All posts by CharlesHueter

Black Star Co-op Financial Condition FAQ

1.     Why did I not know sooner about our financial condition?

The Board has communicated regularly to the membership through our annual reports, membership newsletters, and member assemblies regarding our financial condition as well as actions being taken to address the issue.  At the last annual members meeting held on October 30, 2016, we discussed our declining sales, challenges facing the co-op, our ends policies and the 2015 annual report, which stated:

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Spring Members’ Assembly Wrap-Up

Members gathered for the Spring Members’ Assembly meeting on May 31, 2015.  Once we were called to order, Dana presented an overview of the co-op’s financial statements and the challenges we faced over the last few months.  Competition is rising, our staff compensation is rising, and there were increasing issues with customer satisfaction.  The Workers Assembly answered these problems with the following solutions:

  • a new point-of-sale system
  • improvements to the patio
  • lunch service!
  • more kegs for off-site sales
  • tied wages closer to staff performance

Question from the membership: How will we lower staff remuneration costs? 
Answer: Workers have a new two-track promotion formula allowing those wishing higher wages to take on more responsibilities.

Question from the membership: Are healthcare costs up?
Answer:  Yes, significantly.

Question from the membership: How can the members help?
Answer:  Come in more often, bring more friends, and use the new member-owner cards to give us better sales data.  Also, ask other bars and pubs if they carry Black Star.

Question from the membership: How can we decrease staff remuneration without taking away wages?
Answer:  We will slow the rate of wage increases, follow the two-track system mentioned before, partner with the Democracy at Work Institute to maintain fairness.

Dana and Nicole ended by saying that the financial documents can be misleading at first glance because they are snapshots.  Overall, assets are increasing, the big loans are paid off, and member equity is up.  The co-op is financially healthy and going through a maturation phase.

Michael went over the annual report review committee’s report. The committee is made up of directors and member-owners and tasked with reviewing our annual report. Member-Owners Beth and Marcus helped with this and their assistance was greatly appreciated.

Nicole then lead us through an operations update.  The Workers’ Assembly restructured itself to accommodate the new two-track remuneration system, which allows employees to take on management responsibilities beyond their basic job descriptions, or not, and be compensated accordingly. A fair living wage will not be abandoned, starting wages have actually increased.  Expansion planning is in full gear with a possible south Austin focus.  Patronage tracking has is finally in order, so Member-owners should ask for their new cards when they visit.

The WA Team Leaders then provided some details from their area of the business. Chris, speaking for the kitchen, talked about a new oven for making our own pastries and bread, the new lunches, and announced menu changes for the fall.  The Kitchen Team continues to reach out to vegans and vegetarians.  Andy, speaking for the Beer Team, said new beers were coming, some recipes might be reformulated, and discussed the Pneuma West Coast pale.  A new member-owner beer will also be solicited via the Black Star newsletter. Jodi, the new Pub Team Leader, was proud to announce the addition of a diet soda to the menu, something that had been in demand at the Co-op for a while. 

We then took a break and socialized. With beer, of course!

When we returned, the board reported to the membership.  Steve gave an update on the House That Beer Built: six Austin families now have homes! This project went above and beyond our normal charitable work. I reviewed the major board actions since the last MA meeting.  Annelies provided an overview of our co-op in relation to others and talked about co-ops inspired by us, our partnership with Cooperation Texas, and RAISE.  Michael discussed the board of directors, what it does, and how to run for a seat.  Scott and Steve talked about member-owner participation, mentioning a variety of ways to stay connected to Black Star and increase community involvement.  

Question from the membership: Asking someone to spend $150 to join is hard to sell, any ideas?Answer: The cost supports a good community, a spectrum of positive values, and it advances craft brewing in Austin.

We ended with an open Q&A where we discussed: expanding to a second location, expanding the member-owner beer discount to make up for needed price increases, kicking the patronage tracking system into gear, and how the future of the 2015 fiscal year looked.

