Annual report 2014

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EcoReality Sustainable Land Use and Education Cooperative Annual Report, 2014

Jason and Farm Steward Cleome shows off one of many 2013 greenhouse harvests. (Roxie helped, too!)
Thank you for your interest in EcoReality. The following reports outline the activities of the co-op over its eighth year.

EcoReality was founded in April, 2006, for the purpose of creating an ecovillage on Salt Spring Island. Within days of incorporation, we purchased a 4.8 acre farm on Salt Spring Island, knowing that was but a test-ground for ideas, and that we'd require more land to accomplish our goals.

In March 2008, opportunity struck, and we negotiated the purchase of 43 acres of lovely irrigated farmland with two houses in the Fulford Valley, next to 61 acres of community farmland. We spent our first night here June 3rd of 2008.

Our ongoing goal is to attract additional members, raise capital, and engage the public and political processes necessary to house perhaps 15 to 30 family units in a sustainable, low-energy and low-cost manner.

2013 Overview

2013 has been a rebuilding year. We focused on achieving financial and personnel stability, rather than growth.

One of many early-season greenhouse work parties.
Once again, the year begins in turmoil, this time due to unruly and delinquent renters. We find it necessary to serve three separate eviction notices, and then to spend tens of hours in clean-up, which was not even nearly compensated by security deposits.

And once again, we entertain the notion of packing it all in, selling the property and terminating EcoReality. The board of directors authorize such an action at the first meeting of the year. However, we also note that we showed a tiny profit of about $1,500 for the preceding year. Although not near enough to make up for five-figure losses in preceding years, it's a start, and by the end of February, we decide to formally defer the decision to pursue liquidation.

As luck or karma would have it, we then find the best renters we've had in our history (thanks, Heather & family, and Jason, too!), who have since been here for over a year, the longest we've had any renters. With this income stability, it seems our best efforts on behalf of shareholders are to continue to recruit new member-funders, rather than terminate the co-op at a considerable loss for all involved.

More kids are born at EcoReality in 2013.
Carol's disinvolvement proceeds amicably, yet we are concerned that it might seem like a problem to potential member-funders. Jan, Carol, and EcoReality sign an agreement that neither Jan nor Carol are to redeem more than 500 of their Class A Investment Shares in any given month, lending further stability, in that neither Jan nor Carol can easily cause insolvency problems for the co-op.

Our mortgage is renewed, but our request to increase the mortgage in order to pay out departing shareholders is once again denied. Our lender writes that "it is simply not prudent lending to convert equity into debt... at this time." We reluctantly inform departing shareholders that we cannot return their investment without liquidating the property, at a loss approaching 50%. Such a move still requires approval of 80% of shareholders in every class of shares. This legal requirement makes it highly unlikely that the property will ever go on the market while property values remain depressed, so we inform departing shareholders that the best and quickest way to recoup their investment is through a private transaction (with EcoReality board approval). This way, departing investors can play an active role in recouping their investment by aiding our recruiting efforts.

Jan plants American Chestnut trees in the east field.
We remain confident that there are people out there who have the funding and desire to do collaborative agriculture at this scale, and in May, we host a meeting of four such potential member-funders. Over the course of a weekend, we pour over the numbers, review our constitution, and discuss plans for future development. At the end of that weekend, we have one decline, two "maybees," and one gentleman from India begins immigration proceedings, based on investing in EcoReality once his immigration is complete. While the two "maybees" have since declined, we continue to receive queries and visits from interested potential member-funders.
One of Robert Laporte's EcoNest homes.
Robert Laporte proposes putting an "EcoNest" natural-built house on site in an affordable manner, and Jan gets busy working on plans, quotes, permits, etc. Although it will take a costly and time-consuming rezoning in order to build additional houses for people, we can build up to 5,000 sqft of "auxiliary farm buildings" without rezoning, and we get a wink and a nod to build one to residential standards, on the condition that we put forth our re-zoning proposal at the same time. Long story short, we were unable to raise the ~$100,000 it would have taken to erect this building, but Jan and Robert "greased the skids" for future such projects, obtaining detailed materials quotes and arriving at a high-confidence budget. With a bit of luck, this project may be revisited in the next year or two.

