With the 2014 campaign now fully underway, even Mr. Jacob wants a piece of the action with today’s response to our provocative questions distributed prior to the Meet the Candidates forum on Monday.
Coop financial statements for fiscal years 2009, 2010, 2011, 2012, and 2013 are available online, so you can see what he’s talking about yourself. In both 2011 and 2012, the coop shows an operational deficit, meaning that expenses were greater than income. That’s actual expenses, not counting depreciation or amortization.
I know one prospective buyer last year whose mortgage application was turned down because the lending bank had misgivings about those deficits. Even if the coop looks better a year later with flip taxes from a resurgent housing market bailing us out, the underlying concern about our financial stability has not been resolved.
But, please, let’s look at this another way, because I’m not interested in having a shouting match with Mr. Jacob or anyone else. Cooperatively Yours decided this past spring to encourage communication with the board and management. That means asking questions in a more public way to hold our directors accountable, and pressing them to distribute quarterly reports of board actions and hold mid-year financial Q&A’s so that these kinds of issues can be discussed more constructively. To that end, I’m very grateful to Mr. Jacob for his memo, because it opens a conversation about what kind of a deficit may be beneficial and what kind is unsustainable.
One of the questions our flyer asked on Monday was: “The coop’s deficit grows every year — now almost $11 million. Are you OK with that?” Mr. Jacob says that because that figure represents what’s called accumulated deficit it’s actually not an unhealthy number and therefore, yes, he’s OK with it. That’s a perfectly good answer. I would rather it had come without bold-faced all-caps name-calling, but I think this is progress, and this Thanksgiving, I’m grateful for it — let’s get answers first and we’ll work on our manners another time.