Board of MeetingDirectorsAugust23,202211AM Sacramento, California
SAFE FOOD IS OUR BUSINESS 1 Schedule of Events
SAFE FOOD IS OUR BUSINESS 1 Tuesday, August 23, 2022 Schedule of Events Location: Sacramento Conference Room 710 Striker Sacramento,AvenueCA95834 Schedule of Events : 1 1 a.m. 5 p.m. Board Meeting
SAFE FOOD IS OUR BUSINESS 1 Agenda
SAFE FOOD IS OUR BUSINESS 1 Agenda 11:00AM Executive Session 11:30AM Call to Order Call to Order DFA of CA • Roll Call • DFA May 2022 Minutes Tab 3 Tab 4 Vaughn Call to Order Safe Food Alliance, Inc • Roll Call • Minutes • Business Tab 5 Vaughn 11:40AM Chairman’s Report Brian B. 11:45AM President’s Report Tab 6 Vaughn 11:50AM Key Performance Indicators Tab 7 Vaughn 12:15 PM Lunch 12:45 PM Financial Review Tab 8 Anne 1:15 PM Pension Plan Update Tab 9 Anne 1:25 PM FY 2022 Business Unit Updates Tab 10 Senior Team ** 2:10 PM FY 2023 Strategic Initiatives Tab 11 Senior Team ** 3 PM Break 3:15 PM FY 2023 Budget Tab 12 Anne 3:45 PM FY 2023 Capital Plan Tab 13 Vaughn 4 PM Organizational Charts Tab 14 Maribel 4:05 PM Fill Board Vacancy (Bylaws 3.06) Brian B. 4:10 PM Bylaw Revisions Tab 15 Vaughn
4:30 PM Future Meetings Tab 16 Katie 4:35 PM Other Business Brian B. 4:45 PM Executive Session Brian B. 5 PM Adjournment ** Senior Team ** Thomas Jones Senior Director of Analytical Services Laboratory Department Katie Edwards Director of Client Services Training & Consulting Department Narayan Patil Executive Director Certification Body Maribel Nunez Alvarez Senior Director, Administration and Operations Commodity Inspection Hillari Bynum Director of Marketing Marketing Department Joseph Nicholl Director of Client Relations Business Development/DFA Membership Anne Heredia Controller Accounting & Administration Annette Magee Director of Business Development Business Development (LOA)
SAFE FOOD IS OUR BUSINESS 1 Roll Call
SAFE FOOD IS OUR BUSINESS 1 Roll Call ➢ Brian Barczak ➢ Brian Dunning ➢ Dane Lance ➢ Gary Ford ➢ Jack Mariani ➢ Mark Mariani ➢ Mike Emigh ➢ Pete Turner ➢ Wendy Maduff DFA of California Board Terms Board Member Term Elected Re Election Due Pete Turner 2022 2025 Brian Barczak 2022 2025 Jack Mariani 2020 2023 Mike Emigh 2020 2023 Gary Ford 2020 2023 Dane Lance 2021 2024 Mark Mariani 2021 2024 Brian Dunning 2021 2024 Wendy Maduff 2022 2025
SAFE FOOD IS OUR BUSINESS 1 DFA of California May 2022 Meeting Minutes
Anne
1
Staff
Call to Order: Chairman, Brian Barczak, called the regular meeting of the board to order at 2:37 PM and asked for the roll call A quorum was present.
Alvarez Executive Session Action: Prior to the Board Meeting, during executive session, Koligian requested clarification from the Board regarding the reimbursement of travel costs for Directors’ spouses/significant others. By unanimous agreement, the Board took the policy position all travel costs for the Directors’ and the president’s spouses/significant other shall be paid by the DFA.
Approval of Minutes: The February 15, 2022, board meeting minutes were made available for comment and approval. Director Jack Mariani made a motion to approve the February 15, 2022, board meeting minutes, seconded by Director Dane Lance and they were unanimously approved.
Absent
Jack PMarkMarianiMarianieteTurner Mike Emigh (Vice Chair) Present Vaughn Koligian
DFA of of Directors
California Board
Meeting Minutes May 19, 2022 Hyatt Regency, Incline Village, Nevada Board Members Present
Further, the Board requested this policy be disclosed in the minutes as an action taken during executive session.
Dane Lance Gary Ford
Brian Barczak (Chair) Brian Dunning
MaribelJHillariAnnettHerediaeMageeBynumosephNichollNuñez
Chairman Barczak, adjourned the regular session at 5:15 PM whereupon the board excused staff and went into executive session for approximately 10 minutes.
2
Pension Plan Update: Ms. Anne Heredia presented an overview of the DFA pension plan as of April 2022 and a comparison of the status as of April 2021 Ms. Anne Heredia provided the board members with the update regarding not having the annual Pension Audit. She informed the board that Curcio Webb said the exposure would be a result of a mis payment. The board’s consensus was that we would forgo the Pension Audit for this next year. The board sought clarification if the DFA is required to pay the annual FASB insurance for the pension plan and Ms. Anne Heredia stated she’d investigate the matter and report her findings at the next board meeting.
Respectfully Submitted: Maribel Nuñez-Alvarez Secretary
President’s Report Executive Summary:
Individual Department Updates: The board was presented a comparison of revenue, expenses, operating income, G&A allocation, and net income for the FY2022 versus FY2021 for the same period, including a 3 year review for the lab, CB, and T&C units. The business development and marketing departments also gave presentations on current projects and their status.
Future Meetings: Mr. Koligian presented the upcoming scheduled dates for the future board meetings to be held on August 23, 2022 (DFA office), November 10, 2022 (Monterey, CA), and February 28, 2023 (Indian Wells, CA).
Mr. Vaughn Koligian reviewed the organization’s activities in the executive summary, along with a high-level financial review through the third quarter, FY 2022. A brief overview of the current activities and outcomes from July through March 2022 for each department were presented
Nomination Committee Update: Director Brian Dunning gave an update on the nomination committee’s recommendation to nominate Dr. Wendy Madoff, Brian Barczak, and Pete Turner on the ballot for vote during the Annual Membership Meeting to be held on Monday, May 23, 2022.
Financial Review: Ms. Anne Heredia reviewed the Consolidated Balance Sheet FY 2022 for the period ending March 31, 2022. The financial reports addressing Income Statement vs. Prior Year Actuals through March 31, 2022, for FY 2022 were then discussed, according to each revenue unit. Mr. Vaughn Koligian presented a capital request for $210,000 for an asset replacement of three laboratory instruments. Director Gary Ford made a motion to approve the capital request, seconded by Director Dane Lance and it was unanimously approved. Directors requested additional support material be presented for future, large capital requests.
SAFE FOOD IS OUR BUSINESS 1 Safe Food Alliance Meeting Minutes
Executive
Summary
SAFE FOOD IS OUR BUSINESS 1
SAFE FOO D IS OUR BUSINESS Year ‐ End Executive Summary – August 2022
1
Senior staff recently met with a professional business coach to help align strategic initiatives and improve overall staff inter workings.
Continue to work to build a more cohesive structure throughout all units. Turnover has declined, yet staff is spread very thin.
The focus on rebuilding the DFA’s presence with members is being well received. The Marketing Department is leading this charge and the effort has inspired the teams.
Effects of the outbreak on the T&C unit are being overcome and a break even is projected for 2023.
Continue to battle the challenges of the outbreak and routinely make internal adjustments to retain staff. Staff accountability remains a priority. Performance evaluations are more attuned to constructively building on strengths and candidly addressing areas of improvement. April has proven to be a timely month to perform evaluations. Work previously performed by two senior staff members has been delegated to other members of the team.
Hired two Training and Consulting team members and anticipate hiring one additional depending on growth. Hired two BD team members this past year and there’s room to hire up to two more to improve coverage from Stockton to Bakersfield. BD growth and staff BD training has been hampered over the last two months due to the BD Director being out on personal leave.
Multiple FMLA instances have impacted staff workload and overall performance in some departments.
Extensive pressure by competition to attract SFA lab staff. Paid spot bonuses and made two off cycle wage adjustments totaling more than $160K to keep lab staff. Further, modest wage adjustments were made during the April performance evaluation cycle. Greatly impacted our P&L and we’ll just have to make up for it! Have begun implementing tiered lab pricing model based upon volume, however, the effort has been somewhat limited due to the Director being out on leave and the unfamiliarity of two new hires with our lab activities.
The growth in the Audit Unit continues, yet due to COVID delays that led to scheduling restrictions by our two primary audit platforms, the majority of our audits must now be performed in the latter half of the calendar year which impacts scheduling, particularly with prospects.
Continue to emphasize the importance of increasing lab business and rebuilding T&C activities. Tie in opportunities between departments and members/prospects are emphasized. Received PPP forgiveness in the amount of $1.1M in December 2021. G&A expense allocations are reviewed twice annually. The Accumatica accounting software installed in the latter part of the last fiscal year is serving us very well. Loss of walnut and fig inspection revenue transferred a significant amount of G&A burden on the Lab and other units.
Extensive training of 5 new employees to become SQF and BRC certified has taken its toll on the unit. The value of the certification push will soon prove worthwhile.
Continue to work on developing the digital moisture meters as the USDA ARS lab team has resumed their support activities. Demand for the analog meters is very cyclical but this last year was off significantly.
2
Missed the timing of the roll out of the Starlims software for the SFA labs. It should be noted, there was a change of ownership that disrupted matters as well as software staff being out numerous times due to COVID issues. We sought approximately $57,000 in compensation for the delays and was able to negotiate for $79,000 in services as an offset for the delays and loss of opportunity.
Continue to be judicious in evaluating the cost ‐ benefit relationship for attending trade shows, conferences and related activities. Continue to collaborate with the California League of Food Producers for complementary marketing and business development activities. Limited number of SFA Marketing and BD staff make this effort particularly challenging.
USDA allowed outgoing fig inspections to become voluntary. It should be recognized, fig inspection volume is limited (industry handles 6 to 7,000 tons). Continuing fig work helps retain Kingsburg located inspection staff that perform almond and pistachio inspection activity, plus a limited number of other products throughout the remainder of the year. Have been forced to make some hourly adjustments in wages to retain some of our more experienced inspectors. Experience and the ability to effectively train for consistency must be retained. Increases in minimum wages and competition from handlers seeking to hire all levels of inspection staff remains a problem.
Lost walnut industry mandatory inspections. Continue to scramble for inspection work in walnuts, almonds and pistachios to help mitigate the loss. A number of medium to smaller walnut handlers continue to use us for inspection activities.
Last year, the three month delay in adjusting walnut rates received a positive response. Rates were adjusted effective December 1, 2021. Continued follow up and emphasis on contingency planning activities throughout all units of the DFA/SFA/SFC businesses. Our lack of depth makes this matter particularly challenging.
Holding twice a year membership appreciation dinners which need to grow in numbers. Both dinners held to date have directly resulted in securing additional business. Members, non member clients and prospects are invited.
