Board of Supervisors Meeting   3/19/2021

Oh, that's live on YouTube.

Can we shrink out a little bit?

I'd like to call the order of the joint meeting of the Nelson County Board of Supervisors and Planning Commission, March 19, 2021.

Continuation of our session, our supervisor session from 3-9, and it's called special meeting.

Yeah, we are both in person.

The Board of Supervisors are all present.

Dylan's indicating that they don't have a quorum, so there's no need to copy the order.

Okay.

Mr. Stapleton, if you do get a quorum, can you inform me and we'll be able to call your meeting to order?

Will do.

Okay.

So I'd like to welcome everyone who's here as well as people that are watching us live.

First of all, I'd like to give some introductions of who is sitting with us in the courtroom.

The supervisors to my right, Mr. Harvey and Mr. Barton, to my left, Mr. Ruppeter and Mr. Parr.

We have our county administrator, Steve Carter here.

We have our county attorney, Mr. Payne.

From county staff, Andrew Crane, who is our master of the technical aspects of the meeting.

Maureen Kelley from economic development, both Dylan Bishop and Emily Hulstrom from planning.

Okay, then we will move into the work session which includes presentations

by four people.

We're so fortunate that you were able to make time to be with us.

We have John Kraft, who's the Virginia, I'll call it Beverage Control Authority Senior Compliance Officer.

We have Pam Miles, the program supervisor from the Virginia Department of Agriculture and Consumer Services.

Mary Beth Williams with Williams Compliance, and Kyle Schreib, the Executive Director of the Virginia Agribusiness Council.

Thank you all again for being here.

Mr. Kraft, we would like to get you up first, but just before you do, for the board and for the planning commission members that are present,

If you have questions for specific people, presenters, as it comes up during their presentations, please make note of them.

Please don't forget them.

There's always a chance that someone who comes up later will answer a question in their presentation.

And then I'll moderate a Q&A session after all the presentations are done.

And after that, when we're totally finished with the presentation and Q&A,

have a brief recess while we reconfigure things and then go on to the other half of our board supervisor meeting and deal with the other business.

So first, I'd like to introduce John Kraft.

Board of Supervisors, Planning Commission, and guests, pleasure to be with you.

Thanks for having me here.

My understanding is the best thing that I can share with you today is a little bit of an overview of the application and licensing process for the folks that I supervise, which are specifically industry licensees.

And what I mean by that

are folks that are manufacturers, wholesalers, importers, shippers, those kind of licenses as opposed to your retail licenses that are associated in your county.

So Hilltop Berry Farm and Winery, for example, that's a farm winery or Silverback Distillery.

The application and licensing process is important for you in the sense that during this process, there is a posting and publishing that is required by code where they both post a notice at their location and they publish in a paper that has to be of general circulation in your locality, which can be fairly liberal as long as it's available to members of your community.

And the reason that that's a requirement, and the General Assembly wrote that in, is so that everyone is aware that someone is licensing.

Someone is applying for some type of license.

And if you have any concerns, we want you to contact us.

If you wish to place an objection against the issuance of a license, you have a 30-day window to do that during this same process, the posting and publishing process.

And all you have to do is contact the special agent or the regional office that is closest to you and they'll get that to the right person.

So for all industry licensees in your locality and throughout Nelson, I am that responsible party.

I have the entire Shenandoah Valley from Lynchburg to Winchester.

and also assisting with Loudoun and Fauquier Counties in Northern Virginia.

And I've been doing that for a little over two decades at ABC and for about 15 and a half years with compliance, which is the specific issue we're talking about today.

This application process requires the entity, whether that is an LLC or a corporation or a private individual, to apply to what was formerly known as the ABC board, is now the ABC authority,

By supplying certain information, their business information, a lease, and for these industry licensees, many of them have a qualification or multiple qualifications that they must meet before they're able to be licensed.

And that typically is the question that I get from localities.

How does this work?

What are their qualifications?

What does this allow them to do?

I believe Ms. Williams is going to go over some very specific guidelines and codes about that, so I'll try not to dabble too much onto that.

But when they're supplying this information, we're conducting an investigation.

So for example, a farm winery.

They have to be located in an agriculturally zoned area of your county.

And if so, then that's one of the major qualifications.

For that farm winery, they also have to have a producing orchard or vineyard, which could also be extended to bees if they're making meat and using honey.

And then they have to have the equipment necessary in order to manufacture that product.

For limited breweries, which you probably are familiar with, although some folks refer to them as farm breweries, technically in the ABC code, they are termed limited breweries.

They're not identical with farm wineries, so there is a differentiation.

They have to grow something on their farm that is going to be used at some point in the production of their beer.

Likewise, they have to have equipment necessary to manufacture their product.

and with distilleries, which you're familiar with, they have to have the equipment necessary also, although they do not have to be in an agriculturally zoned area.

The agricultural area, which is a large part of your particular county, of course is going to be inundated with folks that are using this opportunity for buy-write licenses, such as the Farm Winery or Limited Brewery.

What this does allow them to do is conduct agricultural-based business upon that location.

I'm sure Ms. Williams will touch on it.

It does not allow them to do anything they desire on that location.

So one of the concerns that we hear quite often is if a farm winery is licensed in my area, I'm worried about it being a concert venue.

What the Board of Supervisors cannot do pursuant to law is create a particular local regional ordinance that would prohibit them from having a farm winery and conducting that farm business.

What you can do is regulate the other activities that are not agriculturally based in your locality, such as the number of people that can gather, the music that

that folks probably call you about and call me about from time to time.

Now that's a local ordinance and that's something that ABC doesn't enforce.

That's something that your sheriff's office would enforce, for example, the noise ordinance.

But that's certainly a prohibition that the county can empower itself to limit in these locations.

What I want to stress for you all and before I answer any of your questions and the specifics that you want to know about is that we're partners in this during the application process.

We're a neutral party that is investigating an application for a license.

If there's a concern on the part of the board,

whether it's zoning or your supervisors or any other agency within your locality, we want you to reach out to us.

Let us know what your concerns are or if there's something we can explain or shed some light on.

There's misperceptions from time to time not only in localities but among citizens about what these individual industry licensees can do legally pursuant to their licenses.

and quite often through conversations I've had over the years in Nelson and in many other localities, shedding some light on the particulars has assisted folks in understanding exactly what they can expect and what will not happen in that area.

I also want you to know that if a license is issued in your locality, ABC doesn't end there.

We conduct annual inspections of the premises, ensuring that they still qualify for the licenses for which they have been issued.

We're making sure they still have an example of farm winery or producing orchard or vineyard, that they have equipment, that they're maintaining proper records that are required by ABC, and that we're reviewing those to make sure they're in full compliance with both administrative code and the code of Virginia.

And we want you to know, if you have concerns about this, that we want you to reach out to us.

And for these licensees in your area, that would be me.

I think you'll have my contact information.

If not, I know Ms. Kelley has it.

We've spoken quite often throughout the years about different events and opportunities for your county.

Those are the specifics I want you to know off the bat, but I'm predominantly here to make sure your questions are answered and I just don't give you a bunch of information that may or may not be helpful.

Okay, hang on.

I'm sure we'll have some for you.

Yes, sir.

I'll be here.

Okay.

Good afternoon.

I also want to thank the Board of Supervisors and Planning Commission for having me join you today.

So as you stated, I work for the Virginia Department of Agriculture and Consumer Services and I manage our state food safety program.

So just to give you a little bit of background about what we do, our program is responsible for the inspection of all the retail food stores in the state.

That includes all the supermarkets, grocery stores and convenience stores and gas stations that have food in your county and throughout the state.

We also inspect all the food warehouses and food distribution centers and all the food manufacturers, which we're here to talk to you about today, which includes the wineries, microbreweries and distilleries.

They have to have an inspection from us.

We're looking at the sanitation of the firm, making sure they have a good sanitary product when we're in the firm in addition to what ABC is doing.

We have 25 food safety specialists throughout the state who have territories who make inspections, as I said, at all of these firms.

And we have our food safety specialist, Matt Cornick, covers Nelson County, and he is responsible for inspecting the production of all craft beverage manufacturers in your county.

And we regulate these firms using our Virginia food and drink law.

And we have adopted federal regulations that include good manufacturing practices.

So I want to share with you today a memorandum of understanding that we have with the Department of Health.

So in early 2015 we were approached by different well craft beverage production facilities and some other folks.

to work on a memorandum of understanding with the Department of Health.

And we put this memorandum of understanding together for the purpose of having an agreement between Department of Health and VDACs to clarify our special, sorry, our special responsibilities in the winery tasting rooms that offer food service to the public.

And this agreement allowed both of our agencies to maintain a high level of public health protection.

