Texas Wine and Grape Growers Association Board of Directors Meeting Tuesday, June 13, 2017 Omni Hotel & Resorts Mandalay Dallas, Irving, TX

Transcription

1 Texas Wine and Grape Growers Association Board of Directors Meeting Tuesday, June 13, 2017 Omni Hotel & Resorts Mandalay Dallas, Irving, TX Call to Order Dusty Timmons The meeting was called to order at 12:00 noon by President Dusty Timmons. Roll Call Dana Pool Officers Present Dusty Timmons, President; Bob Landon, Past President; Mike McHenry, President-Elect; Dana Pool, Secretary; and Fredrik Osterberg, Treasurer. Board Members Present Chace Hill, Brenda Canada, Susan Steger, Gabe Parker, Jon Bowden, Stephen Morgan, Mark Tyler, Penny Adams, Pat Brennan, Patrick Whitehead, and Paul M. Bonarrigo. Officers and Board Members Not Present Dusty Evans (proxy to Mark Tyler). Staff present Debbie Reynolds, Executive Director; Kathy Henry, Membership Director. Attendees for Board Meeting Reports/Presentations: Rick Naber, Ricky Anderson, and Larry Epp. Guests present Mark Hyman. Approval of Minutes Dana Pool The February 15, 2017 Board meeting minutes were distributed by . There were no corrections. A motion was made by Stephen Morgan to dispense with the reading of the minutes and accept as distributed. The motion was seconded by Pat Brennan. Motion Passed. Treasurer s Report As of May 31, 2017 Fredrik Osterberg TWGGA Bank Accounts: Wells Fargo Operating = $70, Wells Fargo Savings = $141, Frost Bank Association Reserve = $5,

2 Profit and Loss: - Income Focus - Overall income exceeds budget by $22,138 - Membership exceeds budget by $6,975 - Event Registration income up $6,335 over budget - Sponsorship income below budget Conference sponsors renew in July- September - Expense Focus - Expenses are under budget by $3, Cash Flow: Continues to be strong and steady over the entire year. Looking forward: Grape Camp exhibitor registration, attendee registration and Annual Conference registration will open July 1. Need to lock in a Conference presenting sponsor if Farm Credit does not return. Keep a watch on membership. This is the time of the year when renewals slow and typically come in past expiration dates. Farm Credit has until July 1 to decide if they want to return as the Conference Presenting Sponsor. If they do not, the Association will seek a new Presenting Sponsor. The cost is $25,000. Sponsorship in general is a big support to the Association events. A motion was made by Pat Brennan to approve the Treasurer s Report. Stephen Morgan seconded the motion. Motion Passed. President s Report Dusty Timmons President Timmons noted the 85 th Legislative Session was completed with high drama, excitement and no movement. For our industry, there was virtually no net gain nothing positive, nothing negative (except for the craft beer industry who was impacted by negative legislation). Like the saying, No man s life, liberty, or property are safe while the legislature is in session. Going forward, the Board must be diligent in preparing for Sunset and the next session. The state of the industry is exciting for growers and wineries. Pre-harvest reports in the Hill Country and High Plains are very promising. Sunset will be a challenge to be faced mainly by the 2018 Board. Preparation is key. Texas Tech received their funding again, this time in a block grant. The Texas A&M Extension personnel are doing a great job. 2

3 Report on TCEQ and Texas Wineries Rick Naber and Ricky Anderson Rick Naber provided a historical review of when Texas wineries caught the eye of the Texas Commission on Environmental Quality (TCEQ). TWGGA was part of the early discussions beginning in June of Texas wineries are regulated by TCEQ if the following applies: 1. You supply water for drinking, hand-washing, dishwashing, cooking or bathing to 25 people or more for at least 60 days out of the year. Whether your water comes from a well, natural water source, or is hauled from another water provider, you meet the definition of a Public Water System (PWS). 2. You treat or dispose wastewater. 3. You dispose of waste. Pat Brennan noted 4.0 Cellars were certified by TCEQ at the time of construction. Rick Naber (Flat Creek Estate) has spent two years and recently was certified by TCEQ. TCEQ has given adequate time to allow Texas wineries to comply with TCEQ rules. It is vital the Association take the lead to ensure all Texas wineries know the rules, process, enforcement, certification and exemption (if applicable) as it applies to TCEQ, PWS and winery wastewater. The message now is not to wait any longer all wineries should make this a priority. Two documents were provided for the Board: A white paper on the issues and recommendations created by Bob Jones and a Wineries: Am I Regulated? Document created by TCEQ. The main issues for Texas wineries is PWS, Wastewater (including run off from the crush pad) and Stormwater. Resources Available (who are currently working with Texas wineries) and Terms Discussed: 1. Consulting Companies Bob Jones; RSAH20 2. Engineers WaterEngineers 3. Title 30, Texas Administrative Code (30 TAC), Chapter 290 on the Secretary of State s website 4. Total Organic Carbon (TOC) is the amount of carbon found in an organic compound and is often used as a non-specific indicator of water quality or cleanliness. 5. The Safe Drinking Water Act (SDWA) is the federal law that protects public drinking water supplies throughout the nation. Under the SDWA, EPA sets standards for drinking water quality and with its partners (like TCEQ) implements various technical and financial programs to ensure drinking water safety. 6. The Clean Water Act (CWA) is the primary federal law in the United States governing water pollution. 3