SAFE FOO D IS OUR BUSINESS Executive Summary CONSOL IDATED FINANCIALS (as of 6/30/22): Please refer to Tab 7 for details of the financial performance. Impact to Revenue: Decrease in commodity inspection income. Received $1.12M from PPP loan forgiveness program. Lab revenue continues to increase, largely due to mycotoxins and pesticide testing. Yuba City experiencing growth. Impact to Expense: Reduction in walnut and fig inspection payroll costs. Workers compensation and business insurance continue to increase. Seeking insurance quotes from existing and three new carriers. Competition for staff, particularly lab staff, required the payment of off cycle wage adjustments and spot bonuses. $ $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $14,000,000 $16,000,000 FY22 YTD FY21 YTD FY22 YTD FY21 YTD FY22 YTD FY21 YTD Current Year vs. Prior Year Revenue Expenses Net Income 3
The following charts do not include PPP and Intercompany revenue. $ $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 LaboratoryTraining & ConsultingCertification BodyInspection YTD Revenue CY vs. PY YTD FY22 FY21 $ $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 MicrobiologyChemistryPesticidesOtherYuba City Lab Laboratory Revenue CY vs. PY YTD FY22 FY21 4
$ $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 GFSI (BRC/SQF) HACCPPCQIProduce Safety Misc TrainingConsulting Training & Consulting Revenue CY vs. PY YTD FY22 FY21 $ $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 SQFBRCHACCPMisc Audits Certification Body Revenue CY vs. PY YTD FY22 FY21 5
$ $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 WalnutsPistachiosFigsPrunesAlmondsOther Commodity Inspection Revenue CY vs. PY YTD FY22 FY21 6
SAFE FOOD IS OUR BUSINESS 1 Key Performance Indicators
160,000140,000120,000100,00080,00060,00040,00020,0000 2016 2017 2018 2019 2020 2021 2022 Lab Tests by Year
$$50,000.00 $100,000.00 $150,000.00 $200,000.00 $250,000.00 $300,000.00 FY19 FY20 FY21 FY22 TC Services Comparison Public Training Private Team Training Consulting
6050403020100 FY 2019 FY 2020 FY 2021 FY 2022 Certification Body Audits by Scheme HACCP BRC SQF
Marketing Update July 2021 June 2022 Web Analytics for California Users Interested in Lab Services, Compared to Last Year Web Analytics for the Fresno Area
2022 Renewal: We received a 30% risk factor adjustment (-$59,477) for our safety initiatives and employee training through our IIPP. Our premium is based on estimated $6.9M payroll dollars ($94,777). We added the Waiver of Subrogation Coverage ($1,934) per grant requirements (Air SamplingCA State Parks). Claim Update: 4 open claims (Inspection Department); 2 litigated and 2 monitored for maximum medical improvement. Our experience modification rate 205% includes the previous 3 years in the calculation (07/01/2018 - 06/30/2021) $101,547 in premium. $282,909 $281,137 $233,663 $229,736 $164,289 $127,988 $130,606 $160,274 $147,013 2.36 1.93 1.7 2.35 2.25 1.77 1.77 1.77 2.05 0 0.5 1 1.5 2 2.5 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 RateModificationExperience (%) ($)Premium Experience Modification Rate
SAFE FOOD IS OUR BUSINESS 1 FY 2022 Financial Statements
DFA of California (DFA) Safe Food Certifications (SFC) Safe Food Alliance (SFA) Less: IntercompanyConsolidatedConsolidated 6/30/20226/30/20226/30/20226/30/20226/30/20226/30/2021$ Variance% Variance ASSETS Cash $3,372.4 $95.7 $510.1 $3,978.2 $4,006.0 $(27.8) ‐1% Accounts Receivable 231.4 218.8 719.4 1,169.61,504.5 (334.9) ‐22% Accounts Receivable ‐ Intercompany 2,099.1 $(2,099.1) Other Receivables 103.3 103.3 164.6 (61.4) 37% Inventory 89.0 89.0 88.1 0.91% Deposits 24.7 24.7 37.5 (12.8) 34% Prepaid Expenses 46.0 2.6 43.1 91.7 75.716.021% Fixed Assets 4,630.1 775.6 5,405.75,666.4 (260.7) 5% Investment in Safe Food Alliance 1,389.1 (1,389.1) Investment in Safe Food Certifications 435.1 (435.1) Total Assets $12,331.1 $317.1 $2,137.2 $(3,923.3) $10,862.2 $11,542.9 $(680.7) ‐6% LIABILITIES AND NET ASSETS Liabilities Accounts Payable $100.5 $28.7 $135.4 $264.5 $296.5 $(32.0) 11% Accounts Payable ‐ Intercompany 141.71,957.4(2,099.1) $ Deferred Revenue 43.3 43.3 15.927.4173% Paycheck Protection Program Loan*** 1,122.7 (1,122.7) 100% Pension Liability ** 484.0 484.0 484.0 0.0 0% All Other Liabilities 586.0 2.6 588.6 681.1 (92.5) 14% Total Liabilities 1,170.5 170.32,138.7 (2,099.1)1,380.52,600.3 (1,219.8) 47% Net Assets Unrestricted Assets 10,419.3 (3.2) 350.7 (1,824.2)8,942.66,108.72,833.946% Current Year Increase (Decrease) in Unrestricted Assets*** 741.3 150.0 (352.3) 539.12,833.9 (2,294.8) 81% Total Unrestricted Assets 11,160.6 146.8 (1.5) (1,824.2)9,481.68,942.6539.16% Total Liabilities and Net Assets $12,331.1 $317.1 $2,137.2 $(3,923.3) $10,862.2 $11,542.9 $(680.7) ‐6% Ratio Analysis 6/30/20226/30/2021 Cash Ratio 4.44 1.89 Current Ratio 5.74 2.60 Debt Ratio 0.13 0.23 Debt to Equity Ratio 0.15 0.29 * Supplemental information on following page. **FY2022 Pension Liability will be adjusted post‐audit, recorded in Q4. ***Paycheck Protection Program Loan was forgiven in December 2021. The revenue is recognized in FY22. DFA of California and Subsidiaries Consolidated Balance Sheet (in thousands)* June 30, 2022 and 2021 A B C A B C
Consolidated Balance Sheet Supplemental Information (A) Accounts Receivable/Accounts Payable ‐ Intercompany These amounts are comprised of intercompany transactions between the related entities DFA, Safe Food Alliance and Safe Food Certification. These intercompany transactions are for periods December 2021 through June 2022. These transactions include: Rent charged to Safe Food Alliance Payroll costs paid by DFA G&A Allocations Reimbursement for miscellaneous expenses paid by related entity Cash receipts received by related entity Paycheck Protection Plan (B) Investment in Safe Food Alliance Amount Date Detail
$40.0K 3/31/2014 Cash initially transferred to invest in Safe Food Certifications $251.1K 8/31/2015 Balance owed as a payable moved to investment $201.5K 6/30/2016 Balance owed as a payable moved to investment $18.0K 2/28/2017 Cash transferred to Safe Food Certifications to cover payables $104.5K 6/30/2017 Balance owed as a payable moved to investment ($100.0K) 10/1/2019 Payment made from Safe Food Certifications to DFA to repay investment ($ 80.0K) 12/6/2019 Payment made from Safe Food Certifications to DFA to repay investment $435.1K
(C)
$500.0K 3/1/2019
Amount Date
Cash initially transferred to invest in Safe Food Alliance Corporation $792.0K 3/1/2019 The value of the Laboratory assets transferred to Safe Food Alliance $ 97.1K 3/1/2019 The value of the inventory (consumables) that was transferred to Safe Food Alliance $1,389.1K Investment in Safe Food Certifications Detail
DFASFCSFAG&A ConsolidatedConsolidatedConsolidatedConsolidatedConsolidated ActualActualActualAllocatedActualExcl. PPP Rev.Actual ActualActual Fav/(unfav)Fav/(unfav) FY 2022 FY 2022FY 2022 FY 2022FY 2022 FY 2022 FY 2021$ Variance% Variance Revenue Inspection and Red Seal Certificates $3,749.0 $3,749.0 $3,749.0 $6,284.9 $(2,535.9) 40% Laboratory** 724.9 $5,713.9 6,438.8 6,438.8 5,785.8 653.0 11% Auditing $1,037.7 1,037.7 1,037.7 971.9 65.8 7% Training & Consulting 398.0 398.0 398.0 444.5 (46.6) 10% Intercompany Revenue 157.6373.7 11.5 542.7 542.7 557.8 (15.2) 3% Member Dues 299.2 299.2 299.2 314.9 (15.7) 5% Paycheck Protection Program 890.2123.5 109.0 1,122.7 1,122.7 Other Revenue Total Revenue $5,820.8 1,534.96,232.2 $ $13,587.9 $12,465.3 $14,359.7 $(771.8) ‐5% Expenses Payroll Costs $2,425.8 $841.4 $2,219.0 $1,651.9 $7,138.1 $7,138.1 $7,895.4 $757.3 10% Supplies 294.9 1.41,472.123.51,791.9 1,791.9 1,583.1 (208.8) 13% Insurance 282.6 81.6 214.6283.8 862.5 862.5 841.6 (21.0) 2% Legal & Professional Services**** 230.4119.9 253.9150.5 754.7 754.7 733.5 (21.3) 3% Intercompany Expenses 228.2 5.1 309.40.0 542.7 542.7 557.8 15.2 3% Utilities & Maintenance 105.0 1.3 359.458.5 524.1 524.1 479.5 (44.6) 9% Depreciation 171.0 0.0 145.096.5 412.6 412.6 411.3 (1.3) 0% Travel, Auto, Meals & Meetings 67.7155.1 123.5123.9 470.3 470.3 273.9 (196.4) 72% Temps, Recruiting & Employee Relations 20.4 0.9 7.6 10.5 39.4 39.4 172.1 132.7 77% Office Expenses 29.8 9.8 25.3102.1 167.0 167.0 143.7 (23.3) 16% Taxes, Licenses & Fees 33.7 12.1 37.223.6 106.5 106.5 113.4 6.9 6% Business Development & Marketing 0.3 0.0 0.082.2 82.5 82.5 77.4 (5.0) 6% Continuing Education, Dues & Subscriptions 1.7 17.2 13.539.3 71.7 71.7 44.0 (27.7) 63% Rent 11.5 7.2 12.27.2 38.0 38.0 39.3 1.3 3% Miscellaneous expenses 1.5 0.9 17.127.5 46.9 46.9 71.9 25.0 35% Total Operating Expenses $3,904.4 1,253.75,209.9 $ $2,680.9 $13,048.9 $13,048.9 $13,437.8 $388.9 3% Net Operating Income $1,916.4 281.11,022.4 $ $(2,680.9) $539.1 $(583.6) $921.9 $(382.8) 42% G&A Allocation 1,175.1131.11,374.62,680.9 Net Income (before Pension Plan) $741.3 150.0(352.3) $ $539.1 $(583.6) $921.9 $(382.8) 42% Pension Plan*** (1,912.0) 0 Net Income $741.3 150.0(352.3) $ $539.1 $(583.6) $2,833.9 $(2,294.8) 81% Net Income Margin % 13% 10% ‐6% 4% ‐5% 20% * Supplemental information on following page. ** DFA Laboratory Income is Research, Grant and Moisture Testers Revenue. *** FY2022 Pension Plan unrealized (gain)/loss will be adjusted post audit, recorded in Q4. ****Includes Grant Professioanl Services to Stanford and USDA DFA of California and Subsidiaries Consolidated Income Statements (in thousands)* Fiscal Year June 30, 2022 and 2021 F D D E
Consolidated Income Statement Supplemental Information (D) Intercompany Revenue/Expense Rent: $ 150.8K Kingsburg Rent 6.8K Yuba City Rent $ 157.6K Total Resource Sharing: $ 385.1K The Resource Sharing represents reimbursement for shared internal resources between units. (E) Legal/Professional Services The Legal/Professional Services expense is comprised of attorney fees, CPA services, contracted auditors/trainers, outsourced lab tests and TASC Grant Partner funding. (F) Payment Protection Program Payment Protection Program Loan was forgiven in December 2021. The revenue was recognized in Q2FY22.
LABORATORY TRAINING & CONSULTINGSUB TOTALG&A TOTAL TOTAL Fav/(unfav)Fav/(unfav) FY 2022FY 2022 FY 2022 FY 2022FY 2022FY 2021 $ Variance% Variance Revenue Laboratory $5,713.9 $5,713.9 $5,713.9 $5,016.0 $697.8 14% Training & Consulting $398.0 398.0 398.0444.5 (46.6) 10% Intercompany Revenue 6.4 5.111.5 11.5189.7 (178.2) 94% Paycheck Protection Program 109.0109.0 109.0 109.0 Total Revenue $5,720.2 $512.0 $6,232.2 $6,232.2 $5,650.2 582.010% Expenses Payroll Costs $2,045.7 $173.2 $2,219.0 $866.2 $3,085.2 $2,911.9 $(173.3) ‐6% Supplies 1,444.927.31,472.111.71,483.91,256.1 (227.7) 18% Insurance 197.017.6214.6145.0 359.6328.9 (30.8) 9% Legal & Professional Services 141.7112.3253.975.5 329.5276.9 (52.5) 19% Intercompany Expenses 157.6151.8309.40.0 309.4331.221.87% Utilities & Maintenance 359.2 0.2359.429.3 388.7337.8 (50.9) 15% Depreciation 145.0 0.0145.017.2 162.3194.632.417% Travel, Auto, Meals & Meetings 93.530.1123.563.3 186.9115.7 (71.2) 62% Temps, Recruiting & Employee Relations 7.6 0.07.64.6 12.2 16.5 4.326% Office Expenses 21.7 3.625.349.4 74.7 60.1 (14.6) 24% Taxes, Licenses & Fees 37.2 0.037.211.8 49.0 57.2 8.214% Business Development & Marketing 0.0 0.00.059.4 59.4 41.2 (18.2) ‐44% Continuing Education, Dues & Subscriptions 5.6 7.913.519.8 33.3 22.4 (10.9) 49% Rent 12.2 0.012.21.5 13.7 15.3 1.510% Miscellaneous expenses 17.1 0.017.119.7 36.8 49.112.325% Total Operating Expense $4,685.9 $524.0 $5,209.9 $1,374.6 $6,584.5 $6,014.8 $(569.7) ‐9% Net Operating Income $1,034.3 $(12.0) $1,022.4 $(1,374.6) $(352.3) $(364.6) $12.3 3% G&A Allocation 1,253.9120.71,374.6 (1,374.6) 0.0 0.0 Net Income $(219.6) $(132.7) $(352.3) $0.0 $(352.3) $(364.6) $12.3 3% Net Income Margin % 4% 26% 6% 6% 6% Safe Food Alliance Income Statements ‐ Lab and T&C Separated (in thousands) Fiscal Year To Date June 30, 2022 and 2021
DFASFCSFAConsolidatedConsolidated Fav/(unfav)Fav/(unfav) FY 2022FY 2022 FY 2022FY 2022 FY 2021$ Variance% Variance G&A Expenses Payroll Costs $699.6 $86.1 $866.2 $1,651.9 $1,702.5 $50.5 3% Supplies 10.9 0.9 11.7 23.5 39.0 15.540% Insurance 126.3 12.5 145.0 283.8 288.6 4.82% Legal & Professional Services 69.3 5.6 75.5 150.5 160.8 10.36% Utilities & Maintenance 26.1 3.1 29.3 58.5 91.9 33.436% Depreciation 77.5 1.9 17.2 96.5 104.8 8.38% Travel, Auto, Meals & Meetings 56.1 4.5 63.3 123.9 42.7 (81.1) 190% Temps, Recruiting & Employee Relations 5.5 0.4 4.6 10.5 63.8 53.283% Office Expenses 47.1 5.6 49.4 102.1 51.5 (50.6) 98% Taxes, Licenses & Fees 10.4 1.3 11.8 23.6 30.0 6.421% Continuing Education, Dues & Subscriptions 18.0 1.4 19.8 39.3 22.7 (16.6) 73% Business Development & Marketing 19.5 3.3 59.4 82.2 62.9 (19.3) 31% Rent 2.6 3.1 1.5 7.2 5.1 (2.0) 40% Miscellaneous expenses 6.4 1.5 19.7 27.5 49.1 21.644% Total G&A Expenses $1,175.1 $131.1 $1,374.6 $2,680.9 $2,715.3 $34.4 1% Allocation % 44% 5% 51% Allocation % (Prior Year Quarter 4) 45% 7% 48% *G&A expenses are allocated to Safe Food Alliance and Safe Food Certification based on IRS mandated time, time and space, and benefits derived studies. DFA of California and Subsidiaries General & Administration Expenses ‐ As Allocated By Line Item* (in thousands) Fiscal Year June 30, 2022 and 2021
