Our Annual Meeting was held in January again this year.
The group began the meeting by reviewing the agenda and the financial reports.
This is an important year in the evolution of the Windswept Farmstead Cooperative: both parties have agreed to move forward to become ownership partners of the LLC that owns the land. The initial lease agreement terminates on March 1st, at which point N&J will receive their first ownership shares under the terms of the Purchase and Sale Agreement. After that they agree to continue to purchase shares from Eric and Alison until they own 100% of the shares.
The group worked on the logistics of making this transition work smoothly, and they also reviewed all the language of the Purchase and Sale Agreement together to discuss and resolve any questions that came up before the initial equity transfer.
After the group had a shared understanding of the work that would need to be done before March 1st and then on the appointed day for signing all the necessary paperwork, the group discussed progress on the list of repair and maintenance tasks that had been drawn up at the 2016 Annual Meeting. They crossed off items that had been accomplished, and re-prioritized those that had not. Then they each brought up the items they would like added onto the 2017 task list and prioritized those, assigning responsibility for each of them to the current and future LLC members.
N&J brought up two issues that possibly involved By-Laws changes and the group discussed these. It was clear that a shared understanding of these issues could not be accomplished during this Annual Meeting, so an additional meeting was scheduled for resolving them after some necessary research.
N&J outlined new projects for their business — Dickey Hill Farm — that they planned to proceed with beginning in 2017.
With no other business remaining on the agenda, the Annual Meeting was adjourned.
We held our WFC Annual Meeting in late January. Although N&J aren’t yet equity shareholders, we still benefit from their input on any decisions that will be made at this meeting of the owners. We are also interested in talking about their long-term plans and learning how they feel after nearly a year in residence at the farm.
First we review the financial reports from 2015 and discussed any questions that they generated. We looked at the task list of items we had discussed at our first WFC Annual Meeting the year before, to cross off those items that had been successfully completed, and to prioritize the items that had not been addressed. Then we all listed the items that we wanted to address in 2016.
In addition to WFC work that we wanted to get done (and budget payment for) in 2016, N&J also listed the capital investment they were interested in making in their own farm business, Dickey Hill Farm. The group discussed whether any of the projects on their list would improve WFC but not be able to be removed if N&J ever wanted to leave the LLC. Often this is called “sunk cost” when it involves a leased property. For example when a business leases a retail space for a store, they may move walls, strip and refinish the floor, and improve the electrical system to accommodate their equipment. When the lease runs out, none of that can be removed by the business, so the lessor and lessee should have already agreed on a way to deal with any “sunk cost” in the property before the lease is signed.
Other discussion items included:
- the future plans of the cow herd, ownership of which was slowing being transferred over to Dickey Hill Farm outside of the WFC arrangement;
- the future use of the Airstream trailer that was a part of the WFC;
- the best way to monitor and split the costs of energy use between the cheese studio, and the walk-in refrigerator that N&J had built in 2015.
The group also reviewed the timetable set up in the Purchase and Sale Agreement: when the initial lease ran out in early 2017 N&J could could be voted into WFC as members and become equity shareholders. The P&SA also specifies that if either party wished to back out of the P&S they would have to notify the other party of their intentions at least six months before the end of the lease. The P&SA was reviewed, and the specific deadline date in late summer was acknowledged.
Without any more agenda items, the meeting was adjourned until 2017.