And we wanted to ensure the efficient use of our resources by both agencies going into these firms.

We had also heard that there was not uniformity throughout the state.

What was allowed to be served in the tasting rooms without a permit by VDH?

So some counties would require if you even were slicing cheese, you had to have a permit and be considered a restaurant.

So it was different throughout the state.

And we wanted to make that uniform.

And I worked with Julie Henderson, who's over environmental health with the state of Virginia.

We worked on coming up with this memorandum of understanding.

So it was signed in 2015.

And we also had a second similar MOU,

that was developed to cover breweries and distilleries and that it was finalized in September 2015 and signed by our two commissioners.

So the first MOU that we developed covered the wineries and the cideries and so we had a general agreement so

In food service operations where the establishment had a retail on-premise or both the retail on-premise and retail off-premise license for beer, wine, or liquor from ABC, they were going to be inspected by VDH because that type of food service required exceeds the limitations of what would be allowed under our inspection, and it would fall to VDH.

In all other instances, food service operations would fall to VDACs, our agency, as long as the food service met certain limitations.

So establishments expanding food service beyond that, which qualified for inspection by us, would be considered restaurants and they would be required to be inspected and permitted by Virginia Department of Health.

So for these craft beverage manufacturers, for them to fall under us, the food service limitations were they could sell first packaged food items from approved sources, such as sandwiches, crackers, similar items, and they had to stay in their package and they could be reheated in the package.

But what also was allowed, if we had ready-to-eat food items from approved sources that complied with law, they could be unpackaged and have their packaging removed to allow for limited preparation and or reheating for immediate service only.

And it had to be limited to cutting, slicing, and sandwich assembly.

So examples, they could make sandwiches from packaged lunch meat.

They could take a can of soup.

It's already commercially prepared.

Reheat it for immediate service.

They could take frozen food such as a pizza that they're just taking the package off and heating it, cutting up cheese, making cheese boards or vegetable trays.

So it had to be limited to that.

They couldn't make food.

They're not able to make food from scratch, like making chicken salad from scratch, cooking and frying.

That would fall outside of this procedural agreement, outside of our jurisdiction, and they would be required to get a VDH permit.

And if they're wholesaling, we would also inspect the processing area of the firm.

So what we were trying to do is our agencies in all of these firms to begin with, and we're inspecting the processing area, manufacturing of the craft beverages in the state.

And while we were in there, we had this agreement that they would be able to do limited food service in their tasting rooms without having to get a permit.

But if they expanded into

doing other foods that were required or looked at on as a restaurant, they would require a permit.

So then the second MOU that we came up with later in the year, when we did the winery and Saturday, we said, hey, we need to also address the breweries and distilleries.

So it's very similar, almost identical to the last.

We had the general agreement that breweries that operate in conjunction with a restaurant for onsite consumption, they would fall under the jurisdiction of VDH.

Now, if they were,

Engaging in wholesale distribution, we are responsible for all the wholesale inspections in the state or wholesale manufacturing and distribution of processing manufacturing operations in the state, and that would be inspected by VDACs.

In all other instances, food service operations would fall to VDACs as long as food service met the limitations below.

And if they expanded that food service, again, they would have to get a permit and there would be considered a restaurant by VDH.

So one thing that was different with the breweries is they were allowed to serve beer on site where you're just drinking it on site and that would fall under VDEX.

We would also do wholesale distribution of beer.

Now they could also, just like I said for the last MOU, they can have packaged food items that are from approved sources.

that stay in the package, they can sell those.

Again, they can take packaged food ready to eat that's been inspected, it's approved, and they can unpackage it and remove it to allow for limited preparation, exactly the same as before.

They can do reheating for immediate service, and it's limited to cutting, slicing, and sandwich assembly.

So it was identical to the last MOU.

We just wanted to make it consistent with all the craft beverage establishments throughout the state.

And just a note, when you have the,

The third-party operations that come, you have the food trucks.

Those do not fall under VDACs.

Those have to be permitted and inspected by Virginia Department of Health.

And also, in addition, if the firm wishes to hold any type of special event, such as an oyster roast or pig roast, they had to contact VDH to obtain a special event permit.

That would not fall under VDACs.

So just in closing, our agency was already in these firms, like I said, inspecting the manufacturing of the craft beverages.

So we wanted to determine what types of food service would be inspected by us and or when they needed a permit.

And we just wanted to make sure we're trying to use the most efficient resources that we can to be uniform throughout the state.

And I want to thank you all for having me today.

And Maureen has my contact information if I can provide any further assistance or answer any questions you may have at a later date.

Thank you, Ms.

Miles.

Hello everybody.

I'd echo my previous speakers.

Appreciation for you all having us here today.

I have a company here in Hanover County.

We deal with the regulations, the laws and the regulations that apply to alcohol producers.

So wineries, breweries, distilleries.

We deal with some importers, meaderies, cideries, those sorts of things.

This is not just in Virginia.

We deal with entities, production entities around the country, but obviously, I'm a Virginia girl.

We work with a lot of the Virginia producers.

So there are a few things that I think are important for everybody.

The first being, I just wanted to give you all sort of a big picture of what regulation for these entities really comes down to.

Alcohol is the third most regulated industry in the country.

And they have got

They deal with TTB, which used to be part of ATF, but has split off into just being regulation of tobacco and alcohol.

It's the Tax and Trade Bureau for alcohol and tobacco.

So that is their federal regulator.

And in order to get licensed and before they can even go and submit an application with ABC, they have to have applied for application with TTB as well.

So TTB has a

A lengthy application process.

Part of it is submitted online.

And then you also speak with an inspector.

Sometimes they ask for pictures to be submitted.

Sometimes you have a physical inspection.

Generally, because ABC does their own in-person on-site inspection, TTB has now deferred, except in unusual circumstances, to ABC going and doing their inspection.

So we don't generally see an inspector come out, a physical person come out.

Although I certainly have seen, particularly in the days of COVID, them doing some of these FaceTime or Zoom inspections where they're walking through the area.

They also are regulated by the FDA.

So they have to set up, unless they are really selling almost everything out of their tasting room,

to consumers.

They have to be registered as a manufacturer with the FDA.

One thing that I think is very confusing for people is, and I think everybody that's been in the industry for any period of time,

We start talking about it.

Alcohol is considered food for all federal and state regulations.

So beer, wine, spirits, mead, cider, all of those things are considered food.

So the food regulations apply.

So you'll see in the regulations of, you know,

Food manufacturers must do the following blah, blah, blah, blah, blah.

And all of those apply to alcohol manufacturers as well.

So you've got these two primary federal regulators and then obviously the tax folks are in there as well with the IRS and Department of Taxation at the state level and things like that.

But our primary regulators as far as the day-to-day activities

for all of these suppliers is ABC and VDEX, which is why it was important for you to hear from both of these two.

And then VDH, as Pam indicated, if you have a seller, a manufacturer that is going above that threshold level of food service as outlined in those MOUs.

Those MOUs are in the handouts that were prepared for you.

I will acknowledge right off the bat that I forgot to include several things in the handout.

So I've already sent those to Dylan and to Maureen, and I'm sure that they'll give them to you as well.

Complete oversight on my part at a big one, so I apologize for that.

With respect to the oyster roasts and the pig roasts and things like that, just before I move into my other things, there were a couple of things that sort of caught my ear.

Certainly if a winery or brewery or distillery was doing their own, they were the providers of the oysters or the pig or something like that.

They would absolutely have to have a permit.

Most of these guys are doing this in conjunction with somebody that is already a licensed seller, whether it's

an oyster company or whether it's a barbecue place or somebody that holds their own license for that.

So for that part, you probably wouldn't see a winery, brewery, cidery, meadery, distillery apply with VDH for their own event permit.

You would see that coming in from the actual food seller.

But if a

If somebody got a wild hare and decided they didn't need a stinking barbecue place, they were going to do their own pig, then they absolutely would have to be the one that would go and get that permit from VDH.

But just a point of clarification there.

I did want to talk quickly about the licenses.

I included also in the handouts sections of 4.1 of the Code of Virginia, which is the ABC Act.

And I included some of the definitions that were helpful.

Some things relative to alcohol producers are included in the definitions, and then some really aren't included in the definitional section.

They're included in what are the privileges of those licenses themselves.

So I included

bits and pieces, it looks like it's a little bit cobbled together.

And it is because some of them, you know, are included in certain sections, and then others are not.

But one thing that I wanted to bring to your attention that's going on, and you'll notice that all of these things have got

effective July 1, 2021.

So there was a license reform act that was passed last year.

It was supposed to go into effect on July 1 of this year.

So it revamped the licenses where currently we have sections for distilleries and sections for licenses relative to beer.

And then we have sections relative for sales and production of wine.

