Board of Directors Minutes: January 2004

Board of Directors Minutes: January 2004

INTERNATIONAL BOTTLED WATER ASSOCIATION

BOARD OF DIRECTORS MEETING

Aladdin Resort and Casino

Las Vegas, Nevada

Friday, January 16, 2004

8:00 a.m. – 11:30 a.m.

MINUTES

I. Call to Order

The meeting was called to order by the Chairman Mike Verrochi, Blue Hills Spring Water, Inc., who announced the presence of a quorum. Those present were:

 

Officers:

Mike Verrochi, Chairman, Blue Hills Spring Water, Inc.

Steve Raupe, Secretary/Treasurer, Eureka Water Co.

Doug Oberhamer, Past Chairman, Deep Rock Water Co.

 

Directors:

William G. Bell, Tyler Mountain Water Co.

H.R. Hidell, III, Hidell-Eyster, International

Bryan Hendrix, Melwood Springs Water Co.

Dave Holdener, Nicolet Forest Bottling Co., Inc.

Scott Hoover, Roaring Springs Bottling

James J. Land, Jr., Wissahickon Spring Water Co.

Charlie McCoy, Coca-Cola/Danone Waters

Mike Reardon, Culligan International Co.

Gordon Vander Helm, Danone Waters of North America

Jeff Vinyard, Crystal Springs Bottled Water

Marcus Wren, III, Music Mountain Water Co.

William Patrick Young, Absopure Water Co. Inc.

 

IBWA Staff/Counsel:

Joe Doss, IBWA President

Robert P. Brady, Hogan & Hartson, L.L.P.

 

II. Approval of the Minutes

It was MOVED AND SECONDED to approve the minutes of the October 31, 2003, Board of Directors Meeting. MOTION CARRIED.

 

III. Treasurer’s Report

Secretary/Treasurer Steve Raupe reported that the overall financial status of IBWA continues to be very good.

The auditors — Thomas Havey LLP — have just completed their review of the IBWA financial statements for fiscal year 2002 (December 1, 2001 – November 30, 2002). The draft auditor’s report was delivered to IBWA just this week. The final report will be mailed to the Board of Directors.

In 2003, total revenue was $3,349,224 and expenses were $3,180,482. The amount of excess revenue over expenses for 2003 was $168,742. IBWA investments for the 2003 fiscal year had a net appreciation in investment value of $545,719. The net change in IBWA assets was therefore a gain of $714,461. The IBWA investments (reserve future fund) are being managed by Kochis Fitz, which was chosen by the Finance Committee in 2000 to be our financial advisor.

The 2003 fourth quarter figures from Kochis Fitz indicate that the IBWA portfolio had a gain of 11.57% ($358,281.96) during the past three months. The overall gain for IBWA investments during 2003 was 31.26%.

It was MOVED AND SECONDED to accept the Secretary/Treasurer’s report. MOTION CARRIED.

 

IV. Committee Reports

Executive Committee

2004 IBWA Budget

The 2004 IBWA Budget is $3.578 million was outlined and discussed. $71,000 of the 2003 budget surplus will be used to balance the 2004 budget after careful review of the projected expenses. IBWA would also donate $50,000.00 to the Drinking Water Research Foundation for ongoing projects. This amount will also be funded from the 2003 budget surplus.

It was MOVED AND SECONDED to accept the 2004 IBWA Budget. MOTION CARRIED.

IBWA Reserve Fund Policy

Based on a budget of $3.5 million, the Executive Committee has determined that IBWA should maintain a reserve fund of $3 million and recommend the adoption of the following IBWA Policy on Reserve Funds:

1. There shall be two components to the reserve fund:

    • The first component of the reserve fund shall consist of a minimum of$2.5 million. The money in this account shall not be used, except under extraordinary circumstances, and only for activities or programs approved by the Executive Committee and Board of Directors.
    • The second component of the reserve fund shall consist of $500,000. The money in this account will serve as a contingency fund and can be used for any association programs and activities approved by the Executive Committee or Board of Directors. 

2. If there is a budget surplus at the end of any fiscal year, the Executive Committee, with Board approval, shall determine how to allocate the excess funds. The budget surplus can be used:

    • To restore the contingency reserve fund to its authorized level
    • To fund programs or activities in the next fiscal year
    • To contribute funds to the Drinking Water Research Foundation
    • For any purpose deemed necessary and appropriate to accomplish the objectives set forth in the IBWA Bylaws.

 

It was MOVED AND SECONDED to adopt the IBWA Reserve Fund Policy. MOTION CARRIED.

 

Reserve Fund Investments

The Committee considered suggested revisions to the current IBWA Investment Policy Statement that was adopted in 2001 to guide our financial advisors at Kochis Fitz. The suggested changes prepared by Kochis Fitz take into account the new reserve fund policy and the current market situation. The $500,000 reserve fund would a short term account and would be divided two-thirds to short and intermediate fixed income investments and one-third to absolute return strategies (hedge fund). The minimum reserve account of $2.5 million would be invested mostly in equities due to the long-term nature of the fund. The combined return of the two investment strategies will allow us to meet our investment goals and permit us access to funds when necessary.

 

2004 Business Plan

The proposed 2004 IBWA Business Plan was discussed. The reference to the possible formation of a Political Action Committee (PAC) in the Government Relations section was debated and it was decided that it should be retained because, as worded, it does not commit IBWA to developing a PAC.

