APPROVED MINUTES

Northeast Dairy Compact Commission

December 6, 2000 - Centennial Inn, Concord, NH

Vice Chair Mae Schmidle called the meeting to order at 10:05 am. On behalf of the Compact Commission, Commissioner Schmidle welcomed the new members from Connecticut, Bob D'Assasandro and Neil Marcus.

Commissioners in attendance:

CT: Shirley Ferris; Bob Jacquier; Mae Schmidle; Bob D'Allasandro; Neil Marcus
MA: Charley Arbing; Gordie Cook; Jay Healy; Sam Shields
ME: Fred Hardy; Colon Durrell; Stan Millay
NH: Powell Cabot; Deb Erb; Doug Morris
RI: Aaron Briggs; Ron Newman, Al Bettencourt; Peter Petrone
VT: Jacques Couture; Andy Dykstra; Harold Howngan; Millicent Rooney; Bobby Starr

Commission Staff in Attendance:

Dan Smith, Executive Director; Tom Lehner, Staff Counsel; Carmen Ross, Regulations Administrator; Nancy Audette, Office Manager; Sara Spencer, Special Projects Administrator

I.          Public Participation

There was no public participation during this period.

11.       Introduction of Guests

Kay Zeoski, Office of New York State Senator Nancy Lorraine Hoffman, Carl Peterson, Agrimark, Inc.; Ray Christensen, New York Department of Agriculture and Markets; Gail Christensen; Reenie DeGeus, Vermont Department of Agriculture, Food and Markets; Gabe Moquin, Connecticut Department of Agriculture; Pat Green, Country Folks; Kelly Fuersetenburg, New England Country Folks; Lester Gibbs and Ray Roberts, Vermont Grange; Richard Uncles, New Hampshire Department of Agriculture; Erik Rasmussen, Market Administrator

IIl.        Consideration and Approval of Minutes of the November 1, 2000 meeting

Motion 12/6-1 by Ron Newman/Second by Bobby Starr

Moved to approve the minutes of November I as presented with the following amendment: to indicate that Bob Wellington commented during the second public comment period and that Andy Dykstra spoke about the Nominations procedure during the period for individual state discussion.

MOTION PASSED 6 TO 0

IV.       Consideration of Communications

Mr. Smith reported on the formal communication from Commissioner Ferris announcing the appointments of Commissioner D'Allasandro and Commissioner Marcus from Connecticut. Mr. Smith extended his welcome to the new members.

V.        Financial and Budget Report: Month Ending October 31, 2000

Commissioner Cabot gave a brief introduction of the budgeting process described in greater detail in the Finance Committee Report. Mr. Smith reviewed the financial statements for the Administrative and Producer Settlement Funds for the month ending October 31. He explained how the Producer Settlement Fund statement identifies the different accounts being held within the Fund. He also noted that the monthly versus year to date expenses continue to run substantially under-budget, a circumstance to which the budget adjustment for 2000 and 2001 Budget both respond.

Vl.        Reports

A. Chair's Report Commissioner Schmidle stated that her Chair's Report would be incorporated into her report for the Committee on Administration.

B. Executive Director's Report Mr. Smith introduced Sara Spencer, the Special Projects Administrator for the staff. He also indicated that he had not yet had success in hiring an economist or public information director to round out the staff, primarily due to the press of time dealing with the budget and other day to day operations matters. He also reported that the Organic Cow briefing process was nearing completion. He closed by noting that the office would be moving to a downtown Montpelier location at 64 Main Street, Room 21 on Monday, November 11.

C. Committee on Administration Commissioner Schmidle reported that the Committee's attention had been focused on the budget review process and most particularly on the issues of the benefits package and new employees. Commissioner Howrigan indicated the Committee had by motion approved an update or increase in the benefits package, the restoration of the positions of Office Manager and Economist and the revision in the position of Administrative Assistant to Special Projects Administrator. These decisions by the Committee were incorporated into the budget proposal being presented to the Commission by the Finance Committee.

Commissioner Schmidle also reported the Committee had approved in concept an agreement between the Commission and the Market Administrator to pay for monthly services by the Market Administrator on an annualized basis by contract, to begin next month, and that the Committee had approved the current monthly statement for payment. The Committee acted jointly with the Finance Committee in reaching these recommendations for full Commission action under new business.

D. Committee on Finance Report Commissioner Cabot reported that the Committee on Finance had developed a revised 2000 Budget, and a proposed 2001 Budget in the amount of $840,000.00, for the Commission's consideration. He indicated that the Committee had approved a reduction in the administrative assessment from $0.32 to $0.27 as part of the 2001 Budget process.

E. Committee on Nominations Commissioner Dykstra reported the slate of proposed officers and members of the Committee on Administration for year 2001, as follows: Chair: Mae Schmidle, Connecticut Vice-Chair: Peter Petrone, Rhode Island Treasurer: Colon Durrell, Maine Secretary: Douglas Morris, New Hampshire At-Large: Harold Howrigan, Vermont At-Large: Charles Arbing, Massachusetts

F. Committee on Regulations and Rulemaking Commissioner Starr reported that the Committee had met a number of times by conference call since the last meeting, but that the Committee's work had yet to reach the point in process for a report to the Commission.