6,809,954.00 ReceivingInshell ShelledPrunesFigsAlmonds PistachiosRaisinsCut Fruit 0.61 WalnutsWalnutsWalnuts Sampling,TOTALTOTAL Pecans & 2619082 Red Seal Fav/(unfav)Fav/(unfav) 1,608,036.16 FY 2022FY 2022FY 2022FY 2022FY 2022FY 2022FY 2022FY 2022FY 2022FY 2022FY 2021 $ Variance% Variance Revenue Inspection $369.2 $529.0 $1,155.2 $445.6 $425.4 $500.8 $285.3 $11.4 $18.3 $3,740.3 $6,284.5 $(2,544.2) 40% Red Seal Certificates 8.7 8.7 0.4 8.32178% Other Revenue Total Revenue $369.2 $529.0 $1,155.2 $445.6 $425.4 $500.8 $285.3 $11.4 $27.0 $3,749.0 $6,284.9 $(2,535.9) ‐40.3% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Expenses Payroll Costs $227.6 $329.4 $814.2 $206.8 $241.3 $263.0 $123.7 $4.6 $11.5 $2,222.2 $3,390.1 $1,168.0 34% Supplies 9.4100.422.4 7.44.63.54.20.00.0151.9 167.315.49% Insurance 22.235.1106.924.728.630.810.10.61.1260.0 308.048.016% Legal & Professional Services 0.3 1.4 2.3 5.75.51.10.60.70.017.6 10.8 (6.8) 63% Utilities & Maintenace 0.1 0.4 9.6 9.040.18.54.00.00.171.9 79.1 7.39% Depreciation 0.0 0.0 5.6 7.623.05.12.60.00.043.8 44.9 1.12% Travel, Auto, Meals & Meetings 2.5 7.912.3 3.84.612.810.20.40.154.7 70.115.422% Temps, Recruiting & Employee Relations 3.5 9.3 4.8 1.11.20.10.10.00.020.1 105.185.081% Office Expenses 0.2 2.5 7.4 3.04.32.20.50.00.020.2 32.111.937% Taxes, Licenses & Fees 8.0 0.9 3.1 2.312.42.81.40.00.030.9 33.1 2.37% Continuing Education, Dues & Subscriptions 0.0 0.0 0.9 0.10.20.00.00.00.0 1.2 0.1 (1.0) 783% Rent 1.7 4.3 3.3 1.30.00.90.00.00.011.5 14.3 2.819% Miscellaneous expenses 0.0 0.0 0.0 (0.2) 0.50.00.00.00.0 0.4 2.4 2.185% Total Operating Expenses $275.6 $491.7 $992.6 $272.7 $366.2 $330.8 $157.3 $6.4 $12.8 $2,906.2 $4,257.6 $1,351.4 32% Net Operating Income $93.6 $37.3 $162.6 $172.9 $59.2 $170.0 $128.0 $5.0 $14.2 $842.7 $2,027.2 $(1,184.5) 58% Operating Income Margin % 25% 7%14%39%14%34%45%44%53%22% 32% G&A Allocation** $79.2 $113.5 $247.9 $95.6 $91.3 $107.5 $61.2 $2.4 $5.8 $804.5 $1,033.8 Net Income $14.4 $(76.2) $(85.3) $77.3 $(32.1) $62.5 $66.8 $2.5 $8.4 $38.2 $993.4 Net Income Margin % 4% 14% 7%17% 8%12%23%22%31% 1% 16% ** G&A Allocation by commodity is calculated based on commodity revenue. DFA of California Detailed Income Statement by Commodity Inspection Activity (in thousands) Fiscal Year June 30, 2022 and 2021
DFA of California Commodity Supplemental Detail (in thousands) Fiscal Year June 30, 2022 and 2021 Receiving Receiving InshellInshell ShelledShelled WalnutsWalnuts WalnutsWalnuts WalnutsWalnuts FY 2022FY 2021$%FY 2022FY 2021$%FY 2022FY 2021$% Revenue Inspection $369.2 $432.3 $(63.0) ‐15% $529.0 $1,422.0 $(893.0) ‐63%1,155.2 $ $2,923.3 $(1,768.0) 60% Red Seal Certificates Other Revenue Total Revenue $369.2 $432.3 $(63.0) ‐15% $529.0 $1,422.0 $(893.0) ‐63%1,155.2 $ $2,923.3 $(1,768.0) ‐60% Expenses Payroll Costs $227.6 $239.411.8$ 5% $329.4 $716.0 $386.6 54% $814.2 $1,744.1929.8$ 53% Supplies 9.411.21.816% 100.4106.76.46% 22.430.48.126% Insurance 22.219.9 (2.3) 12% 35.1 44.29.121% 106.9175.568.639% Legal & Professional Services 0.3 0.0 (0.3) 1.4 0.0 (1.3) 4456% 2.3 1.2 (1.0) 85% Utilities & Maintenance 0.1 0.30.262% 0.4 0.90.452% 9.610.40.88% Depreciation 0.0 0.00.0 0.0 0.10.1100% 5.6 5.4 (0.2) 4% Travel, Auto, Meals & Meetings 2.5 2.80.310% 7.9 12.95.039% 12.321.08.641% Temps, Recruiting & Employee Relations 3.519.716.282% 9.3 51.942.682% 4.831.226.585% Office Expenses 0.2 0.50.469% 2.5 6.54.062% 7.413.66.145% Taxes, Licenses & Fees 8.0 6.8 (1.2) 18% 0.9 0.7 (0.2) 26% 3.1 4.00.922% Continuing Education, Dues & Subscriptions 0.0 0.00.0 0.0 0.00.0 0.9 0.0 (0.8) 2094% Rent 1.7 2.00.315% 4.3 4.90.511% 3.3 3.70.412% Miscellaneous expenses 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0 Total Operating Expenses $275.6 $302.727.1$ 9% $491.7 $945.0 $453.3 48% $992.6 $2,040.4 $1,047.8 51% Net Operating Income $93.6 $129.5 $(35.9) ‐28% $37.3 $477.0 $(439.8) ‐92% $162.6 $882.8 $(720.3) ‐82% Operating Income Margin % 25%30% 7% 34% 14%30% (before G&A allocation) Fav/(unfav) Variance Fav/(unfav) Variance Fav/(unfav) Variance
Revenue Inspection Red Seal Certificates Other Revenue Total Revenue Expenses Payroll Costs Supplies Insurance Legal & Professional Services Utilities & Maintenance Depreciation Travel, Auto, Meals & Meetings Temps, Recruiting & Employee Relations Office Expenses Taxes, Licenses & Fees Continuing Education, Dues & Subscriptions Rent Miscellaneous expenses Total Operating Expenses Net Operating Income Operating Income Margin % (before G&A allocation) PrunesPrunes Figs Figs AlmondsAlmonds FY 2022FY 2021$%FY 2022FY 2021$%FY 2022FY 2021$% $445.6 $323.6 $(122.0) ‐38% $425.4 $467.8 $(42.4) ‐9% $500.8 $445.155.8$ 13% $445.6 $323.6 $(122.0) ‐38% $425.4 $467.8 $(42.4) ‐9% $500.8 $445.155.8$ 13% $206.8 $111.2 $(95.6) ‐86% $241.3 $235.5 $(5.8) ‐2% $263.0 $234.5 $(28.5) ‐12% 7.4 8.71.214% 4.6 5.30.713% 3.5 1.5 (2.0) 129% 24.7 12.0 (12.7) 106% 28.6 25.5 (3.1) 12% 30.8 21.0 (9.7) 46% 5.7 6.00.35% 5.5 3.0 (2.5) 82% 1.1 0.2 (0.9) 406% 9.0 17.48.448% 40.1 37.7 (2.4) 6% 8.5 8.3 (0.2) 3% 7.6 12.54.939% 23.0 20.2 (2.8) 14% 5.1 4.5 (0.6) 14% 3.8 3.3 (0.4) 13% 4.6 4.3 (0.2) 5% 12.8 12.6 (0.2) 2% 1.1 0.2 (0.9) 398% 1.2 1.1 (0.1) 11% 0.1 0.90.993% 3.0 3.90.822% 4.3 4.40.12% 2.2 2.0 (0.3) 14% 2.3 2.70.416% 12.4 14.31.913% 2.8 3.20.311% 0.1 0.0 (0.1) 0.2 0.0 (0.2) 0.0 0.10.1100% 1.3 2.91.656% 0.0 0.00.0 0.9 0.7 (0.1) 17% (0.2) 2.42.6107% 0.5 0.0 (0.5) 0.0 0.00.0 $272.7 $183.3 $(89.3) ‐49% $366.2 $351.2 $(15.0) ‐4% $330.8 $289.5 $(41.3) ‐14% $172.9 $140.332.7$ 23% $59.2 $116.5 $(57.4) ‐49% $170.0 $155.6 $14.4 9% 39%43%14%25%34%35% DFA of California Commodity Supplemental Detail (in thousands) Fiscal Year June 30, 2022 and 2021 Fav/(unfav) Variance Fav/(unfav) Variance Fav/(unfav) Variance
Revenue Inspection Red Seal Certificates Other Revenue Total Revenue Expenses Payroll Costs Supplies Insurance Legal & Professional Services Utilities & Maintenance Depreciation Travel, Auto, Meals & Meetings Temps, Recruiting & Employee Relations Office Expenses Taxes, Licenses & Fees Continuing Education, Dues & Subscriptions Rent Miscellaneous expenses Total Operating Expenses Net Operating Income Operating Income Margin % (before G&A allocation) Cut Fruit,Cut Fruit, Sampling, Sampling, Pecans & Pecans & PistachiosPistachios RaisinsRaisins Red SealRed Seal FY 2022FY 2021$%FY 2022FY 2021$%FY 2022FY 2021$% $285.3 $233.352.1$ 22% $11.4 $6.05.4$ 89% $18.3 $31.2 $(12.9) ‐41% 8.7 0.48.32178% $285.3 $233.352.1$ 22% $11.4 $6.05.4$ 89% $27.0 $31.6 $(4.6) ‐15% $123.7 $96.7 $(27.0) 28% $4.6 $2.0 $(2.6) ‐134% $11.5 $10.8 $(0.8) ‐7% 4.2 3.2 (1.0) 33% 0.0 0.20.175% 0.0 0.10.1100% 10.1 8.9 (1.2) 13% 0.6 0.4 (0.3) 78% 1.1 0.7 (0.4) 53% 0.6 0.1 (0.5) 411% 0.7 0.2 (0.5) 317% 0.0 0.00.0 4.0 4.20.13% 0.0 0.00.0 0.1 0.0 (0.1) 2.6 2.2 (0.3) 14% 0.0 0.00.0 0.0 0.00.0 10.2 12.82.520% 0.4 0.2 (0.2) 87% 0.1 0.10.04% 0.1 0.0 (0.1) 0.0 0.00.0 0.0 0.00.0 0.5 1.10.657% 0.0 0.0 (0.0) 28% 0.0 0.00.055% 1.4 1.50.210% 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0100% 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0 0.0 0.00.0 0.0 0.0 0.0 $157.3 $130.8 $(26.6) ‐20% $6.4 $2.9 $(3.5) ‐122% $12.8 $11.8 $(1.0) ‐9% $128.0 $102.525.5$ 25% $5.0 $3.11.9$ 59% $14.2 $19.8 $(5.6) ‐28% 45% 44% 44%52% 53% 63% DFA of California Commodity Supplemental Detail (in thousands) Fiscal Year June 30, 2022 and 2021 Fav/(unfav) Variance Fav/(unfav) Variance Fav/(unfav) Variance
FY 2022 FY 2021 $% Revenue Moisture Meters $87.3 $145.8 $(58.5) ‐40% Research Revenue 121.1 76.944.358% Grant Revenue 516.4*547.1* (30.6) ‐6% Other Revenue 0.0 0.0 0.0 Total Revenue $724.9 $769.7 $(44.8) ‐6% Expenses Payroll Costs $204.2 $108.9 $(95.3) ‐88% Supplies 142.8 136.3 (6.5) 5% Insurance 22.6 12.9 (9.7) 75% Depreciation 127.2 87.3 (39.9) 46% Utilities & Maintenance 33.2 10.6 (22.5) 213% Travel, Auto, Meals & Meetings 3.6 0.3 (3.3) ‐1118% Temps, Recruiting & Employee Relations 0.2 0.0 (0.2) Legal & Professional Services** 197.6 205.4 7.84% Office Expenses 9.5 16.0 6.440% Continuing Education, Dues & Subscriptions 0.6 0.8 0.331% Miscellaneous expenses 0.1 0.0 (0.0) 105% Taxes, Licenses & Fees 2.8 3.2 0.413% Total Operating Expenses $744.4 $581.7 $(162.7) ‐28% Net Operating Income $(19.5) $188.0 $(207.5) ‐110% Operating Income Margin % ‐3% 24% G&A Allocation $56.5 $23.1 Net Income $(76.0) $164.9 Net Income Margin % ‐10% 21% **Includes Grant Professioanl Services to Stanford and USDA DFA of California Research, Grant, Moisture Meters Supplemental Detail (in thousands) Fiscal Year June 30, 2022 and 2021 *Grant Revenue: ‐ Chlorate TASC Grant 2 Years began July 16, 2020 and is for a total of $994,528. Revenue recognition began in Q3 FY21. The Grant was extended through February 2023. $30,000 of the revenue will be recognized in FY23. ‐ Fluoride TASC Grant began July 14, 2021. This 2 year Grant was for a total $100,000. $50,000 was recognized in FY21 and FY22. Fav/(unfav) Variance
SAFE FOOD IS OUR BUSINESS 1 Pension Plan Update
SAFE FOOD IS OUR BUSINESS 1 Pension Plan Update Current Year Prior Year Plan Status As of August 2022 As of August 2021 Total Participants: 89 95 Number of participants currently receiving benefits: 71 77 Total monthly benefit amount: $43,330 $50,454 Number of terminated vested participants (no longer employed by DFA but not yet receiving benefits): 9 8 Number of active employees: 9 10 Plan Assets As of June 2022 As of June 2021 Total Assets: $6.4M $8.1M Investment Breakout: - Bonds - Stocks - Cash 3%28%69% 2%58%40% Total Liability: $6.9M $9.0M Funded Status: 92.7% 90.0% Notes: Minimum Required Pension Plan Contribution: Based upon current market conditions and plan assumptions, a contribution is not anticipated through 6/30/23. The evaluation of our plan and possible future contributions will be analyzed no less than twice yearly and any changes will be conveyed to the Board of Directors. Annual Pension Audit has been discontinued.
2 Life Annuity Elections: 50 Benefits cease upon death Average Age of Participant 75 Monthly Amount $ 17,378 10 Year Certain Elections: 5 Benefits cease after 10 years Average Age of Participant 70 Monthly Amount $ 1,377 Joint Survivor Elections: Number of Participants Monthly Amounts Benefit transfers to spouse upon death 50% 10 $ 13,256 Spouse receives 50% of benefit until their death 75% 1 $ 2,980 Spouse receives 75% of benefit until their death 100% 5 $ 8,339 Spouse receives 100% of benefit until their death Total 16 $ 24,575 Average Age of Participants 74 Average Age of Spouse 73 Note: There are currently 18 participants not yet eligible for benefits. 1 13 42 15 Participant Age Range 51 ‐ 60 : $131 : 1 61 ‐ 70 : $7,254 : 13 71 ‐ 80 : $29,769 : 42 81 ‐ 90 : $6,176 : 15
3 Pension Plan Funding Gap AsAssumptions:of6/30/22 $6.9M Liability $6.4M in Plan Assets Funding Gap: $500K Approximately $500K in termination fees to purchase annuities and administration costs, to be added to the liability, which would bring the funding gap to $1.0M. $ $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 $11,000,000 6/30/20196/30/20206/30/20216/30/2022 Funding GAP Liability Plan Assets Funding GAP Cash Balance
SAFE FOOD IS OUR BUSINESS 1 FY 2022 Department Updates
SAFE FOOD IS OUR BUSINESS 1 Laboratory Update July 2021 – June 2022 Strategic Objectives: Grow revenue and reach thro ugh key initiatives that build on existing trends in revenue growth. Business development will target environmental monitoring, wine, fresh fruits, rice/grains, while seeking additional volume from core commodities (dried fruit, tree nuts). Breakeven after G&A allocation. Laboratory Four Year Trend (in thousands) FY 2022 FY 2021 FY 2020 FY 2019 Revenue $ 5,720.2 $ 5,021.5 $ 4,260.1 $ 4,263.0 Expenses $ 4,685.9 $ 4,164.4 $ 3,712.5 $ 3,551.5 Net Operating Income $ 1,034.3 $ 857.1 $ 547.6 $ 711.5 G&A Allocation $ 1,253.9 $ 1,102.8 $ 717.8 $ 629.4 Net Income $ (219.6) $ (245.7) $ (170.2) $ 82.1 Laboratory & Technical FY 2022 Initiati ves - total revenue of $6,000,000: $5,720,225 (95% of forecast) Expanded ELAP accreditation (nitrates in water). Application submitted to add pesticides to ISO, expand scope for microbiology and chemistry. EMP training courses launched. Goal: Achieve Chemistry revenue of $2,331,000 $2,155,768 (92% of forecast) Post-season surge in aflatoxin testing (more shipments). OTA testing up ahead of EU Maximum Limits for pistachios.
Increase in environmental samples.
Slower growth in environmental samples (higher product inventory).
Swabbing course an excellent recruiting tool. Continue growth of wine testing business, with focus on pesticides and chemistry testing. Wine testing up by 7% over PY.
Increased aflatoxin screening of export almonds (EU, Japan). Expanded clientele for testing in chemistry, microbiology. Expand marketing of services to packinghouses from 30 to 60 miles, targeting pesticides, EMP and microbiological testing.
