FEBRUARY 2, 2000




Commission members in attendance:
CT: Robert Jacquier, Mae Schmidle, Gabe Moquin (designee)
MA: Mary K. Kassler, Jim Hines (designee), Gordon Cook, Sam Shields
ME: Linda Smith Dyer, Colon Durrell, Fred Hardy
NH: Debora Erb, Powell Cabot, Doug Morris
RI: Al Bettencourt Jr., Ron Newman, Becky Bessette, Peter Petrone (designee), Aaron Briggs
VT: Harold Howrigan, Bobby Starr, Millicent Rooney, Andy Dykstra, Bobby Starr, Jacques Couture

Ex Officio members present:
Leon Graves, Commissioner, Vermont Department of Agriculture, Foods and Markets

Commission staff present:
Kenneth Becker, Executive Director; Dixie Henry, General Counsel; Carmen Ross, Regulations Administrator; David Ferch, Public Information Director; Patricia Lammott, Temporary Office Assistant

Chair Linda Smith Dyer called the meeting to order at 10:30 a.m., on Wednesday, February 2, 2000.

I. Public participation:
Bob Wellington of Agri-Mark distributed a price forecast showing farm prices for milk at or near record low levels throughout the year.

Mr. Wellington was questioned by a number of Commissioners.

Maggie Murphy from the office of New York State Sen. Nancy Loraine Hoffman said a number of New England state representatives and the Council of State Governments are forming a Northeast States Association for Agricultural Stewardship (NeSAAS) with the intent of complimenting the Compact. New York has set aside $25,000 to fund this organization and is seeking similar commitments from the other states.

Mr. Graves said the executive committee of the States Ratification Committee met in January to discuss strategy. It was determined that a million dollars was needed, about $400,000 to come from the state governments. Mr. Graves also gave a brief rundown of support for Compacts in the Congress.
Mr. Graves said supporters need to reach out to non-farm organizations such as environmental groups.

II. Introduction of guests:
Maggie Murphy; Ray Christensen of the New York State Department of Agriculture and Markets; Gail Christensen, a New York dairy farmer; Bob Wellington; Steve Watous of Allied Federated Coops, Erik Rasmussen, Federal Milk Market Administrator Order 1.

III. Consideration and approval of minutes of the January 5, 2000 meeting:


Motion 2/2-1 by Bobby Starr/Second by Debora Erb
Moved that the minutes of the Jan. 5, 2000 meeting be adopted as presented.



IV. Consideration of communications:
Mr. Becker said New York farmer Ken Dibbell sent a letter that was included in the information packet supplied to the commissioners. Also, the packet includes letters from Mr. Rasmussen and the Chubb Insurance company.

V. Financial and budget report: Month ending November 1999:
Mr. Cabot said the Committee on Finance met earlier in the day. He also said he traveled to Montpelier to meet with the lead partner in the accounting firm of Fothergill, Segale and Valley and was impressed.
Mr. Cabot said November figures had been reviewed and would be submitted for acceptance.
Mr. Cabot said a portion of the funds from Maine were repaid.
He also said the committee is looking into the question of indemnification and will report at the March meeting.

VI. Reports
Chair’s Report:
Ms. Dyer reminded the Commissioners to correct their directory information and biography information for the public information directory.

Ms. Dyer also said she was invited to speak before Sen. Richard Lugar’s Agriculture Committee on Feb. 9.

Ms. Dyer also pointed out that there are vacancies on the Commission that should be filled. She asked for and received consensus to communicate with the appropriate governors regarding filling the vacancies.

B. Executive Director’s Report:
Mr. Becker said the accounting firm is working to finish the 1999 year end report in time to prepare the Commission¹s annual report by the March meeting but the scheduling is very tight. Barring the accountant and auditor’s report, the 1999 annual report is near completion.

Mr. Becker said the January pool for $5.6 million, with an over-order obligation of $2.21 and a producer price of $1, was disbursed without problems. The only issue regarding the pool is a report of a handler who is not in compliance with the regulations. An enforcement letter was sent and the relevant state agriculture commissioners and state attorneys general have been contacted.

Mr. Becker also referred to the letter indicating that the Chubb Insurance Co. will not renew the Directors and Officers insurance. The Commission’s insurance agent is looking for alternatives, said Mr. Becker.

Mr. Becker asked Mr. Ferch to update the Commissioners on use of the web page.
Mr. Ferch said the web site was visited in January by 746 individuals who came on important dates to the Commission, including the 7th, 13th and 20th. The pattern of hits on the web pages indicates the visitors know what they are looking for and are seeking numerical information. Also, given that many people visit at 4 a.m. and 10 p.m., it is safe to assume many farmers are visiting the web page. This information will be helpful in making the web site more useful.

