APPROVED MINUTES
COMMISSION REGULAR MONTHLY MEETING
WAYFARER INN - BEDFORD, NH
May 5, 1999
Commission Members in Attendance:
CT: Richard Allen, Shirley Ferris, Robert Jacquier and Mae Schmidle
ME: Tom Doak, Colon Durrell and Fred Hardy
MA: Gordon Cook, Jay Healy, Mary Kassler and Sam Shields
NH: Powell Cabot, Debora Erb and Doug Morris
R I: Al Bettencourt, Aaron Briggs, Ron Newman and John Smith
VT: Jacques Couture, Andy Dykstra, Harold Howrigan, Millicent Rooney and Bobby Starr
Commission Staff Present:
Kenneth Becker, Executive Director; Dixie Henry, General Counsel; Carmen Ross, Regulations Administrator; and Patricia Lammott, Temporary Office Assistant
The Meeting was called to order by Chair Mae Schmidle at approximately 1:25 p.m.
Public Participation:
Robert Wellington provided the Commission with current information regarding Compact legislative activity in other states and Congress. The Compact reauthorization legislation was introduced in Congress last week and 153 Congressmen have signed onto the House bill and 39 Senators have signed onto the Senate bill. Mr. Wellington also provided data about the amount of milk products purchased from the East by the Commodity Credit Corporation over the last three years. The only purchase from the East was a small quantity purchased from Agri-Mark which was required by USDA for a bag test.
Commissioner Howrigan also informed the Commission that Senate Majority Leader Lott is now supporting the Compact legislation and has signed onto the Senate bill.
Members of the public introduced themselves to the Commission at the request of the Chair.
Consideration of Minutes - April 7, 1999 Meeting:
Millicent Rooney made a motion to accept the minutes of the April 7, 1999 meeting. Ron Newman seconded the motion. Motion to accept the minutes passed by unanimous vote of the six State delegations.
Communications:
There were no communications to report.
Financial and Budget Reports - Months Ending January, February and March 1999:
Mary Kassler reported that, for the period January through March 1999, the Commission income was about $65,000, or about $20,000 per month, due to the pending petition and the administrative assessments held in escrow. In response to the reduced income, the Commission expenses are lower than budgeted for the three-month period. As of March 1999, the Commission expenses are $153,000. Net income showed a deficit of approximately $88,000. The balance sheet as of March 31, 1999 reflects this deficit and the checking account balance is $88,000. The payments due on current liabilities were made on time, including the $48,000 payment of principle and interest due March 31, 1999. The remaining balance owed to the banks is $92,000.
Additions to Agenda:
The Chair recommended two additions to the agenda. Under Section VII. Old Business, a new item "D." will be added to discuss administrative matters regarding the pending handler petitions. Under Section VIII. New Business, a new item "C." will be added to receive the Committee on Finance Recommendations and a possible Executive Session.
Reports:
Chair:
Mae Schmidle, referendum agent, reported the results of the producer referenda on the administrative assessment and electronic funds transfer amendments to the price regulation. The administrative assessment passed with 99.5% and the electronic fund transfer amendment passed with 99.7% of the producers voting in favor of the amendment.
At the request of the Chair, Doug Morris reported that he traveled to Washington, D.C. on April 27, 1999, for the press conferences held to announce the introduction of the Compact legislation in Congress and that he gave interviews to many of the reporters in attendance. Ken Becker stated that the travel expenses for Mr. Morris' trip were paid by the States Ratification Committee and not the Commission.
Executive Director:
Ken Becker reported that the pending petition is proceeding according to the schedule established by the Hearing Panel. According to the schedule, the Hearing Panel will issue its draft recommendations on June 7, 1999, the petitioners will have an opportunity to respond by June 28, 1999 and the final recommended decision will be issued on July 19, 1999. The schedule anticipates that the Commission will consider that decision at its August meeting and issue its final determination on the petition. The substance of the petition was not discussed.
Mr. Becker reported that the Committee on Finance has met to review certain information and the Committee will have a report later in the meeting.
Due to other commitments, Mr. Becker was not able to attend the Federal Market Administrator's Economic and Market Information conference annual meeting on April 21, 1999. Dixie Henry, General Counsel, attended and gave the presentation in his place.
