In a year when Weavers Way faced increased competition, it is a pleasure to announce that the Co-op generated record sales and a net profit in fiscal year 2016. As a result, the Co-op will give back to members a portion of that profit. At our Dec. 6, 2016, meeting, the Board of Directors approved the declaration of a patronage rebate for a third consecutive year.
The rebate will be available starting Jan. 16.; the redemption period ends on May 20. You’ll an email with more details, and cashiers will also be able to provide information.
The total amount of the rebate is $281,911; of this, $56,382 will be returned to members. The remainder will be maintained in the Co-op’s Reserve Equity fund.
Why such an odd amount? The rebate is one of the many things that makes a co-op different from a typical corporation. One of the main drivers of the rebate is that the IRS permits corporations structured as cooperatives to pay patronage rebates based on sales to member-owners. Weavers Way’s Board reviews audited financial results each year and determines the maximum rebate that can be paid. This rebate reduces Weavers Way’s federal taxable income by allowing us to eliminate the amount attributable to member-owner sales. The IRS requires that a minimum of 20 percent of the declared rebate must be paid in cash; the remainder can be retained as reserve equity. Based on member sales in fiscal 2016 (July 1, 2015, to June 30, 2016), $281,911 is the maximum the Co-op could declare as a rebate.
Virtually all co-op boards around the country choose to retain the allowable 80 percent in equity. How does this benefit us as members? It’s our operating capital. Each household is contributing this portion of their rebate and, collectively, that money is being used to run our cooperative enterprise.
Here are some examples of initiatives that have been undertaken by our management team using our equity funds.
As many of you likely noticed, PECO outages disrupted the Chestnut Hill store last year on a number of occasions. To ensure that this does not continue, we’ve invested in a gas-powered emergency generator that will kick on immediately in the event of a power failure, keeping the lights on and the refrigerators and freezers humming. A second backup unit will be installed in Mt. Airy.
Another instance of our retained equity at work is the creation of additional, more inviting community spaces. The Garage at 542 Carpenter Lane, down the street from the Mt. Airy store, housed our successful holiday popup store, and it is also the main base for our workshop program and many other events, including movie nights and member forums. It offers a venue for partnering with neighboring businesses and organizations. Similarly, the Chestnut Hill Backyard renovation improved the existing space, providing a more welcoming environment for events and for members to gather.
In addition to those infrastructure enhancements, we’ve funded new positions — assistant produce managers at both Mt. Airy and Chestnut Hill and additional farm staff, for example — high-quality jobs that improve efficiency and enhance customer service.
These are a few of the ways our collective equity is being put to use. My hope is that you are able to identify with one or all of these actions as something that is important and that resonates with you. Each fulfills one or more of Weavers Way’s Ends and the overall mission of the Co-op.
Sound good to you? We hope so!
Rebates will be available starting Monday, Jan. 16, 2017. As in past years, you will be able to use your rebate to shop or take it in cash. You can also add it to your own equity account, put it in your EasyPay account or donate it to Food Moxie at the cash register or online.
Look for an an email with more details and a link to make your selection.