The whole licensing schematic at ABC is being revamped.

So all of them are going into manufacturer's licenses and then they'll be broken down from there.

The privileges themselves are not changing, but it's just sort of the layout of the way you see things.

The reason that that becomes important is that, for instance, the wine licenses currently are in 4.1207.

All of them are going to go into 4.1206, I think, or 206.1.

That was supposed to happen July 1 of this year.

One of the things that happened as part of this License Reform Act was that a lot of the fees were changed.

As you can imagine, most of the fees did not go down.

So as part of COVID, there was legislation this year

to bump that back so that now all of those things that say that they'll become effective July 1 of 2021 will actually become effective January 1 of 2022.

They bumped it back so that all of these businesses that are struggling because of COVID weren't faced with this increase in license fees during COVID.

So it just sort of gave everybody a little time to catch their breath.

There also was certainly a logistic issue at ABC, too, that ABC had to react

unbelievably quickly to come up with guidelines and protocol throughout COVID.

And what that did was take the manpower that would have been assigned to changing the licensing protocol and the licensing systems within ABC, it reassigned those people necessarily.

One thing with the two that have already spoken that I'd like to point out was, we were faced with a

a global pandemic, but certainly something that had immediate and dramatic impact on all businesses in Virginia and elsewhere.

And because we have these primary regulators

They jumped in very, very quickly, came up with protocol and guidelines that worked within the regulatory framework or sometimes had to go to the governor and ask for a change in the law itself to allow these businesses to continue to work with the limitations that had been put on everybody through COVID.

ABC has really become an incredibly valuable source because they're already out and doing inspections of all of their licensees.

They teamed very, very closely with VDH to ensure that all of those requirements that were put on these business owners to make sure that people were masking, that people were socially distancing, that the protocol was all being complied with.

ABC was immediate.

in jumping in with VDH and ensuring that all of their licensees were compliant with those.

They were going out, they were issuing warnings.

As you may remember, the VDH system allowed for an anonymous tip.

So ABC and VDH would make a call onto, if it was an ABC regulated industry or industry member, they would make a call and say, hey, we've had a complaint and talk with them about it.

If it happened again, licenses were gone.

I mean, this was not something that anybody took lightly and the regulatory environment

for these businesses, I would hazard to say was significantly more heightened than almost any other industry in the state because we already had the regulatory framework.

So they were able to put that into place very, very quickly and go out and make this stuff happen.

So kudos to them for not only wearing their normal

regulatory hats, but for really figuring out how to take their regulatory umbrellas that they're already using and very quickly react to both needs that were coming up through the executive orders and the limitations on business activities, but also to make sure that the regulations that were put out there and the requirements that were put out there were actually being complied with.

So I wanted to make sure that you all realize that because this is such a regulated industry, the reaction time for the pandemic was just almost instantaneous for these industries.

Let's talk a little bit about the differences in licenses.

So again, you have this in your materials.

But one of the things that I wanted to just point out, and this changed in 2016, was that a farm has to be on agricultural, land-zoned agricultural.

But there's an expansion to that definition.

So before that wasn't there, right?

It was a farm winery could really kind of be anywhere.

So land-zoned agricultural includes obviously

Land That's Zoned Agricultural, that kind of goes without saying, but also any land that the county, any premise or property that the county deems appropriate to have a farm winery.

And that's the same for a limited brewery or a limited distillery.

So you've got sort of two parcels.

So you have a buy right ability to have this type of business if you are on land zoned agriculture, agricultural,

just by the county zoning definitions.

But if you're not on land-zoned agricultural, then you can come to the county and say, hey, we'd really like to do this.

And you guys get to say yay or nay.

So there is that piece of it.

The one zoning provision that's specifically mentioned as not being available for a farm winery, a limited brewery, or a limited distillery is residential

Conservation, I always want to say residential commercial, and I know that that's not right, but I still just want to say that.

So if you're zoned RC, and I don't know that Nelson has any RC, those are generally done in counties where you have big pieces of property, often with a historical significance, that have some sort of conservation easements, but have been allowed to have residential

So basically what they're trying to do is prevent some of these pocket farm properties, some of the areas that are zoned residential but have bigger pieces of property from turning into a neighborhood full of farm wineries, limited breweries, and limited distilleries.

One of the things that I did want to point out that's a difference between those is really the use with relation to farm wineries is the use of the property.

So for limited breweries and limited distilleries, some of your product has to be grown on site.

The only thing that we know that doesn't count is that is water.

And there was great haggling over that when the limited brewery license was actually enacted a few years ago.

But literally one hop vine would be enough.

That's enough.

If you have one hop vine and you are using a single hop in your beer, that's enough to be able to get a limited brewery or for distillery

whether it's wheat or corn or whatever it is, one bit.

For farm wineries, there's a far greater threshold.

And so 51% of the wine that they produce must be produced from grapes that is grown on property that they either own or lease.

and no more than 25% of their wine can come from fruit from outside of Virginia.

So there's a much bigger agricultural threshold for farm wineries than there is for limited breweries and limited distilleries.

That may change.

I mean, ultimately, when they originally got the limited brewery license passed, they wanted it to be a farm brewery.

And it turned out that there weren't any, or at least no participants in that discussion, breweries that could meet that threshold, the high threshold.

So because of that, farm wineries have additional privileges that the others do not.

So that's really the difference when you're looking at them.

The one thing that I do want to talk about, because I know that everybody can read the statutes.

And if you have specific questions on those statutes, obviously I'm happy to answer them.

But the thing that I think that becomes an issue in each jurisdiction are what we call usual and customary activities.

And this is why I said this was a big omission.

15.2-2288.3 is the one that relates to farm wineries.

Kyle had included 2288 and I just completely spazzed on the fact that the ones that were specific to the different commodities weren't included.

So Dylan or Maureen will get those to you.

I emailed those to her just at the beginning of the session.

So 2288.3 is Farm Wineries.

And it basically has a list of things that the localities cannot get involved in regulating at all.

They cannot.

It doesn't matter if there is significant risk to public health, safety, well-being.

Those things are production and harvesting of fruit and other agricultural products and the manufacturing of wine.

You'll notice in a lot of these sections that wine, particularly farm wine, is specifically mentioned where brew,

Breweries, beer and distilleries and spirits are not and again that ties back into that higher threshold of agricultural activity that that's required for farm wineries.

So number one was production harvesting of fruit manufacturing of wine.

The second is on-premise sale tasting and consumption of wine during regular business hours within the normal course of business at a licensed farm winery.

The direct sale and shipment of wine by common carriers to consumers.

So that's really direct shipping.

You guys can't be involved in that.

The sale and shipment of wine to ABC to wholesalers or to out of state purchases.

You guys can cannot regulate in that area.

And then the storage warehousing and wholesaling of wine in accordance with 4.1.

Oh, and then the sale of wine related items, which always just sort of

that wine related items that are incidental to the sale of wine so you know things like wine openers and wine coolers and the bags that you put the ice in that you can put the the wine bottle in to keep it cool and wine glasses and you know that kind of thing so those are the things that you guys cannot play in that realm

There are things that you can play in, that you all have the ability to regulate, but there are thresholds.

2288.3 is the one that was originally, the one for farm wineries, was the one that originally existed and then the ones for breweries and the ones for distilleries came later and they're pared down.

They are not exactly the same as the one for farm wineries.

Again, specifically because of that higher agricultural threshold.

So the start of 2288.3 is just kind of an acknowledgement of the economic impact that the farm winery industry has on the economy of Virginia.

Any local ordinance involvement in regulating farm wineries has to be reasonable and has to take into account the economic impact of such a restriction on the farm winery.

Then we start talking about usual and customary events.

Usual and customary activities at the farm winery, we kind of go, how do we know what those are?

And there are a couple of ways.

There was a survey that was done originally, I want to say in 2002 or 3?

I could be wrong with it.

Kyle, is that right?

2002?

Yeah, that really they surveyed the wine industry and said, hey, what do you do at your winery?

And there was 25 questions or something like that.

And then they went through and they said, okay, so these are the activities that people are doing at their wineries that are usual and customary activities.

And the legislature decided at that point, rather than saying,

This is a usual and customary activity.

And this is a usual and customary activity.

And this is a usual and customary activity because that was really so fluid, right, that they didn't want to have to go back in and touch that statute every single session to add additional usual and customary activities or take them away.

So they left it as this usual and customary activities.

There was another survey that was done just a couple of years ago at the request of some of the legislators.

They asked that a working group be formed to do that.

We do have a list of usual and customary activities.

Usual and customary activities at wineries do include things like having music performers, like having oyster roasts or pig roasts, like having harvest parties, like having weddings, hosting events like that to introduce people to both for the education on wine, but also for

to introduce them to the property, bring them out and show them how things are done.

