Food & Drink

Sacramento's most bitter political fight may be unfolding at a local grocery store

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The Sacramento Natural Foods Co-op opened its new store on Wednesday, Oct. 12, 2016. Former Co-op general manager Paul Cultera showed off the larger new store at 28th and R streets.
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The Sacramento Natural Foods Co-op opened its new store on Wednesday, Oct. 12, 2016. Former Co-op general manager Paul Cultera showed off the larger new store at 28th and R streets.

A special election to overhaul the Sacramento Natural Foods Co-op's constitution would lead to greener pastures down the road, some say. But other longtime members believe it's the latest power grab aimed at turning the co-op into a Walmart-like corporation.

The 45-year-old institution opened voting last week for a clean-slate revision of its bylaws and affiliated articles, less than a month after the documents were unveiled at the store's quarterly meeting.

As co-op directors have encouraged members to vote for the changes, a group called Friends of the Co-op has pushed back, leading to a showdown between those who say they want to bring the store into the present day and an old guard who claims the co-op they know and love is being decimated.

The dispute grew so acrimonious that longtime Sacramento Natural Foods Co-op member Rhonda Rumrey sued her own store on June 1 and asked for an emergency injunction to suspend the election.

A Sacramento Superior Court judge denied the injunction Friday. Rumrey did not comment, but her attorney, Andrew Bluth, said it's common for an emergency injunction request to be denied and that Rumrey is considering her next course of legal action.

The revised bylaws would allow the Sacramento Natural Foods Co-op's board of directors to suspend or expel members for any reason whatsoever, institute 10-year noncontinuous term limits for board representatives — some of whom served up to 29 years in the past — and open membership to non-California residents.

They would also add two vice chairpersons to the seven-person board, allow nonmembers to buy stock shares and reduce the number of member meetings from quarterly to annually.

It's the last of those alterations that irks Friends of the Co-op member and former co-op board president Michelle Reynolds the most, she said, because it's intentionally designed to diminish the common member's participation in the organization. The co-op now has about 10,000 members.

"True, not everyone wants to go to meetings and engage with the co-op board, but now with the new bylaws, they won't have the chance," said Reynolds, who served on the board from 2009-2015 and has been a co-op member for 15 years. "These are not people who want to create a ruckus at the co-op. These are longtime shoppers who want to have their voices heard."

Critics like former director of finance Glenn Carnahan, who left the store in September 2017 but remains a member, allege the co-op is becoming more oligarchical and point to the new bylaws' seemingly abrupt roll-out as evidence of such a movement.

Board directors drafted the overhauled bylaws and articles for two years before introducing them on May 10 for a voting period running June 4-17, they said in an FAQ sheet. Members were allowed to ask clarifying questions the day the bylaws were introduced but weren't allowed to suggest amendments, Carnahan said.

Proponents argue that today's co-op doesn't resemble the one that was founded 45 years ago. The board anticipates $45 million in sales this year from its 42,000-square-foot store at 29th and R streets, a far cry from the $108,000 in sales made at the 16,000-square-foot store by 16th and P streets in 1973.

The co-op's Facebook page shared a lengthy post from vice president Joel Erb, who dismissed Friends of the Co-op as "a small but vocal set of members who seem to carry around a 'sky is falling' mentality that does not represent the reality." It was easy to consult all members before drafting rules back when the store had a $250 asset base in 1973, but it's harder now that the co-op ranks among Sacramento's most popular major grocery hubs, Erb said.

"At the same time that we are your favorite community grocery store and gathering place, we are a business subject to the whims of the marketplace, competing with stores like Amazon/Whole Foods, Nugget, Safeway, Raley's and whoever comes next week," Erb wrote.

Sacramento Natural Foods Co-op board president Michelle Mussuto, who voted for the updated bylaws, said current regulations unnecessarily restrict the co-op's financial, organizational and governmental flexibility. Adding two vice chairpersons allows the board to better represent its substantial membership body, Mussuto said, while also installing more set roles for elected officials.

“In the early days, our co-op was largely run by volunteer members," Mussuto wrote in an email. "Nowadays, we enjoy having a professional team to run the store, yet our articles and bylaws conflate responsibilities in a way that has become burdensome and unhelpful.”

Reynolds and Carnahan attributed what they see as a push for centralized control to general manager Dan Arnett, who came to Sacramento in December 2016 after running Central Co-Op in Seattle for four years. Under Arnett, Central Co-Op became the first store in the U.S. where members and employees each owned 50 percent of the business.

Central Co-Op also acquired the 4-year-old Tacoma Co-Op in November 2015 only to close it in July 2016, and Arnett left two months later as protesters questioned what had happened. A new Tacoma store is expected to open this summer.

Under the new bylaws, Arnett would become the Sacramento Natural Foods Co-op's CEO and sign off on tasks currently assigned to Mussuto, such as renewing the store's liquor license or submitting its tax forms. Arnett did not respond to a request for comment.

The new bylaws could be amended in the future by a two-thirds board vote or if 10 percent of the membership sign a non-electronic petition. That's too tall of a hurdle for an organization built on cooperative ownership, Reynolds said.

"This is not a grocery store that follows a corporate model, and it's not even a nonprofit where the board can just make decisions based on what they think is best," she said. "It belongs to everybody that’s part of the co-op and that's what makes it so interesting."

The Bee's Benjy Egel is launching a new effort to cover Sacramento's dining and beer scene. Please send tips and story ideas by email at begel@sacbee.com, on Twitter @BenjyEgel or by phone at (916) 321-1052.

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