2021 Annual Voting
The votes are in!
Unanimous "Yes" to Board Slate and Articles changes
Only 2 "No" votes to Bylaw changes
All 3 motions have been passed. We would like to thank to all who participated.
*Find document links at the bottom of this page
We would like to Welcome our new and re-elected Board Members:
Beth Ladrach - Board President
Daniel Baker
Jamie Carlton
Tom Rumbaugh
Article of Incorporation Changes
Description of Vote for Membership:
The Board of Directors of Wooster Local Foods Cooperative, Inc. (“Local Roots”), is recommending an amendment to the organization’s Articles of Incorporation. This is a document that is filed with the Ohio Secretary of State to register the organization. The Articles provide the public some basic information about an organization, such as a business address and contact name, but can also provide additional information where warranted.
When Local Roots first filed its Articles in 2009, the Board included additional information that the cooperative would try and qualify as a special type of federally tax-exempt cooperative called a Section 521 Farmer Cooperative. This is similar to the more familiar tax exemption under Internal Revenue Code Section 501(c)(3) in that no tax is owed on certain types of income. Unfortunately, the rules are very strict for qualifying as an exempt cooperative and thus it is not something Local Roots was able to do without major changes to its business model. Rather than pursue exemption, the Board chose to operate as just a traditional cooperative under Ohio law.
Upon a routine review of governance documents, Local Root’s legal counsel, Robert Stutzman, felt it was appropriate to remove references to Section 521 and add additional information to be more representative of the existing business model. The Board of Directors agreed and permitted Atty. Stutzman to seek outside counsel with an attorney in Columbus specializing in Ohio Cooperative Law, Carolyn Eselgroth. Together, the attorneys prepared a draft of Amended Articles, which was approved by the Board, and now is being submitted to the Membership for final approval.
As you will see in review of the Amended Articles, there are more details regarding how the cooperative is structured than in the original Articles. Most of this additional language was developed to mirror statutes in Ohio Revised Code Chapter 1729, which governs cooperatives. The organization is still member-based and governed by a Board of Directors, which is governed by a separate Code of Regulations (“Bylaws”). While the Board approves the amendments and does not feel any of the proposed changes should necessitate further review, it welcomes any questions or comments that the Membership may have prior to their vote.
Bylaws Changes
Description of Vote for Membership:
In addition to the amendment to Articles of Incorporation, the Board of Directors is recommending an amendment to the organization's Bylaws, specifically in Article 6, Section 3, as it relates to financial audits. Article 6, Section 3 is currently written in a conflicting way. It states the Board must vote to obtain an audit at least once every two years, but it also requires an audit to be completed in that same timeframe. So, it’s unclear if an audit is actually required regardless of a vote or just if a vote is in favor. A financial audit can be very expensive, and because of that, the organization has never once actually procured a formalized audit.
The organization does have a subcommittee of the Board, a "Finance Committee", consisting of Finance/Accounting professionals, that meets regularly to provide financial oversight including reconciliation of accounts and analysis of financial records. We also procure the services of a local accounting firm to file our taxes, and our Treasurer is a CPA. With all this in mind, and considering the substantial costs of audits, the Board is recommending we amend the Bylaws to make clear that the Board has the authority to procure an audit, but it is not a requirement. The proposed language makes it a requirement for the Board to at least consider an audit every two years, unless the Finance Committee recommends one earlier, but the ultimate decision to procure an audit rests with the Board.
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Current Language
Article 6, Section 3
The Board of Directors shall utilize an accounting system which shall be adequate to meet the requirements of the Association’s operations and shall require proper records to be kept of all business transactions. As may be recommended by the Finance Committee, but no less than every two years, the Board of Directors shall, by majority vote, obtain an audit of the Association’s financial accounts from an independent, third party selected and approved by the Finance Committee, for the purposes of assuring good accounting practices or such other purposes as the Finance Committee may determine.
Proposed Language
Article 6, Section 3
The Board of Directors shall utilize an accounting system which shall be adequate to meet the requirements of the Association’s operations and shall require proper records to be kept of all business transactions. Every two years, or sooner as may be recommended by the Finance Committee, the Board of Directors shall vote on whether to obtain an audit of the Association’s financial accounts. If approved, such audit shall be conducted by an independent, third party selected and approved by the Finance Committee, for the general purposes of assuring good accounting practices or such other purposes as the Finance Committee may determine.