Sharing Our Story

Sharing Our Story—Background and Context

Saving DNF: The current struggle was initiated in response to the shocking attempt by this Board to sell DNF to a growing co-op conglomerate in another state, La Montañita Food Co-op (LMC) headquartered in Albuquerque, New Mexico, which manages several stores and has a record of targeting small food co-ops for takeover. This surprise announcement came on Tuesday, August 12th, 2014 (this Board-planned press release or PR announcement went out to DNF members the eve of the 12th, that is Monday evening, the 11th, in conjunction with a coordinated local media publication date also targeted in the Board's communication plan for publication by Thursday, August 14th). This led to an immediate alert from Root, who responded within four hours (after by chance seeing the announcement that evening) to about 50 Durango community members, many of whom were also DNF members. Subsequent to that alert, it expanded quickly to the organization and support of a DNF “Merger Revolt” by over 200 DNF member-owners over the next four weeks. This was organized by Root Routledge and Pat Blair. Pat has been a member of DNF for the 40 years of its existence and served as the Co-op's first General Manager (GM) for eight years. This is our story; and as of this publication date, March 31, 2015, it is still going on as we approach an April 25th, 2015 election for five new Board members of a total of seven. Root is running for one of the open seats.

Background: Root and Pat are two among several DNF members who vigorously stood up against the attempt this past summer to sell our local DNF Co-op. Evidently, according to the current Board's timeline reconstruction and a personal letter last fall to the National Cooperative Grocers Association (NCGA) President by former DNF Co-General Manager, Kimberly Wiggins, this was initiated and promoted by the NCGA itself and a co-op consultant hired by the DNF Board, Mark Goehring of Cooperative Development Services (CDS) Consulting, who is also on the NCGA board. From their perspective, they see small local co-ops like DNF as weak targets for takeover "for their own good," by larger financially strong co-op franchises with the claim that co-ops with annual sales below $5 million will always struggle just to make ends meet (our current sales are about $2 million). This is the corporate capitalist model that has swept the business thinking of our country, seeking evermore concentration of ownership, managed by larger non-local entities; far from the models put forth by, for example, the Business Alliance for Local Living Economies (BALLE). The problem is, as outsiders looking at us as simply another little store, they just didn't consider what the membership wants before launching their effort to get us to sell ourselves to a large conglomerate—however, they easily convinced our Board to sell DNF.

Unbeknownst to all but a handful of carefully preselected "key members," solicited with one-to-one phone calls to support the sale of DNF, major preparations were brought virtually to the point of finalization, just shy of final signatures on a Definitive Agreement document (which would close the sale), based on the details worked out in an already signed Letter of Intent (LOI). The LOI was not what has been claimed, "merely an exploratory document about the possibility of a merger;" the agreement is explicitly spelled out in detail with the aid of lawyers and accountants—but until now the members were never allowed to see it (although Root and Pat had obtained a copy early on, August 23rd, which is now part of the story documents below). Throughout in all its communications, the sale of DNF has been euphemistically, inaccurately and continuously referred to, marketed and sold to the membership and community by the DNF Board using the more appealing label "merger". Both the Letter of Intent and line-item billing entries by the Board's legal firm clearly identify the planned transaction as a "sale of DNF assets," lock, stock and barrel. In fact, at one point after having their legal team investigate the legal implications of a "merger" versus a "sale", the law firm was instructed by the DNF Board to proceed with the LOI as a "sale." They even had them look into whether or not the members actually legally owned the DNF Co-op! They apparently wondered whether or not it was simply a "business entity" that the Board "owned." Yet, the Board continued to market it to the membership throughout as a "merger," touting great benefits for the membership, which they never supported with any analysis or facts. They merely kept pushing it as a "great opportunity" whenever they could; but what that was for the members they could not make explicit, beyond LMC having good management.

The sale was enthusiastically endorsed by DNF Board President Geoff Wolf, who unbeknownst to the general DNF membership proceeded with the Board to prepare DNF for its sale, spending several thousand unbudgeted dollars on legal, accounting and consulting services in the process. In ready form, it was finally announced to the general DNF membership on August 12^th (notice sent out the evening before) with the opening words: "The board of Durango Natural Foods (DNF) is excited to share with its members, staff and community plans to merge DNF with the La Montañita Food Co-op headquartered in Albuquerque." We went "huh?" When did all this happen and why? The Board's efforts to prepare for this sale began, as far as we know from their own documents, early spring of 2014 on into the summer of 2014 — with no transparency to the member-owners of DNF. Nor was there even any inquiry as to potential member interest in selling their co-op, such as a "Hey, what do you guys think…" kind of survey before actually spending money to prepare it. Every document and statement made demonstrates without a doubt, they wanted to sell DNF and made every effort to keep it quiet until it could be sprung on an unsuspecting membership in final form, as if it was a "done deal," except for the final "formality" of a member-vote for approval. In fact, the few DNF staff members who knew anything about a possible merger were explicitly instructed not to discuss the merger with any of the members. The first the general membership got wind of any of this was with the Board's August 12th press release, which began:

"The board of the Durango Natural Foods [Co-op] (DNF) is excited to share with its members, staff and community plans to merge DNF with the La Montañita Food Co-op headquartered in Albuquerque." It went on, "…The co-ops have signed a Letter of Intent [LOI] and are pursuing next steps with a goal of completing the merger in October. … We're especially excited about the merger with La Montañita because they are experienced with integrating new stores and co-ops into their organization – having acquired stores in Santa Fe and Gallup… A store manager will be hired by La Montañita to be responsible for operating the store. Arrangements are being made for staff and members to be integrated into the La Montañita Co-op… Details of the plan will be available in a few weeks for DNF members…

"'This transition will be great for our members, customers and staff. La Montañita has proven, top level management, runs great stores, and has much better buying power than we'll ever have… All in all, we couldn't be happier, and are looking forward to becoming a part of this larger co-op community enterprise,' said [Geoff] Wolf, [DNF Board President]."

A more profound principle is at issue—Co-op Ownership, Board Power and Democracy: Use of the word "we" in this Board PR communication, and its ambiguous relationship to the DNF membership, is very telling. What's at issue here and in this upcoming election April 25th, 2015, for the five open Board seats, is much more than the outrageous attempt to sell DNF and the damage this Board has done to our organization. What's really at issue is the core philosophy behind a democratically run co-op and the purpose, power and function of its Board of Directors. This is the principle issue facing the members in this election, with immense implications for DNF's future protection and viability as a locally owned food cooperative, managed and run by its member-owners on behalf of all its members; as well as healthy relations with the community of suppliers and customers in our local food system.

For reference, two key clauses from "The Cooperative Identity," replicated in the official "Durango Natural Foods Board of Directors — Information Packet," intended to empower co-op members via the institutions of democracy, member-participation, and accountability of elected representatives, are:

"Democratic member control: Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership…"
"Autonomy and independence: Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy."

This Board persistently, throughout its communications, decision, actions and behavior sees DNF as merely a well-defined "entity" which is theirs to control as an entity (keep in mind the members of this "entity Board" were elected with less than 40 voting members—who they actually represent has to be understood from their subsequent actions and decisions; especially what they spend money on). That keeps it clean regarding such Board musings as "what might we do with this entity of ours," without the Board having to deal with any messy details of the store's operations. The Board has been clueless as to the organizational health of our store, since they refuse to be engaged with or concerned about any of its actual operations. They "control the entity" and do what they wish with it as an entity by "choosing, hiring and managing the GM," for whom only they have the power to hire and fire at their whim. This is the expression of an authoritarian management structure that does not serve the interests of a democratic co-op. So, who does a new GM owe loyalty to—the president and members of the Board; or the DNF member-owners? Obviously, with the power over one's livelihood and job, the GM is beholding to this powerful Board that chose the GM, and to do whatever they want done regarding the entity.

But what about the ethical question: Who ought the GM be loyal to? And especially when faced with circumstances that represent an existential threat to the co-op itself. It should be the DNF membership, of course; if indeed we are a democratic cooperative run by its members. That positive co-op loyalty is what in fact can manifest under challenging circumstances when the GM comes from our own membership or our member-owner organizational staff itself. But that is problematic under a dominant authoritarian Board that simply treats any challenge to its authority as insubordination, subject to the ultimate punishment of firing. In our case, because Co-GM Kim Wiggins made the ethical decision regarding her loyalty to the DNF members, in the face of the assault on our organization by this Board; she was summarily fired for helping the member-owners and member-owner staff challenge this Board's power to do what it had been doing to sell DNF, while it was further damaging our operational capabilities and ability to perform core business functions.

