APPROVED MINUTES

Northeast Dairy Compact Commission

February 7, 2001 - Holiday Inn, Manchester, NH

Chair Mae Schmidle called the meeting to order at 10:20 am.

Commissioners in attendance:
CT: Bob Jacquier; Mae Schmidle; Neil Marcus; Gabe Moquin, as designee for Shirley Ferris
MA: Gordie Cook; Mary Kelligrew Kassler; Jim Hines as designee for Jay Healy
ME: Fred Hardy; Colon Durrell; Stan Millay
NH: Powell Cabot; Doug Morris
RI : Aaron Briggs; Ron Newman; Peter Petrone
VT:Jacques Couture; Andy Dykstra; Millicent Rooney, Robert Starr

Commission Staff in Attendance:

Dan Smith, Executive Director; Tom Lehner, Staff Counsel-Nancy Audette, Office Manager

I. Public Participation

Bob Wellington of Agrimark, Inc. reported on the Compact panel discussion that was held during the International Dairy Foods Association Annual Meeting. In response to questions from Mr. Moquin and Commissioner Dykstra, Mr. Wellington also spoke about various milk marketing issues related to the Compact.

II. Introduction of Guests

Ray Christensen, New York Department of Agriculture and Markets; Gail Christensen, Erik Rasmussen, Market Administrator; Bob Wellington, Agrimark, Inc. ; Steve Watrous, Allied Federated Cooperatives; Maggie - Office of New York State Senator Nancy Lorraine Hoffman.

III. Consideration and Approval of Minutes of the January 3, 2001 meeting

Motion 2/7/01-1 by Commissioner Jacquier /Second by Commissioner Newman

Moved to approve the minutes of January 3, 2000 as presented.

MOTION PASSED 6 TO 0

IV. Consideration of Communications

There were no communications to consider.

V. Financial Report: Month Ending December 31, 2000

Commissioner Durrell, Treasurer, presented the financial statements for the Administrative Fund and the Producer Settlement Fund for the month ending December 31, 2000.

VI. Reports

A. Chair's Report Commissioner Schmidle reported that the Committee on Administration had discussed the upcoming meeting schedule and would have recommendations under New Business.

B. Executive Director's Report Mr. Smith gave an extended report on a number of matters in view of his intended absence for the following month. He spoke first of Office operations, indicating that Sara Spencer was again working full-time and that Ms. Audette was concentrating her time on the Commission books and pool administration, and organizing Commission meetings. He indicated that the auditors would be conducting their field work on February 19-20, to allow for the audit to be completed by springtime and the congressional review.

Mr. Smith also spoke about the Congressional approval process and his trips to a number of states considering Compact legislation, at the request of state legislators. He described the progress being made on the Congressional Impact Report, indicating that approximately 70 percent of the study is well underway. He noted that the Report was being prepared by a series of consultants, including the newly retained Deb Brighton, rather than an in-house economist. He also noted that the Commission was in a strong cash position, and that the Finance Committee had determined to review the budget for purposes of devoting more resources toward the Congressional Impact Report. He indicated that the Committee on Administration would also be taking up this issue.

Mr. Smith also spoke of the Commission's upcoming meeting schedule, indicating that the Commission should determine its schedule for meeting travel after Vermont, beginning in May, and his expectation that the Administrative Committee would have a recommendation for the Commission at the March meeting.

Mr. Smith also indicated that the process for reimbursing escrowed litigation funds to out-of-business producers was progressing well, as was the on-going procedure for administering the school lunch reimbursement program. He also noted that a license revocation procedure had been initiated against Turner's Dairy, consistent with the enforcement guidelines. Mr. Smith closed by observing that the office procedures had noticeably improved with the move to the new office space.

C. Committee on Administration Commissioner Schmidle reported that the Committee had reviewed scheduling and meeting location issues for the March and April meetings. She indicated that the Committee would recommend that the Commission meet in Concord for the March

meeting, concurrent with the Annual Meeting, and then travel to Vermont for the April meeting. She indicated that these two meetings would diverge from the standard practice of meeting on the first Wednesday of the month, in order to accommodate scheduling concerns, primarily those of the Congressional delegations.

D. Committee on Regulations and Rulemaking Commissioner Starr reported that the Committee on Regulations had begun its discussion about the price regulation and whether to amend the amount of the over-order obligation. He indicated that the Committee was focusing on three issues: the presence or absence of market premiums and the price regulation's impact on them, the relationship between changes in the federal order price series and the function of the compact over-order obligation and movement in retail prices between July, 1997 and the present.

D. Committee on Audit Commissioner Marcus reported that the Audit Committee had held a conference call on Tuesday, February 6 to consider whether to retain the accounting firm of Sullivan and Powers again to conduct the annual audit. The Committee decided to do so, and would be so recommending to the Commission under new business.

