January 3, 2018 at 11:18 am #4150January 3, 2018 at 8:51 pm #4183Garth ShaneyfeltParticipant
Thanks for sharing the survey results. I will try to attend the BOD meeting as well; hope there is a good facilitator!January 4, 2018 at 8:24 am #4187William SeibertParticipant
We made a deal. You’re unable to keep it.
Please give me a refund, like in the adult world.
5212January 4, 2018 at 8:33 am #4188Garth ShaneyfeltParticipant
The Coop is based on voluntary membership. If you don’t want to be a member anymore, you can indeed get your membership investment back. See Customer Service. Since you are such a greedy & unpleasant human I for one am happy to see you go.January 7, 2018 at 9:20 pm #4202Gary SeldonParticipant
This is an effort to share some of my thoughts and concerns regarding the “Replace 2% Member Discount with Variable Member Discount” agenda item scheduled for a vote at this Wednesday’s January board meeting.
The board has prepared a draft motion as follows:
“The Board agrees to eliminate the 2% discount in favor of variable member discounts and authorizes the General Manager and authorizes the General Manager to implement the change. The change will be implemented sometime after the annual meeting and no later than July 1, 2018, P&BRC is charged with bringing policy recommendations to the Board reflective of these changes.”
I am neither firmly in favor or opposed to the discount changes we are considering.
I am firmly opposed to deciding on the discount changes we are considering at our January Board meeting rather than at our Annual Meeting in March.
My math shows our FY 13-17 losses at 956K. There is no doubt in my mind that we have a problem that needs to be addressed. I question whether eliminating the 2% discount in favor of variable member discounts is an option we want to pursue.
Our FY 18 budget shows 123K for the 2% discount. The budget projects a 58K net income improvement with the discount changes we are considering. The 65K difference between the numbers is due to investing that amount into the additional variable discount programs.
Using FY 18 budget numbers I’ve estimated how the discount changes we are considering, might have affected our losses if they had already been in effect during the FY 13-17 time period. This shows a 30% improvement to our losses, they would have been held to 666K. If we eliminated the 2% discount without investing 65K/yr. into the additional variable discount programs, our losses would have been 64% better, holding losses to 341K.
The discount changes we are considering are not adequate on their own to resolve our financial problems, but they certainly would address a substantial chunk.
I perceive the primary means our co-op is undertaking to regain financial security are represented in the changes we’ve seen at McCusker’s over the last couple years, and the GFM expansion possibilities that we are exploring.
I have concerns/questions that may be in the think globally act locally category. The degree to which the global economy is horribly unjust cannot be overstated. We of course are just a drop in the global economy bucket. Would the discount change we are considering be a drop in the bucket that helps or hurts efforts to heal/remedy economic injustice?
Currently, with our 2% cash register discount we distribute 123K among all members who choose to make purchases. If the proposed changes are implemented, 58K of that money would go to the members who choose to make purchases of products offered in the new variable discounts, and 65K of that money would be invested (is this primarily advertising costs? labor costs?) in additional variable discount programs.
Is this a change that supports fairness and justice?
Do we say that it isn’t, but that it is a compromise we need to make in order to survive in this economy?
Do we want to trade savings on food based on across-the-board equity, for savings on food based on specials and advertising?
The Board decided to act on possible discount changes at the January meeting. While I affirm that the Board made that process choice with legitimate authority, I disagree and would like to respectfully offer some of my minority opinion.
At last year’s annual meeting, members were told there would be a year-long consideration of our discounts, voting on the discounts in January would short circuit that process. I think it would be more appropriate for this decision to go to the membership at this year’s annual meeting.
The $175 membership stock purchase price, and the 2% cash register discount, are the two basic elements of the membership deal offered. They apply to all who become members of our co-op. Changing either certainly seems like a momentous Co-op decision.
Our bylaws make it clear that stock price is set by a majority vote of the stockholders at a membership meeting, and that the board has authority to set the discount structure.
The McCuskerʼs Decision-Making Process Resolution was approved at the ’08 annual meeting. With that resolution, the membership strongly recommend that momentous decisions be made in as open, democratic, and transparent a way as possible, such as at a Membership Meeting.
It seems entirely possible to me that the proposed discount changes could be considered and decided by the membership at this year’s annual meeting. I think it would bring more health to our co-op’s democracy.
Thanks for reading, sincerely, GaryJanuary 9, 2018 at 8:03 pm #4223George TouloumtzisParticipant
In the spirit of the cooperative ethical values of “honesty” and “openness” that are incorporated in our Ends policies, I appreciate this Member Forum as a place for the expression of frank differences and debate. In the spirit of the cooperative ethical value of “caring for others”, I hope that we can extend kindness and respect to each other while we engage in these discussions.
here’s to a gentler world, George T.January 10, 2018 at 3:25 pm #4227Jeanne DouillardParticipant
The following is another perspective on GARY’S POINTS from another board member.
Many thanks to Gary for his well thought out missive.
From my perspective, the BOD has several options to address the financial situation we find ourselves in.
