the renovation at all, and then Dan and John will create a separate renovation budget.
• He noted there is a big increase in the personnel budget for the year, but Carolee Colter had recommended it, and Dan has long felt that this was an area that was neglected. The co-op saw great numbers last year, but at the expense of their managers, who have been working really hard. Thus, some new positions are being created. There will be a marketing assistant, a stocking supervisor, and a personnel adminstrator. In addition, Aldia will become the Marketing and Member Services Director, and Bill and Margaret are also stepping into new larger roles and titles. Besides the higher-level increases, there was an increase to the entire wage scale.
• Jane asked if the board could see the wage rates, just for our information. Dan said sure, and will include it in the next board packet.
• Jimmy asked what our lowest paid employee is right now? Dan said they begin at $7 to $8, with a review after 3 months and a $0.25 to $1.00 increase, and then 6 and 9 month reviews with similar possibilities for increases. Jimmy noted that this improvement is very appreciated by the board, as we all want Wheatsville to be a place known to be good to their employees.
• The board began talking about what livable wage is in Austin. David said it is currently $10.61. Shri noted that benefits are not included in livable wage, so that probably boosts most FT Wheatsville staff positions to livable wage.
• Shari noted that the board can write policy saying the GM should move toward providing a livable wage to all employees, if we want.
• Jimmy moved to approve the budget. Johnny seconded. It passed 8-0-0.
• Dan noted that two places in the financials were not filled in yet: staff bonuses and taxes. Dan then requested from the board $30,000 for staff bonuses. He said this is in addition to the mid-year bonus. He feels that this is necessary and will boost staff morale right before a difficult time.
• Most of the board was ready to accept Dan's request, but Jimmy had some reservations. He noted that we're about to enter a phase in which we'll be very short on cash. In addition, Bob is not here to weigh in on this.
• In light of Jimmy's reservations, the board decided to wait until August to make this decision. Dan can use any estimates he wants until then.

Follow-Up on the CCMA Meeting--8:01 pm

• On the topic of the board's contribution to the member loan drive, Jane reported that she talked to other co-ops who had successful loan drives without the board giving the 10-15%.
• Colin felt like Gessner's directive was to force us to go through what every member must go through, but was not fatal as he predicted. Shari felt that this should not deter the board from trying to meet this goal, because it would be a tremendous help to our efforts. The board talked about this for a little while, and then the conversation fizzled without resolution.
• Dan said he added co-op values added to the website.
• Colin asked if the co-op values would be put on the WV windows. Johnny said he wants to do it, but is unsure yet if it will happen.

GM, Staff, and Committee Reports--8:11 pm

• As for the special meetings that Dan requested the board be open to, he said things are OK right now, but if something comes up, he wants us to be open to quick special meetings so we don't have to wait a month to approve very time sensitive developments. The board felt like this was definitely reasonable.
• Dan wanted to announce some major developments that he had discussed with the Finance Committee recently. It looks like University Federal Credit Union is now able to do loans over $100,000, and wants to partner with us in the project at a low rate. It would be a promotion: co-ops helping co-ops. In addition, the UFCU will start doing newsletter articles for us about things like how to get loans and other basic financial information.
• There is also the possibility of a Wheatsville brand credit card. We'd split the 1% with the UFCU. They are checking into the potential profitability of such a card.
• Also, in September, the UFCU will have business services so we could go to them for all our banking in the near future if we wanted.
• Dan said the UFCU was also starting to open branches in South Austin, and they may want to start discussing the possibility of a joint Wheatsville/UFCU location down south somewhere.
• The board responded with excitement and gratitude.
• The Nominations Committee had a few things to report. Johnny is putting together a board application for potential nominees that would include many questions just for board review, as well as the questions to be put in the Breeze during the election. He is also creating a handbook for nominations, so the board will have a guide to the election process set in place for years to come.
• The basic idea now with elections is for the board to review all of the nominees, and choose which nominees will be voted on in the general election (if there are far more nominees than spots).
• Jimmy queried as to whether a UFCU employee might want to run for the board.

Monitoring GM Policy--8:25 pm

• The policy being monitored this month was D14, regarding renovation and expansion projects.
• Dan noted he would update his answers to this policy throughout the renovation project.
• In policy D14.9, the word "move" was changed to "project" for accuracy.
• In policy D14.3, the phrase "to be less than" was changed to "to be more than" for accuracy.
• There was discussion about the passive, negative language in the policy. Shari thought that it was not only awkward, but inaccurate. She felt this in particular with the language in D14.8. The board in general felt like the language should be changed.
• Rose-Marie moved to discuss this at the special policy meeting. David seconded. It passed 8-0-0.
• Johhny moved to accept the GM report on policy D14. Shari seconded. It passed 8-0-0.

GM Evaluation in August--8:36 pm

• Evaluation forms were given to all of the board at the meeting, and are due back July 18th in a sealed envelope.

Agenda for Next Month--8:45 pm

• Since Bob was not at the meeting, the board decided to go over the agenda for next month briefly to help Bob out:
• Board Evaluation for roughly 2 hours
• Approving the Member Loan Program (if enough legal information has been decided upon)
• GM Staff Reports and Wage Schedule (both Incidental/Informational)
• Approve/Deny Staff Bonuses
• An action item on Dan's purchasing power (if Dan requests a specific dollar amount)
• An action item on having an audit every so many years.
• Committee report by Membership Committee for Grow Wheatsville! Concert.
  

Board Self-Evaluation -- 8:50 pm

Plusses:

• People aren't afraid to disagree. We're open to difference.
• Although our PoGo will refine, we were pretty much on task..

Minuses:

• Johnny didn't feel prepared as a facilitator
• Shari thought we spent too long on the Expansion topic, since it was all supposed to be simply informational, not an action item.

Rose-Marie moved to adjourn. Jane seconded. Motion passed 8-0-0.

Meeting adjourned at 8:54 pm