That kind of dovetails really nicely with the agritourism stuff, which Kyle's gonna talk about in just one minute.

But I wanted to just finish up talking about, if something is deemed a usual and customary activity, there's a threshold before the localities can impose regulations.

And that immediate threshold is that there has to be, that usual and customary activity has to pose a risk

the Public Health Safety and Well-Being.

So there has to be a finding that whatever that activity is poses a danger to your community before you can impose some sort of regulatory scheme on those activities.

Then

The regulations that you impose have to be as narrowly tailored as possible to address the actual concern and they have to be reasonable.

So that's kind of where we are.

There are also within 2288.3 and the corollary regs for breweries and for

I don't think there actually is one in for distilleries, which is kind of weird.

But about noise ordinances.

So you can't have a different noise ordinance for outdoor amplified noise than you do for any other business.

And that just makes sense.

But it's in there.

So that really, I know that these events are just sort of the bane of people's existence a lot of times.

And they're really an area that causes great consternation.

Events are not regulated by ABC, which is what John said.

They don't get in and go, this is too many events, this is too many people.

other than one situation with events that are licensed by ABC, and I'll come back to that in one second.

If there are problems with the events, that really does come down to the sheriff.

Is it above what your noise ordinances are?

Enforce the noise ordinances.

Is there something about that type of event or that type of activity that is posing a risk of public safety, a risk to public safety, health and wellbeing?

Then that's where you go.

Then that's where you go with the local ordinance to try to figure out how do we cure that ill.

There are permits, temporary permits, that are issued by ABC.

They can be for up to three consecutive days.

I think in the new regs they're just being called banquet permits that are being issued to manufacturers.

We sort of affectionately call them manufacturers' multi-day permits.

because they can be one to three days on a single permit.

They can have up to eight of those per year.

And those are actually issued by ABC.

The benefit of those is that they have to be issued for the purpose of education on the commodities, but a winery can sell beer during those activities and vice versa.

So a brewery can sell

can sell wine during those activities.

Otherwise, it is not okay for a winery to sell beer and it is not okay for a brewery to sell wine unless you have both winery and brewery at the same location.

If you've got that, you have common ownership, then they can have a shared tasting room where people can drink both beer and wine.

But these are not supposed to be rural bars.

That's not the point of these laws.

The way the weddings usually happen is you'll have somebody that has a caterer's license.

You'll have a winery or a brewery that has caterer's license, like Veritas, for instance.

Or you'll have a situation where the bride and the groom or the corporate entity that's having a function or something like that, they get an event permit, a banquet permit.

It's in their names.

They apply for that with ABC.

And ABC says, how many people do you think are going to be there?

What are the hours going to be?

What's going to be the portion of the premise that's going to be used for this purpose?

So they can determine whether the winery or brewery can also be open during the time that event.

is taking place.

So all of those things go through a review at ABC.

You'll have somebody that's looking at the banquet permits.

They'll then come to John and say, hey, John, one of your wineries, we've got somebody that's pulled a banquet permit for a wedding at one of your wineries.

They say it's going to be in a banquet hall.

Have you been there?

Do you know what the deal is with that?

And is that going to be okay for the winery to still be open during that time?

So they'll have this interface to make sure that the ABC laws are being complied with relative to those events.

And then any violations relative to those events.

Unless they're egregious, the wineries and the breweries do maintain some responsibility.

Obviously, if

In the middle, there have to be winery and brewery staff that are still there for those events.

If in the middle of the dance floor, the 15-year-olds are holding a keg stand contest, the brewery is going to need to step in on that.

Um, blatant, uh, violations of the law that the winery or the brewery, the host can't turn a blind eye to it, but the winery or the brewery is not the one at that point.

If there is an event permit holding, uh, you know, that's covering this event, the winery, the brewery is not, um, responsible for, for IDing those people.

The event, um, permit holder would be the one for ensuring that minors were not being served, uh, and things like that.

Unless again, it was, you know, an obvious

An obvious violation.

Thank you, Ms. Williams.

Kyle.

Good afternoon.

Thank you for having me, Board of Supervisors and

and planning.

My name is Kyle Shreve.

I'm the executive director of the Agribusiness Council.

We're a Richmond based trade association representing the agriculture and forestry industry supply chain.

And our members really run all the way through from small farmers all the way up to processors, large agribusinesses and we do have the farm wineries.

I put a

a little flyer we put out to give you a better sense of who our membership is in your handouts.

In the last few years, more and more farmers in particular have turned to what has grown into agritourism to supplement revenue for the farm and to generate interest in rural Virginia.

And it's become a bigger and bigger part of the agriculture and tourism economy.

latest study that I saw in 2017 by the Virginia Cooperative Extension put the agritourism industry at two billion dollars in economic activity in the commonwealth so and that that number just continues to grow every year now as Mary Beth mentioned you know and during the pandemic those numbers took a bit of a hit last year as events were not allowed but we're hoping that

As things get back to normal, more and more will have them.

And as you've heard, more and more of those events take place on farm wineries, but we have producers such as dairy farmers that are holding more and more events on the farm in order to supplement the dairy.

members that are doing corn mazes and you know pumpkin patches and more and more things that are seasonally based in nature and so we wanted to make sure as these regulatory actions take place and I'll go through the different ways in which it's regulated that we don't upset the apple cart in the larger agricultural sense to allow producers to continue to supplement and do what they do best which is to grow

Food and Fiber for those of us in the Commonwealth.

As you can probably guess though, as more and more of those events happen in rural Virginia, obviously there's some conflict that arises because of it.

And I'll just build on what some of what the previous presenters have done, where the biggest conflicts that our industry has seen over the last few years and where we've participated in numerous stakeholder work groups to try to resolve some of these issues comes with any structure you're holding an event in

and then the events themselves and how to properly regulate and balance the economic activity generated versus public safety.

And so, you know, kind of as that definition got going, the General Assembly established in 3.2-6400 what an agritourism activity is.

And it's any activity carried out on a farm that allows members of the public for recreational, entertainment or educational purposes to enjoy rural activities.

And then it goes on to list

including but not limited to farming, wineries, horseback riding, et cetera.

And so what we have seen is more and more of those activities happening under the broader definition of what we call agritourism.

Now, if you are building a building or starting an agricultural enterprise for the purposes of having agritourism, or if you're an existing farm that wants to build a building to house events, or what we see more and more of is that

A building that you're building is going to be used for production, agriculture, or to be used and will have multiple purposes with it, in which you could have an orchard that uses it, a building for not only processing and canning, but then also have a storefront built on the side.

You are exempt from things like the Uniform Statewide Building Code, for example, and that's included in Section 36-97 definitions in which

Farm building or structure, if used for the storage, handling, production, display, sampling, or sale of agricultural, horticultural, floricultural, or silvicultural products produced on the farm, then you are exempt.

It does not mean that you are exempt from other types of marine-like environmental concerns like erosion and sediment control plans.

If you are a building that is, if you're going to build a structure on your property that's

10,000 square foot or above, you still have to go to DEQ and get a erosion and sediment control plan.

In addition to that, you are not exempt from any setback ordinances that a locality has put.

So if a particular locality has said through ordinance that you have to have a thousand foot setback from any structure from any adjacent property, you still have to comply with any setback ordinances that

The locality has put into place.

And so, you know, obviously, once you get into that, you can start to have events and build and use it as long as you're using it for those defined purposes, and there's six of them.

And the key word in that statute is the word primarily.

And so you can't just build a building, say that it's a farm structure building, because every once in a while, you have an animal in there.

but use it for events every week.

You have to show that you are primarily going to use that for the processing, production, sale of an agricultural product and then you can hold events in that particular space.

And as I said, that becomes more and more diversified.

I have a member in Northern Virginia that holds barn dances in their farm, in their goat barn.

Just a once-in-a-month thing.

It's primarily used for the storage and moving around of goats and they hold old-fashioned barn dances.

That would be exempt because you're using it primarily for the care and housing of agricultural production animals.

It does not mean localities don't have any options when talking about regulating particular events.

And usually those happen through special use permits.

15.2-2288.6 is where the General Assembly, on top of what Mary Beth outlined in point three, started to say that we're going to treat agritourism activities in which the locality cannot issue a special use permit or otherwise regulate them through ordinance unless

There's a substantial impact on the health, safety, or general welfare of the public.

And so, locality, what does that mean?

Localities have taken different interpretations of that.

It is really up to the locality to make the case and to justify what is a

threat to the health, safety, or general welfare of the public while also taking into account it has any ordinance has to be reasonable, which means you have to let the event go forward as long as there's proper precautions taken and shall take into account the economic impact of the restriction on the agricultural operation.

