In the Vote Notes, our Board highlights questions and comments about the Special Election and proposed changes, that have arisen in discussions with owners.
Find more information and answers to many other questions on our Elections page.
Hello Central Co-op!
Our Special Election is in full swing and members of the Board have been engaging with members in the store and in a variety of meetings over the past several weeks. It's been a good experience and we've received a lot of great feedback. In these "Vote Notes" we will try to highlight some questions and comments that have arisen in the course of those discussions. Read on for our first official “Vote Note”.
A few people have asked why we have targeted to complete the vote by the end of 2015 and whether 28 days is sufficient time to understand the options and make a good decision as an organization. So, we wanted to talk a bit about our process and why the Board believes that this timeframe is the right one.
Last year in a Community Conversation members encouraged us to find ways to grow – responsibly and sustainably. We have been developing the strategy and evaluating options since then. The possibility of a merger arose in discussions with Tacoma Food Co-op leadership in September and the leadership has been investigating it since then.
We have been contemplating advantages of conversion to a solidarity co-op for years. With the merger opportunity that has arisen, now is the time. The proposals are synergistic - that is why we designed them together.
As we were considering both of these ideas, we brought in legal, financial and cooperative experts from all over the country to develop and review our options and we have received extremely positive feedback from those consultants. When the boards of Central and Tacoma Food Co-op voted to put these proposals forwarded, the votes were unanimous.
Our members elected the board to develop options for the members and do the heavy lifting... our members don't have to become experts on these issues; just consider the proposals that the Board has created and vote Yes or No. Our 21-page Voter Guide has been mailed to every member household and the co-op’s elected leaders are in the store almost daily, conversing with members. Our next general information sessions will be held on December 12 and 14. (RSVP with your owner number to firstname.lastname@example.org).
Our standard election cycle is 2 weeks, including for major revisions of Articles & Bylaws. In this election we allowed 28 days, double the normal allotted time.
Another important thing to note is that the timeframe of this election has a major advantage in that there is a significant savings in cost and complexity to the co-op to complete the merger prior to the end of the fiscal year.
Stay tuned for another “Board Vote Note” tomorrow! Board Members will be in the store tonight between 5 and 7pm – please stop by and chat!
Central Co-op Board President and Chair
Hello Again Central Co-op,
In our conversations with members, a few people have asked "What are the pros and cons of these two proposals?" Should there be a list of reasons to consider voting "No" on the ballot items?
In response, we considered sketching a “Pro/Con” list for the voter guide, but then scrapped the idea. We have worked diligently with co-op experts over the last few months to iron out potential risks and negative impacts from both ballot proposals. Frankly, it was difficult to identify any significant “Cons.”
This isn’t to say that there aren’t any risks or potential losses for either ballot issue, but we are certain that we have anticipated the worst cases and developed plans to counteract risk.
In the case of the merger with Tacoma Food Co-op, the potential benefits to them as a young co-op with limited resources are very large: things like increased buying power for lower prices, employee benefits, and additional administrative support. You could imagine potential negatives for Tacoma like a loss of identity or voice, or diminution of local vendor relationships. But we’ve crafted the plan together to minimize or eliminate all of these risks.
For Central Co-op, the merger would lower our per-unit costs and expand our growth potential and cooperative impact. Risks for Central could have been insufficient resources such as leadership capacity, capital, or support systems to handle the responsibilities of the merged co-op. But we wouldn't be bringing these proposals before you if we weren’t certain that we, in fact, have these resources. We are currently completing further due diligence on the project, and will address any issues that might arise from that process.
On the conversion to a Solidarity Co-op, creating a new class of worker-owners, Central has been studying this option for several years. We have modeled our approach after Weaver Street Co-op, to take the best from, and improve on, their 27 years of experience as a Solidarity Co-op. Potential impacts on the stability of hybrid ownership governance, balance of voices, management of member equity and surplus distributions, and operational impacts have been thoroughly vetted. We’ve employed experts in cooperative business law to ensure that all of these bases are covered. We feel that these measures will further our strides to empower and engage employees, making Central Co-op an even better place to work and shop.
So, if you want a list of reasons to vote "No," we don't have one. But that's actually the good news.
If you have questions or would like to chat with a Trustee, please stop by the store tonight from 5pm to 7pm.