Getting someone to fill Ben's capable shoes as Farm Steward proves to be a difficult task. Three very good candidates slip through our fingers for various reasons, and we settle on someone with limited agriculture experience and considerable "baggage." This proves to be near-disastrous, as much of the work Jan and other volunteers performed in late winter and early spring is ruined and discarded.

But then along comes Cleome Rowe, a life-long farmer and middle-school science/math teacher, and we accept her as the first new member in four years in June. Under Cleome's leadership, we manage to recover from our difficult start, and fill the greenhouse with cucumbers, tomatoes, basil, and peppers. Cleome becomes a Director in July.

Due to the labour difficulties mentioned, neither the market garden nor the greenhouse perform as well as the previous year, but due to limited labour, we choose a wholesale-only strategy, and manage to supply just about every organic cucumber sold in island grocery stores.

In 2013, we earned $2,285.88 on $100,479.01 of gross revenue -- a 2.3% profit margin, not far from last year's margin.

Looking Ahead

Espi Contreras shows off the cucumbers she helped grow.
Although the year began with considerable people stress, further events remind us that our experiences with others has been almost universally wonderful! So we plan to build on those memories this year, and it looks like we have a great crew lined up for the growing season. We have received a Canada Summer Jobs grant, and so will be able to pay Wylie for his summer work before he returns to school in the fall. He is joined by enthusiastic volunteers Dan McCool and Micayla Gammon for our main early-season staffing in 2014. We are now prepared to have a strong presence in market garden produce this year. We will continue to cultivate our good wholesale relationships with island grocers, while also getting re-involved in Saturday and Tuesday farmers markets.

We finally have some wonderful, long-term renters, with whom we have a mutually-respectful arrangement. Good renters means we have a certain measure of financial stability, and can focus on other business aspects without undue concern for turning cash around.

Dairy continues to be a strong and reliable area. We mourned the loss of herd queen Maya, who died from birthing complications, yet we managed to make up for the loss of her milk (she was the most productive doe) with record kid births and sales. All our does appear to be bred, and we look forward to a joyous kidding season — my personal favourite part of this job!

We are dedicated to progressing with numerous sustainability initiatives, and plan to convert our Vanagon to electric drive, as a dedicated market vehicle. We have already procured most of the key components, and plan to have this ready for the first Tuesday market in June. We also plan to rehabilitate our biodiesel operation, with the help of several interested people.

With the capable help of Cleome, we are re-invigorating our educational activities, with plans to host a dozen or so Korean middle-school students for two weeks, and further plans for starting a regular experiential learning program for local school-age children, as well as continuing to have workshops, work-parties, and Permaculture classes.

In the longer term, we are looking forward to nourishing numerous potential member-funder contacts we've made in the past year, including Adam Perry and his wife Grace Kyomugisha and their son Emmanuel-Jacob. Adam has agreed to be a Director this year, and intends to pursue membership. Other prominent visitors help us in our recruiting efforts, including Transition Town US co-founder Raven Gray, prominent video blogger Janaia Donaldsen and intentional community maven Diana Leafe Christian.

Having survived a number of tumultuous years, we've successfully focused on stability, and are now ready for careful growth.

--Jan

Communication Steward's Report (Jan Steinman)

Duties

The communication steward is responsible for acting on behalf of efficient and understandable communications, both within EcoReality, and between EcoReality and the outside world.

This includes:

  • Service as statutory Secretary:
    • keeping and maintaining legal records, such as incorporation certificates and meeting minutes,
    • recording and maintaining legally required information, such as member and investment shares and shareholder information, working with the Finance steward as necessary,
    • taking meeting notes and/or minutes, or seeing that such is delegated and properly executed by a delegate,
    • maintaining and arranging access to public records,
    • filing required reports.
  • Providing mechanisms for organizing, maintaining, storing, and accessing our internal documents, information, and agreements, such as:
    • serving as librarian,
    • maintaining resource inventory,
    • maintaining information infrastructure,
  • Presenting EcoReality's "face to the world," including website, press releases, promotion, and recruiting.
  • Balancing our commitment to radical transparency with the need for personal privacy.