Goal: Achieve Microbiology revenue of $1,227,980 $962,881 (78% of reforecast)
Continued increases in testing of tree nuts, wine, fresh produce.
Additional instrumentation from TASC grant adding testing capacity.
Goal: Achieve Yuba City Labor atory revenue of $1,012,470 $964,873 (95% of forecast)
Reduced growth in water testing with FSMA revisions.
Pesticides, OTA, histamines, microbiology. Continue growth of rice testin g with an emphasis on EMP and pesticide/fumigant testing. 35% increase in rice testing. Microbiology, chemistry, pesticides, fumigants.
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Pesticide screens expanded, reconfigured to improve service and laboratory efficiency = improved turn-around-time.
Goal: Achieve Pesticide revenue of $1,375,050 $1,294,791 (94% of reforecast)
Samples of fresh fruit (citrus, stone fruit, grapes, pomegranate, kiwi) increased by 64% over PY. Microbiology, pesticides, chemistry.
3 Expand the environmental monitoring pr ogram (EMP) offeri ngs to include webinars, hands-on training and in-person consultation and sampling. Nineteen trainings (swabbing 101) held. In-person consultation and swabbing conducted in cannabis nursery, rice facility. Virtual consultation for tomato distributor in Midwest. Effective recruiting tool for attracting new lab clients. Complete implementation of the new LIMS system. User Acceptance Testing underway. Go-live date target is September. Extend LEAN initiative into all laboratories. Delayed until LIMS implementation is complete. Add Nitrates to ELAP Field of Accreditation Completed. Expand the ISO 17025 scop e of accreditation: Pesticides, additional chemical, and microbiological tests to be added. Audit in August 2022.
SAFE FOOD IS OUR BUSINESS 1 Research, Grants & Moisture Meters Update July 2021 – June 2022 Strategic Objectives: Secure annual grant and research revenue commitment of $840,000, expanding outreach efforts to industry, commodity boards and commissions. Grant/research funding is generally received over a two to three-year period, so funding must be sought on an ongoing basis. Grants fund the purchase of expensive instrumentation that is retained by DFA and can be used for general laboratory testing after the project ends. Moisture meter revenue goal $140,000. Research, Grants and Moisture Meters – Four Year Trend (in thousands) FY 2022 FY 2021 FY 2020 FY 2019 Revenue $ 724.9 $ 769.7 $ 322.0 $ 115.1 Expenses $ 744.4 $ 581.7 $ 257.9 $ 258.5 Net Operating Income $ (19.5) $ 188.0 $ 64.0 $ (143.4) G&A Allocation $ 56.5 $ 23.1 $ 50.3 $ 17.0 Net Income $ (76.0) $ 164.9 $ 13.7 $ (160.4) Grant and Research FY 2022 Initiati ves - total revenue of $840,000: $637,580 (76% of forecast) USDA TASC funding for fumigant research and chlorate residues in key commodities. Commodity board studies on PPO sterilization, smoke damage and aflatoxin contamination. Private industry studies on volatile compounds, cold storage fogging and gas sampling strategies.
Goal: Government Grants research opportunities. Year 2 of 2 Year TASC/Chlorate Grant-$436,830.00. Collaborators are Stanford University and USDA/ARS. Year 2 of 2 Year TASC/SF Grant-$50,000. Submitted by CDPB, collaborators include DFA, USDA. Moisture Meter FY 2022 – total revenue of $140,000: $87,320 (62%)
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Goal: Digital Moisture Meter Development. COVID delays with development at USDA ARS. Second version of prototype send into facilities for testing. Revisions under way based on feedback from testing.
Goal: Industry Research Opportunities. Commodity testing for phenolics, volatiles, foreign material-$11,900.00. SF Gas sampling device -$6,620.00. Cold Storage Fogging Validation-$11,050.00
Goal: Commodity Boards research projects. Almond Board PPO Project-$10,640.00. CWB Smoke Taint Project-$18,969.00. Almond Board/UC Davis Glyphosate Project-$24,675.00. University of Georgia Athens Phosphite Project-$3,200. CFI Fig Aflatoxin/Quality Study-$18,442.00. USDA IR-4 Fig Quality Evaluation-$6,418.00.
Goal: Expand engagement wi th industry associations. COVID restrictions reduced access through most of FY 22. Attended zoom meetings of rice, pistachio, citrus, cherry, date, wheat, fig boards. Attended in-person meetings of walnut, almond, prune boards, CA Citrus Quality Council, CA Specialty Crops Council MRL workshop.
SAFE FOOD IS OUR BUSINESS 1 Training & Consulting Update July 2021 – June 2022 Strategic Objective: Refocused the departments direction on private team training and consulting, decreasing focus on public training due to the pandemic. • Hired 2 new Trainers & Consultants • Utilized website analyti cs and form requests to grow the department business • Partnered with the marketing department to target the audience downloading resources on the website • Offered virtual public training and began offering in-perso n public training after March 2022. Training & Consulting – Four Year Trend (in thousands) FY 2022 FY 2021 FY 2020 FY 2019 Revenue $ 403.0 $ 628.7 $ 926.9 $ 1,073.9 Expenses $ 524.0 $ 538.0 $ 656.8 $ 805.8 Net Operating Income $ (121.0) $ 90.7 $ 270.1 $ 268.1 G&A Allocation $ 120.7 $ 177.0 $ 428.4 $ 587.7 Net Income $ (241.7) $ (86.3) $ (158.3) $ (319.6) The above chart does not include Paycheck Protection Program Revenue.
2 Training & Consulting FY 2022 Initiative (reforecast) total revenue of $370,200: $403,033 (109% of reforecast) Produce Safety Training accounted for 26% of revenue. Goal: Achieve Public/Live Virtual Training revenue of $110,000. $59,870 (54% of forecast) Increase demand towards the end of the year for in-person courses Goal: Achieve Contracted Services (Ons ite Training and Consulting) revenue of $160,000. $228,104 (143% of forecast) o $125,804 of Private Team Training o $102,300 of Consulting Increased demand for onsite/customized training and consulting services Goal: Achieve Self-Paced Web Training revenue of $50,000. $4,999 (10% of forecast) Turned off self-paced website in September 2021 and have not turned back on. Goal: Build steady revenue streams through Business-to-Business service packages. Strong business development and sales activities (Katie Edwards) Launched new member benefits and have seen more member engagement for onsite, custom services Partnering with other revenue departments to help grow all company revenue
SAFE FOOD IS OUR BUSINESS 1 Commodity Inspection Update July 2021 – June 2022 Commodity Inspection – Four Year Trend (in thousands) FY 2022 FY 2021 FY 2020 FY 2019 Revenue $ 3,749.0 $ 6,284.9 $ 5,760.9 $ 6,426.0 Expenses $ 2,906.3 $ 4,257.7 $ 4,008.5 $ 3,970.0 Net Operating Income $ 842.7 $ 2,027.2 $ 1,752.4 $ 2,457.0 G&A Allocation $ 804.5 $ 1,033.8 $ 1,475.1 $ 1,704.0 Net Income $ 38.2 $ 993.4 $ 277.2 $ 752.0 The above chart does not include Paycheck Protection Program Revenue. FY 2022 Reforecast: $3,570,490 Actual: $3,748,983 (105% of reforecast) Have mitigated the loss of employees due to the decrease in hours. Have initiated business development projects to increase our commodity inspection: training, receiving and outbound services.
•
•
• Use Search Engine Optimization and Digital Marketing to increase leads and brand awareness in the area surrounding the Kingsburg Lab
o The EMP initiative was very successful increasing total testing volume as well as revenue in the lab. Additionally, it created our Swabbing 101 course which has been very popular with clients.
Rollout new environmental monitoring sales offering
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• Expand into the Stockton/Modesto Market and the Yuba/Chico Market through expanded courier service
• Utilize enhanced analytics and reporting to gain clarity on performance and revenue
o Through the use of google analytics, SEM rush, and Microsoft power bi we have developed a slate of tools and data sets that give us significantly more visibility and allow for more strategic decision making.
CB – 10% Use Search Engine Optimization to drive leads
o SEO efforts and redesigned web content was successful at increasing the number of leads generated for these services.
o Our digital campaign efforts were successful and we saw a notable increase in the number of leads, traffic, and direct searches from this area.
Introduce Quote Builder
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o Quote builder was implemented on the website and significantly increased our SEO reach and increased our total leads generated Promote private team training and consulting
o Our digital campaign targeting lab services in this area was very successful in increasing brand awareness, however, without a courier van we weren’t able to capitalize on this increased awareness and the project is stalled until we can offer that service.
SAFE FOOD IS OUR BUSINESS 1 Marketing Update July 2021 June 2022 Lab – 5 0%
T&C – 20%
WWW.DFAOFCA.COM PAGE 2 o SEO drove significant growth in the CB. The SEO strategy was re calibrated and the number of leads increased significantly • Use Webinars and Gated Content to generate leads o This initiative was successful and drove too many leads for existing resources to capitalize on. Special Projects – 20% • Operation Comeback Kid o Stakeholder interviews were complete, findings were documented and published. • New Day for DFA New member benefits o The first stage of new member benefits were rolled out and the campaign has been launched. It will continue into FY23 as we shift to recruiting new members.
SAFE FOOD IS OUR BUSINESS 1 Business Development Update July 2021 June 202 2 LabActivities70% • Focus on packing shed expansion around Kingsburg for EMP and pesticide testing • Increased by 64% from a small base compared to prior year • Business Development team created a prospect list to target packing houses within 30 -60 miles of the Kingsburg facility • Further optimize pricing strategy . • Created tiered pricing model and implemented based on volume • Increase wine pesticide testing, grow business with wine partner lab • Determined a potential wine partner lab and still evaluating relationship • Expand /Explore testing opportunities with the California rice industry • Continued growth of rice testing with an emphasis on EMP, with a 35% increase compared to prior year • Attended industry meetings to create relationships with potential rice customers • Targeted customers and visited onsite • Finalize and implement new LIMS with customers • LIMS was not implemented in a timely manner. Target September 2022 T&C – 20% • Cross -selling on all sales calls • Existing staff covered TC quotes & new requests through m id - October when Katie returned from LOA • Discussed TC services with all customers • Increase business with web lead follow ups ongoing activity CB 10% • Cross-selling on all sales calls • Discussed CB services with all customers
SAFE FOOD IS OUR BUSINESS 1 FY 2023 Strategic Initiatives
8/16/20221FY2023StrategicInitiatives 1 MainInitiatives 4.Launch3.Maintain2.Continue1.Increasethevolumeoflaboratorytestsinthedriedfruitandtreenutcommodities.Diversifyourcustomerbaseinkeyfoodsectorsandexpandcouriercoverage.toexpandTraining/Consultingserviceswithafocusonpromotingpublictrainingandincreasingrevenueincontractedservices(privateteamtraining&consulting).steadygrowthincertificationauditsfocusingonHACCP&GFSIaudits.‘ANewDayforDFA’andbeginofferingnewmemberbenefitstoincreasememberengagementandvalueinmembership. MainInitiatives 221
Laboratory8/16/20222FYStrategicObjectives:2023: extendedsamplingfruit,commoditiestieredIncreasevolumethroughaggressivebusinessdevelopmentandtheuseofpricingmodel.Keyinitiativeswilltargetexpandedtestvolumefromcore(driedfruits,treenuts)andcontinuedexpansionintoallergens,freshrice/grains.TrainingandconsultingactivitieswillexpandfromEMPintoforpesticides,air/waterandFDAtesting.Addedcourierrouteswillfeedworkdaysandreduceturnaroundtime. FY2024:Buildon2023growthachievements: •extendLeveragegrowthintestvolumeandrevenuetoaddpersonnel,courierroutesandtheserviceday(swingshift),withaneventualgoalofa24/7operation. •maximumOptimizeefficientuseoftheexistinginstrumentation,addingequipmentwhencapacityisachieved.3LabCont’d Initiatives •waterContinueexpansionintothepackinghouse/freshproducesector,targetingpesticides,EMP,andmicrobiologicaltesting. •testing.ExpandtrainingconsultingfromEMPtosamplingforair/water,sanitizers,pesticides,FDAExpandenvironmentaltestingtoincludecompressedairandallergens. •Buildnitratetestingprogramthroughmarketingandstakeholderoutreach. •ContinuegrowthofricetestingwithanemphasisonEMPandpesticide/fumiganttesting. •ExpandandpromoteFDAtesting. •FullimplementationofSTARLIMS. •Fullimplementationoftiered-pricing. •ExpandtheISO17025scopeofaccreditation(pesticides,rancidity,moisture). •ObtainFSMAlaboratoryaccreditationwhenavailable. 443
8/16/20223Research,Grants&MoistureMeters FYStrategicObjectives:2023 Finalizeandprojectssourcestorecedes.personal:Continuetopursuegrantandresearchrevenuecommitments.Expandoutreacheffortstoindustry,commodityboardsandcommissionsasCOVIDFundspaidforgrantandresearchprojectsaregenerallyreceivedoveratwothree-yearperiod,therebynecessitatingtheimportanceofseekingthesefundingonanongoingbasistoavoidgapsinresearchactivities.Critically,grantallowtheDFAtobothfundandretainownershipofscientificinstrumentationhireskilledtechnicalpersonnelwhosupportotherareasofthelaboratory.developmentofthedigitalmoisturemeter. FY2024:Continuetopursueandexpandgrantandresearchrevenuecommitments.5Research,Grants&MoistureMetersCont’d FY2023Initiatives: •Expandengagementwithindustryassociations. SecurepresentationswithCDFAboards/commissions,industrytradeassociations. Attendmeetingsandnetwork. •Industryresearchopportunities. ThreeGLPstudiesforSulfurylfluoride-$165,000. GLPEthyleneOxideTaskForce-$25,000. •Commodityboardresearchopportunities. CWBquality/ranciditystudy-$75,000(2ndroundforreview). •Governmentgrantresearchopportunities. Year3TASC/Chlorate-$200,000(pending).StanfordUniversity,USDA/ARScollaborators. project.Year1TASC/EthylFormate-$350,000.USDA-ARSsubmitted,DFAandindustrycollaborator.Three-year(Primarybeneficiarieswouldbeforpost-harvestfruitandnuts) TASC/BilanaphosProject-$150,000-$300,000/yr.(est.)(Conversiontoglufosinate) collaborators.TASCAflatoxinGrant-tobesubmittedbyCaliforniaFigInstitute($68,000/yr.for4years).DFAandUCANR665
