Whole Foods Erie Co-op Board of Directors
MEETING MINUTES
May 26th, 2021 / 5:30-7:30pm
*Online Zoom meeting***; *L. Nieratko, GM (Host)***
Attending: President - Shari Gross, Vice - President - Alison Kaminski, Secretary - Kevin Schaaf, Directors: Derek Golembeski, Freda Tepfer, Amanda Gates
Absent: Treasurer - Michael Barron
Staff Personnel: General Manager- LeAnna Nieratko, Human Resources - Natalie Conway, Jess Royer - Front End Manager (Board Learning)**,** Board Assistant - Alethea Bodine
Guests: Liz Bugbee, Varun Shetty
Introductions:
It was mentioned that K. Schaaf will be responding to inviting guests to virtual meetings moving forward. The President introduced the board and guests, allowing time after for comment from guests in attendance.
Comments: Both member owners - one older (Liz), one newer (Varun) - expressed gratitude for having the opportunity to attend.
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ADDENDUM: Summary of movement from May 14, Work Session Meeting:
S. Gross proposed the following resolution for board review:
The Board of Directors of the Whole Foods Cooperative, having completed more than one year of study regarding the matter of a proposed downtown store, resolves the following:
Whereas the Board has directed the General Manager to implement a plan to increase the affordability and access to food at any WFC current or future location; and
Whereas the project is determined to be in alignment with the Whole Foods Cooperative Ends policies; and
Whereas the WFC and EDDC have reached mutually acceptable language with regard to a Lease Agreement, including that the proposed WFC downtown store cannot move ahead without raising the necessary amount of capital;
Therefore the Board of Directors authorizes the General Manager to execute a Lease Agreement with the EDDC and to initiate a campaign to raise the required capital to start up a downtown store.
**M. Barron motioned for a board vote. D. Golembeski seconded. F. Tepfer voted against the motion; all others voted in favor. Motion passed by a majority vote of 6-1.**
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MEETING AGENDA:
Review of April minutes; Secretary
Edits were suggested. A. Kaminski asked that edits be highlighted in the future for consideration.
Motion was made by D. Golembeski to approve the April Minutes as corrected. K. Schaaf seconded. All were in favor. Motion passed.
Treasurer Report; Treasurer - not present
L. Nieratko shared that all information from the Treasurer's Report will be included in her reporting.
GM Reporting; GM
FYIs
Sales for April were up 1.5% to last year at $380,896. This is with traffic up 48%. Dramatic increases in traffic are anticipated with the continued re-expansion of the café.
Net income for April was -$25,755. This is in part due to the bi-annual property tax payment which came out at $16,958 but does get partially reimbursed by Summit Dental. Payroll was high at 25%, though it was offset by better margin performance, the difference in our margin-minus-labor (MML) plan was -$5,136. While this number will need to be reduced in general, some of what impacted this metric in April was onboarding six (6) new employees as well as covering COVID leave.
Member Owner Update:
Due to the POS switch, our normal system of reporting continues to be aligned. We do not have the complete updated equity for this month, but we did have (35) new member owners join in April, (48) in May.
Media: WFC was featured in the local Look Book, and had a segment on Newsmakers discussing the second store https://www.yourerie.com/newsmaker/ .
WFC was also featured in the Erie Times:
https://www.goerie.com/story/news/local/erie-next/2021/05/13/downtown-erie-pa-food-desert-whol e-foods-coop-erie-events-grocery-store/7220577002/
Donations: As of 5/4 we began donating out-of-date food or items with damaged packing 3x a week to Climate Changers. Here is a part of the organization’s description:
“The Total Change Program was born out of an intense desire to help reduce recidivism. Through one man’s experience having spent 18 years and 2 months in incarceration and a strong vision to help others through the process of re-entry into society, Fred Williams is devoting his time and life-skills to solve the critical issues facing ex-offenders.”
**COVID:** From 5/4-5/16 there were several members of staff out of work (3 positive COVID tests, and 4 quarantines). This was the result of an event outside of the Co-op. WFC worked closely with the Health Department and determined there was no reason to believe any spread had occurred on the store premises.