Accomplishments

Communications Statistics

Statistic 2006 2007 2008 2009 2010 2011 2012 2013 Change
Home page hits 13,312 18,126 65,438 110,967 146,759 195,415 282,586 336,078 +19%
Meetings page hits 12,970 15,482 96,303 114,335 137,584 240,868 334,105 377,340 +13%
Google references 3,190 3,220 7,940 10,700 17,700 ~60,000 ~58,600 ~97,700 +67%
Agricultural production 0 318 1,753 12,776 12,021 12,347 12,264 10,908 -11%
Labour 9 1,307 3,057 3,161 3,280 4,702 7,016 4,617 -34%
Sales 0 $410 $1,588 $8,534 $10,569 $8,013 $10,266 $8,566 -17%
Email List 72 116 220 327 342 354 397 387 -2.5%
Members 4 4 9 6 3 3 3 3 0%
Investors 4 4 9 6 5 31 44 47 +6.8%
Volunteers 0 11 18 16 8 18 16 15 -6.2%
Newsletters 4 5 13 23 23 23 24 24 0%
Meetings 19 16 65 71 53 35 50 40 -20%


  • Google references nearly doubled. Given the proprietary nature of Google ranking, it's hard to assign meaning to this statistic.
  • Agricultural production and labour was down, reflecting staffing problems.
  • The number of investors was up, due entirely to new Class D Investment Shares, which support our successful community supported dairy operation.

Outreach

Data Management

We continue to improve our data management capabilities, with almost all information available to the public. We are still not tracking expenses (which are tracked in QuickBooks) in this system as well as we'd like.

Our horticultural database continues to grow, and we've added links to major on-line resources, so we can quickly connect our seeds and plants to everything one would want to know about them.

Improvement Opportunities

  • With increased stability and progress, we plan to resume periodic newsletters. (We said that last year, and it's still true!)
  • On-line resources:
    • Project management system needs improvement and more database support, which has begun with expense reporting.
    • Keeping track of agreements is currently tedious, and needs more database support.
    • We'd like to implement a simple graphing system, so that data trends can be easily visualized.

Challenges

  • Our major challenge is still financial, although the focus is now on replacing early investors over stability of cash flow.
  • Time remains a challenge. Many communications tasks get short-changed due to current and immediate needs to take care of animals or to get plants in the ground or to market.

Future Plans

  • We continue to seek additional member-funders who can help us implement our business plan and site development plan.
  • Winter plans include upgrading our database and providing graphical reports.
  • More newsletters, as interesting news develops!

Jan Steinman

Finance Report

Balance Highlights

  • Liabilities (as of 31 December 2013)
    • CCEC Mortgage: $326,387.42
    • Class A Investment Shares: $1,416,536.69
    • Class B Investment Shares: $170,254.72
    • Class D Investment Shares: $2,055.00
    • Member shares: $10,000
    • Accounts Payable $24,108.04
  • Assets:
    • Fixed Assets: $1,924,474.36
    • Shareholder Loans:$12,659.45
    • Other Assets: $26,626.16
    • ISCU Chequing: $1,838.89

Profit Centres

Nearly a third our income came from rent, and nearly half our expenses went to overhead, which includes three of the biggest single expenses: interest ($14,949.18), insurance ($5,605.00), and taxes ($2,705.70).

Rental income continues to pay most expenses. We also made modest amounts in fruit and vegetables. High labour costs impacted dairy, eggs, and transplant starts.

Click on the arrows in any column to sort by that column.