The Commission's brief has been filed with the Court in the New York State Dairy Foods case (renamed Crowley Foods, Inc. v. Northeast Dairy Compact Commission on appeal to the First Circuit). The Attorneys General of the six New England states, as well as New York and New Jersey, filed an amicus curiae brief in support of the Commission. Mr. Becker expressed his thanks to all the people in the State Departments of Agriculture and the offices of the Attorneys General who helped to get the brief filed on a very short time frame. Mr. Becker especially acknowledged the efforts of Commissioner Jay Healy and Commissioner Leon Graves and their staff in preparation and coordination of the brief in support of the Commission. In addition, the New York State Farm Bureau and the Conservation Law Foundation in Boston also filed briefs in support of the Commission, emphasizing the environmental benefits of the Compact. The Court will set the case for argument, probably over the summer.
Treasurer's Report:
Mary Kassler referred to the financial and budget report already provided.
Committee on Finance:
Mary Kassler reported that the Committee met and discussed the surplus in the WIC reserve account. Since the implementation of the price regulation, the Commission has refunded approximately $1.5 million to the New England WIC programs based on milk purchases. The claims have been slightly less than the 3% set aside from the compact pool each month. The account presently has a balance of approximately $160,000. The Committee will review the regulations and verify the amount of surplus and make a recommendation for the distribution of those funds at a later meeting.
Committee on Administration:
Chair Mae Schmidle reported that the Committee met several times and will be making some recommendations under new business.
Audit Committee:
Tom Doak reported that the 1998 draft audit is being reviewed by the Committee and that he anticipates the audit will be available for the Committee to review by the next meeting. Also, the Committee requested that the auditor be asked to come to an Audit Committee meeting prior to the next Commission meeting.
Bylaws Committee:
Deb Erb reported that the Committee will meet by conference call on May 18, 1999 to begin the process of reviewing the Bylaws to ensure that they will accommodate a transition should the Compact be reauthorized and expanded. Ms. Erb asked Commissioners who have suggestions or ideas for revising the Bylaws or who wish to attend the conference call to contact her.
Committee on Regulations & Rulemaking:
Bobby Starr reported that he will make recommendations regarding the school milk reserve account, the extension of the school milk exemption and the CCC reserve escrow later in the meeting.
Old Business:
Deliberation and Decision on Proposed Rule to Extend the Exemption of School Milk:
Bobby Starr made a motion to adopt the rule to extend the school milk exemption, to find that the public interest will be served by the amendment of the Over-order Price Regulation to dairy farmers under Article IV to extend the exemption of milk sold in eight-ounce containers by school food authorities in New England and to find that a level price of $16.94 (Zone 1) to dairy farmers under Article IV will assure that producers supplying the New England market receive a price sufficient to cover their costs of production and will elicit an adequate supply of milk for the inhabitants of the regulated area and for manufacturing purposes and to find that the major provisions of the order, other than those fixing minimum milk prices, are in the public interest and are reasonably designed to achieve the purposes of the order. Ron Newman seconded the motion. Ken Becker reviewed the substance of the pre-discussion draft and the good cause findings. The motion passed by unanimous vote of the six State delegations.
Bobby Starr made a motion that whether the terms of the proposed amendments are approved by producers will be determined by a producer referendum as required by Article V. Section 13 to be conducted as follows:
a) December 1998 be the designated representative period for determining eligible producers;
b) Ballots will be mailed to eligible producers and qualified cooperatives by June 11, 1999; c) Qualified cooperatives must mail notice of block votes to members by June 15, 1999;
d) All ballots must be received in the Commission office by 5:00 pm on June 21, 1999; and
e) Mae S. Schmidle shall serve as referendum agent; and
that the Commission find good cause to set the effective date of the school milk exemption on July 1, 1999 and that the 30-day waiting period is excused because it is impracticable, unnecessary, and contrary to the public interest.
Ron Newman seconded the motion. Ken Becker explained that holding the referendum in June may allow the Commission to save $4,000 to $5,000 if the referendum can be simultaneous with a referendum on the supply management rule. He further explained the good cause findings and criteria. The motion passed by unanimous vote of the six State delegations.