C. Committee on Finance Report:
Mr. Cabot said the accountant firm of Fothergill, Segale and Valley has been under formal contract since June of 1999, but they have been providing regular services since the inception of the Commission. The contract should be renewed on the same basis although the rates may go up in the summer to reflection inflation. The firm will continue to provide a 10 percent discount for making monthly payments on time.

D. Committee on Administration Report:
Ms. Dyer said the Committee on Administration held a conference call on January 27 but not all six states were represented so no official action was taken.

E. Audit Committee Report:
Mr. Howrigan said the Audit Committee has not met so there is no report.

F. Bylaws Committee Report:
Ms. Erb said the Bylaws Committee has met to discuss conflicts between the Bylaws and the personnel manual. Resolution of the conflicts was to be discussed under new business.

G. Committee on Regulations and Rulemaking Report:
Mr. Starr said the committee had a productive meeting on January 28 and will offer a recommendation under old business.

VII. Old Business
A. Deliberative meeting, continued from January 5, 2000 meeting, to consider whether to implement an assessment/refund supply management program.

Mr. Starr said the Commission on Jan. 5, 2000 elected to proceed with the assessment/refund program and the committee is considering a program that would extract 5 cents/cwt from each pool, and raise roughly $3 million. The assessment/refund pool would be divided in two. One half would be divided evenly amongst the producers who did not increase production by more than 1 percent. The remaining half would be distributed on a hundredweight basis. There would be a cap of $12,000 for any one producer. However, before moving forward with a specific proposed rule, the committee recommends closing the pending rulemaking proceedings and holding an informational meeting.


Motion 2/2-2 by Bobby Starr on behalf of the Committee on Regulations and Rulemaking
Moved to close the current rulemaking proceeding regarding supply management policies and to direct the Committee on Regulations and Rulemaking to hold an informational public meeting in February and to recommend a proposed rule to address the Commission’s responsibility under Section 9(f) of the Compact at the March 1, 2000 Commission meeting.
Discussion followed.


Ms. Dyer suggested that the motion be made in the form of two separate motions.

Mr. Starr said he would prefer to keep it as a single motion because the intent is to bring interested parties to the table so they can participate in the discussion.

Mr. Cook asked if new recommendations will be entertained at the committee meeting.

Mr. Shields asked if new information would be entered into the record as a result of the meeting.

Ms. Henry said that it could.

Mr. Starr said all forms of comments will be entertained.

Ms. Kassler asked if the Commission or the committee would hold the meeting.

The committee is holding the meeting but all Commissioners are invited to attend, said Mr. Starr.

Ms. Kassler said she would like the motion to reflect the willingness to receive information from the public.

Mr. Starr said he would accept a friendly amendment to include the words "for the purpose of obtaining input and information."

Mr. Hardy said the Commissioners should first have a chance to discuss the proposals amongst themselves.

The Commissioners are free to discuss the proposal at any time, said Mr. Starr.

Mr. Dykstra asked if he would be permitted during the meeting to make statements on behalf of his co-op.

Ms. Dyer said that with ex parte restrictions lifted, a commissioner could testify to the point.

Mr. Cook advocated a rule that would use a percentage of the pool rather than a fixed amount. He also advocated raising the cap.

Mr. Morris said that from an economic point of view a percentage makes sense. But the practical issues dictate a fixed amount to be removed from each pool.

Ms. Erb asked when the Commission as a whole would discuss the proposal.

Mr. Starr answered that discussion would take place when the public meeting was concluded.

Mr. Ross said the figures in the proposal were arrived at through an analysis of the trends and the awareness that large farms should not receive a disproportionately large payment.

Mr. Starr repeated his motion with Ms. Kassler¹s friendly amendment.
Mr. Howrigan called the question.


Motion 2/2-3 by Harold Howrigan/ Second by Andy Dykstra
Moved to call the question (2/2-2)


Following a caucus, the states voted on Mr. Starr¹s motion.

Motion 2/2-2 by Bobby Starr on behalf of the Committee on Regulations and Rulemaking
Moved to close the current rulemaking proceeding regarding supply management policies and to direct the Committee on Regulations and Rulemaking to hold an informational public meeting to obtain input and information in February and to recommend a proposed rule to address the Commission¹s responsibility under Section 9(f) of the Compact at the March 1, 2000 Commission meeting.



Break for Lunch from 12:18 a.m. to 1:15 p.m.