4 Key Points from Ricky Anderson, RSAH20 1. Ricky provided information on his background and the background of his partners, Carlos Rubinstein and Herman Settemeyer, all three formerly with TCEQ. 2. TCEQ must enforce the federal laws. Texas is a privacy state allowing them to govern as they see fit within the confines of the law. Sometimes, TCEQ rules are as stringent and perhaps more so than EPA rules. TCEQ has enforcement power and does administer penalties that can begin at $25K per day. 3. TWGGA and TCEQ will come together to understand and discuss the rules and requirements. Ultimately, TWGGA will not be fined for non-compliance. The winery owner/operator has the responsibility to take the information provided and become compliant. 4. Any exception process is a band-aid but eventually compliance must occur. 5. The starting point is: a. What/where are you not compliant? b. How does TWGGA collect information from Texas wineries? Survey? It is vital every winery who falls under these rules has contacted TCEQ and is working on the process of compliance. c. What kind of waste stream are your creating and how are you treating? d. Can you locate your well logs? Can you locate original documentation from when the well was first built/installed? e. Have you reviewed the regulations in Chapter 290? f. What is your testing protocol? 6. There was a discussion of what are other states are doing to reach compliance. 7. Complaints can come from former disgruntled employees, other state agencies, or the general public/visitors to wineries. Recommendation from Rick Naber and Ricky Anderson: 1. TWGGA form a committee with the members being the Regional Winery Directors. President-Elect Mike McHenry will chair the committee. 2. TWGGA become the state resource for Texas wineries as it relates to TCEQ rules and the issues of PWS, Wastewater and Stormwater. a. Provide a link on the TWGGA website to Chapter 290 b. Conduct conference calls and webinars in the next 30 days. c. Create reference documents and a glossary of terms d. Offer a self-assessment and check list for Texas wineries. Rick Naber created a self-assessment and will share with TWGGA. e. Provide FAQ s on terms, rules, and anything TCEQ related that applies to Texas wineries 3. TWGGA to be the one voice representing the Texas wineries with TCEQ 4. Review other states (especially CA, OR, WA, and NY) who have gone through or are currently going through these same issues of compliance. Do they have a boiler plate solutions already identified? 5. It is important we move Texas wineries to the point where they understand compliance and the process. Hosting educational venues and providing references will be helpful. 4

5 6. RSAH20 can partner with TWGGA in meetings with TCEQ and the efforts. Fredrik Osterberg made a motion to authorize the TWGGA President to appoint a committee, whose members are the Regional Winery Directors, to study TCEQ compliance. Brenda Canada seconded the motion. Motion Passed. It was recommended after the committee begins their work, they may want to include wineries who have gone through the compliance process or are currently working toward certification of their PWS. Member Open Forum Presentation Larry Epp Larry Epp, with ECOESIS, LLC and a TWGGA member, presented Witness Texas USA, a promotion platform and passport program designed as an automated, in-the-cloud, based sales and marketing resource. The program is modeled after the TDA Passport Program. A copy of the presentation was provided for Board members. 1. Currently, Larry is the only employee. The vision is to have up to six employees. 2. The program is electronic and paper-based. 3. The program is free to wineries; the paper passport is a cost. 4. There will be approximately six revenue channels membership, advertising, and communications (newsletters in multiple formats) were mentioned. 5. The recommendation from Larry Epp: a. An endorsement from TWGGA b. Blend of the TXWinePassport Mobile App with Witness Texas USA c. Provide an array of options that would appeal to all generations Millennials, GenX, Baby Boomers d. Offer an integrated platform 6. The TXWinePassport Mobile App, originally introduced by the Texas Wine Foundation but now totally maintained by TWGGA, is marketing focused. In the future, the Mobile App could go back under Texas Wine Foundation. 7. BarZ Adventures is the developer for the Mobile App. The company also maintains and hosts the Mobile App. They own the code and it is proprietary information. 8. TWGGA has access to user statistics. 9. It was suggested to offer Witness Texas USA to a test group for evaluation. The test group would be any winery in the State of Texas. This test is offered to TWGGA Board members wineries. 10. The challenge, from Board members, is another passport program with the appearance that TWGGA is offering two programs. Texas Wine Foundation Report Patrick Whitehead/ Fredrik Osterberg The Texas Wine Foundation Board of Directors met via conference call on March 20, The TWF Board reviewed the fundraising events at the 2017 TWGGA Annual Conference: Wine Pull ($1,900) Glow Sticks ($3,180) First Walk Around Wine Tasting ($575) Large Format Wine Bottle Auction ($5,750) 5