Obviously, there's an awful lot of gray area there in which localities have generally weighed and then

They're exactly right.

You can make sure that as long as they comply with the same noise ordinance, you know, things like what we typically see around the Commonwealth is time limits, right?

Noises up to a certain time frame, up to midnight, what have you, for a given thing.

And that's across all sectors, not just for agritourism.

So that's what we see.

And we participate in a work group

in 2018 was the latest one.

It's not the first, but it was the latest in which we kind of reviewed all this and tried to suss out.

And what you find is that more and more as you try to change these statutes and update them, because of the diversity operation, the diversity of structures, the diversity of events, it is very, very difficult to change them and get it to where you're not limiting

Bonafide Agricultural Production on top of it while also making sure we encourage folks to come to rural Virginia and generate economic activity for the purposes of agritourism.

And so that's where the wine industry has been very proactive

In coming up with best management practices, they've worked with localities to make sure public safety is there.

One of the things, you know, we mentioned public safety when it comes to ABC laws, but one of the other things when it comes to that is not only working with the sheriff, but fire marshals as well to make sure that there are lines of egress, entrance and egress when it comes to things like ambulatory services should an emergency arise.

Entrances are properly marked.

and fire plans are in place in case a fire should break out in an event, especially an indoor event in a given property or structure.

And so the council has obviously worked with the Winery Association as well as a lot of other localities and associations coming up with those best management practices and putting them into place to make sure events can be held safely and manage the economic impact of the structure.

So that's all I have.

I'm absolutely happy to answer any questions that may arise when it comes to the definitions that we provided in the code or any other issues that arise when it comes to agriculture, agritourism, and events.

Mr. Shreve, thank you very much.

We're now going to move into the question and answer session.

I'm going to lead with the Board of Supervisors and do a round and give everyone a chance to ask the question if they have one in their mind.

And then we'll move into the members of the Planning Commission who may also have questions.

I would ask that the answers

be fairly concise.

And if they're too brief, we can always ask for further clarification.

But there's liable to be a lot of questions.

So we would like to try to target the answers as specifically as we will try to target our questions.

which would have went after each speaker.

It would have been a whole lot easier to come up with a question.

But one of the problems, most of the problems we're having, it's not so much in the operation, but it's in the part with building things, with site permits and telling the county to go hop.

They don't have anything to do with it.

That has been my main,

They're just going and start doing everything.

They're not subject to E&S, but I take it as one of those.

So they are.

One question is, what is the difference between what you call VDOT and Virginia Department of Health?

Anybody?

Yeah, do you want me to answer and then?

Yeah, so I work for, it's not VDACS.

It's V-D-A-C-S.

I talk soft, you may not hear me, but it's the Virginia Department of Agriculture, Consumer Services.

So it's not Virginia Department of Transportation, but Virginia Department of Agriculture and Consumer Services.

So we actually are, we work very closely with Virginia Department of Health.

They inspect all the restaurants.

As you know, you've got your local health department.

They inspect food service.

And we have a food safety program where we inspect in your county and all throughout the state.

We're responsible, we divvy duties up with Virginia Department of Health, but we inspect the grocery store, supermarkets, all the food manufacturers.

So all the manufacturers in your county is inspected by our program, but we're the Virginia Department of Agriculture.

A little bit.

The other thing is...

I don't know Mary Beth,

Well, no, that's good.

I mean, that wasn't that big of an issue.

I just didn't understand.

The other question is, you had some instances where people come in and build some very large buildings that are pretty much used for warehouses and things like that.

There's no old site by the building department which they would be probably wouldn't always want to be exempted normally because they've got electricity in them but they'll build something like that and call it under this ag thing and then turn around and they have 50 employees in and open to the public well they don't have the proper exits and things of that sort

You got all these people piled in this one area, and there's nothing far as the building code to help prevent these accidents that we normally do.

That's been one big issue.

The other thing I think we've been, not misled, but misinterpreted is no setback, where I think we've been very clear today

If we've got a setback, they've got to meet that.

But we've had some, and it's been some while ago that when they were building, told the planner to stick it, he'd build it any way he wanted to.

And he built it right up on a major highway.

So that should have been addressed.

And I think that's the biggest thing is we need to make sure that our building department is aware

of these things, and that our planning department is aware.

Now, when you're talking about sending out that licensing part that you got to put in the paper and stuff, do they have to send the county or the planner or somebody in the county that same type of aid?

Or does the county have to pay people to sit there

go through all these things and you don't know which paper they put it in.

We use Nelson County Times majority, but instead of us having to go and look for these things happening, that we could be more aware up front and go with and help them to make sure that they're leading codes and what the codes are.

But I'm telling you that most of the people under this act playing with the wineries

I can't speak to the buildings, but as far as ABC and the advertisements I think you're speaking of, one of the things that ABC does, because the code requires it, the code says that ABC is required to notify the chief law enforcement officer of the locality in which the license will exist of the application for an ABC license.

We go beyond that.

We not only do that, and each locality has some discussion about who they think their chief law enforcement officer is.

Some tell us it's their sheriff or their chief.

Some prefers it to be their Commonwealth's attorney.

We typically, and I don't have Nelson County's in front of me, so I don't know the contacts, but we usually contact two to three people.

at minimum, which includes the sheriff, usually someone from zoning, because they're the ones that tend to have the most difficulty with some of the applicants as far as abiding by the laws you're referring to.

And at times, we also have a third or even fourth contact.

We have that same exact problem in Nelson County.

Imagine if you guys have somebody specific that you would like for ABC to contact when there are applications.

In my experience, ABC has been very, very receptive to whoever you want them to notify, they'll notify that person.

Talking about the planning problem, that is probably one of the best

Mr. Rutherford, you have a question?

Yeah, I mean, one, I want to thank you all for joining us today, I guess a COVID socially distanced way.

But, you know, I think you answered the one question and that was, what is the quantifiable amount of

farming and I believe that was answered by Ms. Mary Beth and what it takes to be classified as a farm brewery and I don't know if you said the same thing for farm winery.

I think you said it was 51% production if I'm not mistaken but for a brewery

Yeah, that's right.

That's right.

So yeah, it would be in a calendar year.

So the threshold for farming activities is dramatically different for a farm winery than it is for a limited brewery or limited distillery.

And I think that goes back to the last question about buildings and where does that exemption apply.

So, I mean, the exemption from the building code is not to the

It's not to the type of business that it is necessarily, but rather to the use of the building.

So it's on a property where farming operations take place.

So arguably, somebody that's licensed as a brewery or as a distillery, not a limited brewery or limited distillery, they don't even arguably have farming operations

As it relates to this, now you'll see a lot of places that are out in rural areas.

And they may also be corn farmers or something, you know, they may have another agricultural activity that takes place.

But for farm wineries, I mean, again, it goes to the use of the building.

And there are six criteria that if that building is primarily used for one of those six

things and that these definitions are in the handouts that you have as well.

So if the use of that building is primarily for one of those six uses, then it's exempted from the building code.

But certainly not every building that's used at a craft beverage producer or even at a limited brewery or limited distillery or farm winery, certainly not every single building is

And if I could just add very bad, that goes across to all farming operations, not just farm wineries.

You have farming operations that will have the family's primary living structure, right?

Your house or an office that they use on top of that that is not exempt because it's not used for one of the six purposes of storage handling

And to that end, you can't just build a warehouse in the middle of nowhere and ships things in.

It has to take place where the farming operation, where that farm winery is, and be used primarily for the storage handling or production.

It has to have another use for it to qualify.

And that's a reflection that's been in the code for a long time, knowing that a lot of these farm buildings are

kind of old have been used that way for a long time.

Thank you guys.

One of the concerns has been addressed several times at board meetings was that once we recognize the existence of a farm brewery

Distillery, a limited distillery, that because of the importance of agribusiness to Virginia now, that this is the last influence we can have.

That once a person has been so designated, let's say, as a farm brewery, they pretty much have freedom to do what they want to do.

Is that true, or is it true for limited breweries, limited wineries?

Yes, let me step in there.

And what you're talking about is when they're actually approved by the ABC.

Right.

That's the question.

Okay, I'll begin and I'll let Mary Beth and Kyle add because they've spoke to a lot of the things that you can do and what is allowable.

As far as ABC's concerned, my experience has been the greatest difficulty is the perception between citizenry or local government between what these licensees are allowed to do.

And some of them may say, for example, we're going to be open Friday and Saturday till 8 p.m. And everybody says, well, OK, I'm OK with that.

Not understanding that that is not a restriction that ABC places upon them when they're licensed, or we're not going to have events.

We can't control that because that's not under our purview.

So in that first example, if they're going to be open on Fridays and Saturdays till 8 and everybody says that's fine,

What's important to understand is they have to operate by codified guidelines.

