Patronage refund checks have been mailed!! If you haven't received yours by now, we might not have your current address. You can now update your contact information via our website here.
For more than three decades La Montañita Food Co-op has honored commitments to our members and our communities, including the member patronage refund. Despite the challenging economic environment, the Co-op completed its 2011-2012 fiscal year on August 31, 2012 with sound operational and financial results. The Board therefore anticipates our 23rd annual member patronage refund.
As a La Montañita member, you are an owner of the cooperative. The patronage refund is that part of net earnings returned to members in direct proportion to the amount of their Co-op purchases over the year. Since the patronage refund was initiated in 1990, La Montañita has returned more than 3.4 million dollars to our members. We are pleased that this year’s financial performance should once again permit us to add to this total.
Patronage refunds are unique to cooperatives. The traditional investment model provides a financial return based on the size of the investment. Cooperatives, too, start with an investment (for example, annual membership dues), but base the financial return (patronage refund) on each member’s yearly purchases. The more a member shops at the Co-op, the greater the refund. The cooperative investment model is accessible to all, sustainable, and supports the entire community rather than a small group of investors. The Co-op exists for the benefit of its members and in return members take responsibility for the health of the Co-op by paying dues and buying groceries.
The 2012 Annual Report (see the October Co-op Connection newsletter) described in general terms the financial challenges and successes of this last year. Upon completion of the final accounting review and financial adjustments, the Board of Directors announced the exact amount of this year’s patronage refund at their November 20th meeting. The overall patronage refund includes two parts: 1) A cash refund to members, and 2) A portion retained for the Co-op as equity. This year’s cash refund is anticipated to be 1.30 % of member sales, up from last year’s 1.12 %. The retained portion is used to fund capital expenditures -- major items like new equipment or improvements necessary to keep our facilities in good condition -- and each year’s amount is based on upcoming needs. This year’s retained portion is anticipated to be 1.13 % of member sales, compared to last year’s 1.80 %. Equity is how you as owners provide financial capital to the Co-op, keeping us strong and able to provide the range of services and programs that are important to the membership. This is one way in which the Co-op is able to weather the credit crunches that cripple other businesses.
Co-op services and programs set us apart from other natural foods markets. Instead of earnings being sent away to out-of-state investors, we invest those earnings in our local communities. We have members donating time in public schools and nearly 50 other community organizations in Albuquerque, Santa Fe and Gallup. Our members deliver groceries to senior and homebound people and provide the essential help that makes our Earth Day, Garden Party and other events so successful. For their donated time these members receive a shopping discount; it results in slightly lower net earnings for the Co-op, but fulfills our goal of adding value to our communities. This is an example of another cooperative difference: the multiple bottom line, based not just on dollars, but on social and environmental concerns as well.
Programs like the Co-op Distribution Center (the cornerstone of our regional FoodShed Project), the La Montañita Fund ( coop member investors pooling resources to provide affordable loans for local producers) and the Veteran Farmer Project are all thriving and improving every day. Each of these programs demonstrates how all of us – local farmers, ranchers, producers, retailers, consumers, local businesses and organizations – can help ourselves through these tough economic times by sharing and supporting the cooperative business model as a real alternative to the corporate model. La Montañita is acknowledged nationally as a leader in establishing innovative and workable programs in food distribution and grassroots community investing.
The Board understands that maintaining such ambitious programs can impact your patronage refund check. The power of cooperation that comes from balancing our multiple bottom lines and pooling our financial resources enables the creation of something better than any of us can do alone. Together we can turn our values into concrete benefits for the whole.
YOU OWN IT!
When you think about your La Montañita Co-op, think about being an owner of a local business, because that is exactly what you are. You reap the benefits of a natural foods grocery store every day and you can look forward to a financial return on your purchases from our past fiscal year operations while making a solid investment in the future of the cooperative you own.
Congratulations to us all for another great year at the Co-op!
Watch Your Mailbox!
Your La Montañita Food Co-op Patronage Refund check will be mailed in early to mid-December. Checks will be issued to all members who receive a patronage refund of $5 or more. If you were a member in good standing from September 1, 2011 to August 31, 2012 and do not receive a check, please visit any Co-op location information desk... it may be that your refund is less than $5. If that is the case, we will look up your membership account and issue you a store credit or cash refund on the spot.
If you have moved and have not yet updated your address, please do so immediately. Watch your home mailbox for your Patronage Refund check in December.
A Note from LMC General Manager, Terry Bowling
You probably have noticed several references to this year's patronage refund in this month’s newsletter! We are thrilled to be able to return $265,000. to our members -- $16,000 more than last year. It is your support that has made this patronage amount possible. Given the state of the economy to be able to do over a quarter of a million dollars in patronage refunds is a testament to your support of your co-op and the co-op economic model.
We did have an issue at our Santa Fe store that added an extra calculation to our usual patronage refund work.
In early January 2012, our computer system experienced a server failure at the Santa Fe store. After months of efforts to retrieve this data we could not recover the lost data. This data included member sales for the time period in which the server was not working. We consulted an outside certified public accountant to assist us with the best method to address this lost data to make sure all Santa Fe members received all the patronage refund that was due to them.
To rectify the situation, this year patronage calculation for members who shopped at the Santa Fe store, was done by looking at each member’s purchase data for the 256 days we did have purchase data for during our fiscal year of September 1, 2011 to August 3, 2012. We then divided each member ‘s purchase data by 256 (the number of days we have data for), then multiplied it by 366; days in a year plus one leap year day (256/366). This is the same as multiplying each member’s purchases for the period we have data for by 1.43, to come up with the total purchases used to calculate each member’s patronage refundable amount for the full fiscal year.
This server glitch only affects the Santa Fe store member purchases. We did not experience any member purchase data collection issues at the other Co-op locations. As with any problem the key question is how do we prevent this from happening again? We are installing a new POS (point of sale) system at all stores. This new system is far more reliable than the current system and has multiple points of backup. I’m confident that the above calculation is fair and just; and that everyone will receive the full patronage refund they have earned.
Please let me know if you have any questions, I can reached at
or by phone at 505-217-2020, thank you for another successful year for our co-op.