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Fiscal Year 2016 Operating & Capital Budgets

Fiscal Year 2016 (FY16) is 53-weeks long, running June 29th, 2015 to July 3rd, 2016.Co-op bylaw 6.1states “The fiscal year of the Co-op shall be from the first Monday nearest June 30th to the Sunday nearest June 30th next, for a revolving 52/53-week cycle.” Every five years we have a 53-week fiscal year and FY16 is a 53-week year.

Co-op bylaw 6.2 requires that management prepare an annual budget with input from the Board and its Finance Committee, the Board approves the budget, and a consolidated version of the budget is published and distributed to the Owners.

The FY16 budget was approved by the Board on June 16th. This budget reflects a Cooperative that is focused on returning to profitability amongst increased competition in the organic and natural food markets.

Some of the highlights from the budget:

  • Returning to profitability (net income = $50,000).
  • Reduce personnel spending $275K year-over-year by freezing merit pay, issuing two 1% Cost of Living Adjustments (Fall and Spring), reducing Administrative Labor by 7.5% versus current rate and suspending the 401(k) employer match for the calendar year 2016.
  • Funding projects that support profitability:Implement our values-based Customer Service Initiative and Staff Product Knowledge Development.
  • Cultural Audit to support our commitment to becoming a more inclusive and diverse organization.
  • Third retail site selection—recommend a third retail site to our Board.

Any Questions?
If you have any questions regarding the FY2015 budget or other Co-op financial matters, feel free to email me at .

FY16 Budget by the numbers (the below numbers are rounded)
$ 41,920,000total budgeted sales
$ 26,660,000in cost of goods sold (63.6% of sales)
$ 7,917,800in total wage expense (18.9% of sales)
$ 3,222,400in benefits, taxes, and other personnel related expense (7.7% of sales)
$ 483,000in debit/credit card processing fees
$ 406,900in repair and maintenance expenses
$ 394,000in rent expenses
$ 295,100in utility expenses
$ 250,000in Access (need-based) discounts
$ 200,000in capital expenditures (see accompanying capital budget)
$ 178,800increase fair share equity
$ 50,000projected surplus (aka net income)

 

Approved FY16 Operating Budget
The operating budget is a detailed projection of sales and expenses to support and guide day-to-day Co-op operations.
 FY16 BudgetFY15 Actual
 $% of sales$% of sales
Total Sales$41,920,000100.0%$41,482,798100.0%
Cost of Goods($26,660,000)-63.6%($26,493,732)-63.9%
Gross Margin$15,260,00036.4%$14,989,06636.1%
Personnel Costs$11,140,20026.6%$11,373,10127.4%
Other Operating Expenses$4,175,80010.0%$4,303,01610.4%
Total Operating Expenses$15,316,00036.5%$15,676,11737.8%
Income (Loss) from Operations($56,000)-0.1%($687,051)-1.7%
Total Other Income (Expenses)$106,0000.3%$194,0510.5%
Income Tax Expense$00.0%$176,0000.4%
Net Income (Loss)$50,0000.1%($317,000)-0.8%

 

Approved FY16 Capital Budget
The capital budget includes significant, long term investments to support strategic initiatives (sales growth and/or operational efficiency), equipment replacement, or facility improvement.
ITEMFY16COMMENT
3rd Retail Site: Preliminary Planning and Preparation$40,0003rd retail site selection and feasibility/market study
POS Server Upgrades$26,000Upgrade POS to improve system performance, staff efficiency, and PCI compliance.
Hot Case Merchandiser: West$11,700Improve merchandising of rotisserie and other ready-made hot prepared food items.
Solar Thermal System: East$10,500Purchase solar thermal system on roof of 1221 Willy as part of 2009 agreement with Resource Solar.
2X: All locations$14, 500Replaces Citrix as primary technology for staff to connect to key operating systems. 2X has a lower cost of ownership and better integrates with our technology infrastructure.
Willy Pack Cooler: East$8,100Improve merchandising of refrigerated Willy Pack product.
Floor Scrubber: East$7,600Replace obsolete equipment.
Delivery Van Refrigerated Unit: OSK$6,500Replace obsolete equipment.
Refrigerated Pizza Production Table: East$6,000Improve utilization and merchandising of product for East’s hearth oven.
Accounting System Version Upgrade: CO$2,500Upgrade accounting system to current version.
Juice Bar Freezer: East$2,400Improve Juice Bar work space for improved customer service and efficiency.
Unallocated/Contingency$64,200 
Total$200,000 

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