Discussion:
F. Tepfer commented that returning citizens might be a better term than ‘ex-offenders’. D. Golembeski asked about the addressance of an email regarding non-organic grapes. L. Nieratko did respond to the customer by clarifying that the language being used, in lieu of ‘organic’ - words like ‘conventional’ are
being used. This conversation will be continued during the May 30th 4-5 pm Open Session. The topic discussed will be surrounding Food Accessibility.
There was further discussion amongst the directors regarding the source of the foods purchased and sold by the WFC. It was agreed that part of the role the WFC plays in our community is not only that of provider, but also of educator. There continue to be several opportunities to read, attend and learn more about the food the WFC sells and how it is sourced.
Motion was made by D. Golembeski to approve the GM’s Report. A. Kaminski seconded. There was no further discussion. Motion passed.
B3 Financial Planning, including 6 month Business Plan (July 2021 \- Dec. 2021); L. Nieratko
When reading the Business plan, it is important to find compliance with the policy document. L. Nieratko then asked if she might present the Business Plan as a way of reporting for the July 2021 - Dec. 2021 period.
Business Plan
L. Nieratko presented some research data regarding foods and general shopping interests since the pandemic began. It was found that 33% of people do not eat fresh produce. WFC continues to educate people how to buy, store and use fresh produce. Frozen food sales are, consequently, up. Many people are eager to return to shopping in person, but online shopping was one of the biggest changes felt in the past year. The WFC continues to work toward building the online order service. People are also shopping less frequently, but buying more. In addition, government guidance has also fluctuated broadly, dictating changes in safety protocols - sometimes overnight - having repercussions on how and where people shop.
Food Service and Bulk Sales are still down significantly. The gravity bins are still not fully operational, as they were in March 2020. Nor are the self-serve aspects of the Cafe available. Sales have been soft to the business plan at the start of the year. These two departments have endured vastly different operating procedures than in previous years. In both cases, recent steps taken in an effort to get back to pre-covid operations has brought each department closer to originally projected numbers.
As the Board is looking to change the active shopper period to (5) years, there are 159 member-owners who are inactive in that time frame, representing $14,095 in equity.
WFC still plans to give raises while bringing labor:sales number down.
WFC is applying for a grant for parking lot repairs, which will undoubtedly be higher than projected - as it has been an ongoing issue. We will also be addressing kitchen floor repairs.
Member Sales for June will include a two week period - June 12 - 26 - for a $10 coupon for all sales above $50.
Motion was made by D. Golembeski to find the GM compliant for Policy B3 - Financial Planning with presentation of the Business Plan. A. Gates seconded. There was no further discussion. Motion passed.
B4 Financial Condition; L. Nieratko
We have an internal multi-part compliance plan towards net income. Much of the plan is outlined in greater detail in the accompanying Jul-Dec 2021 Business Plan.
Increase Sales:
The primary mode of securing operational financial stability is through an increase in sales. We are coming out of the pandemic restrictions, have a booked food truck, traditional operating hours and a lot of press. The situation seems ripe for growth.
Specific action steps:
● The relaunching of the much-loved bulk sale as well as replacing the gravity bins ● The participation in ‘Core-sets’ and sales programming through NCG
● The use of press coverage regarding the Downtown store to drive sales and traffic pre-opening Review and Revise General Expenses:
● A finance intern, Yonari Asgedom will serve the WFC for the summer. He plans to audit each expense category by line to find areas where cost can be reduced.
● A review of depreciated assets and record keeping in an effort to verify accuracy while making replacement plans
● A continued reduction in general expenses
A note on Labor: A significant amount of control expenses come out of labor. Management has built a more realistic plan for labor into the attached 2021 Business Plan, reserving the option to cut more aggressively if sales continue to stay at the current volume. Some administrative labor will shift to the Downtown location and not be replaced at 26th street. This will ease expenses for both locations.