8/16/20224MoistureResearch,Grants&MetersCont’d FY2023Initiativescontinued: •Completefieldtestingofdigitalmeterandfinalizedesign. UtilizeUSDA&privateengineering,industrialdesignsupport. TargetFY2024formanufacturingandsaleofthedigitalmeter. •Sell,serviceandmaintaintheanalogmetersthroughFY23. Swap-outprogramwhendigitalmetersareready. Establishadatefortheendofsupportonanalogunits. •Developmarketingprogramforthedigitalchangeover. Sales/deliveryofnewmeters. Trainingonitsuseandfeatures. 7 GrantsLaboratory,Research,andMoistureMeter BudgetBudgetActualActualActual FY2024FY2023FY2022FY2021FY Kingsburg2020 Microbiology$1,271.0$1,155.5$962.9$910.5$938.7 KingsburgMycotoxins1,794.71,631.61,359.6976.0852.2 KingsburgPesticides1,709.11,553.71,294.81,117.3820.1 KingsburgOtherTests748.9681561.0579.7538.9 Kerman 351.5319.6266.3288.7265.0 Northern(YubaCityandWinters)1,622.41,474.91,269.31,143.8845.1 Research,GrantsandMoisture Meter 879.6799.6724.9769.7322.0 TotalRevenue$8,377.2$7,615.9$6,438.8$5,785.7$4,582.1 8TheabovechartexcludesIntercompanyRevenue87
8/16/20225Training&Consulting FYStrategicObjectives:2023: ondevelopmentTheseforFoodPromote&GrowTraining/ConsultingServicestoDFAMembersandCaliforniaManufacturersthrough:In-PersonPublicTrainings,ExpandedreachandprospectingPrivateTeamtraining,andTargetedoutreachandmarketingpromotionsforConsulting.goalswillbecompletedbypartneringwiththelaboratorydepartmentandbusinessteamsforcross-promotionsandworkingwiththemarketingteamtocapitalizewebsiteinquiriesandSearchEngineMarketing. FY2024:Continuetogrowonsiteservicesthroughnewofferingsandtargetedindustries. orReplaceFELSGrantforProduceSafetytrainingbyaddinginanewserviceofGlobalGAPPrimusGFSfortrainingandconsulting. ExpandpromotionstoDFAmemberstoutilizememberbenefitsandaddonservices.9Training&ConsultingCont’d FY2023Initiatives: •coursesGetbacktoin-personpublictrainingcoursesandoffer5differentpublicthroughoutthestate. •Continuetogrowandexpandprivateteamtrainingandconsulting. •DevelopNewTrainingPrograms(PrimusGFS,GlobalGAP,other). •services.training,RefocusDFAMemberBenefitsthroughmemberaudits,freepublicfreemonthlyrefreshertrainings,anddiscountedonsite •planning,Continuedimprovementondepartmentefficiencies,contingencyandadministrationofupdatingtrainingtopics. 10109
8/16/20226Training&Consulting BudgetBudgetActualActualActual FY2024FY2023FY2022FY2021FY FSMA2020 -ProduceSafety$20.0$124.8$103.6$179.6$352.7 HACCPTraining 75.071.561.756.165.3 MiscellaneousTrainings68.965.522.412.352.5 Consulting 237.0120.0102.378.138.1 FSMA–PCQI 53.851.369.220.335.8 OnlineT&C 0.00.05.045.825.7 GMPAudits 0.00.00.024.224.8 GFSITraining(BRC/SQF)46.043.833.828.123.0 TotalRevenue$500.7$476.9$398.0$444.5$617.9 11TheabovechartexcludesIntercompanyRevenue CertificationBody FYStrategicObjectives:2023:Continueandmaintaingrowthofcertificationaudits. •IncreasenumberofGMP&HACCPsitesthroughmarketingSEOandpromotions •GrowSQF&BRCGSsitesfromotherCBsthroughdirectB2Bcallsandprospecting ocost).TargetfoodprocessingsitesinCA&neighboringstates(ResourcesinCA-reduced •DevelopPrimusGFSAuditProgram. •Addonemorein-houseauditor. •revenue.Utilizecurrentbusinessdevelopmentteamtocapturenewleadsandgrow FY2024:Continueaboveactivitiesandhirestaffasgrowthtakesplace. 121211
8/16/20227CertificationBody BudgetBudgetActualActualActual FY2024FY2023FY2022FY2021FY SQF2020 $560.5$533.8$459.0$403.5$324.5 BRC 396.5377.6343.3349.9263.4 HACCP 79.175.367.358.977.1 RTI 131.4124.2108.8134.881.8 Other 68.465.159.324.61.7 TotalRevenue$1,235.9$1,177.0$1,037.7$971.9$748.5 13TheabovechartexcludesIntercompanyRevenue FY2023Initiatives •ServicesLearnaboutourcompetition(CooperativeAgriculturalSupportAuthority):VoluntaryInspectionServices. •reachUnderstandwhichcommoditiesarewithinourgeographicalareaofandlearnwhichcanbedoneonavoluntaryinspectionservice. •Focusonobtainingadditionalreceivingwalnutinspectionservices. •Focusonobtainingadditionaloutboundalmondinspectionservices. • 1413Pursuecanneryfruitinspectionwork.CommodityInspection14
8/16/20228CommodityInspection BudgetBudgetActualActualActual FY2024FY2023FY2022FY2021FY Shelled2020 Walnuts $1,339.2$1,339.2$1,155.2$2,923.3$2,732.2 InshellWalnuts 614.5614.5529.01,422.01,111.0 ReceiveWalnuts 385.7385.7369.2432.3390.1 ShipPrunes 37.737.737.729.145.1 ReceivePrunes 355.8355.8407.8294.5484.8 ShipFigs 256.4256.4263.0293.6334.8 ShipFigsLab 21.621.621.620.116.4 ReceiveFigs 174.4174.4131.8140.2101.1 ReceiveFigsQuality 9.19.19.113.912.2 Almonds 501.1501.1500.7445.1294.7 ShipPistachios 192.6192.6194.6161.1105.4 ReceivePistachios 88.788.790.772.192.5 Raisins 11.411.411.45.95.0 RedSeal 8.78.78.711.314.1 Other 18.718.718.520.421.6 TotalRevenue$4,015.6$4,015.6$3,749.0$6,284.9$5,760.9 15TheabovechartexcludesIntercompanyRevenue Marketing Lab–50% Stockton/ModestoNorthernExpansion–UtilizeanetworkofcourierstoexpandourlaboperationintothemarketandtheYuba/Chicomarket. operation.Improveclientexperiencebystreamliningtheonboardingprocess,clientsupport,andlogistics Expandourreachthroughlocalpartnerships,collaboration,andmicro-influencerprogram. T&CMembersImplementanAccountBasedMarketingcampaigntargetingtreenutprocessorsandDFAintheCentralMarket.–20% •Activatee-commerceonthewebsitetogeneratepassiveincomeandmaximumresources. •PromoteprivateteamtrainingthroughanAccountBasedMarketingcampaign. •Rebuildandrepositionpublictraining. • 1615CollaboratewithdepartmenttoaddvaluetoDFAmembersthroughexpandedbenefits.16
8/16/20229MarketingCont’d DFA–20% Implementa‘NewDayforDFA’brandcampaign. Continuerollingoutnewslateofmemberbenefits. EngageindustrypresstorepositionDFA. CBUpdateDFAvisualidentity.–10% ContinuetostrengthenSearchEngineOptimization(SEO)efforts. HostawebinarserieswithBRCGS. PromoteHACCPaudits. Allmarketingandbusinessdevelopmentactivitiesshallbecoordinatedtomaximizeeffectiveness. 17 NewDayforDFAUpdate •engagementLaunchedNewDayforDFAwebsite.Result:+46%increaseinafterallnewbenefitswereannounced. •PremieredANewDayforDFAatclientdinners. •Successfullyrolledoutnewmemberbenefits:FreeTraining,Refresher Courses,andCrisisCare. •It’sallaboutvalue&reciprocity. ANewDayforDFA181817
8/16/202210Momentum:whatcomesnext •JanuaryProfessionalDevelopmentBenefits&DFAPartnerProgrambeginsin2023. •identity.DFAwebsiteredesign(basedonnewdaywebsite)andnewvisual •Growingthemembershipby10%.BusinessANewDayforDFA19Development Lab–50% model.Aggressivebusinessdevelopmentactivitiesbasedontieredpricing Focusonbothcorecommodities(DFTN)andfreshfruits,rice,allergens. research.Emphasizeexpertiseinpesticides,EMP,mycotoxins,microbiologyand laboratory.Promotetechnicaltraining(EMPandbeyond)intheKingsburg FinalizeandimplementnewLIMSwithcustomers. 2019overFocusonsellingsolutionsnotservices.Prioritizeaccountdevelopmenttransactionalsales.20
8/16/202211T&C–20% TargetexistinglabclientsforPrivateTeamtraining. stoneUseTCtoopenthedoorwithprocessorsinidentifiedexpansionindustries(i.e.rice,citrus,fruit,grapes,cherries). Focusonsellingsolutionsnotservices.Prioritizeaccountdevelopmentovertransactionalsales. Membership–20% WorkcloselywithMarketingandClientRelationstogrowmembershipbase. Focusonincreasinglabbusinessfromcurrentmembers. CB–10% SomewhatFocusonsellingsolutionsnotservices.Prioritizeaccountdevelopmentovertransactionalsales.limitedintheshorttermduetogettingstaffcertified.BusinessDevelopmentCont.21OverallForecastDepartmentRevenue BudgetBudgetActualActualActual FY2024FY2023FY2022FY2021FY Inspection2020 $4,015.6$4,015.6$3,749.0$6,284.9$5,760.9 Laboratory 7,497.66,816.35,713.95,016.04,260.1 LaboratoryDFA (Research,Grants,MM) 879.6799.6724.9769.7322.0 TrainingandConsulting500.7476.9398.0444.5617.9 CertificationBodyAudits1,235.91,177.01,037.7971.9748.5 OtherRevenue* (FY22IncludesPPPRevenue)805.4805.11,964.4872.7582.4 TotalRevenue$14,934.8$14,090.5$13,587.9$14,359.7$12,291.8 22*MemberandIntercompanyRevenue2221
SAFE FOOD IS OUR BUSINESS 1 FY 2023 Budget
BudgetActualActualActualActual FY 2023FY 2022FY 2021FY 2020FY 2019 Revenue Inspection4,015.6 $ $3,749.0 $6,284.9 $5,760.9 $6,426.4 Laboratory Testing6,816.35,713.95,016.04,260.14,263.0 Laboratory Research, Grants & Moisture Meters799.6724.9769.7322.0115.1 Auditing1,177.01,037.7971.9748.5973.7 Training & Consulting476.9398.0444.5617.9803.4 Member Dues293.2299.2314.9312.2271.4 Intercompany Revenue511.9542.7557.8269.752.5 Other Revenue (FY2022 Paycheck Protection Program)1,122.70.5209.4 Total Revenue $14,090.5 $13,587.9 $14,359.7 $12,291.8 $13,115.0 Expenses Payroll Costs7,681.6 $ $7,138.1 $7,895.4 $7,608.2 $7,364.1 Supplies2,239.41,791.91,583.11,454.61,471.7 Insurance928.0862.5841.6772.6758.9 Legal & Professional Services636.6754.7733.5461.8389.0 Intercompany Expenses511.9542.7557.8269.752.5 Utilities & Maintenace492.8476.1479.5413.6396.9 Depreciation454.3412.6411.3392.5395.2 Travel, Auto, Meals & Meetings528.4470.3273.9415.0610.6 Temps, Recruiting & Employee Relations40.039.4172.191.438.2 Office Expenses211.7215.0143.7126.8113.0 Taxes, Licenses & Fees108.2106.5113.4102.1102.2 Business Development & Marketing275.282.577.4202.4518.2 Continuing Education, Dues & Subscriptions86.171.744.033.236.4 Rent39.338.039.360.048.0 Miscellaneous expenses44.946.971.9126.658.7 Total Expenses $14,278.3 $13,048.9 $13,437.8 $12,530.6 $12,353.6 Net Income (before Pension Plan) $(187.7) $539.1 $921.9 $(238.8) $761.4 Pension Plan* (1,912.0)994.6360.4 Net Income $(187.7) $539.1 $2,833.9 $(1,233.3) $401.0 Net Income Margin % (before Pension Plan) 1%4%6% 2%6% Net Income Margin % 1%4%20% 10%3% *FY2022 Pension Plan expenses and unrealized (gain)/loss will be recorded post‐audit. DFA of California and Subsidiaries Budget Trend Analysis
DFA CB SFAG&AConsolidated BudgetBudgetBudgetBudgetBudget Revenue Inspection4,015.6 $ $4,015.6 Laboratory799.66,816.3 $ 7,615.9 Auditing1,177.0 $ 1,177.0 Training & Consulting476.9476.9 Member Dues293.2293.2 Intercompany Revenue157.6204.4150.0511.9 Other Revenue Total Revenue $5,266.0 $1,381.4 $7,443.2 $14,090.5 Expenses Payroll Costs2,594.7 $ $879.8 $2,487.2 $1,719.8 $7,681.6 Supplies321.21.41,893.123.82,239.4 Insurance298.485.3246.9297.4928.0 Legal & Professional Services222.852.9178.5182.4636.6 Intercompany Expenses284.415.0212.6511.9 Utilities & Maintenace107.41.3335.748.5492.8 Depreciation231.70.0182.440.2454.3 Travel, Auto, Meals & Meetings83.2145.0137.5162.8528.4 Temps, Recruiting & Employee Relations22.30.54.912.340.0 Office Expenses12.313.357.4128.8211.7 Taxes, Licenses & Fees35.212.137.923.0108.2 Business Development & Marketing45.00.00.0230.2275.2 Continuing Education, Dues & Subscriptions1.916.412.055.786.1 Rent12.37.213.26.639.3 Miscellaneous expenses0.10.916.327.644.9 Total Operating Expenses4,272.8 $ $1,230.9 $5,815.6 $2,958.9 $14,278.3 Net Operating Income $993.1 $150.5 $1,627.5 $(2,958.9) $(187.7) G&A allocation1,186.7141.31,630.9 (2,958.9) Net Income $(193.6) $9.2 $(3.4) $(187.7) Net Income Margin % 4%1%0% 1% DFA of California and Subsidiaries Consoliated Income Statements FY 2023 Budgets
Safe Food Alliance Income Statements ‐ Lab and T&C Seperated FY 2023 SFA Departmental Budgets LaboratoryT&CSubtotalG&ATotal Revenue Laboratory Testing6,816.3 $ $6,816.3 $6,816.3 Training & Consulting Fees476.9 $ 476.9476.9 Intercompany Revenue150.0150.0150.0 Total Revenue $6,816.3 $626.9 $7,443.2 $7,443.2 Expenses Payroll Costs2,157.1 $ $330.1 $2,487.2 $933.9 $3,421.1 Supplies1,866.626.51,893.112.31,905.4 Insurance213.033.9246.9157.6404.5 Legal & Professional Services167.710.8178.594.5273.0 Intercompany Expenses157.655.0212.6212.6 Utilities & Maintenace335.50.2335.725.8361.5 Depreciation182.40.0182.421.4203.8 Travel, Auto, Meals & Meetings102.235.3137.584.3221.7 Temps, Recruiting & Employee Relation 4.90.04.95.910.8 Office Expenses54.43.057.465.9123.3 Taxes, Licenses & Fees37.90.037.912.250.1 Business Development & Marketing0.00.00.0168.1168.1 Continuing Education, Dues & Subscrip 5.76.312.028.940.9 Rent13.20.013.21.014.2 Miscellaneous expenses16.30.016.319.235.6 Total Operating Expenses5,314.5 $ $501.1 $5,815.6 $1,630.9 $7,446.5 Net Operating Income $1,501.8 $125.8 $1,627.5 $(1,630.9) $(3.4) G&A allocation1,504.7126.21,630.9 (1,630.9)0.0 Net Income $(3.0) $(0.4) $(3.4) $(3.4) Net Income Margin % 0%0%0%0%
DFACB SFA Consolidated Total TotalTotal Budget G&A Expenses Payroll Costs700.9 $ $85.0 $933.9 $1,719.8 Supplies10.60.912.323.8 Insurance127.212.6157.6297.4 Legal & Professional Services81.36.694.5182.4 Utilities & Maintenace18.93.825.848.5 Depreciation15.63.221.440.2 Travel, Auto, Meals & Meetings72.55.984.3162.8 Temps, Recruiting & Employee Relation 6.00.45.912.3 Office Expenses53.39.565.9128.8 Taxes, Licenses & Fees8.91.812.223.0 Business Development & Marketing57.24.8168.1230.2 Continuing Education, Dues & Subscript 24.82.028.955.7 Rent2.33.31.06.6 Miscellaneous expenses7.11.319.227.6 Total G&A Expenses $1,186.7 $141.3 $1,630.9 $2,958.9 Allocation % 40%5%55%100% DFA of California and Subsidiaries General & Administration Expenses FY 2023 Departmental G&A Budgets