It was MOVED AND SECONDED to accept the 2004 IBWA Business Plan. MOTION CARRIED with dissent.

 

Nominating Committee

Chris White, Suntory Water Group, resigned from the Board of Directors and as Vice Chairman of the Board. The IBWA Nominating Committee recommended that the current IBWA Treasurer, Steve Raupe, Eureka Water Co., be named to replace Mr. White as Vice Chairman. A new Treasurer will be appointed.

It was MOVED AND SECONDED to accept Chris White’s resignation and elect Steve Raupe to the position of Vice Chairman of the Board. MOTION CARRIED

 

Supplier Committee

On behalf of Supplier Committee Chairman Doug Hidding, Blackhawk Molding, presented the report. A copy of the minutes of the Supplier Committee meeting held Wednesday, January 14, 2004, is attached to and incorporated as a part of these minutes. The Committee reviewed the surveys on the 2003 Wide World Food Expo (WFE)and discussed the various options for the future of IBWA with a Trade Show/Convention. After a thorough evaluation, the Committee recommended that IBWA hold its own stand-alone Convention and Trade Show in 2005, at a location to be determined. Therefore, IBWA will not be a part of the WFE in 2005. IBWA will be a sponsor of Bev Expo 2004, along with some sponsors of WFE. In 2006, the Committee recommended participating with Bev Epo if an appropriate agreement can be reached with the show sponsors.

It was MOVED AND SECONDED to accept the Committee’s recommendation to hold an IBWA Convention and Trade Show in 2005 and to participate in BevExpo in 2006. MOTION CARRIED. The Committee was thanked for their input and hard work.

 

Technical Committee

Technical Committee Co-Chair Al Lear, Wissahickon Spring Water, Inc., presented the report. A copy of the minutes of the Technical Committee meeting held Wednesday, January 14, 2004, is attached to and incorporated as a part of these minutes.

 

Government Relations

Government Relations Committee Co-Chair, Leann Underhill, Absopure Water Company, presented the report. A copy of the minutes of the Government Relations Committee meeting held Thursday, January 15, 2004, is attached to and incorporated as a part of these minutes.

 

Communications Committee

Communications Committee Co-Chair Chris Dunn, Dunn Works, LLC, presented this report. A copy of the minutes of the Communications Committee meeting, Thursday, January 15, 2004, is attached to and incorporated as a part of these minutes.

Chairman Dunn reported that the Communications Committee adopted a sense of the Committee statement on water quality reports. The statement is as follows:

“The IBWA Communications Committee reaffirms the critical importance of providing to consumers meaningful information about the quality of bottled water brands. It is the sense of the Committee that bottlers shall remain diligent in providing this information and commit to compliance with this IBWA Model Code requirement, which requires that IBWA bottler members provide to consumers, upon request, meaningful information about their [proprietary] bottled water brands.”

The Committee gave a directive to staff to identify and promote to members recycling resources, such as recycling bins, so they may order and utilize these materials to encourage recycling among customers and other community based opportunities. Staff will also explore the development of a Communications tool kit to provide ideas to members with regard to grassroots/local recycling promotion, opportunities and partnerships, messages and other tool industry may utilize to demonstrate proactive commitment to recycling.

 

Convention/Education/Awards Committee

Convention/Education/Awards Committee Co-Chair Andy Mooradian, Blue Hills Spring Water, presented the report on the Awards program. He indicated that the Committee recommends the Committee be returned to three Committees, because of workload and allotted time for Committee discussions. The Committee is considering two new awards, plant manager of the year and an environmental award, as part of an effort to increase interest in the IBWA Awards Program.

Convention/Education/Awards Committee Co-Chair H.R. Hidell, Hidell-Eyster, International, presented the report on the Convention, which supported the recommendations of the Supplier Committee.

Convention/Education/Awards Committee Co-Chair Shayron Barnes-Selby, DS Waters, presented the Education portion of the Committee discussion.

A copy of the minutes of the Convention/Education/Awards Committee meeting, Wednesday, January 14, 2004, is attached and incorporated as part of these minutes.

 

Membership Committee

Membership Committee Chairman Phil Sustrick, Western Square Industries, Inc., presented the report. A copy of the minutes of the Membership Committee meeting held Wednesday, January 14, 2004, is attached to and incorporated as a part of these minutes.

 

State Association Presidents Committee

State Association Presidents Committee Chairman Robert Smith, Smith’s Mountain Bottled Water, presented the report. A copy of the minutes of the State Association Presidents Committee meeting, Thursday, January 15, 2004 is attached to and incorporated as a part of these minutes.

 

Drinking Water Research Foundation

Chairman Jack West, Puro Filter Company, presented the report. A copy of the minutes of the Drinking Water Research Foundation meeting held Wednesday, January 14, 2004, is attached to and incorporated as a part of these minutes.

 

International Council of Bottled Water Associations

John LaPides, Snow Valley, Inc., has been appointed to be IBWA’s representative to the ICBWA. Jack West, Puro Filter Company, will continue to serve as the other IBWA representative to ICBWA. Jeff Vinyard, Crystal Springs Bottled Water, is currently ICBWA chairman.

 

V. Old Business

There was no Old Business to discuss.

 

VI. New Business

The next meeting of the Board of Directors will be held Thursday, June 24, 2004, at the Park Hyatt Hotel in Washington, DC.

 

VII. Adjournment

There being no further business to come before the Board of Directors, it was MOVED AND SECONDED to adjourn the meeting. MOTION CARRIED.

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