This entitlement to power over Durango Natural Foods Co-op as a well-defined entity, regardless of their lack of concern for what's happening inside our store, could not be more explicit than the policy statements made by this Board themselves. In particular, this is illustrated by the "DNFC BOD Responsibilities" section of the "Durango Natural Foods Co-op: Board of Directors 2015 Election Packet," which also emphasizes that new Board members will be indoctrinated into their system of control:

"The DNFC BOD operates using Policy Governance, a governing style that clearly defines the role of the BOD and GM. This style of governance allows the BOD to have its arms around the store without having its fingers in it. It should be noted that the BOD is NOT involved in the day to day operations of the store. Training will be provided to new BOD members in this system of governance." [original emphases]

So, what does it mean for a Board to claim it has "its arms around the store?" That phrase ought to feel kind of creepy to DNF member-owners, given the "autonomous entity" thinking of this Board. Why do they see themselves as having their arms around our store? To protect it? From what? To nurture its operations and care for its employees? None of these do they actually do; nor, judging by their actions and statements, do they even care about. They simply treat the "entity" as theirs.

So; is it to treat our store as merely some business unit that is theirs to wheel-and-deal with as an on-going entity—like engaging professional legal and accounting services, and collaborating (conspiring?) with an outside consultant, a co-op conglomerate, and a national co-op organization to prepare it for sale to an out of state entity, unbeknownst to the membership at large? To understand this, simply read the wording of their policy statements, like the above, and their press release to the members and public. Their mindset is clear: "The board of the Durango Natural Foods [Co-op] (DNF) is excited to share with its members, staff and community plans to merge DNF… All in all, we couldn't be happier, and are looking forward to becoming a part of this larger co-op community enterprise…" For the insignificant members, we will learn of "the details of the plan… in a few weeks." Just exactly who is the "we" who are so excited about the "incredible opportunity," which "will be great for our members, customers and staff"? Other than a statement or two like "this will mean savings for everyone shopping [at] the co-op," the entire press release is focused on the Board's intent to promote LMC's management, size and capabilities… and the sale of our name, assets and all rights to them under the guise of "a merger."

Sharing Our Story—Telling the Full Story in Transparent Detail

The effort to sell DNF became a highly contentious and divisive issue from summer through the fall of 2014; one that has impacted our community, the individuals involved, and the health of our organization; and, in the words of the current BOD and its president in meetings and communications, the Board has not yet laid to rest the potential for another future attempt to sell DNF. Some, including Root and Pat, have been outraged by this attempt to sell our co-op; others, who sided with the Board, have been upset at our response to save DNF and remove the current Board. We responded by creating DNF member petitions to stop the sale, retain our existing management structure for stability and competence, and request this current Board step down. We were successful in stopping the sale, for now; but not in being able to prevent the subsequent damage to our organization, nor in the removal of this Board. During a 10-day period we obtained over 200 petition signatures from members who agreed with the petition objectives; which in anyone's memory of our local DNF co-op, was an unheard of level of active democratic engagement by members. This April 25th election for five open seats (on a board of seven) is finally our opportunity to see a positive culmination of our efforts. DNF needs active involvement of its members; we just about lost our beloved co-op DNF!

Rather than trying to summarize and sew together so much detail with excerpts from original communications and other documents, I (Root) have chosen to tell the core details of our story in full transparency with the original documents themselves, accompanied by explanatory and summary comments where necessary and helpful to flesh out the context of the events taking place. Below is a table, with links, that lists in chronological order the relevant email communications and related documents. The communications originate from the DNF Board; my (Root Routledge) responses; and exchanges between Root and other key individuals, including: Pat Blair with whom we launched more than one petition on behalf of the member-owners' interests in saving DNF from the merger and further damage by the Board; Kim Wiggins, the former DNF Co-General Manager (Co-GM), fired by the Board within 24 hours of our last petition launch August 27th, 2014, to the DNF members; and others.

Table 1 below gives a short description of either the single email (some are more lengthy than others), or the email contents of that day, grouped into one file of related exchanges for the day (or more than one day of related strings) in chronological time-order within. Taken together, the chronologically ordered linked files read as a story sharing what we were thinking and talking about as it was happening. Only by reading through the communications, along with links to associated documents in the same timeframe, from the beginning to the end of this chronological list, do you get a full understanding of our struggle to save our co-op. And further, the later documents reflect our eventual efforts to take control of the Board in this new election April 25th, 2015, and reform its structure and power, with a complete rewrite from scratch of the DNF Bylaws to make our co-op safe and ensure the co-op's health and democratic control by DNF member-owners on out into the future.

Separately, an overview summary story is provided with the 2015-03-31.DurangoNaturalFoods Edition (2nd Edition) of a new Durango-based democracy activist publication, The Unheard Herald, in old-style "eNewspaper.pdf" format, available on our website http://www.TheUnheardHerald.com, in combination with webpage features. The website holds this table of communications and the original documents collection. The 1st Edition, 2012-04-07.KeepDurangoLocal, published three years ago, is also available on the website with all associated documents.