VII. Old Business
B. Standing Committees for 2000.
Ms. Dyer asked to postpone appointing the standing committees until the March meeting.

VIII. New Business
A. Committee on Finance Recommendations:


Motion 2/2-4 by Powell Cabot on behalf of the Committee on Finance
Moved that the November 1999 Financial Statements be placed on file for audit purposes.



Motion 2/2-5 by Powell Cabot on behalf of the Committee on Finance

Moved to extend the accountant contract with Fothergill, Segale and Valley, CPA



B. Committee on Administration Recommendations:

C. Bylaws Committee Recommendations:
Ms. Erb said the Commission should hold a discussion based on her memo detailing the conflicts identified between the bylaws and the personnel manual to arrive at a consensus. But the Commission should not take action at the current meeting.

Ms. Erb said the Bylaws Committee identified three conflicts between the personnel manual and the bylaws: 1) who develops, who adopts, who implements personnel policies; 2) who conducts performance evaluations; 3) who oversees dismissals.

Ms. Schmidle said the bylaws were written before the personnel manual was drafted so the bylaws appoint responsibility for developing personnel policy to the Committee on Administration.

Mr. Starr said that since a personnel manual has been drafted responsibility for initiating policy changes should flow from the staff, to the executive director, to the Committee on Administration to the Commission. There was consensus on this opinion.

Regarding performance evaluations, Ms. Erb said the bylaws dictate the executive director performs staff evaluations and the Commission conducts the evaluation of the executive director. The personnel manual states the Committee on Administration performs annual evaluations of its employees.

Ms. Kassler said it is standard practice to have the executive director perform evaluations of the staff and to have the Commission perform the executive director’s evaluation. There was consensus on this opinion.

Ms. Erb said regarding dismissals, the manual said the Commission retains the right to terminate employees, while the bylaws say the executive director oversees dismissals and the Committee oversees the executive director.

The proposal was to change the manual to read that the executive director oversees dismissals with the chain of command flowing upward through the Committee on Administration to the Commission, Ms. Erb said.

Ms. Kassler questioned the use of the word "action" as it regards oversight of dismissals and evaluations because it gives the appearance that the committee and Commission take action.
There was consensus to clear this up in the bylaws.

Ms. Schmidle said the intent of bylaws is to make them difficult to change so change should occur in the personnel manual.

Ms. Erb said the problem with this issue is the bylaws conflict themselves and should be changed.

Mr. Cook questioned the use of the title CEO in the bylaws. Ms. Dyer asked for and received consensus to remove the phrase “CEO”.


Ms. Erb said the Bylaws Committee would recommend changes at the next Commission meeting.

D. Committee on Regulations and Rulemaking Recommendations:
Mr. Starr said the public meeting will take place Wednesday, Feb. 23, 2000 from 1 p.m. to 4 p.m. at the Centennial Inn in Concord, NH.

E. Proposed Executive Director’s Evaluation Form:
Ms. Dyer said she combined all suggestions for the form from Mr. Couture and Mr. Howrigan.

There was debate over the use of the words "meets" "fully meets" and "meets practically all".

Ms. Schmidle said she wants to use "fully meets" throughout the form because "meets" alone was too casual.

Mr. Hines said "meets" is descriptive enough and the form should be made consistent with the one word. There was consensus on this point.

Ms. Schmidle asked whether the Commissioners should sign their performance evaluations.

Ms. Erb and Mr. Howrigan said the Commissioners should be willing to stand behind their statements. There was consensus to have Commissioners sign the evaluation forms.

F. Next meeting date:
The Commission set the next meeting date for March 1, 2000 at 10:30 a.m.

Mr. Becker pointed out that the March meeting is the annual meeting so committee chairs should come prepared to make annual reports.


 Announcements: Opportunity for individual state comments:
Mr. Jacquier asked Mr. Wellington and Mr. Graves about production levels in the past six weeks.

Mr. Wellington said that national milk production is up 3.5 percent while production in New England was down 1 percent.

Mr. Moquin said the Connecticut attorney General is conducting an investigation into control of market share of retail milk.

X. Executive Session:


Motion 2/2-6 by Mae Schmidle/ Second by Sam Shields
Moved to go into executive session to discuss personnel matters.


The Commission went into executive session at 2:17 p.m.
and emerged at 3:30 p.m.

Motion 2/2-7 by Harold Howrigan/Second by Jacques Couture
Moved that Denise Little¹s claim be referred to the Committee on Administration for appropriate handling.


The meeting was adjourned at 3:35 p.m.


Respectfully submitted,





Mary Kelligrew Kassler, Secretary

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