Hanover
“It comes down to communication. It was not good in the past but it’s much better now,” said Etna resident Michael Bettmann, vice president of the Co-op Board and a radiologist who is not seeking re-election when his term expires this year.
The meeting of the Hanover Consumer Cooperative Society is scheduled to begin at 11 a.m. on Saturday, April 1, at Listen Community Services on Maple Street in White River Junction, and will kick off a monthlong vote on new members of the board, and changes to the bylaws.
Five candidates are running for five seats on the board. The top four vote-getters will win a three-year seat, while the remaining candidate will get a one-year seat.
The candidates are Thomas Battles, a Lebanon middle school special education teacher who previously worked as sales manager for his family’s alcohol brokerage company; Elizabeth Blum, who has been a member since 1987 and was elected to the Co-op board in April 2016; Don Kreis, an attorney and consumer advocate regarding New Hampshire utilities who previously served on the board from 2003 to 2013; Benoit Roisin, a professor at Dartmouth’s Thayer School of Engineering who is seeking re-election; and Ann Shriver Sargent, a member since 1989 and owner of the Norwich-based Sargent Design Company.
Fans of the Co-op are hoping that the new membership won’t undo the current board’s ability to maintain a delicate balancing act.
Beginning in 2014, some Co-op members went public with concerns about management practices, transparency and staff treatment under the board and Terry Appleby, of Norwich, who had served as general manager since 1992. Much of the debate, which included protests and a failed unionization effort, centered around Appleby and two former Lebanon store employees who sued the Co-op claiming wrongful termination.
“I think Terry did a fantastic job over 24 or 25 years,” Bettmann said. “He did become sort of a flashpoint.”
In 2016, several new additions to the board, including some of the former protestors, didn’t impede the board from moving forward. In May, the terminated employees reached a settlement with the Co-op, and in July, the board announced the hiring of Ed Fox, a former Vermont Foodbank executive who was chosen from a pool of 70 candidates to replace Appleby as general manager.
Leaving the board with Fox in place, Bettmann said, “feels like a legacy.”
Bettmann said the improvements have been “not structural changes, but attitude changes.”
Sales in 2016 were up by $1.5 million over 2015, but the organization still posted a loss of $118,000 for the year, in part because the sales hadn’t kept pace with optimistic projections associated with a $5.3 million renovation of the Hanover food store.
On Friday, Allan Reetz, a spokesman for the Co-op, said the company hopes to use various means to address the gap, which he said was exacerbated by regular discount days that resulted in a $450,000 difference in revenues.
He said leaders have put together a different budget for 2017, one that is in line with conservative projections, but doesn’t respond to loss by avoiding future investments.
“Management has chosen to invest in staff training and technology to help those employees serve members and use that technology to run the members’ business more efficiently,” he said. “We’re talking about six-figure investments — it’s pretty impressive.”
In February, a 2016 audit included several positive findings for the organization, including that “the Co-op’s ability to generate cash from operations improved, increasing to $1,336,000 from $528,000,” and that it was doing well on measures of debt-to-equity ratios, and reserves for health care expenses.
Reetz also said that this calendar year is off to a “robust start.”
“I don’t want to jinx this,” Reetz said, “but — as of a few weeks ago (the budget plan) is producing results running approximately 50 percent ahead of where we expected to be so far for 2017.”
One proposed change to the bylaws is meant to prevent the board’s nominating committee from blocking out candidates who’d like to run for a seat on the board.
Under the current bylaws, the nominating committee is instructed to act as a filter to the pool of candidates by presenting member voters only with the candidates who are “deemed to be suitably qualified,” a description too vague to offer guidance to the committee about criteria.
Candidates also can petition to be placed on the ballot without the committee’s stamp of approval, but they are designated as such on the ballot.
The board has recommended doing away with the nominating committee, and replacing it with an election committee that would instead advertise open positions, and then forward all candidates to the voters for a decision.
“The new election committee will not reject candidates,” according to informational materials from the board. “The election committee and board will count on an informed membership to pick the right candidates.”
Another change would extend the term of elected board members so that their terms would last until their replacements are seated. Right now, a board member’s term ends at the annual meeting, while the new board member isn’t seated until the first meeting held after the end of the month-long vote.
“The reality is that it is essentially a month gap between when retiring people roll off the board and new people are seated,” Bettmann said.
Other changes to the bylaws are meant to fix a problem with the Co-op’s Class B shares, which currently are out of step with state regulations because they were issued, beginning in 2015, without having a fixed maturity date.
“It’s a technical issue,” Bettmann said. “The state said the way you issued them is not the way we like to see it.”
Members are asked to approve a series of changes to the bylaws that will allow existing Class B shareholders to swap out their current shares with a new set of Class B shares that have a maturity date, and can be cashed in. The maturity date will be set by the board.
If the measure is approved, Class B shareholders will be able to swap their shares for five years, after which the older form of Class B shares will become worthless.
“It’s sort of a solution to a technical problem,” Bettmann said. “It’s not a substantial change.”
During the April 1 meeting, members are invited to circulate among various tables at which board members and key management personnel will be prepared to talk about the business of the organization.
In a prepared statement announcing the meeting, Fox said the format will help engage the members in their ownership role.
“Any questions the members have, all the concerns they want to raise and all the kudos they want to offer, can be delivered one-on-one with staff and Co-op management while sharing delicious local food,” he said.
Founded in 1936, the Co-op’s 400 workers operate retail food stores in Hanover, Lebanon and White River Junction, a market and service center in Hanover, and a commissary kitchen.
The keynote address of the April 1 meeting, about the role of Co-ops in the region’s food economy, will be delivered by Vermont Lieutenant Governor David Zuckerman, a Progressive and organic farmer in Chittenden County.
Matt Hongoltz-Hetling can be reached at mhonghet@vnews.com or 603-727-3211.