VII.      New Business

            A. Committee on Nominations

            Motion 12/6-2 by Mr. Dykstra on behalf of the Committee on Nominations

            Moved to approve the slate of proposed officers and members of the Committee on Administration for year 2001, as proposed by the Committee on Nominations and as follows:

Chair: Mae Schmidle, Connecticut
Vice-Chair: Peter Petrone, Rhode Island
Treasurer: Colon Durrell, Maine
Secretary: Douglas Morris, New Hampshire
At-Large: Harold Howrigan, Vermont
At-Large: Charles Arbing, Massachusetts

At Commissioner Schmidle's request, Commissioner Healy assumed the podium to preside over the election process. There were no nominations from the floor. The candidates each gave brief statements on their backgrounds. Balloting by state was conducted by paper ballot. MOTION PASSED 6 TO 0

There were no challenges or contests; one ballot was determined to contain a chad which was further determined to be fully punched and thereby accounted for.

B. Committee on Regulations and Rulemaking Recommendations:
No recommendations reported.

            C. Recommendations of Committee on Finance

                        i. Motion 12/6-3 by Mr. Cabot on behalf of the Committee on Finance

Moved to approve 2000 Budget Adjustment as proposed by the Committee on Finance, including the staffing and benefit provisions approved by the Committee on Administration.

Mr. Cabot and Mr. Smith reviewed the proposed 2000 Budget Adjustment by reference to the budget memorandum attached to these minutes. In summary, Mr. Smith indicated the budget adjustment resulted in essentially the same overall budget amount, but provided for greater reliance on in-house staff capability than on outside services. He also noted that the SEP (Simplified Employee Pension Plan) contribution was increased to 15 percent from 13 percent.

MOTION PASSED 6 TO 0

ii. Motion 12/6-4 by Mr. Cabot on behalf of the Committee on Finance

Moved to approve 2001 Budget in the amount of $840,000.00 as proposed by the Committee on Finance, including the staffing and benefit provisions approved by the Committee on Administration.

Mr. Cabot and Mr. Smith reviewed the proposed 2001 Budget, again by reference to the budget memorandum attached to these minutes. In summary, Mr. Smith stated this budget allowed for a full staff and included the updated benefits package, and noted for the Commission's specific consideration that the line items for outside legal counsel had been zeroed out and the amount budgeted for commission meetings had been reduced by $5,000.00. He also described how the budget provided for a one-half cent reduction in the amount of the administrative assessment to reconcile income with expenses and to reduce the cash on hand by $30,000.00 over the budget year 2001. This reduction would bring the cash on hand in line with the requirements of the Commission's administrative assessment regulation, as detailed in the budget memo. He indicated the total reduction in income amounted to approximately $150,000.00.

There was general discussion about the amount budgeted for meetings. In particular, Commissioner Ferris asked if the budgeted amount for meetings was sufficient to allow for monthly meetings. It was indicated that $35,000.00 was the amount originally budgeted when the Commission was implementing the price regulation as well as holding monthly meetings. The reduced amount contemplated continued monthly meetings coupled with the expectation that the Commission would not be involved in the coming year in regulatory proceeding as involved as the original process. It was decided that the Finance Committee should review the relative costs of meetings and regulatory proceedings.

Mr. Smith noted that the Commission has never amended its meeting allowances and recommended that the Finance Committee review this issue and report back to the Commission. He indicated that an increase in mileage and meal allowances may result in an upward pressure on the budgeted amount for meetings.

There was also general discussion of the proposed reduction in the administrative assessment, with questions and answers being drawn generally from the attached budget memorandum.

MOTION PASSED 6 TO 0

iii. Motion 12/6-5 by Mr. Cabot on behalf of the Committee on Finance

Moved to reduce the administrative assessment from $0.032 to $0.027 per hundredweight, effective January 1, 2001.

MOTION PASSED 6 TO 0

D. Recommendations of Committee on Administration

i. Motion 12/6-6 by Mr. Howrigan on behalf of the Committee on Administration (jointly with Committee on Finance)

Moved to authorize the Executive Director to contract for one year with the Market Administrator to make monthly payments for services provided by the Market Administrator, in total amount of $140,000.00 or as may otherwise be required. The contract is also to allow for review from time to time by the Commission of the Market Administrators invoices.

MOTION PASSED 6 TO 0

                        ii. Motion 12/6-7 by Mr. Cabot on behalf of the Committee on

Administration (jointly with the Committee on Finance)

Moved to pay November 10, 2000 Market Administrator Invoice in the amount of $5,304.00.

MOTION PASSED 6 TO 0

VIII. Opportunity for Individual State Comments. Commissioner Ferris introduced and extended her welcome to the new Commission members from Connecticut.

IX.       Public Comment

Carl Peterson, President of Agri-Mark, expressed his appreciation for the Commission's Efforts and highlighted the need for continued monthly meetings in view of the Commission's high profile function. The meeting was adjourned at 12:29 am.

Respectfully submitted,

Mary Kelligrew Kassler, Secretary

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