Report by Reauthorization Tracking Committee:
The Committee referred to the report previously provided under public participation. Bobby Starr reported that there is very strong and well-financed opposition to the Compact legislation.
Report on Pending Handler Petitions:
Ken Becker reported that, with regard to the Organic Cow petition, the Committee on Administration decided that an outside hearing officer should be appointed to act as the Hearing Panel for the consideration of the petition on remand from the federal court and that Dixie Henry, General Counsel will represent the Commission.
The Hearing Panel will hold a hearing on Monday, May 10, 1999 in the pending petition in In re Suiza, et al.
New Business:
Committee on Administration's Recommendations:
Ron Newman made a motion, on behalf of the Committee on Administration, to approve payment of an invoice dated April 8, 1999 in the amount of $6,508.11 to the Federal Market Administrator's Office for the February pool, audits completed during March and audits completed by Order 2. The motion passed by unanimous vote of the six State delegations.
Ron Newman made a motion to set the next meeting date on Wednesday, June 2, 1999 at 10:00 a.m. at the Wayfarer Inn in Bedford, NH. John Smith seconded the motion. Discussion followed. The motion passed by a vote of 5-1, with Maine voting against the motion.
Ron Newman made a motion, on behalf of the Committee on Administration, that Ken Becker be authorized to contract with the Fothergill CPA firm to provide accounting and bookkeeping services to the Compact Commission until December 1, 1999. Ken Becker explained that the services to be provided would include payroll, accounts payable, financial reports and ensuring accuracy of transfers into and out of the producer-settlement fund each month. Discussion followed. The motion passed by unanimous vote of the six State delegations.
Committee on Regulations and Rulemaking:
Bobby Starr made a motion, on behalf of the Committee on Regulations and Rulemaking, to withhold 3% of the producer pool for the school milk exemption reserve account in each month that there is a compact producer pool. Carmen Ross, Regulations Administrator explained the basis for the 3% figure. Discussion followed. The motion passed by unanimous vote of the six State delegations.
Bobby Starr reported that the Committee met and discussed whether to recommend withholding money from the April pool to meet a potential obligation to the Commodity Credit Corporation (CCC). Current projections indicate the potential liability may be in a range from $0 to $4 million. The Committee decided to continue to monitor milk production levels and to ask staff to follow up with the CCC and does not recommend withholding any money at this time. The Committee will report on this issue again at the next meeting.
Committee on Finance:
Mary Kassler made a motion to go into Executive Session, pursuant to Article 5, Section 5, roman numeral iv of the Bylaws, to discuss financial issues in relation to pending litigation. Ron Newman seconded the motion. The motion passed by unanimous vote of the six State delegations. Bobby Starr and Richard Allen recused themselves from the executive session.
Following the executive session, Mary Kassler made a motion, on behalf of the Committee on Finance, to approve a resolution authorizing the establishment of a line of credit up to three hundred and eighty-five thousand dollars ($385,000). (Attachment I). Discussion followed. The motion passed by unanimous vote of the six State delegations. Richard Allen did not participate in the discussion or the vote on the resolution. Bobby Starr was not present for the discussion or the vote.
Announcements: Opportunity for individual State comments:
John Smith reported that he and Mary Kassler are providing information to other WIC programs regarding the potential expansion of the Compact and the treatment of WIC programs under the Commission regulations. They were presented with the National Association of WIC Directors Leadership Award for 1999 at the recent national meeting of WIC directors. The regulations and procedures developed by the Northeast Dairy Compact Commission with respect to WIC and school milk programs are seen as a model for other states and regions interested in entering into dairy compacts.
Ron Newman reported that the Division of Agriculture in Rhode Island has the retail market surveys for the month of April 1999 regarding the retail response to the drop in the farm price. Anyone who wishes a copy may contact Mr. Newman.
New Hampshire Commissioner of Agriculture Steve Taylor reported on the Compact reauthorization efforts in Washington, D.C.
The meeting adjourned at approximately 3:15 p.m.
Respectfully submitted,
Powell Cabot
Secretary
The next Commission meeting will be held Wednesday, June 2, 1999 at 10:00 a.m. at The Merrimack Hotel and Conference Center, 4 Executive Park Drive, Merrimack, New Hampshire.