Cut Fruit, Sampling, InshellReceiving ShelledPecans & Total WalnutsWalnutsWalnutsPrunesFigsAlmondsPistachiosRaisinsRed SealCommodities Revenue Inspection614.5 $ $385.7 $1,339.2 $393.5 $461.5 $501.1 $281.4 $11.4 $18.8 $4,006.9 Read Seal Certificates 8.78.7 Total Revenue $614.5 $385.7 $1,339.2 $393.5 $461.5 $501.1 $281.4 $11.4 $27.5 $4,015.6 Expenses Payroll Costs368.6 $ $257.5 $884.1 $176.9 $255.8 $279.0 $143.6 $4.9 $12.3 $2,382.6 Supplies102.49.823.57.65.33.54.90.00.0157.0 Insurance38.424.6113.621.530.332.610.70.71.1273.6 Legal & Professional Services3.00.58.78.710.22.91.00.00.034.9 Utilities & Maintenace0.60.210.09.441.08.84.20.00.074.2 Depreciation0.00.05.67.623.05.12.60.00.043.8 Travel, Auto, Meals & Meetings8.82.913.23.95.513.210.90.40.359.0 Temps, Recruiting & Employee Relations9.83.75.01.91.40.20.00.00.022.0 Office Expenses1.50.11.60.20.10.70.00.10.04.2 Taxes, Licenses & Fees1.08.33.42.313.03.01.40.00.032.4 Continuing Education, Dues & Subscriptio0.00.01.00.10.20.00.00.00.01.3 Rent4.51.83.41.70.00.90.00.00.012.3 Miscellaneous expenses0.00.00.00.00.00.00.00.00.00.0 Total Operating Expenses $538.5 $309.4 $1,073.0 $241.9 $385.6 $349.9 $179.2 $6.0 $13.7 $3,097.3 Net Operating Income $75.9 $76.2 $266.2 $151.6 $75.8 $151.2 $102.1 $5.4 $13.8 $918.3 Operating Income Margin % 12%20%20%39%16%30%36%47%50%23% G&A Allocation122.977.1267.893.772.3100.261.32.35.5803.1 Net Income $(46.9) $(0.9) $(1.7) $57.9 $3.5 $51.0 $40.8 $3.1 $8.3 $115.2 Net Income Margin % ‐8%0%0%15%1%10%15%27%30%3% Budgeted Detailed Income Statement by Commodity Inspection Activity FY2023 Budget Detail DFA of California
Research and Grants Moisture Meter Total Revenue Revenue699.2 $ $100.4 $799.6 Total Revenue $699.2 $100.4 $799.6 Expenses Payroll Costs170.9 $ $41.2 $212.1 Supplies102.661.5164.2 Insurance17.17.724.9 Legal & Professional Services176.31.5177.8 Utilities & Maintenace24.88.533.3 Depreciation122.15.1127.2 Travel, Auto, Meals & Meetings3.50.23.7 Temps, Recruiting & Employee Relations0.20.00.2 Office Expenses0.08.18.1 Taxes, Licenses & Fees0.02.82.8 Business Development & Marketing0.00.00.0 Continuing Education, Dues & Subscriptio 0.60.00.6 Rent0.00.00.0 Miscellaneous expenses0.00.10.1 Total Operating Expenses $618.2 $136.7 $754.9 Net Operating Income $80.9 $(36.2) $44.7 Operating Income Margin % 12% ‐36%6% G&A Allocation26.426.352.7 Net Income $54.5 $(62.6) $(8.0) Net Income Margin % 8% 62% 1% DFA of Caifornia FY 2023 Budget Detail Research, Grants, Moisture Meter
SAFE FOOD IS OUR BUSINESS 1 FY 2023 Capital Plan
Capital Budget FY 2023 Equipment (all laboratory related)Est. LifeFY 2023FY 2024 LocationNotes/Descriptions Courier Van 5 years40,000 $ KingsburgAdditional vehicle for lab growth. Courier Van Replacement 5 years36,000 KingsburgReplacement for 2016 Nissan. GC MS/MS10 years 250,000 KingsburgAdditional pesticide screening capacity. Aflatoxin/OTA Robotic prep station10 years 51,000 KingsburgExpand capacity and efficiency in mycotoxin analysis. PCR system10 years 38,500 Yuba CityReplacement instrument for pathogen detection in Yuba City. GC MS/MS Power backup10 years 13,000 KingsburgBattery back up system necessary to avoid analytical delays/instrument damage. Orbit-trap Power backup10 years 13,000 KingsburgBattery back up system necessary to avoid analytical delays/instrument damage. Incubator10 years 3,000 KingsburgRequirement for STEC/O157. HPLC Power backup10 years 1,000 Yuba CityBack up for chemistry lab. Courier Van 5 years 40,000 KingsburgAdditional vehicle for lab growth. LC MS/MS10 years $400,000 KingsburgReplace/supplement the Agilent equipment. VIDAS 3010 years 32,000 Yuba CityImprove efficiencies and capacity in Yuba City. Total Capital Expenditures Budget $445,500 $472,000 Note: Items listed under 2024 are for visibility only and do not require action at this time
Capital Budget FY 2023 Non‐Lab Software/Repairs/RemodelEst. LifeFY 2023FY 2024LocationNotes/Descriptions Dell PowerEdge Server and Consulting7 years53,342 $ Sacramento OfficeUpgrade to new server. Restrooms Remodel 10 years10,000 Sacramento OfficeUpgrade plumbing and paint. Lobby Remodel10 years10,000 Sacramento OfficeUpgrade the entrance and furniture. Building Repaint10 years25,000 Yuba CityRepaint metal building. Building Bird Screen7 years15,000 Yuba CityInstall full height screen. Micro Room Addition TBD Yuba City ISO USDA Audit may require a Micro Room Addition. Total Non‐LAB Capital Expenditures $113,342 ‐$ Note: Items listed under 2024 are for visibility only and do not require action at this time
SAFE FOOD IS OUR BUSINESS 1 Organizational Charts
Food Trainer/ConsultantSafetyZahraKarim VaughnPresident/CEOKoligian Controller Senior Director of Analytical Services Anne Heredia Thomas Jones Senior Accountant Chemist Jilly Darling Mike Kimball Director of Research Chemistry Wiley Hall Accountant Hillari Bynum Commodity Supervisor Commodity Supervisor Commodity Lead Chemist Central District Chou AccountantVang AnnMargaret Dwyer Chemist I Gianina De GuzmanWebsite(Vacant)Support Christy Cook Business Development Specialist (Vacant) Amanda Britton Quality Assurance Manager Kingsburg/Fresno Yuba City/Sacramento Kingsburg and Kerman Laboratories Microbiology Manager Rosario Chavez Andrade Records Quality Control Technician I Paul Smith Roberto Sonon Jr. Southern District Northern District Central DistrictSouthern District Northern District Commodity Lead Commodity Lead Commodity Ceres/Stockton/LindenSupervisorAngelaAlvarez Commodity Lead Jessica Silva Delano/Wasco Prunes - Yuba City Minche Gunawan (Vacant) Yuba City and Winters Laboratories Laboratory Manager Carlos Perez Laboratory Manager ChemistryKerchouManagerMoua Kyla Ihde Melissa Medina Harpreet Purewal Christy Pacheco Megan Peebles Southern District Northern District Commodity Lead Commodity Lead Central NataliaCentralModesto/CeresDistrictDistrictVillanuevaKingsburg Sheri Sudberry Laboratory Technician 3 Mckayla Clark Yuba City Laboratory Senior Laboratory Technician Melody Martinez Winters Laboratory Leticia Gomez Rowlana Edwards Walnuts- Yuba City Shawna Horton Northern CommodityCommodityAlmondsCommodityDistrictLead-SacramentoJonallySouthersWinters/DixonSupervisorNorthernDistrictSupervisorChico Director of BusinessAnnetteDevelopmentBusinessMagee(LOA)DevelopmentSpecialistMarthaPradoBusinessDevelopmentManager Ana KarenHollisterCastaneda IT Administrator Modesto/Ceres Mohammad Asif Noor Northern CommodityCommodityDistrictLeadRedBluffDeborahWilsonNorthernDistrictLead Central CommodityDistrictLeadStockton/LindenJeniferLong Senior Director, Administration and Operations Director of Client Relations Joseph Nicholl Maribel Nunez-Alvarez Director of Marketing Human Resources Administrative(Vacant)GeneralistAssistantJessicaReynolds Director of Client Services Food Trainer/ConsultantSafety Account Development Manager Katie Edwards Organizational Chart 2022
Executive CertificationDirector,ServicesNarayanPatil Technical Director Food Safety Auditor Food Safety Auditor Antonio Munguia Jose Contreras Shawnil Guiles Food Safety Auditor John Kangas Food Safety Auditor Food Safety Auditor Food Safety Auditor Jeff Nelson Food Safety Auditor Vianey Marquez Food Safety Auditor Abigail Llanes (Vacant) (Vacant) Organizational Chart 2022
SAFE FOOD IS OUR BUSINESS 1 Bylaws Revision
4. Providing an array of specialized services to the dried fruit, tree nut and related industries.
5. Striving to improve the overall business conditions of persons engaged in the packing and shipping of dried fruit, tree nuts, and kindred products.
Draft August 2022 BYLAWSOF
Section 1.01. Name. The name of this corporation is DFA of California, hereafter referred to in these bylaws as "Association".
ARTICLE I. General Provisions
3. Supporting and directing research relative to dried fruit, tree nuts and kindred products on issues of vital importance to these commodities.
Section 1.03. Purpose. The Association is a nonprofit mutual benefit corporation organized under California law The Association is formed for the purpose of engaging in any lawful act or activity for which a nonprofit corporation may be organized under the law, including but not limited to the following:
DFA OF CALIFORNIA
1. Providing a forum for members of the dried fruit and tree nut industries to gather and discuss issues relevant to business of packing and shipping dried fruit, tree nuts and kindred products.
2. Providing leadership and acting as a liaison between the dried fruit, tree nut and related industries.
The principal office for the transaction of business of the Association shall be located in the county of Sacramento, State of California. The Board of Directors ("Board") shall have the authority to change the location of the principal office so long as the principal office remains in the State of California. The principal office of the Association may be moved outside of California only upon approval of the regular members. The Association may also have offices at such other places within or without the State of California where it is qualified to do business, as its business may require and as the Board may from time to time designate
Section 1 02. Principal Office
2 ARTICLE II Members
The Association is organized with members, but without capital stock. Any person, whether individual, sole proprietorship, partnership, corporation, limited liability company or other business form, which is the owner of a commercially viable processing facility engaged in the packing and/or processing of dried fruit, tree nuts or kindred products, may submit a written request for regular membership to the Board or the Secretary of the Association. Any such person shall be eligible for regular membership on approval of their written request by the Board and the payment of such dues and fees as the Board may fix from time to time. Regular members of the Association shall have all rights afforded members under the California Nonprofit Mutual Benefit Corporation Law.
Status. Any member may apply to the Board for inactive membership status. The Board shall consider any such request at a regular or special meeting, and may grant or deny the request in its sole discretion. In the event a member is granted inactive membership status, the member shall not be liable during
Section 2.04. No Liability for Services. Inasmuch as the Association performs services for members on a nonprofit basis, every member agrees as a condition of membership not to assert any claim or file any action against the Association arising out of or relating to services offered by the Association. Furthermore, no member may question the competence or qualification of an Association inspector unless the member does so before the inspection begins. Non members requesting services from the Association shall also be required to execute a waiver and release of all claims against the Association arising from or relating to the services.
Section 2 05. Food Safety Audits In order to maintain the highest quality standards for product inspected and certified, the Association will offer as a benefit to its members voluntary periodic unannounced GMP audits and announced FSMA audit by a qualified Association auditor.
Section 2 01. Qualifications and Rights of Regular Membership
Section 2.03. Fees and Dues. Each member must pay, within the time and on the conditions set by the Board, the fees, dues, and special assessments in amounts to be fixed from time to time by the Board.
Section 2.02. Associate Members. The Board may, by resolution, create a class of associate members who are non voting members of the Association If a class of associate members is created by the Board, the Board shall determine, as part of the resolution, the qualifications, rights, duties, and dues for associate members.
Section 2.06. Good Standing. Those members who have paid the required fees and dues in accordance with these bylaws, who operate in accordance with any code of ethics established by the Association, and who are not suspended shall be members in good
Sectionstanding.2.07.Inactive
3 the inactive period for any dues or other obligations of membership. An inactive member has no voting rights and cannot have a director on the Board. An inactive member may apply to the Board for reinstatement of active membership at any time, and shall not be required to pay another initiation fee if the request for active status is Sectiongranted.2.08.
Termination of Membership. Membership shall terminate on the occurrence of any of the following events: (a) Resignation of a member upon notice to the Association; (b) Failure of a member to pay any dues or fees set by the Board within a period of time determined by the Board after they become due and payable; (c) Expulsion pursuant to Section 2.09 of these bylaws.
(a) The member shall be given 15 days prior notice of the proposed suspension or expulsion and the reasons for the proposed suspension or expulsion. Notice shall be given by any method reasonably calculated to provide actual notice. Any notice given by mail shall be sent by certified mail, return receipt requested, to the member's last address as shown on the Association's records.
(b) The member shall be given an opportunity to be heard, either orally or in writing, at least five (5) days before the effective date of the proposed suspension or expulsion. The hearing shall be held, or the written
Section 2.10. Procedure for Suspension or Expulsion. If grounds appear to exist for suspension or expulsion of a member under Sections 2.08 or 2.09 of these bylaws, the procedures set forth below shall be followed:
Section 2.09. Suspension or Expulsion of Membership. Any member or officer of the Association who has reason to believe that another member has violated or failed to perform any duty or obligation of the Association may file a written complaint with the President or the Board. A complaint filed with the President shall be promptly transmitted to the Board. A regular or associate member may be suspended or expelled in accordance with Section 2.10 of these bylaws, based on the good faith determination by the Board or a committee authorized by the Board to make such a determination, that the member has failed in a material and serious degree to comply with the Association's Articles of Incorporation, bylaws, code of ethics, or any law applicable to the Association and its members, or has engaged in conduct materially and seriously prejudicial to the purposes and interests of the Association. A person whose membership is suspended shall not be a member in good standing during the period of suspension.