Profit Centre Income % Expenses % Profit Margin
Agri-Tourism $20.00 0.02% 0.00% $20.00 100.00%
Capital Projects $1,479.86 1.47% $1,562.13 1.59% -$82.27 -5.56%
Dairy $16,587.23 16.51% $16,938.75 17.25% -$351.52 -2.12%
Education $326.18 0.32% $343.90 0.35% -$17.72 -5.43%
Eggs $2,751.83 2.74% $3,191.79 3.25% -$439.96 -15.99%
Fruiticulture $2,444.64 2.43% $2,205.99 2.25% $238.65 9.76%
Market Garden $10,611.32 10.56% $9,952.69 10.14% $658.63 6.21%
Medicinal Herbs $91.07 0.09% $120.21 0.12% -$29.14 -32.00%
Overhead $25,434.41 25.31% $48,524.19 49.42% -$23,089.78 -90.78%
Rent $30,604.31 30.46% $2,899.97 2.95% $27,704.34 90.52%
Transplant Propagation $8,435.42 8.40% $10,573.40 10.77% -$2,137.98 -25.35%
Value Added $1,692.74 1.68% $1,880.11 1.91% -$187.37 -11.07%
Total $100,479.01 100% $98,193.13 100% $2,285.88 2.27%


Formal accounting documents are available here:

Balance SheetProfit & Loss
File:Balance Sheet 2013.pdfFile:Profit & Loss 2013.pdf

Future Plans

  • The three biggest expenses are not currently allocated to profit centres. To paint a more accurate picture, they should be allocated to profit centres based on percentage of some value, such as gross income, net profit, or labour worked.
  • We plan to put a lot of effort into Education in 2014, by establishing experiential learning programs for school-age children.
  • High labour expenses impact all profit centres besides rent. Volunteer labour is allocated to the various profit centres based upon time sheets turned in by volunteers.
  • The cost of volunteer hosting was calculated in 2012 based on per-diem estimates of $2.50 per meal for food and $2.50 per day for lodging. In 2013, we switched to actual food costs (budgeted at $7.50 per person*day), which paints a more accurate picture.

-- Jan Steinman

Farm Steward Report

Duties

Cleome shows off some of the basil plants she grows.

The Farm Steward organizes and oversees the timeline, labor, budgets, all the needs and purchase of seeds and plants for the gardens.

Overview

This was a year of rethinking the most efficient use of volunteer time and energy and focusing our energies in areas that provide the most profit for the least amount of work. The year began chaotically with a new greenhouse manager who was unaware of the scope of the responsibility, an infestation of whitefly that was not recognized and corrected immediately, and the loss of many plant starts.

When I arrived in the middle of June to assist with the work, the gardens were not planted and the greenhouse had few surviving starts. We prioritized the plantings, built up the soil in the greenhouse with horse manure, and had a decent crop of cucumbers that were marketed to local retailers. We were also able to sell some of our lettuce, tomatoes, and basil in the same manner. Vegetables that were not sold wholesale were either sold at our farm stand or put up for our own use. With hard work and a more organized approach to growing and marketing our produce, we managed to turn what could have been a total loss into almost breaking even for the year.

Members Cleome, Jan, and Rudy and volunteers show off their greenhouse plantings.
We also managed to keep the Physalis alive over the winter so production for 2014 should be much earlier and heavier.

Future Plans

In 2014 we are focusing on improving the planting beds in the greenhouse by building cedar boxes. This will give us increased growing area since we can plant across a level area instead of on hilled beds. We are expanding the variety of crops with the addition of more varieties of cucumbers, melons, and squash. Outdoor plantings of potatoes, strawberries, cane berries, root crops, greens, and other crops will be increased, both in total plants and varieties.

On a trial basis, we are marketing vegetable starts, both as a wholesaler and as a retailer. It will be interesting to see if we can develop a strong market for our starts as we only use organic soils and non-plastic, sustainable pots. At the worst, we will have more plants for our market garden and can reuse the soil.

A longer term goal is to provide an agriculturally based education for young people. We plan to start a program for those 6 to 17 years old that allows us to incorporate sustainable practices into a formal education program. Young people will learn how to choose, nurture, grow, harvest, cook, store, and process the foods they produce while learning about the biological, social, environmental, and financial systems that support sustainable production.

Now that the turmoil of the first half of 2013 is behind us, real improvement and growth is evident and we are looking forward to a rewarding and profitable year in 2014.

--Cleome Rowe

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