by Alex Gyori
Over many months now, my contributions to our newsletter have involved issues related to the opening of our new Co-op store. Despite an urge to take up topics that are less of the moment, I feel compelled to comment on several consequential, practical questions that persist: general contractor issues, cash flow, and a retirement.
General contractor woes.
Let’s start with the issues surrounding the general contractor. It has been somewhat distressing to see in the local media the reporting that Baybutt Construction, Inc.’s president has alleged that it was the Co-op’s fault that his company fell on hard times. For our part, it is a fact that throughout the whole construction project BFC and our housing partners followed to the letter our contractual obligations regarding payment for work done. Through People’s United Bank, all properly drawn-up requisitions were paid in full. During the last several months of the project, the general contractor failed to present the required paperwork, and payments were appropriately held up. As of the present time, People’s retains a significant portion of unspent construction loan funds. Baybutt’s collapse forced us to call in the bond agent that insured the project’s completion.
Our project is essentially complete, with a few punch- list items to go. It is therefore our expectation that all legitimate claims for payment by the subcontractors will soon be settled through the bond company, but it has been a gradual and necessarily methodical process as the bond agents sort out the complex situation. One result of the slow pace is that final landscaping of our green roof and the parking lot is yet to be scheduled. We had been looking forward to seeing this happen in very early spring.
Cash Flow. In February I reported that cash flow had become very tight, due to the delays in getting the store open. Specifically, on the one hand we had to start paying back our loans well before our revenue stream began producing the needed cash, and on the other, the complicated issues engendered by the collapse of Baybutt Construction, Inc., required us to retain the services of our project manager, our clerk of the works, and legal counsel, long after the scheduled completion dates. As a result, our cash reserves were depleted. I am happy to report now that, although cash is not yet where we want it to be, the trend is very positive, there has been steady improvement. Based upon our latest updated projections for the forth quarter that began at the beginning of April, we will achieve a break even point by the end of June if we achieve the forecast sales, margins, and expenses.
A well-deserved retirement.
After fifteen years on the job, our highly skilled and dedicated financial manager, Bruce Boardman, has announced his retirement, effective as of October. At 76 years of age, he deserves some serious R & R! Bruce was semi-retired when he hired on in 1998 as our part- time financial manager, but over the years he increased his schedule to full time. His knowledge and experience have been essential in helping BFC prepare to meet the accounting needs of a growing organization, particularly the unbelievably complex aspects of our redevelopment project financing. He will be missed, but will have left a lasting legacy of sound fiscal management that will benefit the Co-op for many years to come. Thank you, Bruce!