6 For the 2018 TWGGA Conference, fundraising events would include: Combine the Walk Around Wine Tasting with a dinner event with food stations or local restaurants. The space being used for the event is the 3 rd floor of the Irving Convention Center Junior Ballroom, lobby and outdoor covered patio. If possible, the TWF would suggest hosting a store at the event so guests can purchase bottles of wine. Bring the cost down to $50, between the Walk Around Wine Tasting ($25) and the Dinner ($80). Another option is to keep the cost at $80 with a portion of the ticket sales donated to the Texas Wine Foundation. Use space in the Irving Convention Center that would host up to 300 people. Start early selling tickets to the general public creating a lot of interest in the Dallas/Fort Worth area. The Hoss Newsom Scholarship Program gave six $1,500 scholarships to Texas Tech undergraduate and graduate students selected by Dr. Ed Hellman and the committee at the University; and four $1,500 scholarships to Grayson College students selected by Andrew Snyder and the committee at the college. The TWF Board discussed hosting a Celebration Day during Texas Wine Month (October). This would be a day focused on donations to the Foundation and supported by Texas wineries, whether TWGGA members or not. The TWF Board is meeting on Wednesday, June 14, The Texas Wine Foundation financial report as of May 31, 2017: Frost Bank Scholarship Account = $12, Frost Bank Foundation Operating Account = $ Profit and Loss - Income Focus - Fundraising efforts in February and March covered all of the 2017 Scholarships (10 at $1,500 each) - Expense Focus - All the trademark work, completed in 2016, was paid in March Looking Forward Director s Liability Insurance due in July Will end 2017 with about $11,000 in the Foundation account The majority of Foundation fundraising is completed in the first six months of the year. Legislative Report/State Gabe Parker Kyle Frazier prepared and distributed a report at the end of the session. The report will be distributed to the industry with a letter from the TWGGA President. The funding was restored to Texas Tech University (one lump sum to be divided through the college). Representative Larry Phillips worked very hard to ensure the funds were provided. 6

7 Senator Nelson is the Chairman of the Senate Finance Committee. It is important these funds become the normal budget process of the educational institutions. The funding will support the Viticulture and Enology Advisors already on staff. The Texas Alcoholic Beverage Commission is included in the Sunset Process in the 2019 Legislative Session. The review will begin over the next few months. TWGGA s preparation for the next session and the Sunset review is vital to the industry. Fact finding forums should begin in the fall. Rights currently enjoyed by Texas wineries must be protected, especially shipping, which has been a target for distributors and package store groups for years. The Texas wine industry does not want to suffer the same fate as craft beer, whose industry was hit with unfavorable laws. Coming off a divisive legislative session, the Texas wine and grape industry is not prepared for the Sunset process. During the review, the recommendation could be to eliminate the TABC or to keep with changes to the code. In any case, preparation and unity as one industry is vital to our industry s continued success. The Sunset Committee is five Senators, five Representatives and two people from the public sector. The process is outlined at TWGGA should not only continue to fund the Economic Impact study but consider conducting the study annually instead of every two years. Add to the study the economic impact of festivals on local communities. Gabe Parker has asked Dr. Tim Dodd, Texas Wine Marketing Research Institute, to conduct a study on the economic impact of wine festivals in Texas. Dr. Dodd believes he has a graduate student who can conduct this study and TWMRI can fund it. TWGGA needs to create local supporters Convention and Visitors Bureaus, Chambers of Commerce, Economic Development Groups in cities where Texas wineries have a big presence. TWGGA needs to build grassroots support with consumers, wine club members. TWGGA needs to build a network of legislators who will support the industry. We need one voice, one agenda, one industry. The industry cannot afford to go into Sunset or the next session divided. Gabe recommended TWGGA extend the contract for Kyle Frazier Consulting, which expires February 28, Kyle has worked with TWGGA for ten years. The Board discussed offering Kyle a longer contract than just two years and opening up the discussion with Kyle earlier than February There are two other legislative agendas in the State that will continue the Texas Hill Country Wineries and Real Texas Wine. Gabe Parker made a motion to give the TWGGA President the authority to appoint a committee that will open up discussion with Kyle Frazier Consulting on a new contract. Bob Landon seconded the motion. Motion Passed. 7