And the guidelines say they can be open to 2 a.m. for on-premises consumption.

Off-premises consumption ends at 12 midnight.

Unless there is a locality, I think Bath County still has, you can't sell until after 12 p.m. on a Sunday afternoon and what have you.

So some of these folks may operate in one way,

And then at a later date as they expand, start exercising some of the additional privileges that they already had, but were not exercising.

And that may appear to the public that they're going beyond what they were initially allowed to do.

And in fact, they've been allowed to do that the entire time.

Now, as far as the specifics of what you can govern, we've all discussed about the agriculture exemption.

They can manufacture their product, they can sell their product, they can ship their product, they can send it out of state, they can send it to ABC.

I think it's important to

To note that as John mentioned earlier, this doesn't stop once the ABC permit is issued.

So if you feel like somebody is violating or is going beyond what they're allowed to do, and John is right.

I mean, there may be things, there may be privileges that they were given that they've just never exercised until some certain

point in time.

But you can always reach out to ABC and find that out.

They have to renew their licenses every single year.

So if there are issues with these licensees acting in a way that's contrary to the ABC laws,

Then at any point during their existence, you can lodge a complaint or a concern with ABC and say, hey, we got concerns about this stuff.

And it may be that it's not within ABC purview, but it may be within ABC purview.

So at the very least, the nice thing that you have with ABC is that these guys are in touch with these licensees all

So, you know, if you call John and say, you know, 123 Brewery, we see this happening all the time and we see people wandering around and this kind of stuff, even if it's not against, if it's not contrary to the ABC law, John could call and go, you know,

These are the things that are raising issues.

We've gotten a call about this.

Just please make sure that you're compliant with all the laws, whether they're ABC laws or not.

And please address these concerns with your locals.

ABC already has those connections with everybody.

And I get calls from ABC regularly saying,

Hey, the, you know, the planning department or the building inspector or this, whoever, in whatever county or the sheriff's office has concerns about A, B or C. And it may not be something that rises to a level of a violation, but

I will tell you from my perspective that my clients want to know if somebody is concerned about something.

They want to address that.

Ask them to be brief in your responses, if you can.

I was talking primarily the scope of the business.

And we negotiate, planning commission negotiates and we approve or disapprove and proffers are offered.

And we have heard in this room that the winery business, for instance, is so powerful that sometimes these proffers

can be overcome.

What do you mean by a proffer?

We say that we want this zoning.

And in order to get, for us,

to agree to the zoning change.

We say the business can only be this big.

They say, the business says, offers the profit.

They say, we want zoning to have a limited brewery, let's say.

And it has been suggested that we, I didn't accept, but it's been suggested that

The wine industry, for instance, is so powerful that sometimes these proffers can be ignored.

Well, the farm wineries don't have to do a proffer, so I think they're in a little bit of a different situation, but certainly for a brewery or a distillery,

If they were to make a proffer and say we won't go beyond this and you all said okay so those are the terms so if you won't have a building that's bigger than this or won't be more than this distance from the road or whatever and they didn't comply with that I mean I think that's a local violation you know that clearly is a local violation if they haven't gotten

The same would be true with a commercial winery, but commercial wineries there just aren't very many of them.

Yeah, I'm not aware of any, although

Most farm wineries that I know already have the agricultural designation which they're going.

They wouldn't need a rezoning clarification.

It would have to be a real special case.

I'm not aware of any, not saying that it hasn't happened.

I'm just not aware of it.

Okay before I go to the Planning Commission members I just wanted to make a statement and that is that Kyle made reference to the gray area and while the benefits of agritourism and what y'all do are obvious a lot of times the costs and the impacts don't come up until later

And in that gray area, there are a lot of Pandora Foxen areas.

If you have something that's allowed, an agricultural area might right.

And most of the county is zoned agricultural.

And if something refers to a single plant in the ground and a single hop,

Then you are in fact allowing a certain use of the agricultural areas that isn't even remotely connected to agriculture.

And while something may be allowed, it doesn't mean that it either makes sense or that it fits the consciousness of people in the county in terms of understanding what's allowed.

Comments?

I'll take that first.

I would say, yes, there's absolutely going to be bad actors.

And in no way do I defend any of that in which the single hop reference.

Now, you know, growing out, I will say that so much of this is not normally based on or, you know, regulated based on taking away something by right like the zoning decision of a property or the building of a building.

So much of the complaints that I hear on is the activities performed in that building or the uses of it with the claiming of an agricultural exemption.

And I think, you know, just speaking from my organization, we work tirelessly to try to educate our members as well as everybody else that the more and more bad actors that take advantages of those

type of situations, the worse it becomes and puts the thing and everybody at risk.

The General Assembly has thus far has made the presumption that we're going to lean on the side of agriculture and the economic activity and the interest in rural Virginia.

But that does not alleviate the concerns when it comes to public safety and public health.

And so it has been, you know, with the gray area I was referring to before was it's up to the locality to decide how much to push it.

Thank you.

Thank you.

respond to some of these things.

Well, I agree with you on that, that it's been, you're not allowed, it's kind of almost been where you're not allowed to touch them.

And I don't like that.

I don't like when farm breweries, wineries come in here and claiming that we can't touch them.

I don't like the fact that they can, they're doing what they're doing and we're not in there taking a look at it, making sure things are safe.

There's a lot of bruise here that are not safe, the buildings where people are.

And I'd love to be able to get in there and tell them you have to swing the doors out, going out for egress.

There's a lot of things like that that are going on.

Yes, I feel that, you know, majority of the long term are doing things right.

They really do.

Mr. Rutherford?

Yes.

To Kyle, or Mr. Street, sorry.

If given the opportunity, I mean, I don't want to waste this time.

I do like to speak in the future about some other industries in our area.

That's it.

I have a question.

In some of these areas where we have concerns, like the ones that our building inspector raised and Mr. Harvey and myself,

Is the only recourse that we have to try to get these things further clarified and perhaps put some of these things back in the box?

I guess I would say the short answer, the short answer is yes.

You know, as far as building code and those kind of things go, which it seems to be is a major concern.

Yeah, I mean, that

It is through the General Assembly, and that's part of the work group that Kyle and I were involved with in 2019, I think, trying to figure out if there is

If there is some kind of something that would make everybody happy and I'm not sure that there is.

I mean, that's ultimately what we came down to, but that's absolutely still a work in progress.

I think it probably has to be done through the building commission really and codifying some of this stuff.

But yeah, I mean, I think from that standpoint, it does have to go through the general assembly.

If it's something that is already within

within the purviews, as we discussed before, that if you can meet the threshold of, is it something that impacts the public safety, health and wellbeing, then you can do a local ordinance to address some of these things.

And then if it's something that's within the purview of already being regulated by ABC, by VDACs, something like that, it could be that you can just ask for additional enforcement on those areas.

So I think it sort of depends on what,

What additional beefing up you're looking for?

One of the problems in that work group that we quickly discovered was how do you handle new build?

That was pretty easy.

You set out, you know, okay, if you're going to build a new structure there, what do you do with a mixed use building that's already there and already been there?

Because previous practices, you regulate the building in the area that it was built, what the code was in the area it was built.

And a lot of these, because there was no code,

Would they be grandfathered in already anyway, which quickly it was weeded out that that wouldn't solve the problem already.

That wouldn't give you any more authority than what you already have now.

And so that has been a big sticking point is how do we figure out how to get this done without causing some of these renovations that it would require on some of these buildings are 300,000 to $500,000, the one economic impact study that I saw on it when we looked at it.

which would put some of these buildings out of business or some of these wineries out of business, not all.

And so the question becomes, how do we do that?

And how do you do it over a slow process?

And that's what the general assembly and the work group wrestled with two years ago that I think is still a work in progress.

I'll say, we're still working on it.

We still meet regularly with the association of counties has worked on it.

The fire marshals, fire chief building code.

We have conversations with them yearly.

on how do we address this and how do we fix it?

I'll add just one thing really briefly, if I may.

One of the things that ABC began to do and largely just continued during COVID, but for the three or four years prior was certainly something I did often was create small work groups

in certain areas and invite either certain licensees from certain groups like all farm wineries or a mix for example in a county to just you know share information, let them know what I'm there to do to help them in case they didn't know me well.

Perhaps it would be of benefit in your locality

And I'm happy to participate, as I'm sure some of these other folks may be as well, although I won't speak for them, is to just maybe invite some of these folks together so we just understand what's going on and the whys behind how some of this operates.

And that often helps.

If I were to go out to a particular licensee and say, you need to do this today, you know how I'm met when I do that.

However, when I've had these meetings, it's been surprising to me how open some of these folks are about what their real concerns are because then they began to see me as John Kraft and not senior special agent.

