Moving Forward at Hampden Park Co-op

—by Nicolet Lyon

Hampden Park Co-op serves its members and community by providing delicious and wholesome food grown in an ecologically sound manner and by involving its members in the process from field to table. Our mutual mission is grounded in respect: for the growers who deserve to make a fair wage and work in safe conditions, for the earth and the limited resources available, and for the eaters who deserve clean and healthy food. This work we do together has only grown in importance since the co-op opened its doors over 30 years ago.

It’s time now to make some important decisions, and the co-op’s Board of Directors would like your help in deciding how the co-op will move forward sustainably.

In 2007, the board became aware that the Independent Order of Odd Fellows (IOOF) intended to sell the building on Raymond. Aware that this was a fantastic opportunity to secure the future of the co-op at its current location and that if another buyer purchased the building, the co-op would likely have to move, the board considered the resources necessary to purchase the building. At the 2007 and 2008 annual meetings, the board brought up the possibility of a capital campaign to support co-op growth, and asked for member feedback about possible fundraising strategies.

As the board moved forward with purchasing the building, we spent considerable time and energy determining the cost of renovating the expansion, buying the building, and increasing staff levels to accommodate the new space. A budget was carefully configured with input from our bank and advice from lawyers, accountants, and an industry consultant. Fortunately, due to responsible fiscal planning in the past, the co-op had the money in savings to move forward with renovation, and we immediately began preparing the new space so that we could generate additional revenue as soon as possible.

While the renovation was in process, the board determined that the co-op needed to raise $200,000 in additional funds in order to meet its new financial obligations over the next critical years. The board collectively made the decision to request donations and loans from members before looking at other alternatives. In early 2009, board members personally contacted all active co-op members to impress the importance of our fund-raising goal. Co-op membership responded enthusiastically and donated or loaned a total of $132,000. The board was able to obtain the bank loan with these generous pledges, but knew the bank would expect further fundraising.

Revenue from the newly opened additional space helped cover cost increases. However, the expansion was ready later than expected due to construction delays. This past summer, co-op sales were less than expected, as food costs continued to rise, recession pressures increased, and construction in the neighborhood decreased customer traffic. Construction on the Raymond railroad bridge has caused further street closings in September and October. Our total income for the 2008–2009 fiscal year was $2.14 million, an increase from $2.01 million in 2007–2008, but short of the board’s budgeted $2.4 million.

The combination of revenue and fundraising shortfalls means that the co-op must look to other options to generate the funds needed to secure our future. Over the past few months, the board has been discussing additional fundraising measures and narrowed the focus to two areas: the volunteer member discount structure and share price.

Most Minnesota food co-ops, both volunteer and non-volunteer, have substantially lower member discounts than ours. Possibilities for addressing this include reducing volunteer member discounts by a few percentage points, or limiting the number of volunteers in each discount category.

The board’s research has indicated that Hampden Park Co-op’s $30 share price is by far the lowest amongst Minnesota co-ops; other share prices range from $75 to $125. Changes might include raising the share price (which would affect current shareholders as well as new members by law) or requiring the purchase of another share within a specified period of time in order to remain an active co-op member.

Co-op discounts and share price have been constant for many years, but inflation and the economy have not. A few changes could raise the revenue we need.

The board now needs feedback about how the co-op membership would prefer to move forward. To that end, we are arranging focus group meetings with target constituents within the co-op: volunteering members in the 28% discount bracket, the top 100 shoppers (by revenue), and the top 30 building fund contributors. These folks should receive invitations shortly.

Unfortunately, a group of nine volunteer directors can meet with only so many people, but we would very much like to hear from those members not participating in focus groups as well. We request and encourage members and the co-op community to contribute written comments via email at board@hampdenparkcoop.com or by dropping them off at the store. There will be a feedback envelope by the Board of Directors information in the co-op entryway. Please note that co-op employees, volunteers, and cashiers are not equipped to receive or convey verbal feedback.

The board fully anticipates that the co-op membership will help choose an equitable and practical way to raise the funds we need to sustainably support the co-op. We may present changes to the by-laws on the ballot at the 2009 annual meeting in order to implement fundraising measures; it’s more important than ever that our membership attend and participate in our democratic co-op system. We look forward to hearing from the co-op membership and community about how we can support our mission together.

[Nicolet Lyon is a law student and a member of the HPC Board of Directors.]