8 Dusty requested TWGGA reach out to the Hill Country and help set up a town hall meeting with members and the TWGGA Board members from Region 5. Final discussion comments and questions: 1. Region Directors are recommended sending s/updates to the TWGGA members in their region. Communication from Region Directors can be shared with other Region Directors. 2. More communication should be distributed during the session with regular updates to the Board. Most of the communication goes to the Legislative Committee during the session. 3. Update the Legislative Report created by Kyle Frazier to include the restored funding and distribute to the industry. 4. Dusty Timmons will appoint a Sunset Committee comprised of individuals from all across the state. 5. Continue monthly coordination calls with the Executive Directors and Presidents of TWGGA, the Texas Hill Country Wineries and High Plains Winegrowers Association. 6. The Legislative Committee needs to select a 2017 Frank Madla award recipient. 7. Should the TWGGA Board members also serve on the TWGGA Legislative Committee? Vision Committee Paul M. Bonarrigo The TWGGA Vision discussion, which began at the June 2016 Board meeting, continued up to and including the February 2017 Board meeting. At that point, the Vision Committee decided to step back and focus more on the legislative side supporting the Commodity Board legislation. That legislation did not pass and it is up to the industry whether or not to pursue the legislation in the future. A Commodity Program could be formed today under the standard check off program language but it would only include the wineries. It is believed that the better program would be all inclusive of the whole industry. The next step may be to brainstorm funding opportunities for the Foundation and focus more on TWGGA s role as a leader in the state. The Vision Committee originally was created to determine the roles of the Texas Wine Foundation and TWGGA. It was determined that the Foundation would serve as the marketing organization and TWGGA as the overall industry organization. Paul will update and send out the Vision files. Legislative Report/Federal Debbie Reynolds The Trump Administration released their Fiscal Year 2018 Federal Budget Request. The impacts to the Texas wine and grape industry include: 1. TTB funding includes a $7M decrease in funding. The current funding is $106M that includes the additional $5M given by the Obama Administration for COLA and formula approvals. This decrease in funding would greatly decrease the ability to get wine to market. 8

9 2. Specialty Crop Block Grants ($68M) Valued Added Producer Grants ($14M) are authorized through the Farm Bill The Trump budget proposes to cut all funding for these two programs. This would be a significant negative impact to trade associations and universities who rely on these programs for essential marketing and research needs. 3. Excise Tax Reform will lower the taxes required by wineries. This is an important decrease in tax obligations. The House has a majority of supporters (218 members have signed on with many from Texas) and the Senate has 45 supporters (must have a majority). We expect the excise tax reform to move through Congress in September. 4. Congress will adjourn June 30 for the Independence Day holiday. They will work 13 days in July before recessing on July 29 until September 4. It is imperative that the budget is passed since the government is only funded through September 30, WineAmerica is funding a 2016 US Economic Impact study including all states and their grape and wine industry. We expect to see the report before the fall meeting in November. 6. Industry Statistics shared by WineAmerica still show a favorable picture for wine, grapes and Texas: a. Grapes are the highest value fruit crop in the US valued at close to $6B. b. Approximately 25,000 farms grow grapes. c. There are over 1M acres of grape bearing land (wine, table grapes and raisins). d. Nearly 8M tons of grapes were harvested in e. There are 9,114 wineries in the US (February 2017). f. More than 900M gallons of wine was produced in g. The US accounts for 12% of the world s wine production and 13% of the world s wine consumption. h. Top 5 export markets for US wine are the European Union, Canada, Hong Kong, Japan and China with 90% of US wine exports coming from California. i. Nearly 30M tourist winery visits annually in the US. j. US wineries employ over 50,000 people k. Texas ranks #5 in wine production and #6 in number of wineries. Executive Director Report Debbie Reynolds Classification Friend $4,960 $3,685 Professional $7,500 $5,550 Small Commercial Vineyard $11,450 $10,250 Small Commercial Winery $10,500 $8,000 Medium Commercial Vineyard $1,400 $1,400 Medium Commercial Winery $4,900 $3,850 Large Commercial Vineyard $900 $450 Large Commercial Winery $2,250 $4,500 Actual $43,860 $37,685 Budgeted Plan $36,885 $34,975 *Comparison of 5/31/2016 to 5/31/2017 9

