New Deal Cafe Board of Directors
Regular Meeting
Present: Diana McFadden, Bill Wilkerson, Brecken Chinn Swartz
Excused: Peter May, Michael Cooney
Others: Joel Moodie, Natalie Hughes England, Fontella Williams, Raj Karkara, Dianne Wilkerson
Peter May called the meeting to order at 7:40 pm.
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Approval of Minutes
The minutes of August 11 and 13, 2007 were approved with minor changes.
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Financial Report
Natalie England reported that the tax return was completed this week (sent by email earlier
in the day) and that the cafe owes no taxes for 2006. In response to Bill’s
questions asked about discrepancies in the cafe’s books, she stated that Bruce was able to work
around them. She left the official copy of the tax return for Peter to sign and mail
before August 31.She distributed financial reports for the year-to-date, April-June 2007 (second quarter),
and June-August 2007 (summer season). The cafe has lost over $7,000 this year so far, almost
all since June. She is still trying to reconcile some discrepancies and uncategorized
expenses. Natalie’s next focus will be on reporting to the state on the amount of sales tax owed by
the cafe, which has not been paid since February. -
Manager’s Report
Joel Moodie reported that the cafe’s bank account is short due to a failure of the
bank to transfer funds between accounts. The situation is dire. He has not been able to
pay bills on time or at all. Payroll has been delayed or checks not cashed. The IRS sent a letter
requesting immediate payment of money owed. Lack of cash has limited his ability to purchase inventory,
and in turn has hurt sales.He emphasized the need to open undeveloped avenues of revenue and recommended a loan
(or loans) be obtained as soon as possible in order to make necessary improvements. He needs the
board’s leadership to apply for and obtain the loans.There is a city-sponsored revolving loan fund for Roosevelt Center, but it is limited to loans
under $500. In addition to the proposed NCCB loan, Joel described three other potential sources
for loans he discovered at a meeting with the Small Business Administration in Largo as follows.
Some are more immediately accessible than others. Interest rates are at prime (the rate given
large banks by the FED, around 10%) plus specific percentage points, for a total rate to the cafe
of around 12%. The options are:- Prince George’s Financial Services Corporation
- Innovative Bank’s SOHO Loan Program
- Creative Financing Program.
The consolidation of the existing loans is possible if the loan amount is large enough. Bill
emphasized the need to insure that the loan be used only for improvements and debt consolidation
as opposed to operating expenses, and proposed that the board be required to approve any expenditures
from the loan. Joel expressed the need for an exit strategy should finances not improve.The board also agreed that applications for financing are a first and immediate step before
planning and renovation. A three member committee composed of a board member, the manager,
and a consultant should work on loans. Bill agreed to work on the NCCB loan application with Natalie
and Joel this week. Other help is needed from the board to work on short term financing
problems and solutions. -
Cafe Improvements
The board discussed the proposed cafe improvement program. The board agrees that necessary
financing should be obtained to insure improvements are of a good professional quality and to
“Do it Right.” The proposed grand opening on or about September 15 should be delayed.
A campaign slogan was suggested: “The New Deal’s New Deal.”The board reached a consensus that the following three things will be completed this week:
- The menu board be fixed.
- Staff will wear black t-shirts to identify themselves as employees.
- A list of trained support volunteers will be created.
The board also agreed that:
- A report on the bathroom renovation plans is desired by the board from Barbara Logan and
Amethyst before work commences. - Plans should be made to fix the floors and walls in September.
- A list of trained support volunteers will be created.
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Potential Solutions
The board discussed the potential solutions to raising money, improving the accountability
and motivation of management and staff, and improving the cafe so that it becomes financially self
sustaining. The discussion focused on the following alternatives:- Close the Cafe (Bankruptcy) – Who would pay the cafe’s debts (over $100,000)?
- Sell Shares in Stockholder Form of Ownership – May be complicated; not that different from
the cooperative in its involvement of multiple “owners{ and the accompanying lack of accountability. - Consideration should be given to a delay in marketing plans until the cafe has the
improvements in place. And the board would like a report from Leslie Brothers. - Renovation work may require closing the cafe for 24-48 hours.
- A long term goal is to purchase the building.
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Staffing
Joel and Fontella reported on serious staffing problems and desired staffing needs.
Brecken suggested that a list of trained support staff (volunteers) will be created and maintained
to supplement staff when necessary. The board directed that the staff wear black t-shirts starting
Wednesday, August 29, 2007 to identify themselves as cafe employees. -
Next Meeting
The next board meeting was set for Tuesday, September 4, 2007 at 7:30pm at the cafe.
The meeting was adjourned at 9:15 p.m.
Respectfully submitted,
Bill Wilkerson, Secretary
These minutes were approved at the Board’s meeting of September 4, 2007.
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