E. By-Laws Committee Commissioner Millay reported that the Committee on By-Laws would be proposing the By-Laws change to enable the Annual Meeting to occur on March 14.

VII. Old Business
A. Committee on Bylaws
Motion 2/7/01-2 by Mr. Millay on behalf of the Committee on Bylaws Moved to amend Article V(C)(1) of the By-laws to read: "ANNUAL MEETING-The annual meeting of the Compact Commission for receiving annual reports of officers and Committees and for the acceptance of the Annual Audit Report shall be held during the [first full week] month of March each year at the time and place designated by the Chair, and immediately precede the regular monthly meeting. Following the Annual Meeting, the Annual Report of the Compact Commission shall be forwarded to each member of the Compact Commission, the United States Secretary of Agriculture, the Governor and Legislative bodies of each participating state and the Commissioner of Agriculture of each participating state."
. MOTION PASSED 6 TO 0

VIII. New Business

B. Committee on Administration

Motion 2/7/01-3 by Commissioner Petrone on behalf of the Committee on Administration

Moved to retain Deb Brighton as a consultant to assist with the Congressional Impact Report at the rate of $60 per hour for the equivalent of 3 days per week.

MOTION PASSED 6 TO 0

Motion 2/7/01-4 by Commissioner Petrone on behalf of the Committee on Administration Moved to schedule the Annual Meeting with the March monthly meeting on March 14.

MOTION PASSED 6 TO 0

Motion 2/7/01-5 by Commissioner Petrone on behalf of the Committee on Administration Moved to schedule the April monthly meeting on April 11 in Montpelier, VT.

It was explained that the attendance of Governor Dean, Senator Jeffords and Congressman Sanders was confirmed for this meeting, and Senator Leahy had been invited. Commissioner Kassler recommended that invitations be extended to all other members of the New England Congressional Delegation, now that there is a confirmed date for this meeting, and this plan was agreed to. This pattern of confirming a date that is workable for in-state Members and then inviting all other Members will be followed for the meetings in the other states.

MOTION PASSED 6 TO 0

C. Committee on Finance Commissioner Durrell reported on his visit to the Compact Commission office in Montpelier, and the Committee's February 1 conference call. He indicated the Commission was in a strong cash position, and reiterated Mr. Smith's statement that the Committee had determined preliminarily to devote a portion of the extra cash to the Congressional Impact Report. Motion 2/7/01-6 by Commissioner Durrell on behalf of the Committee on Finance Moved to file the Financial Reports for the period ending December 31, 2000 for audit.

MOTION PASSED 6 TO 0

Motion 2/7/01-7 by Commissioner Durrell on behalf of the Committee on Finance Moved to adopt a bank resolution authorizing Colon Durrell, Treasurer and Daniel Smith, Executive Director as signatories for Compact Commission bank accounts.

MOTION PASSED 6 TO 0

Motion 2/7/01-8 by Commissioner Durrell on behalf of the Committee on Finance Moved to adoption of a bank resolution authorizing Colon Durrell, Treasurer, Daniel Smith, Executive Director and Tom Lehner to confirm the sending of wire transfers

MOTION PASSED 6 TO 0

D. Audit Committee Motion 2/7/01-9 by Commissioner Marcus on behalf of the Committee on Audit Moved to authorize the Executive Director to execute a letter of agreement with Sullivan & Powers, CPA to conduct the 2000 annual audit, for a fee in the amount of $5,400.

MOTION PASSED 6 TO 0

IX. Opportunity for Individual State Comments.

Commissioner Hardy reported on Linda Smith Dyer's health, and indicated that she appreciated cards and notes. He indicated that he would provide Ms. Audette with Ms. Dyer's address, and encouraged Commission members to write to her. The meeting was recessed for lunch at 12:05 pm.

X. Additional Public Comment

There was no additional comment during this period.

XI. Informational Update: Federal market Order Changes Reviewed by Erik Rasmussen, Market Administrator

Erik Rasmussen, Market Order 1 Administrator, provided a detailed explanation of the implemented changes to the Market Order System that have been in place since January, 2000. He described the consolidation of the federal orders and reviewed comparative pay prices among the now orders. There was a spirited discussion about current pay prices. Commissioner Dykstra stated his strong concern that current pay prices were not adequate, and that the Commission's price regulation was not serving its function in the new federal pricing environment. Mr. Hardy also expressed similar concerns. Mr. Rasmussen also explained the new component pricing and producer price differential (PPD) formulas. His use of a water pitcher and glasses for illustration on this point was particularly illuminating. Mr. Wellington of Agrimark, Inc. participated in this discussion, providing additional explanation and comment.

XII. Adjournment

The meeting was adjourned at 1:13 am.

Respectfully submitted,

Douglas E. Morris, Secretary

Return to Minutes and Motions
Return to the Northeast Dairy Compact Home Page