Trustee and Chair of the Board Engagement Committee
Several people have asked, "Since this is a merger, why will the merged co-op still be called Central Co-op?"
Under Washington State Law, in a merger the two merging co-ops do not disappear, but continue as part of a newly merged entity. That new co-op needs a name. When the leadership of Central Co-op and Tacoma Food Co-op (TFC) developed the Plan of Merger, it quickly became apparent that there were three choices.
First, we could keep the name Tacoma Food Co-op. But that name is specific to a geographic area and not practical for a regional co-op. Second, we could come up with a completely new name. That is possible, but it would cost the merged co-op a huge amount of money in rebranding expenses. We believe the third option, to retain the name Central Co-op, is the best option. The name expresses our cooperative identity without being bound to any particular geography or product. It also retains the significant brand equity that Central Co-op has built nationally over the past few years.
We welcome further questions and hope to see you at one of our information sessions this Saturday afternoon or Monday evening – RSVP to email@example.com.
Trustees plan to be in the store again this evening from 5-7pm, so please stop by if you have questions!
Board Vice President and Chair of the Board Development Committee
Wow, there is a tremendous amount of Special Election discussion happening among member-owners, board trustees, nominating committee members and staff. I've been in the store almost every day for over a week and I've witnessed the buzz growing daily.
The vast majority of the feedback we have received has been positive, along with some thoughtful questions and concerns which we have been addressing each day and incorporating into our other work. It's gratifying to see the passionate commitment to the co-op that is reflected in these conversations.
I'll be back in the store today and at the information sessions tomorrow and Monday. Thank you for being a part of this progressive cooperative community.
If you would like to come to the info session tomorrow, please RSVP by 5pm tonight. If you would like to come to the session on Monday evening, please RSVP by noon on Monday.
Board President and Chair
Part of the changes to our Articles of Incorporation have been to allow the Co-op to offer preferred stock to our members. This is part housekeeping, as Tacoma Food Co-op utilized preferred stock as a capital raising tool to open its doors and, should the merger be approved by members and the boards, our articles would need to accommodate these shares.
This change is also part strategy. The board has been considering the offer of preferred stock regardless of the merger as a powerful capital raising tool. So, what is it? Preferred stock is a method of raising capital from owners that is common among co-ops. Shares earn limited dividends based on the Co-op’s performance. Shareholders do not have additional voting status in the Co-op. Preferred stock is a powerful way we can raise funds, without relying on traditional financial institutions. Additionally, they offer an investment opportunity that member-owners know fits within their values. Central Co-op could initiate a future capital campaign to raise funds for potential expansion or improvement, or another strategic investment to further our role in the regional food system and cooperative community.
Instead of changing the Articles to allow for preferred stock, paying back Tacoma Food Co-op’s shares was another option, but a costly one. Holding on to this equity and adding an arrow to our quiver of capital raising options was a more advantageous choice.
Trustee and Chair of the Board Engagement Committee
We’ve heard a few of you asking about what is there to gain from growing from a single-store co-op serving our neighborhood, to merging to become a two store co-op with the Tacoma Food Co-op (TFC).
This is a great question and the Board has considered it deeply. First, whether ballot proposals are passed or not, Central Co-op will continue to serve our neighborhood. However, how well we are able to serve our neighborhood depends partly on how well we can anticipate change as demographics shift and competition increases. As our Board president has said, “The industrial food system has entered our market in a big way." We’re being proactive by doing what cooperatives do best. Since we’re owned and controlled by our members, we’re guided by member values and focus on service to our members – not return to far-off investors.
By merging with TFC we have the opportunity to grow stronger together. Currently Tacoma only has one cooperative food store and a lot of room to grow, but they lack the buying power and capacity to thrive. If we choose to merge, we will grow the cooperative economy and balance the cost of overhead for both stores. We can address the reality of competition in our neighborhood, while adding good jobs and additional outlets for regional producers. Central Co-op has the talent, capacity, and access to capital to grow stronger together. The best opportunity is with TFC.
Central Co-op Trustees will be in the store tonight from 5:30pm to 7pm, and again on Sunday from 3pm to 5pm. Please stop by and visit if you have any outstanding questions--and of course, please remember to vote!
Date: Wednesday December 09, 2015
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