Tough Decisions To Be Made

 

A special vote will take place at the upcoming meeting

January 24th at 6pm at the First United Methodist Church.

 

Please read this message in its entirety, and come to the

special meeting prepared to vote.

WHAT YOU SHOULD KNOW

 

  • We are currently about $150,000 in debt to vendors.  About $75,000 of that debt is to local farmers and producers, the very people the co-op exists to support.

 

  • Our additional liabilities include about $231,500 in mortgage debt, plus a $70,000 line of credit.

 

  • Vendors have begun taking their claims to the court system.  We have not had to appear physically in court yet, but we expect to see more summonses.

 

  • We recently changed General Managers, and our current Interim General Manager is Jules Masterjohn, former Vice President of the Board.

 

  • Since we sent our last Board e-mail in mid-December, the huge dip in sales we’ve experienced has improved slightly but not corrected.  The average amount a customer spends per transaction is up, but the total customer count is down.  That data tells us that there is a core group of people in this town who really support the co-op, but we are losing customers overall.  Sales for December were 3.7% below what they were the previous year, sales for the beginning of January are down 11.6%.

 

  • 2017 was the first time the co-op had made a profit in many years.  Over the past 10-20 years our sales have generally trended downward, as more and more competition for organic food entered Durango.

 

  • The Board began 2018 with the agenda of exploring a grand makeover for DNF.  We know that the current business model is not working, and we were eager to get creative and find a new niche in this community.  We have recently heard lots of ideas from member-owners that echo our own sentiments: expanding the deli and seating area, focusing even more on local products, offering pre-made meals and CSA-type features, and making DNF a hub for ideas, collaboration, and community improvement.

 

  • In 2018, DNF became a Living Wage Employer, and spent $67,000 on additional labor.  We also gave $60,000 back to Member-Owners in the form of discounts.

 

  • In the first 5 months of 2018, sales were increasing at a rate even higher than our GM projected.  The dip in sales we are currently experiencing began in June.  Sherpa, our General Manager at the time, expected them to recover when the 416 Fire ended, but they did not.  In September the Board began helping Sherpa implement strategies to increase our cash and pay down our debt.

 

  • We have been denied loans by four banks and local lending entities, and haven’t been able to make use of our equity due to years of poor financial performance.  Our fundraising efforts have brought in generous donations from our supporters, and for that we are so grateful!  To date, we have raised close to 10% of our original goal.  While we have been working on paying old invoices, we have been unable to keep up with current invoices as they come in.

 

  • The co-op has seen a series of hard times similar to this in the past.  When we have gotten our feet underneath us and things have started to look up, new challenges have set us back into emergency mode.  We have never truly recovered, and a complete lack of cash reserve is the reason we have been unable to weather this particular storm.

 

  • Because DNF’s liabilities are approaching the value of our assets, The Board is exploring the option of closing the store.  We are failing this community’s farmers and producers, and we believe it is most in line with the co-op’s values to sell our assets and get those people paid, before the problem gets worse. 

 

  • If you as Member-Owners do not agree with the direction the Board is planning to take, you have the option of recalling the Board, and replacing us with 7 new Board directors who are willing to take full legal responsibility for DNF.

Because DNF's liabilities are approaching the value of our assets, The Board is exploring the option of closing the store.

 

We are failing this community’s farmers and producers, and we believe it is most in line with the co-op’s values to sell our assets and get those people paid, before the problem gets worse.

 

If you as Member-Owners do not agree with the direction the Board is planning to take, you have the option of recalling the Board, and replacing us with 7 new Board directors who are willing to take full legal responsibility for DNF.

 

We are holding a vote at our special meeting on January 24th, 6:00pm at the First United Methodist Church.  The issue up for vote will be whether or not to recall the Board.  The ballot will read as follows:

 

Please choose one option:

__Recall the Board of Directors of DNF, to be replaced via election of 7 new directors in accordance with the bylaws.

__Allow the current Board to remain intact and make the ultimate decision of whether or not to dissolve DNF.

 

You can cast your vote at the meeting, as well as in the store or online for 10 days following the meeting.  If the outcome of the vote does indeed recall the Board, a second vote will be held to elect 7 new directors in accordance with the bylaws.

 

Please come to the upcoming meeting, hear our perspective, get your questions answered, and cast a vote.

 

575 East 8th Ave, Durango, CO
970.247.8129

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