Phoenix Earth Food Co-op Board minutes from emergency members meeting on 7 August, 2008 (revised 8/12/08)

(98 people in attendance)

Meeting began 7:08pm

Amy opened mtg and introduced directors present

Mtg parameters set:

Stay focused on economics
Any brainstorm ideas will be written down and addressed at a later time
If anyone feels discussion is out of order, they are to say Point of process

Current financial situation explained:

Sales declining

1st qtr down 14.8 %
2nd qtr down 17.5%
3rd qtr; not looking good

Manager's illness has affected her ability to increase sales
$ needed to get out of the red:

$44,000 total (negative cash flow)
figure does not include Jackson loan
$25,000 is owed to NCGA
Balance owed to other creditors, loans, etc.

If co-op goes bankrupt other co-ops will be financially responsible
Due to default on loan, store must order COD

Question(Bob) ie. 14 days to pay/ addressed

Explanation given for resignation of GM

Remedial measures taken so far:

inventory reduced
rent and other bills have been renegotiated
labor has been reduced

What is needed?

$45-50,000 raised in capital
store must be profitable
must have a board willing to commit to approximately 6-10 hours/week for at least one year

Plan to achieve what is needed

Prices to increase between 4 & 10 %
Sales to increase by an average of 33%
Orders will be paid in advance

Pledges:

tonight a pledge of $50 with no guarantee of return
- will be used to repay loans to which Helen is signatory
within two weeks a pledge of $200 to be paid no later than Dec. 31, 2008
- this money will go in escrow( to be used only if store stays open, otherwise to be returned to donor

Idea-(Claudia Cooper) Should we set our goals higher?
Idea- (Ron Koester) 10% surcharge to non-members

Equity and Patronage

explained by Amy
currently membership dues used for operations leading to no equity

If all of above is accomplished:

2nd qtr of 2009, we will still be $28,106 in the red

Comment: (Bob) If we raise prices, will more people shop at Kroger?

Ques: How can we increase membership?

Manager

need mgr with skill to turn store around
salary would be contingent on performance
need mgr to be in place within 2 months

Idea: Use volunteers; comment ( volunteers still need supervision)

Need board leadership

to oversee mgr
leadership that will educate themselves about co-ops

Time Line

$50 donation within next 2 weeks
Capital pledges ($200) by August 22
Board applications by August 15

Explanation of Jackson family account(Sandy)

$40,000 loan was given to cover startup of co-op
Intention by loaner was for co-op to pay interest only
$46,080 has been paid in interest over past 17 years
$34,327- long term
$2800 - next twelve months
Loaner has passed away
Family has chosen to maintain debt rather than forgive it for interest paid

Ques: Has anyone looked at the possibility of bankruptcy with ensuing startup of new co-op?

Advantage - loans available for new start up

Comments, Questions, Ideas

(out of town visitor/former member) Have we thought about the heart of the coop?
( Washington state) How about orders versus stock?
Is there a way to be a non profit? Answer: In Ohio co-ops may not be nonprofit
Could someone design a letter that members could send to businesses for donations?
Would bankruptcy solve lack of patronage?
Is produce local? Answer: As often as possible
(woman in back row) Coöperative vs club?

possible recommendation from board tonight
vote tonight to go equity? (Amy responded to equity)
brainstorm about 501C3?

Are we going to fish or cut bait?
(Helen) Don't think we can go bankrupt and reopen (not realistic)
Amy responded: tonight is about Stay open or close
Who is the co-op going to attract? Needs to be a "one-stop shop"
If 40 other co-ops are responsible, Have they been consulted?
(Carol) 110 co-ops strong—big ques, value of co-op
Phoenix smallest—negative retained earnings
History of co-op for Blade