10 2017 Lone Star International Wine Competition Facts: wine entries with 12 Double Gold awards, 77 Gold medals, 260 Silver medals, 209 Bronze medals, 6 Best in Varietal awards, and 12 Grand Star Best of Show awards given wine bottle label entries with 1 Double Gold award, 14 Gold awards, 9 Silver awards and 6 Bronze awards. - Wineries participating included 76 from Texas; 18 from other states; and 2 international wineries. The National Grape and Wine Policy Conference was April 25-27, 2017 in Washington DC. TWGGA staff met with Congress members and/or staff from the offices of Senator John Cornyn, Senator Ted Cruz, Congressman Jodey Arrington, Senator Roy Blunt, and Representative Rodney Davis. The Capitol Wine Tasting featured wines from William Chris Vineyards, Pedernales Cellars, and Fredericksburg Winery. The fall WineAmerica conference will be November 9-10, 2017 in Sonoma. This conference follows the Wine Marketing and Tourism Conference (November 6-8) also in Sonoma. TWGGA has approached the Grapevine Convention and Visitors Bureau about leasing the entire building in the event the other tenants move out. TWGGA has received tentative approval of a Specialty Crop Block Grant for December 1, 2017 December 31, The amount will be $18,000 and the funds are to be used for a crop/acreage survey. The final decision from TDA hinges on the federal budget maintaining the funds allotted in the Farm Bill. Stephen Morgan made a motion to accept the Texas Wine Foundation, Committee Reports and Executive Director Report. Jon Bowden seconded the motion. Motion Passed. New Business Annual Conference and Grape Camp Programs Debbie Reynolds The TWGGA Education and Research Committee will review the following as programs for the upcoming conferences: For Grape Camp November 5-6, 2017 at the Gillespie County Fairgrounds Pavilion - Program Day 1 Growing Grapes in Texas from A-Z Business Planning Financial Obligations Business Structure/Tax Implications Different soil types around the state; best varieties for soil types Resources/Research 2017 Harvest Report - Program Day Harvest Report Promising varietals in Texas Sustainable practices that work in Texas Topics geared toward wineries 10

11 For the Annual Conference February 22-24, 2018 at the Irving Convention Center - Change educational tracks to: Planting not Viticulture Production not Enology Presentation not Marketing Protection not Legal - Educational Topics Variety Focus white, red Lessons Learned grower Lessons Learned winery Winery Tasting Room Management Event Planning and Management Maximizing Texture & Flavor in Red Wines from Grape to Barrel Vineyard Mechanization Going to No Touch Alternative Wine Packaging Moving Grapes Across the State Selling and Managing the Logistics of Grapes Both conferences will be held in bigger venues allowing more exhibitors, more educational session capacity, and greater opportunities to bring in the general public to dining/tasting events. Registration will open for both on July 1, TWGGA received contract proposals from Kyle Field/Bryan-College Station CVB and two hotels in Bryan-College Station for the 2021 and 2023 Annual Conferences; and from Embassy Suites San Marcos for the 2021 Annual Conference. The TWGGA staff will review both and report to the Board before the end of June. Paul M. Bonarrigo advised Bryan- College Station is opening a new Executive Center in 2019 with 23,000 square feet of meeting space and 250 hotel rooms. He stated it is worth checking into this venue before making the final decision. Creating a PAC Dusty Timmons It was suggested to create a PAC. Kyle Frazier is the best resource for this process. When he returns to his office, we will find out how we can create a PAC. Announcements/Miscellaneous Debbie Reynolds read a letter to the Board announcing her last day as March 9, The Executive Board will begin the search for a new staff person. Dusty Timmons announced Bill Blackmon resigned his TWGGA Board position. Bill served as Director-At-Large. The Executive Committee will appoint a replacement to complete the term that expires February 22, They believe it is important to appoint someone from Region 5. 11

12 The Board discussed changing the terms of the TWGGA President to a two-year term. The first year would be in an even numbered year and the second year, an odd numbered year during the legislative session. This would require a By-Laws change. A second option is to have the President-Elect Chair the Legislative Committee. The next Board meeting is Saturday, November 4, 2017 at Lady Bird Johnson Park Tasche House. Lunch will be served at 11:00 a.m. with the meeting beginning around 11:30 a.m. Bob Landon made a motion to adjourn the meeting. Stephen Morgan seconded the motion. Motion Passed. The meeting adjourned at 4:22 pm. Respectfully Submitted by Debbie Reynolds, Executive Director Approved by Dana Pool, Secretary 12