2015 Board of Director’s Retreat Recap

On January 25, our Board of Directors met at McKinney Falls State Park for a day of training, brainstorming, and team-building.  Nicole Renaux attended in her role as Board-Staff Liaison and Dana Curtis, Black Star Co-op’s Business Team Leader, facilitated the discussion.  All nine of the directors were present: Steve Basile, Michael Handy, Scott Kelley, Annelies Lottmann, Board President Kenley Maddux, Cole Noppenberg, Joe Silva, John Vinson, and myself, the Board Secretary.

After satisfying our coffee and breakfast urges, we began the discussion with a round of introductions and icebreakers to learn more about each other.  This was important because Michael and Cole have never served on the board and I was appointed to fill a term only a few months before.  I am happy to announce: this is a board of directors that quickly established a friendly rapport and openness.

Dana then guided us along a discussion of a Board Points of Agreement.  We talked about what we expected a high-functioning board would do to ensure respect for a diversity of viewpoints, a healthy balance of work and life, shared responsibilities, and the goal of the board speaking with a unified voice once policy consensus is achieved.  It can be hard to foster and protect that communication space with you and three friends at the pub; now imagine doing that with eight others over matters that directly affect the lives of 27 employees and over 3,200 member-owners.  This was one of the most important discussions we had, and we concluded it knowing we were in closer agreement on our job than ever before.

We then shifted to the subject of Policy Governance, with John and Steve moderating the discussion.  One of the most common things we do as a board every meeting is monitor and discuss the progress of the Co-op, the Workers’ Assembly, and ourselves towards meeting this cooperative’s policies.  It is not glamorous work, but it keeps the board informed about all aspects of Black Star’s operation and momentum forward. A key aspect of this discussion: the emphasis on the understanding that the board does not “run” things.  We have an amazing Workers’ Assembly that takes care of the day-to-day operations.  Rather, our focus should be on the future shaped by an understanding of how the operations are in the present.  Policy Governance gives us a consistent and useful tool to monitor all aspects of Black Star’s performance so we can decide if current policies meet the values and expectations of member-owners.

Next, Annelies took over to connect the broader discussion about monitoring to the practical matter of making decisions based on the monthly monitoring reports.  Most of the time the reports shows no concerns to address or areas worth digging into deeper.  In these cases, we accept the report and move forward with the monthly meeting agenda. However, there are times when the results of the report spur directors into thinking more needs to be known.  The great deal of the trust you place in the Board is demonstrated as we discuss the merits of the policy under inspection, whether the degree of missing the target is sufficiently problematic to warrant a rejection of the report, and what exactly we would seek in a revised follow-up if that were to be necessary.

We broke for a lunch of Black Star burgers grilled on the spot and enjoyed the chance to get outside to see more of McKinney Falls State Park.  The weather was perfect for a walk and we needed to move around.

When we returned, Dana got us back on track with a roundtable discussion of the four pillars of cooperative governance: democracy, teaming, strategic leadership, and accountable empowerment.  These high-level concepts were then grounded in the idea of member engagement.  We want you, the member-owners, to be engaged with the co-op.

However, Black Star member-owners are as diverse as the beers we have on tap.  Some love co-ops and want to see them succeed.  Some joined because they love the mission and values of our organization.  Others value world-class craft beer and cuisine done right and done local.  The board cannot forget that we need to appeal to all member-owners and to contribute in the ways that matter the most to them.

By the late afternoon, it was time for a beer tasting lead by Nicole.  What good is being the director of the best cooperatively-owned brewpub in the world without knowing our beer in depth?

We wrapped up the day’s schedule with a vision discussion.  Here, any idea was valid.  What would things look like for Black Star in 5 years?  Where would we be and what would we have experienced in 10 years?  In many ways, the role of prognosticator is a director’s most challenging.  Industry trends, macroeconomic conditions, the legal and regulatory landscape; these are things that constantly change.  We need to be able to anticipate some of this change so the co-op is not caught flat-footed and can continue to provide stellar experiences in the heart of Austin, Texas.