A membership or any right arising from membership may not be transferred to another person without the prior approval of the SectionBoard.
4 statement considered, by the Board or by a committee authorized by the Board to determine whether the suspension or expulsion should take place
(d) Any action challenging a suspension or expulsion of membership, including a claim alleging defective notice, must be commenced within ninety (90) days after the date of the suspension or expulsion.
Section 2 13. Transfer of Memberships
Section 2.15. Liability of Members. Except as limited by law, no member is liable for the Association’s debts, liabilities, or obligations.
(a) Place of Meeting Meetings of the members shall be held in any place within or outside California designated by the Board or by written consent of a majority of the persons entitled to vote at the meeting, given before or after the meeting In the absence of any such designation, members' meetings shall be held at the Association's principal office.
(b) Annual Meeting. An annual meeting of members shall be held at a time and place determined by the Board. At this meeting, any proper business
Section 2 11. Effect of Termination, Suspension, or Expulsion
2.14. Restrictions on Membership. No individual or legal entity shall hold more than one regular membership in the Association
Section 2 16. Meetings of Members
All rights of a member of the Association shall cease upon termination, suspension, or expulsion from membership. Termination, suspension, or expulsion shall not relieve that member of any existing obligations to the Association. Membership in the Association does not constitute an ownership interest in any asset of the Association at any time.
Section 2 12. No Withdrawal Value
If a membership is terminated for any reason, the Association shall not be liable for the payment of any amount whatsoever. Each member is received into membership on his or her express agreement to this provision. This provision is not for the purpose of penalizing any person whose membership shall be forfeited, or otherwise terminated, but rather because no membership will have any real or intrinsic value
(c) The Board or committee shall decide whether or not the member should be suspended, expelled or sanctioned in some other way The decision of the Board or committee regarding any challenge shall be final.
(e) Manner of Giving Notice for Meetings. Except as otherwise provided in these bylaws or by law, notice of any meeting of members shall be in writing and shall be given not less than 10 nor more than 90 days before the date of the meeting to each member who, on the record date for notice of the meeting, is entitled to vote; provided, however, that if notice is given by mail, and the notice is not mailed by first-class or express mail service, then that notice shall be given not less than 20 days before the meeting
Notice of a members’ meeting or any report shall be given personally, by electronic transmission (Corporations Code Sections 20), or by regular, bulk, or express mail service, addressed to a member at the address of the member appearing on the books of the Association or given by the
(d) Notice Requirements for Members' Meetings. Written notice of any members' meeting shall be given, in accordance with these bylaws, to each member of the Association. The notice shall specify the place, date, and hour of the meeting, and, (1) for a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (2) for the annual meeting, those matters that the Board, at the time notice is given, intends to present for action by the members, but any proper matter may be presented at the meeting.
5 may be transacted, subject to any limitations in law or these bylaws. Only regular members may vote at the annual meeting.
A special meeting of members shall be called by written request, specifying the general nature of the business proposed to be transacted and submitted to the Chairman or to the Secretary of the Association. The officer receiving the request shall cause notice to be given promptly to the regular members entitled to vote, in accordance with subsections (d) and (e) below, stating that a meeting will be held at a specified time and date fixed by the Board. If the meeting is called by anyone other than the Board, the meeting date shall be at least thirty five (35), but not more than sixty (60) days after receipt of the request If the Board calls the meeting, the meeting date may be any date for which appropriate notice is given in accordance with subsections (d) and (e) below. If the notice is not given within twenty (20) days after receipt of the request, the person or persons requesting the meeting may give the notice.
(c) Special Meetings. A special meeting of the members for any lawful purpose may be called at any time by (1) the Board, (2) the Chairman of the Board, (3) the President, or (4) twenty percent (20%) of the regular members. Only regular members may vote at a special meeting.
No business other than the business, the general nature of which was set forth in the notice of the meeting, may be transacted at a special meeting
(1) The Association is unable to deliver two consecutive notices to the member by that means.
Section 2.17. Waiver of Notice or Consent. The transactions of any members' meeting, however called or noticed and wherever held, shall be as valid as though taken at a meeting duly held after regular call and notice, if (1) a quorum is present, and (2) either before or after the meeting, each regular member who is not present in person, signs a written waiver of notice, a consent to holding of the meeting, or an approval of the minutes. The waiver of notice, consent or approval need not specify either the business to be transacted or the purpose of any meeting of members. All such waivers, consents, or approvals shall be filed with the corporate records or made a part of the Aminutes.member's attendance at a meeting shall also constitute a waiver of notice of and presence at that meeting, unless the member objects at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened. Also, attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be included in the notice of the meeting, but not so included, if that objection is expressly made at the meeting.
6 member to the Association for purpose of notice; or if no such address appears or is given, at the place where the principal office of the Association is located Notice given by electronic transmission under this subdivision shall be valid only if it complies with Corporations Code Section 20. Notwithstanding the foregoing, notice shall not be given by electronic transmission by the Association after either of the following:
Section 2.18. Quorum. One-third (1/3) No less than 10% or At least 10% of the regular members of the Association in good standing shall constitute a quorum for the transaction of business at any meeting of members.
Section 2.19. Loss of Quorum. The regular members present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, even if enough members have withdrawn to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the regular members required to constitute a quorum
Section 2 20. Act of the Members If a quorum is present, the affirmative vote of the majority of the voting power represented at the meeting, entitled to vote and voting on any matter, shall be the act of the members, unless the vote of a greater number is required by law, these bylaws or the Articles of Incorporation.
(2) The inability to so deliver the notices to the member becomes known to the Secretary or other person responsible for the giving of the notice.
The Chairman shall cause to be distributed one written ballot to each regular member. Such ballots shall be mailed or delivered in the manner required by Section 2 16(e). All solicitations of votes by written ballot shall (1) indicate the number of responses needed to meet the quorum requirement, (2) state the percentage of approvals necessary to pass the action or actions, and (3) specify the time by which the ballot must be received in order to be counted. Each ballot so distributed shall (1) set forth the proposed action, (2) provide the regular members an opportunity to specify approval or disapproval of each proposal, and (3) provide a reasonable time in which to return the ballot to the ApproAssociation.valbywritten ballot shall be valid only when (1) the number of votes cast by ballot within the time specified equals or exceeds the quorum required to be present at a meeting authorizing the action, and (2) the number of approvals equals or exceeds the number of votes that would be required for approval at a meeting at which the total number of votes cast was the same as the number of votes cast by written ballot without a meeting All written ballots shall be filed with the Secretary of the Association and maintained in the corporate records for at least three years.
Section 2 22. Proxies. Proxy voting is not allowed.
The Board shall consist of at least eight (8) but not more than twelve (12) directors unless changed by amendment to these bylaws. The exact number of directors shall be fixed, within those limits, by a resolution adopted by the Board. Directors shall be elected by and from regular members. No regular member shall have more than one director serving on the Board at the same time.
member who is not an individual shall designate in writing the individual who shall exercise the voting rights and other privileges on behalf of the member. The designation shall be filed with the Secretary of the Association and maintained with the corporate records. Said designation may be changed, permanently or temporarily, by written notice to the Secretary of the Association.
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Section 2 23. Action by Written Ballot Without a Meeting Any action that may be taken at any meeting of members may be taken without a meeting by complying with the following procedure.
Section 2.21. Eligibility to Vote. Regular members entitled to vote at any meeting of members shall be all those in good standing as of the date the vote is taken Each regular member shall be entitled to one vote at any annual, regular or special meeting of Eachmembers.regular
ARTICLE III. Directors Section 3 01. Number and Qualifications
Section 3 02. Election of Directors.
Directors shall be elected at the annual meeting of members. The Secretary shall appoint a nominating committee to select qualified candidates for election to the board at least 60 days prior to the annual meeting at which directors are to be elected. The nominating committee shall communicate the names of its nominees to the Secretary of the Association at least 30 days prior to the annual meeting at which directors are to be elected The President shall verify the eligibility of all nominees, and shall cause the names of the eligible nominees to be sent to all regular members at the time the notice of the annual members meeting is sent Nominations may not be taken from the floor at the time of the election. Neither the Board nor any committee of the Board is authorized to expend Association funds to support a particular nominee for director.
Section 3.03. Terms of Office. The term of office of each director shall be three (3) years and all directors shall serve until expiration of the term for which elected and until a successor has been elected and qualified. If necessary, the Board may utilize any reasonable method to stagger the terms of the directors so as to provide continuity on the Board
Section 3 04. Vacancies. A vacancy or vacancies on the Board shall exist on the occurrence of the following: (a) the death or resignation of any director, (b) the declaration by resolution of the Board of a vacancy in the office of a director who has been declared of unsound mind by an order of court or convicted of a felony, (c) the vote of the members to remove any director, (d) the increase of the authorized number of directors, (e) the resignation or disqualification of the member which the director represents, or (f) the failure of the members, at any meeting of members at which any director or directors are to be elected, to elect the number of directors required to be elected at that meeting.
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Section 3.05. Resignations. Except as provided below, any director may resign by giving written notice to the Chairman or the Secretary. The resignation shall be effective when the notice is given unless it specifies a later time for the resignation to become effective.
Section 3.06. Filling Vacancies. Except for vacancies created by removal of a director by the members, vacancies on the Board may be filled by a majority of the directors then in office, whether or not less than a quorum, or by a sole remaining director (Discuss) The members may fill any vacancy or vacancies not filled by the directors.
The election of directors may also be conducted by mail ballot to the membership in accordance with the procedures in the California Nonprofit Mutual Benefit Corporation law The nominations process and timelines above shall still apply in the event a mail ballot, rather than an in-person meeting, is used by the election of directors.
There shall be no limit on the number of terms which may be served by a director if the director continues to be qualified. Should there be term limits?
Persons
Section 3 08. Annual and Special Board Meetings. An annual meeting of the Board shall be held on the same day as, or the day before or after, the annual membership meeting Other meetings (“special meetings”) of the Board may be held from time to time on the call of the Chairman, the President, or any two directors. The time and purpose for any special meeting shall be set by the person(s) calling such meeting.
Section 3 10. Place and Time of Meetings Meetings of the Board shall be held at whatever place and time is designated from time to time by the Board and, in the absence of any designation, shall be held at the principal office of the Association.
Section 3 07. Reduction of Number of Directors No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.
Section 3 11. Meetings by Telephone Any meeting of the Board may be held by conference telephone or similar communication equipment, so long as the following conditions are met:
(a) Each director participating in the meeting can communicate with all other directors concurrently (b) Each director is provided the means of participating in all matters before the Board, including the capacity to propose, or to interpose, an objection to a specific action to be taken by the Board.
9 appointed to fill a vacancy shall serve until the end of the term of the person whose vacancy they are filling.
(c) The Board adopts and implements some means of verifying both of the (1)following:Aperson communicating by telephone, electronic video screen, or other communications equipment is a director entitled to participate in the Board meeting.
(2) All statements, questions, actions or votes were made by that director and not by another person not permitted to participate as a director.
Section 3.09. Notice of Meetings. Notice of meetings of the Board, specifying the time and place of the meeting, shall be given to each director at least seven (7) days before the meeting by first-class mail, or forty-eight (48) hours before the meeting if personally delivered or by telephone, including a voice messaging system, or by electronic transmission (Corporations Code Section 20). Notice shall be deemed delivered when deposited in the U.S mail or with an express mail service, or when received if delivered personally or by telephone, or on its confirmation of deliver if by electronic transmission.
(a) Policies. Adopt policies, rules and procedures for the management and operation of the Association.
All such waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meetings. Notice of a meeting need not be given to any director who attends the meeting and does not protest, before or at the commencement of the meeting, the lack of notice to him or her.
Unless otherwise restricted by law or these bylaws, every act or decision done or made by a majority of directors present at a meeting duly held at which a quorum is present shall be regarded as an act of the Board.
Section 3.12. Waiver of Notice and Consent to Meetings. Notice of a meeting need not be given to any director who, either before or after the meeting, signs a waiver of notice, a written consent to the holding of the meeting, or an approval of the minutes of the meeting The waiver of notice or consent need not specify the purpose of the meeting
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16. Action Without Meeting Any action which, in accordance with law, is required or permitted to be taken at a meeting of the Board may be taken without a meeting if all directors consent in writing to such action. Such action by written consent shall have the same force and effect as any other validly approved action of the Board. All such consents shall be filed with the minutes of the proceedings of the Board.
Section 3.17. Compensation of Directors. Directors shall not receive compensation for their services. Directors may, at the discretion of the Board, receive reimbursement for travel and other actual expenses.
Sectionmeeting3
Section 3.13. Quorum. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn. A meeting at which a quorum is initially present may continue to transact business, despite the withdrawal of directors, if any action taken or decision made is approved by at least a majority of the required quorum for that meeting
Section. 3.15. Adjournment. A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place. If the meeting is adjourned for more than 24 hours, notice of the adjournment to another time or place must be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment. Any business that might have been transacted at a meeting as originally noticed may be transacted at an adjourned and rescheduled
Section 3 14. Act of the Board
Section 3.18. Powers and Limitations of Board of Directors. The Board, subject to restrictions of law, the Articles of Incorporation, and these bylaws, shall exercise all powers of the Association Without limitation on its general power, except as specified herein, the Board shall have full power and discretion to do the following:
(f) Borrowing money
(g) Gifts. Receive and accept gifts, devises, bequests, donations, annuities, and endorsements of real and personal property, and use, hold and enjoy the same, both as to principal and income, and to invest and re invest the same or any part thereof for the furtherance of any objects, interests or purposes of this Association
(h) Contributions. Make such contributions as the Board determines are necessary and advisable in furtherance of the interests and purposes of this Association.
(i) Fiscal Year. Fix and change the fiscal year of the Association. Unless changed by action of the Board, the fiscal year shall be the 12 month period beginning July 1 and ending June 30 of the following year.
(e) Audits. Select a licensed certified public account to perform an audit of the books and records of the Association and submit a written audit report to the Board.
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(j) Seal. Adopt and use a corporate seal provided that the name of the Association and the state are shown on it. The seal may be affixed to such instruments as the Board shall direct. However, the lack of a corporate seal shall not, by itself, affect the legality of any document executed on behalf of the Association.
Borrow money and incur indebtedness on behalf of the Association and cause to be executed and delivered for the Association's purposes, in the Association name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, liens, and other evidences of debt and securities.
(b) Administration. Retain a person or entity to administer the day to day activities of the Association. An individual retained pursuant to this authority shall be known as the President and shall be an officer of the Association. The Board may also employ, retain, or authorize the employment of such other employees, independent contractors, agents, and legal counsel as it from time to time deems necessary or advisable in the interest of the Association, prescribe their duties and fix their compensation
(c) Bonds Require officers, agents, and employees charged by the Association with responsibility for the custody of any of its funds or negotiable instruments to give adequate bond (Discuss)
Section 3 19. Voting Power. For all purposes, the voting power of each voting director shall be one vote
(q) Other. Do and perform all acts and exercise all powers incidental to, or in connection with, or deemed reasonably necessary for the proper implementation of the purposes of the Association.