I've been here 20 years and I decide, you know, about your license.

And they saw that I was someone that wanted to work with them and that I had concerns.

Sometimes I couldn't even enforce those things.

Traffic, for example, I don't have any purview in.

But when I say, you know, there's been a lot of accidents in here.

The sheriff's office is concerned.

You know, what are some things you can do?

And they tend to be more receptive in these type of environments.

And so in the future, if you're interested in creating some type of work group where you'd like to sit down with some folks, I'm happy to do that.

One of the main things that Chuck had talked about a while ago, I believe that process normally on agriculture exempt buildings, we do allow them, we don't charge for building this unless it has electric or something in it, but it just gives them, their office, an opportunity to know that this is happening and it's

Well, even in Dylan's case, it's so much better for them to come out and find, well, wait a minute, I can't sit and just build a ramp on top of the line.

I've got to back off a little bit.

So if you can't, there's just nothing to have any enforcement on.

It would just have the knowledge that it's going on.

But we're very loose on the normal agricultural building.

But what happens is so many times they will build that non,

with that exempt agriculture building.

And then the next thing you know, it's a public garage or it's something totally different from what they specifically built it for.

I have one more thing and then we'll give everybody one more chance to go around the questions if anybody has.

One of the things that, again, is one of the costs to the county is the seasonality of these businesses.

The reality is that all the special events, all of the high tourist traffic, all tend to happen at exactly the same time.

So whatever limitations are put on the number of events that can go on, there's absolutely no limit

in total of the number of events that can go on at one time.

That is something that impacts the other gray area, which is the health and safety of the residents of the county and such.

Is there a gray area within we can operate similar to the gray area under which these breweries, distilleries, and wineries can operate?

Yes and I will add though you know it does have to be leveled equally across or you know each you know if you're holding a particularly particular type event like a wedding you know where you want to try to limit that you have to hold each individual business holding those I understand your point obviously July 4th weekend is going to have a lot of those events all at the same time for us in a hypothetical you know cumulative impact that's hard to measure because you are limiting

The activity on a given business or a particular licensee rather than you know trying to space them out via ordinance I think would be particularly difficult without being pretty arbitrary or you know it would have to be a first come first serve where as many you only have so many licenses per given weekend I think that's that's going to be a harder a harder ordinance to craft in my opinion as to how you would do that but

Marybeth is right.

Okay.

I want to thank you all again.

Oh, I didn't give... Dylan, do you have anything that you wanted to add to this?

Okay, Maureen?

Okay.

All right.

Thank you all so very much for taking the time for this.

It has been really informative and really helpful.

And don't be surprised if now that we know where to find you, that we do.

Thank you.

I'm just curious about something.

Have we ever looked at the school system, the county combining plans, and is there any reason that they're separate or is there an advantage to that?

Yeah, we have looked at it.

At one point, as you probably know, the schools were annually or periodically pitting theirs out.

We've continued throughout my administration to say that local choice,

about the insurance on a regular basis, then we moved to local choice.

It just makes it easier and competitively, you know, the state, I don't remember which state agency it is, it's a local choice program, and they are responsible for making sure the rates are competitive and the coverages are good.

It really works well for most of the counties

I just find it interesting because where we as a county for key advantage 250 or $778 for the employee school system 604

Well, but if they, it's almost like the fire and rescue.

Well, that's for the province, you know.

Their coverage is their local choice.

They don't have their coverage or less than the two programs that we offer.

What do you mean by less?

The benefits.

Gotcha.

They just call it the same thing, but it's maybe not the same thing.

Right.

Right.

And they don't have it.

They don't have it.

But it's like buying a new car.

If I may, this is an outstanding benefit.

I'll just give an example.

The continuation of significant insurance bills that they have to pay for would be significantly mitigated if they had this coverage.

So I think our people are very happy with the program.

Okay.

So is this an item for action today?

Yes.

OK, we have a motion to second.

Ms. Moyer?

Mr. Barton?

Yes.

Mr. Redinger?

Yes.

Mr. Parr?

Yes.

The service authority, the more they be aware of this, is working with the Virginia Resources Authority to finance their Winding Green Wastewater Project, which is, as I understand it, they're going to revamp, reconstruct their wastewater treatment facility and their election facility.

It's about a 14 million dollar project.

They look at USDA rules of element

VRA has better rates, better terms, so they've been working with the Virginia Resources Authority.

And one of the things that VRA requires is more obligation to the county.

What that means is if they, the service authority, would not be able to pay their annual operation costs, then the county would be morally obligated to

assist the authority with whatever funding they needed.

It's sort of a contradiction in the law or in the terms of it because even if you approve this, it says you're not obligated should they have a shortfall that requires some outside assistance, i.e.

the county.

But as you read down through the document, it says if the county doesn't do that in the event they have a shortfall and they ask you for funding,

then VRA can go to the governor and say the county's not paying you need to hold all those state funds the county receives so it's sort of weird but it's not unusual that the funding entity will require more obligation just to you know assist with ensuring that if all else fails someone's going to

The rate structure, I can't remember what they got.

I think it's maybe less than 1%.

So it's very favorable.

They have to do the project.

They're under a consent order from DEQ.

So there's no going back.

So today, all the authority needs is the board's consent to consider approving the moral obligation.

It's a resolution.

and such time as the authority needs it to be formally approved, which is probably going to be in the next 30 days or so.

So I can answer questions about it.

I'm very familiar with both.

We do it all the time.

No board.

This board cannot obligate another board.

Yes.

This is just some weird formality.

I mean, I will say the usage of even the term moral obligation is just, you know, I've been in court many times and moral obligations are kind of an unenforceable contract.

So we're basically the same.

We're generally supportive of it.

and looking into the future in the event that there was some default.

If I may, I'll try to be quick about it.

The way this would be is worded, subject to formal approval, the draft is in your package.

Each year, I can't remember if they need support or not, the service authority director would have to send

and then we would have to include it in the budget.

And then if the board didn't approve the funding, well that's when VR has the eye.

Well then you have to keep it on your books and until such time as the state will ever see it, they don't pay if they continue to need that assistance.

The service authority staff has said that they don't have any concern.

They won't be able to pay business.

I think it's 20 or 30 years.

I guess time will tell.

But the buck stops here regardless.

Yeah.

But the fact is that ultimately we are all on the same team.

We've got different roles and different missions.

Is this a good time to look at something that's been floating out there?

You can certainly do that.

That's a concern I've expressed a little bit.

I looked at VRA and included it in your package.

It's something that maybe we'll select.

But at this point, the service dog is under consent decree with DEQ.

It's been in place for a year.

They have to do something.

Consideration of the authority

I just, you know, is it something that should be done or not be done?

You know, we've seen it happen.

It's like the Valley system got sold.

It's not working without

The information I included here from VRA is where their analysis is in 2026.

Their operational costs and their debt service will result in a balance of $106,000, which is not a lot of money.

I'm not sure it factors in potential capital projects that they undertake.

My concern beyond that is will the authorities say the county's projects in Route 29 quarter require more capacity than they're able to provide?

What happens then?

Okay, we have a motion and a second.

I move.

Mr. Harvey?

Yes.

Mr. Rutherford?

Aye.

Mr. Barton?

Yes.

Yes.

This is, again, more informational.

We're moving forward with that 2012 bond refinancing.

The board, we are asking the board to continue this meeting

Next Thursday, the 25th, or sometime next week, it's going to be important to act on the formal resolution authorizing the refinancing.

And that's really it.

We're still on track.

I think we've got statements of approximately $185,000.

you know, Commissioner of the Dead, everything that Mr. Cooks pretty much overused the board when he was here a week or so ago.

But nothing today other than to advise the board that this is moving on to inclusion and we want the board to meet sometime next week, practically the 25th.

Back when he was here, weren't rates skipping a little bit up?

Yeah, they still are.

They moved up yesterday because the equity market went down a lot when the bond market went up.

So if I may, in response to that, it was probably very difficult for Davenport to negotiate with the bank because we wouldn't close if we wouldn't have the BPSA until late May, late April, and the rates would flow.

But I thought it was something we was going to do that was going to lock the break.

No, so we're locking it in.

BB&T is committed to hold this break until sometime in late April or early May.

So what we're going to do, what's came against the floor,

So hopefully we can combine our consideration of this revolution at the same time.

I think you're going to find in Candice

Thank you, Mr. Carter.

I developed this short PowerPoint based on the executive summary of the introduce budget, which is also in the folders.

So it's the same information, I just broke it down a different way.

And this is where I have 2021-22 budget introduction.

We have a balanced budget of $41,714,847.

We are proposing to use $1,210,782, which is carryover funds from FY21 for one-time FY22 capital outlay expenses.