1. Eliminate ALL discounts – the Coop would be in very good financial shape.
2. Eliminate the 2% fixed discount and all “at the register” member discounts and rely only Patronage Dividends. This would be a significant help, for the entire discount amount would go directly to help our bottom line.
3. Eliminate the 2% fixed discount yet retain some “at the register” “member-only” discounts. This is the solution our coop board has adopted. This will be some help to our bottom line but does not guarantee a positive net income going forward, since we need to spend money in order to account for the “sales.” This option is an important start but not the total solution. The most important factor in achieving consistent positive net income is lower prices and increased sales, something the expansion will hopefully help achieve.
From Gary: “… 65K of that money would be invested (is this primarily advertising costs? labor costs?) in additional variable discount programs.”
From Jeanne: Sales to shoppers, and in this case, primarily “member sales” will come in varied ways. I am not the GM and cannot speak for him on this question, but I can’t see where the primary cost to the coop using “other type discounts” will be in “advertising and labor costs – some for certain, but exactly how much? I would think it would be quite low.
So where would the money go? A 10% discount on all bulk items means the money comes directly from the co-op’s bottom line. But stores can also negotiate with vendors for better deals. Special prices on local items will also have to be negotiated with local producers. I don’t understand how a change such as we are considering “does not support fairness and justice.”
From Gary: “Do we want to trade savings on food based on across-the-board equity?
From Jeanne: Member savings on “across the board equity” means the members are helped, but the co-op is not helped. When a business is consistently showing a positive Net income, giving fixed member discounts is not an issue. But this is not the situation we are currently in. As Gary noted, “My math shows our FY 13-17 losses at 956K. There is no doubt in my mind that we have a problem that needs to be addressed.” To me, Jeanne, it is clear the coop business is not helped when the business gives money away before it knows whether or not it has made money. We’ve found ourselves in this situation for 5 years now.
From Gary: “At last year’s annual meeting, members were told there would be a year-long consideration of our discounts, voting on the discounts in January would short circuit that process. I think it would be more appropriate for this decision to go to the membership at this year’s annual meeting.”
From Jeanne: The decision has already been made and agreed upon by the board. This is not a topic for tomorrow night’s meeting. From my perspective, this decision tomorrow night is a part of the “year long conversation” by the board. It does not end tomorrow night. More information will need to be shared with members and more decisions made as to exactly how and when this will play out.
From Gary: “The $175 membership stock purchase price, and the 2% cash register discount, are the two basic elements of the membership deal offered. They apply to all who become members of our co-op. Changing either certainly seems like a momentous Co-op decision.”
From Jeanne: Sometime around when the co-op decided to move to the Main Street location, the 5% discount which had been promised to members was changed to 2%. It is my understanding that this was a board decision at that time. The coop business has changed significantly in the past 10 years and this is one decision of many that need to be considered when dealing with these financially challenging times.
From Gary, “The McCuskerʼs Decision-Making Process Resolution was approved at the ’08 annual meeting. With that resolution, the membership strongly recommend that momentous decisions be made in as open, democratic, and transparent a way as possible, such as at a Membership Meeting.”
From Jeanne: Thankfully, we are beginning to see a turnaround at McCuskers. Can we wait another 5 years (for the expansion will certainly take at least this amount of time to show results) before we address the real financial issues we are facing today?
From Gary, “It seems entirely possible to me that the proposed discount changes could be considered and decided by the membership at this year’s annual meeting. I think it would bring more health to our co-op’s democracy.
Jeanne: Over the past two years, the board has spent hours and hours looking into this very complex issue. The board has spent a great deal of time considering this topic, especially this past year (see the “From the Treasurer” blurb in the December New Beet). I am not saying the members would be unable to understand the problems we are facing, but it would take enormous time and effort, and I for one cannot see how it could be done. While the BOD felt it essential to communicate and confer with ownership on this issue (and rightly so), we have concluded (based on the language in our bylaws) that it is the BOD’s responsibility to make this decision as elected member representatives. The Board is ultimately responsible for the financial health of the coop.
From Jeanne: There is another thing we have not spoken about but it is tied to a decision being made at this time, and that is: “What happens when we approach the bank for money to support our expansion effort?”
The discount question and the expansion have not been conjoined in our discussions, and I believe this is a good thing for we might give the impression that the expansion cannot go forward without a change to our current discount structure. From my perspective, this is not so. However, I believe there is a connection. To my mind, here’s how the 2 issues are connected.
1. How will the bank consider our request for money for expansion when they look at our bottom line? We have had significant losses in the last 4 out of 5 years and even though we had a positive net income budgeted for 2017, we still experienced a net loss of @($100,000) in 2017.
2. How will the bank view our financial picture when they see that we are still giving discounts to members in the years of big losses? This is a very important consideration here. We will be able to point to the significant reductions we’ve made in operations in the last few years, but will they ask for more? If they see that we are making even more efforts to help our bottom line, will they be more willing to give us a good interest rate on the loan?
Thank you for reading these points and considering them in your decision making. Jeanne Douillard
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