The King’s Co-op Bookstore’s board of directors weren’t told about the store’s deficit early enough to handle it properly, says board member Aaron Shenkman.
Shenkman voted in favour of slashing staff hours, but opposed the board’s decision because he says the directors were not properly notified of the bookstore’s unprecedented $16,569 deficit.
“It was sort of a very clandestine, in-the-dark thing to do – cut staff hours behind closed doors and then just reveal it to the staff,” he says.
The directors did not know the bookstore was facing a deficit for the last fiscal year, which ended on May 31, 2012, until their first board meeting of the 2012-2013 school year in October 2012. Their last meeting was Apr. 10, 2012.
Stephanie Duchon, the president of the board of the bookstore, says she learned of the bookstore’s deficit in September 2012 when the bookstore received its financial records back from its accountant. The documents were passed at the bookstore’s general meeting also that month. She says the deficit came up as a discussion at the October board meeting, after the board of directors had been elected.
Duchon suggested cutting staff hours by 20 hours per week at the meeting. Shenkman says the issue lies with the fact the board members were not informed of the meeting’s agenda ahead of time.
With notice a day or two prior to the meeting the directors could have brought what he refers to as “real proposals” to the table.
“We would’ve had a much more fruitful discussion, I think, on where the bookstore stands financially and ways to help this,” he says. “It also would’ve been good to get the staff (in) on a discussion about this.”
The bookstore’s deficit is unprecedented. The bookstore has recorded two previous deficits since its launch in 2006 – $3,188 and $2,984 in 2009 and 2010, respectively. Those figures, like its most recent deficit, represent losses pre-income tax expenses – that is, before the bookstore paid its income taxes.
Graham McGillivray, the bookstore’s treasurer, attributes this deficit to a decline in sales and a deterioration of the co-op’s profit margins on the merchandise it sells.
The bookstore’s sales dropped about $15,000 over the last year. The cost of the co-op’s sales also increased about $22,000.
In other words, the bookstore sold less of more expensive goods in the last fiscal year.
When it comes to increasing its profit margins, says McGillivray, the bookstore’s options are limited.
“Our only recourse is to dramatically raise the price of the product[s] and that obviously poses difficulties, given that most of our customers are students.”
McGillivray says suppliers are passing on more of the freight costs to the bookstore, adding that the freight costs themselves have risen. These, he says, are other facts that have contributed to the bookstore’s deficit.
He says these factors are outside of the bookstore’s control.
“We can’t tell publishers, ‘No, I’d really rather buy that book from you for less,’” he says. “They’re the ones who publish the books.”
Shenkman says he and fellow students Anna Dubinski, David Etherington, Gabe Hoogers and Harry Sawchuk want to address the bookstore’s current situation openly and with a communal discussion.
“We believe that our financial problems are better solved by growth, and harnessing the collective power of our cooperative structure,” the letter they wrote in November 2012 to The Watch reads.
The board has called a special meeting of the membership for Wednesday, Jan. 16, 2013 at 5:30 p.m. to allow the co-op’s members to vote on the two resolutions the five students crafted.
“As per bylaws of the (Registry of Joint Stocks Companies) we have to hold the meeting,” says Duchon.
She says the board is required by law to call the meeting because of the petition the five students submitted.
The first resolution seeks to tweak the composition of the board of directors by specifying that one of its four student voting members must be employed by the bookstore at the time of his or her election.
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The staff member, like the remaining three student voting directors, will be elected for a one-year term.
The resolution requests a staff member be elected to an observer position until the next election of the directors. If the resolution passes, the co-op’s members will elect the staff observer at the meeting.
The second resolution is meant to directly address the bookstore’s current financial woes.
It proposes five cooperative members – four from the general membership and one director – be elected to form a Strategic Development Committee, to increase money spent in both the King’s community and others throughout Halifax.
The committee will develop its plan with the cooperative’s membership and the bookstore’s board, staff and manager, which it will put in front of the general body by Apr. 1, 2013.
If the second resolution passes, the cooperative’s membership will then elect four of its own to join a director on the committee, which will sit for five months.
The meeting was originally scheduled for Nov. 21, 2012. It was cancelled, however, because – according to the rules governing co-ops in Nova Scotia – the student did not book a room well enough in advance.
In its place, the board held a town hall-style meeting on Nov. 21, 2012. The resolutions, the board decided, were not up for discussion, however.
Instead, the board looked to the King’s community for further ideas on how to ease its financial pressures – all $16,569 of them.