And this box breaks down our FY21 and FY22 revenue

and compares it side by side with the dollar change and percentage change.

This is based on current tax rates and current revenue strains.

So our dollar change in local revenues is about $325,455.

The state revenues decreased $634,972.

Our federal revenues increased by $1,478,468.

and that does include our FY22 COVID-19 stimulus funding that we anticipate to be $2,921,411.

Our other revenues increase $137,449.

That's primarily due to a transfer in of our reassessment set aside funds.

And we propose to use a yearning balance equal to

FY21 carryover funds for the Capital Outlay.

And so that is a decrease of $1,852,638 from FY21.

So this is a snapshot of FY21 and FY22 recurring funds that were available for use in the FY22 budget.

We began FY21 with a recurring contingency of $489,953

And that was used entirely on one-time expenses, so that comes back into the budget fully.

In FY21, we covered capital outlay items with recurring funds in the amount of $637,103.

And the subtotal of the FY21 funds available is $1,127,056.

We added our FY22 estimated increase in local revenue of $325,455.

And then, as I mentioned before, the transferring of funds for the reassessment of $255,377 for internal available funds of $1.7 million.

In terms of expenditures, FY22 including staff changes,

for proposing an estimated budget of $41,714,847, which is a decrease of $546,238 from FY21's amended budget.

We are including a recurring contingency of $356,566 and maintaining the school resource officer reserve of $207,132.

This details some of the proposed expenditure increases.

We proposed net departmental operational changes of an increase of $301,336.

This includes the 3.7% increase in health insurance and also recommended new positions that we'll show here in a minute.

The balance of the FY22 reassessment contract work and Board of Equalization costs

which are offset by the transfer in of the Set-Aside Fund of $194,454.

The post-catapult outlay increase is $163,987.

Our regional jail increase expenditures is $206,663.

Our non-departmental, which includes agencies and other

Things increases by $47,263, and this includes a 5% proposed salary increase and the associated benefits of $271,692.

The budget also includes school operations increase, including the school nurses as requested at $206,800.

and that includes a 5% salary increase plus a step in those associated benefits of $793,624.

We also include an increase in Virginia Public Assistance which is the DSS and the local increase is $23,639 and that includes a 5% salary increase in those associated benefits.

Let's see.

So our post-hour benefit increases break down as $271,692 for the 5% increase for full and part-time employees.

The 3.7% increase in health insurance premiums for full-time employees only.

As you know, this maintains the same plans and levels of coverage that are currently offered for an increase of $27,802.

And then the FY22 increase in workers comp insurance premiums is expected to be around $21,000.

We had an increase in our experience modification factor from 1.06 to 1.35.

So the total proposed salary benefit increase for FY22 is $320,494.

The proposed new positions included in the budget are full-time buildings and grounds person who would be in general maintenance work and also do a lot of trail maintenance that is increasing due to the Blue Ridge Tunnel Trail.

That's $53,422 in salary and benefits.

Next is a full-time solid waste transfer station scale house operator for $48,507.

dollars in salary and benefits, a part-time social media specialist in the tourism and economic development department, and those wages would be $23,791, and then a full-time library position which was included in the library budget request for $40,191 in salary and benefits.

And then lastly, I believe we have three vehicles requested

from the Sheriff's Department for new vehicles and equipment for $206,800.

And that is the end of the brief synopsis.

Quick overview.

You would have a contingency of unallocated recurring funds of $356,566.

How much of our recurring is being utilized?

Was it 600?

How much recurring revenue is being used for capital expenses?

So it's like that 200.

Obviously the pay raises would be a recurring expense.

And then $341,460 in return funds.

Okay.

I believe if Kim would correct me, one of the things that is in

After that, the only other question I have is in our budget that you're showing us, is that utilizing the potential $2.9 million CARES Act funds?

That is all I have, Mr. Chairman.

And the school operations increase, including school nurses as requested, 206-800.

That's what they requested.

They provided, just we'll provide it to you at the work session if it's not already in the package.

They haven't approved their budget yet though, have they?

No, they didn't.

They did?

Okay.

Wow.

Great.

Yeah, but the biggest thing that you have to deny, there's stimulus money there.

And there's unspent money there.

When will we have an update from them on this past semester?

Yeah, I know what you're saying.

Because we allocated the prior semester $400,000.

So, you know, maybe like a couple hundred K. But we don't know yet how much of the education money is there to get from this recent American Rescue

Absolutely.

I, you know, this program was predicated on a ban side view of economics as opposed to this fly side view, so on.

I don't know if you're not familiar with it.

Are you familiar with it?

They would be spending for capital.

That's what we're trying to better understand.

We've been participating in the National Association of Accountants webinars on this year's stimulus program.

We were waiting on

Since the Democrats made it, the ban side is what they're looking for.

There's also in that ARP a significant amount of funds.

For example, that payroll protection program is still there.

There's a program that's really

But I assume that the money that would go to the communities

You all will decide how to use the money.

Next year, we might have all the money.

I'm sorry?

Yes, for your taxpayers and for the government.

Mr. McGarry, I've got a question.

We only did bonuses.

Well, the basis of that 5%

And also we don't have the actual personal property tax value.

That work hasn't been completed by the commission's office yet.

So our numbers are based on estimates.

This appears to be the time we do have some available money to do some raises.

Well, as I just said, if you don't know some of the things that Candy outlined, positions, the rates, it's up to the board.

We're just proposing that we have to decide.

And if I may, I would just like to say, what an excellent job Candy has done is working continuously to

Any other questions?

Mr. Chairman, may I just add a couple other things?

Oh, of course.

I just want to note that there's a new report in your budget analysis here.

Actually I'm in the like expenditure form.

There's two different reports and one of them shows the dollar increase and the cent increase from last year.

That's kind of new but I just wanted to point that out to you all.

So they don't have the same information, generally speaking, but the one report shows the increase in dollars and percent.

So that is that increase

The dollar percentage increase is before any administrative recommended deductions that would reach the right of us.

So that's why some of the percentage changes, which is a change that staff made that's off to the right, it does influence those percentage changes.

So I'm trying to capture that in the overview document.

Next item, other business?

Okay, let's do that now.

Let's talk about the work schedule.

So we have already proposed, where's that at?

The 25th?

That's what the financial advisor asked for as far as to do financing.

If you're open to it, you can try that and continue to service it.

I got a doctor's appointment in the morning.

I would like to get started on this really as soon as we can.

I'm fine with that.

So we just said 23rd and 25th.

I mean, I'm fine with putting it on the calendar.

30th and the 1st.

We can also react to that on the 25th.

Honestly, we should see how far we get on Thursday.

It ain't going to take it long.

It is not going to take long after Tuesday.

OK.

So we revisit it then.

OK.

23rd and 25th.

And it's 1 o'clock.

Not in the evening.

One o'clock's a good time.

Okay.

So what do we need then?

Yes.

See what?

Yeah, that's where the assessments are.

It's an old board room it is.

I think it's a real room.

Tell him that when you update the farm brewery building codes.

Do all that at one time.

So the old board.

Okay.

So thank you, Ms. McGarry, for all that, for getting us out the door here.

Other business?

Mr. Parr?

No, sir.

Mr. Rutherford?

Mr. Harvey?

I have one thing, which will be coming up at our

April board meeting, I was able to ascertain that this has to do with the proposed restoration plans that ACP has for the 250 property owners in Nelson County that now have easements across their property so a pipeline that's not going to be built and they

FERC has asked for comments on those restoration plans.

There's nothing included in those plans that has anything to do with the ability of any of the property owners to somehow negotiate to get their easements back should they want to.

All of those property owners are encumbered with

Easements on their properties, which could decrease the value of their property, could make transfer of properties difficult, makes it difficult for them to have particular uses on those properties.

And therefore, I would like to draft a letter that requests that FERC consider scenarios by which those property owners could in fact

We get the value of those easements.

It's also going to make title insurance more possible.

I don't know what they're going to do, but I think they should certainly consider doing it.

I think people should have the option if they would like to

somehow negotiate to get their easements back if they could.

Some people will have spent their money, some people will not.

The easements are still owned by Dominion.

Dominion has, they still have the title to the easements.

They've written them off on their balance sheet as if they have no value.

And they've taken the payments that were made property owners as a loss.

So the door is open for them to even give those easements back to property.

Yeah, we became interveners.

So I've just drafted a letter that basically says that folks should consider making a hold of these property owners both in the restoration.

So if anyone has more questions, I'll be glad to.

Talk to you all about it, but I'm going to probably have a letter.

Mr. Chairman, I move that we continue this meeting to March the 23rd at 1 p.m. Second.

Mr. Barney?

Yes.

Mr. Barney?

Mr. Parr?

Yes.

Yes.