Section 3 20. Property Rights. No director shall have any property rights in any assets of the Association.
(p) Services. Authorize the Association to provide services, including but not limited to inspection and certification services, to members and nonmembers, and to adopt the necessary procedures for the implementation of such programs.
(o) Committees. Appoint committees as provided in these bylaws.
(l) Property. Acquire, construct and possess real and personal property
(k) Contracts. Enter into contracts and agreements with individuals and with public and private entities for the advancement of the purposes for which the Association is organized.
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(n) Political Action Committees. Establish and administer state and federal political action committees in order to accomplish and further the purposes of the Association.
ARTICLE IV. Officers
Section 4.01. Officers. The Board shall elect at its annual meeting a Chairman and two Vice Chairmen from among the directors, all of whom shall be referred to as the “elected officers” . The Board shall also appoint a Secretary and Treasurer who may be, but do not have to be, directors. The Board may from time to time elect or appoint such other officers as it deems necessary to carry out the obligations of the Board or the Association, and set their terms and duties. The positions of Secretary and Treasurer may be held by the same person, however no other officer positions may be combined. The President of the Association shall also be an officer of the corporation.
(m) Bank Accounts and Special Funds. Establish one or more bank accounts and/or special funds in order to accomplish and further the purposes of the Association.
Section 4 02. Terms of Office
Secretary The Secretary shall keep, or cause to be kept, at the principal office or other place that the Board may designate, a book of minutes of all membership meetings and meetings of the Board, stating the time and place, whether regular or special, and, if special, how authorized, the notice given, the names of those directors present, and the proceedings of those meetings. The Secretary shall keep, or cause to be kept, a regular showing of the names of the members and directors, their addresses and telephone numbers.
The Secretary shall give, or cause to be given, notice of all meetings; shall keep the seal of the Association in safe custody; and shall have whatever powers and duties may be prescribed from time to time by the Board.
The term of office for elected or appointed officers is two years and until a successor is elected (or appointed) and qualified. Provided however, that if an elected officer is not re elected as a director, his or her officer position shall terminate at the same time as his or her director position. The is no limit on the number of terms an officer may serve so long as he or she remains qualified (Discus term limits)
04. Removal of Officer
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Section 4.05. Chairman. The Chairman of the Board shall preside at all meetings of the members and the Board. He or she shall be the Chairman of the Executive Committee and an ex officio member of all other committees The Chairman shall have the general powers and duties usually vested in the office of chairman of a corporation, and shall have whatever other powers and duties may be prescribed by the Board.
Section 4 06. Vice Chairmen In the absence or disability of the Chairman, one or both of the Vice Chairmen shall perform all the duties of the Chairman, and when so acting, shall have all the power of and be subject to all the restrictions of the Chairman. The Vice Chairmen shall be a member of the Executive Committee The Vice Chairmen shall have whatever other powers and duties as may be prescribed from time to time by the SectionBoard407.
The Assistant Secretary shall assume the role of Secretary when he/she is not available.
Section 4.03. Compensation of Officers. The elected officers of the Association shall not receive compensation for their services. The elected officers of the Association shall not receive compensation if those positions are filled by directors. The Board may authorize compensation for the elected officers if those positions are filled by non Sectiondirectors.4
The Chairman, Vice Chairmen, and any other officers may be removed from office at any time, for any reason, by a majority vote of the Board Any vacancy created by this section may be filled immediately by a majority vote of the Board.
The Treasurer shall be the Chief Financial Officer of the corporation. The Treasurer shall keep and maintain, or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Association, including accounts of its assets, liabilities, receipts, disbursements, gain, losses, capital and surplus. Except as limited by law, the books of account shall be open to inspection at all reasonable times by any regular member or director. The Treasurer shall cause to be filed all reports required by government entities, including but not limited to the Internal Revenue Service, the California Franchise Tax Board, and the Secretary of State.
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The President shall be an at will employee of the Association unless specified otherwise in a written agreement signed by the Chairman and approved by the Board. Subject to the supervisory powers of the Board, the President shall:
(a) Be the Chief Executive Officer of the Association responsible for all management functions.
Section 4 09. President
Section 4 08. Treasurer
(b) Manage and direct all activities of the Association as prescribed by the Board and approved by the Board when necessary (c) Serve as a non-voting ex officio member of the Board and all committees.
(d) Employ and terminate the employment of any other employees of the Association which the Board deems necessary to carry on the work of the Association, and fix their compensation within the approved budget of the Association. (e) Define the duties of the staff, supervise their performance and establish their titles which, in the President’s judgment, are in the best interests of the Association.
The Treasurer shall render to the Chairman and directors, on request, an account of all of the transactions and of the financial condition of the Association, and shall have whatever other powers and duties may be prescribed by the Board.
(f) Not accept any outside employment without the express approval of the Board.
(g) Perform any other powers and duties as may be authorized by the Board.
Section 5.02. Notice Requirements for Committees of the Board. Written notice, via regular or express mail or facsimile, shall be provided to all committee members at least 48 hours in advance of any meeting of a committee of the Board. Provided, however, that this notice may be waived in writing, or by the committee member’s actual attendance at the meeting.
The Board, by resolution adopted by a majority of the directors then in office, provided a quorum is present, may create one or more “committees of the Board”, each consisting of two or more voting directors and no persons who are not voting directors, to serve at the pleasure of the Board.
(h) With respect to any assets held in charitable trust, approve any contract or transaction between the corporation and one or more of its directors or between the corporation and an entity in which one or more of its directors have a material financial interest, subject to the special approval provisions of Section 5233(d)(3) of the California Corporations Code
15 ARTICLE V. Committees
Section 5 01 Committees of the Board
Appointments to committees of the Board shall be by majority vote of the directors then in office. To the extent provided in the Board resolution, committees of the Board shall have the authority of the Board, except that no committee, regardless of board resolution, may: (a) Take any final action on any matter that, under the California Nonprofit Mutual Benefit Corporation Law, also requires approval of the members or approval of a majority of all members; (b) Fill vacancies on the Board or on any committee that has the authority of the Board; (c) Fix compensation of the directors for serving on the Board or on any committee; (d) Amend or repeal bylaws or adopt new bylaws; (e) Amend or repeal any Board resolution that by its express terms is not so amendable or repealable; (f) Create any other committees of the Board or appoint the members of committees of the Board; (g) Expend corporate funds to support a nominee for director after more people have been nominated for director than can be elected; or
Section 5.07. Closed Sessions. At the discretion of a committee chairman, any committee meeting may be closed to persons other than committee members, except that in no event may a committee chairman exclude the Chairman of the Board of Directors from a committee meeting
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The Board or the Chairman may from time to time establish advisory committees composed of any number of directors or non directors who shall assist the Board or a committee of the Board by making recommendations on specific issues. In general, advisory committees do not exercise the authority of the Board, have no independent decision making authority, and are not subject to the notice and quorum provisions applicable to committees of the Board. However, the Board can delegate certain activities of the Association to an advisory committee, so long as the Board retains the ultimate authority to direct and control such activities. In the event such authority is delegated to an advisory committee, the advisory committee becomes subject to the notice and quorum requirements of this Article V, and must report all actions to the Board at the next Board meeting after the action is taken by the committee.
Section 5.03. Quorum for Committees of the Board. A majority of the voting members of any committee of the Board shall constitute a quorum, and the acts of a majority of the voting members present at a meeting at which a quorum is present shall constitute the act or recommendation of the committee.
Section 5.06. Meetings by Telephone. Any meeting of a committee may be held by conference telephone or similar communication equipment in the same manner provided for in Article III of these bylaws.
Section 5.04. Executive Committee. The Executive Committee shall be composed of the Chairman, the two Vice Chairmen, and one other director appointed by the Chairman. The President shall attend Executive Committee meetings as a non-voting, advisory member of the committee. However, if the Secretary and/or Treasurer are directors, they shall be considered voting members of the Executive Committee. Executive Committee shall be a standing committee and shall have all the authority delegated by the Board. The Executive Committee shall be a “committee of the Board” as described above. All action taken by the Executive Committee shall be reported to the full Board at the next Board meeting
Section 5 05 Advisory Committees
17 ARTICLE VI. Arbitration Program
6 02 Mandatory for Regular Members Regular members of the Association are required, as a condition of membership, to participate in any arbitration program established by the Board.
VII.
(a) Right of Indemnity
To the fullest extent permitted by law, this Association may, in the discretion of the Board, indemnify its directors, officers, employees, and other persons described in Section 7237(a) of the California Corporations Code, including persons formerly occupying any such position, against all expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred by them in connection with any “proceeding,” as that term is used in that Section, and including an action by or in the right of the Association, by reason of the fact that the person is or was a person described in that Section. “Expenses,” as used in this bylaw, shall have the same meaning as in Section 7237(a) of the California Corporations Code.
(b) Approval of Indemnity On written request to the Board by any person seeking indemnification under Section 7237(b) or Section 7237(c) of the California Corporations Code, the Board shall promptly determine under Section 7237(e) of the California Corporations Code whether the applicable standard of conduct set forth in Section 7237(b) or Section 7237(c) has been met and, if so, the Board may authorize indemnification.
Section 7 02. Indemnification
Section 6 01. Establishment
Section 7.01. Liability. Except as limited by law, there is no monetary liability on the part of, and no cause of action for damages shall arise against, any volunteer director or officer of the Association based on any alleged failure to discharge the person's duties as a volunteer director or officer if the duties are performed in accordance with the standards of conduct provided for in the California Corporations Code.
The Board may establish and oversee an arbitration program for the benefit of those engaged in the packing and/or shipping of dried fruit, tree nuts or kindred products The specific components of any arbitration program established by the Board shall be described in detail in procedures adopted by the SectionBoard.
ARTICLE Liability and Indemnification
Section 10.01. Amendment to Bylaws. These bylaws may be amended or repealed, or new bylaws adopted by a two thirds vote of the Board. However, approval of the
ARTICLE VIII. Rights of Inspection
Section 9 01. Dissolution by Vote The Association may be dissolved at any time by a two thirds (2/3) vote of the regular members. Upon such election, the directors shall promptly cease operations and proceed to wind up and dissolve the Association.
Section 7 03. Insurance
Section 8.01. Rights of Inspection by Members and Directors. The regular members and directors of the Association may inspect, at any reasonable time, the books and records of the Association to the extent allowed by the provisions of the California Nonprofit Corporation Law applicable to this Association.
If the Board cannot authorize indemnification because the number of directors who are parties to the proceeding with respect to which indemnification is sought prevents the formation of a quorum of directors who are not parties to that proceeding, the Board shall promptly call a meeting of members. At that meeting, the members shall determine under Section 7237(e) whether the applicable standard of conduct set forth in Section 7237(b) or Section 7237(c) has been met and, if so, the members present at the meeting may authorize the indemnification.
ARTICLE IX Dissolution
Section 9.02. Remaining Assets. Upon the dissolution of the Association, all debts thereof shall be paid and its affairs settled, and all remaining assets shall be distributed back to the regular members in equal shares.ARTICLE Amendments
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The Board may adopt a resolution authorizing the purchase and maintenance of an insurance policy or policies or bond on behalf of its directors, officers or employees against any liabilities, other than for violating provisions against self dealing, incurred by the director, officer or employee in such capacity or arising out of their status as such.
X
Section 11 01 Construction and Definitions Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the California Nonprofit Mutual Benefit Corporation Law applicable to this Association shall govern the construction of these bylaws. Without limiting the generality of the preceding sentence, the masculine gender includes the feminine, the singular includes the plural and the plural includes the singular.
ARTICLE XI. Miscellaneous
Section 11.0 2 Robert’s Rules of Order Robert’s Rules of Order shall control if any question of procedure arises during meetings of the membership or the Board.
19 regular members is required for repeal or if an amendment or new bylaw provision would:(a)
Section 11 03 Annual Report Within 120 days after the close of the corporation’s fiscal year, the Board shall cause an annual report to be prepared in accordance with Section 8321 of the California Corporations Code. The report shall be made available to any member who requests a copy.
Materially and adversely affect the regular members’ rights as to voting or dissolution; (b) Effect an exchange, reclassification, or cancellation of all or part of the memberships; (c) Authorize a new class of membership; (d) Change the number of authorized directors; (e) Change from a fixed number of directors to a variable number of directors, or vice versa; (f) Increase or extend the terms of directors; (g) Allow any director to hold office by designation or selection rather than by election by the regular members; (h) Increase the quorum for members’ meetings; or (i) Repeal, restrict, create, expand, or otherwise change proxy rights.
Section 11 07 Required Disclosures and Reporting DFA of California shall comply with the disclosure and reporting requirements of federal and state agencies to which it is subject.
For purposes of this section and these bylaws, a “conflict of interest” means a situation in which a Board or committee member is part of a discussion or decision by the Board or a committee which has the potential to financially benefit that Board or committee member or a member of that Board or committee member’s immediate family “Immediate family” means, spouse or same sex/domestic partner, children, parents, siblings, parents-in-law, or siblings-in-law
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All intellectual property prepared or purchased by or on behalf of the corporation, including but not limited to be DFA of California name, educational, promotional, and training materials, newsletters, contracts, logos, service marks, membership lists, contributor lists, and research results, shall be the exclusive property of the corporation and Board members agree to deal with it as such Board members agree that they will not sell, transfer, publish, modify, distribute, or use for their own purposes, the intellectual property belonging to the corporation without prior approval of the Board memorialized in a writing signed by the Chairman
Section 11 05
Section 11 04 Annual Statement of Transactions and Indemnifications. As part of the annual report described in Section 11.04 above, the Board shall cause to be prepared a statement of any transaction of indemnification if required by Section 8322 of the California Corporations Code.
Both the fact and the appearance of a conflict of interest should be avoided. Board members or committee members who are unsure as to whether a certain transaction, activity, or relationship constitutes a conflict of interest should discuss it with the Chairman, who will determine whether disclosure to the Board or the assistance of legal counsel is required.
Conflicts of Interest Board members and committee members must actively seek to avoid situations and activities that create an actual or potential conflict between the individual’s personal interests and the interests of the corporation. If a Board member or committee member believes that a conflict exists relative to a particular issue being considered by the Board or any committee, he or she shall disclose the conflict to the Board or committee, as appropriate, and abstain from discussion or voting on the issue.
Section 11 06
Intellectual Property
Executed on the day of , 2013 at , California.Signature , Secretary
21 CERTIFICATE OF SECRETARY OF DFA OF CALIFORNIA
I certify that I am the duly elected and acting Secretary of DFA OF CALIFORNIA, a California Nonprofit Mutual Benefit Corporation, that the above Bylaws, consisting of 21 typewritten pages including this page, are the Bylaws of this corporation as approved by the Board of Directors on August 15, 2013, and that they have not been amended or modified since that date.
SAFE FOOD IS OUR BUSINESS 1 Future Board Meetings
SAFE FOOD IS OUR BUSINESS 1 Future Board Meetings November 10, 2022 Monterey, Ca Portola Hotel & Spa February 28, 2023 Indian Wells, Ca Hyatt Regency Indian Wells Tentative May 2023