Cash is healthy, but buyers continue to buy according to our member sales.
Discussion:
F. Tepfer asked if the percentages were relatable to the previous season. L. Nieratko responded that there was no real way to compare the deficit from the previous season to this season, as so many aspects of operations have been so drastically affected (ie. the Food Truck being removed from service, the Curbside Shopping Program, the disappearance of the self service aspects of shopping, etc).
She went on further to remind directors that the chart of accounts for the accountants versus our internal Quickbooks has some things classified differently which impacts our ratio results.
Motion was made by D. Golembeski to find the GM compliant for Policy 4 - Financial Condition. K. Schaaf seconded. There was no further discussion. All were in favor. Motion passed.
Board Policy Evaluation - D8 - Cost of Governance; Secretary
A. Kaminski asked that directors address the questionnaire she sent as soon as they are able, if they have not already.
F. Tepfer raised non-compliance with D.8.1,2 & 3; Board Candidates are not trained. A. Kaminski addressed her concern, raising that the Board Nomination Committee could address moving forward. L. Nieratko noted she has requested changes be made to this Policy to better reflect the BOD process.
K. Schaaf asked for information regarding this policy.
Motion was made by D. Golembeski to find the Board compliant for Policy D8 - Cost of Governance. A. Kaminski seconded. No further discussion was made. Motion passed.
Board Learning: Jess Royer - Front End Manager
Jess Royer, as the Front End Manager, feels very supported by the administrative and operational staff and therefore feels confident she can support the needs of her department.
In terms of members, the Front End is actively asking patrons more questions in an effort to make them feel more welcome to join. She has found that, over time, people have calmed down about pandemic safety protocols. There has been a recent backlash, surrounding the recent sudden change in CDC Guidance, but it was to be expected. Most people have been generally compliant. She is looking forward to a return to normalcy. She is also looking forward to being more proactive about creating less waste. She is excited with the upcoming new promotions.
Questions:
F. Tepfer asked how the new POS is working out. Jess responded that the new system is working out well. People are pretty excited about it.
D.Golembeski asked if there are any fun perks or swag for new Member Owners. H. Yeagle responded that they will be finding new swag from different Departments for new members.
Jess mentioned that perhaps in the new system, IT could program that new M/O might redeem a free smoothie or juice as a gift. F. Tepfer asked if members could still redeem their Beverage Punch Cards. Jess said she would do her best to honor any old incentive programs that people continued to try to use.
L. Nieratko added that as of June 1st, doubly vaccinated patrons will no longer be required to wear a mask in the store.
Other Board Discussions:
Board Budget
L. Nieratko shared that she applies the same percentage of Sales (6.3%) unless the Board votes on adding or removing items. A. Kaminski asked if any one had any reservations in creating a projected list of expenditures moving forward. This was tabled for the Finance Committee to address at a later date.
Address Board Vacancies: Nominating Committee; A. Gates
The only people that have not forwarded resumes have been Chauncey Brown Dumbuya and Brian
Arrington. A plan was made to hold a vote during the week of June 1st.
New Committee: Capital Campaign; S. Gross
L. Nieratko asked if we could have some new nominees for the Capital Campaign Committee. The plan and agenda will be guided by the external service, Columinate. A. Kaminski agreed that this would be determined during the next meeting, on June 9th.
Reformation of Committees in June
D. Golembeski suggested that we have new members voted in by June 7th so that Committees could be reformed by the next Work/Session on June 9th.
Retreat Date/Plan
K. Schaaf agreed to create a Doodle Poll in an effort to plan the next BOD Retreat. He will be contacting Leslie Watson so that they can determine what time frame is best.
Closings
● Mid month Work Session June 9 at 6pm
● Next regular board meeting is June 23, 2021 at 5:30pm.
The Vice President requested a motion to adjourn. Motion was made by K. Schaaf and seconded by A. Kaminski. The BOD Meeting adjourned at 6:57 pm.
An Executive Meeting was held for the remaining time.
Minutes respectfully submitted, Alethea Bodine ~ 6/8/21