November 22, 2004 Board Room Alcoholic Beverages Division
Members Present in the Chambers:	Gayle Collins Scott Doll Dick Stoffer Mary Hunter
Guests Present:	Sheila Douglas, Iowa Wholesale Beer Distributors Cheryl Sinclair, Iowa Wholesale Beer Distributors Lyle Stutzman, Johnson Brothers Jim Clayton, University of Iowa Stepping Up
Staff Present:	Lynn Walding Jim Kuhlman Judy Seib Nicole Gehl Karen Freund Linda Cox Liz Shipley Diane Natale Jolene Eriksen Derek Lippincott
Counsel Present:	John Lundquist

Call to Order

Tribute to Carolyn Cavitt

A memorial page was put on the Iowa Alcoholic Beverages Division website and will continue to be posted there through December. Two articles that appeared in the Iowa City papers were also posted.

The Commission observed a moment of silence in memory of Ms. Cavitt.

Introductions and Announcements

Employees Dick King and Karen Bolme have retired since the last Commission meeting. No one has been hired to fill Mr. King's position as the maintenance person. During Administrator with the Coffee meetings, complaints were received regarding the amount of time licensees waited on hold to place orders. Consequently, when Ms. Bolme retired, the decision was made to hire two people - Kelly Livingston who was introduced to the Commission and Brenda Pappas who was unable to be present.

Jim Kuhlman was welcomed back to work after having been hospitalized with pneumonia and unable to work for approximately three weeks.

Derek Lippincott, who designed many of the changes seen on the webpage, is assigned the task of keeping the webpage fresh and entertaining. He also took pictures at the NABCA Administrator's Conference held recently in Des Moines.

Employee Recognition

Minutes of Previous Meeting

Eye on Iowa

Tobacco Enforcement

Mr. Walding added that tobacco agents meet with partners to determine why the "unable to complete" checks were not completed. Reasons include: the business discontinued selling tobacco; and it is a seasonal business that was not open at the time of the check.

Ms. Gehl stated the "unable to complete" checks on the current report were businesses that had renewed their tobacco permit but were not currently selling tobacco. ABD pays for those as long as there is a valid permit in place. In the cases where it is seasonal such as a golf course, ABD does not pay until the partners return and complete the check.

Recognizing that, due to human error, 100% compliance is probably not an achievable goal, Mr. Walding has set a compliance goal of 95%. Although a 95% compliance goal is a tough challenge, it's one the division hopes to achieve this year or in the near future.

In response to Commissioner Doll's request for a comparison of Iowa to other states, Ms. Gehl replied it is difficult to compare because each state has different enforcement programs and different sampling techniques for the federal program (SYNAR). SYNAR ties substance abuse money to states enforcing their underage tobacco laws. Although each state has to have at least 80% compliance, each state negotiates their own technique for achieving that rate with the federal government. In Iowa, the Department of Public Health negotiated with SYNAR before ABD started tobacco enforcement. Each year Iowa does 800 checks as a random sample from all retailers to comply with SYNAR. As long as Iowa has over 80% compliance, the state continues to receive the substance abuse money. ABD has tried various times to get the SYNAR agreement changed because it's confusing to the public when two different compliance rates are announced. However, the Department of Public Health is reluctant to change the standard because they want to be able to compare that number over time. Last year, the reported SYNAR rate was 5 ½% noncompliant for 800 checks; whereas the checks done for the 5,000 retailers in the entire state resulted in about 11% noncompliance - twice what SYNAR reported. Iowa's compliance rate has been 89% for the past couple years. Some states are happy to achieve an 80% compliance rate while a few states have rates in the mid-90's.

To date, over 1,000 clerks have been trained in tobacco enforcement. The division is making a big push in November and December to schedule and promote classes. It is more difficult to get people in rural areas to the classes. The division is trying different techniques and working with retailer associations to find different ways to get people informed and registered. Brochures are sent to all retailers in counties where training is scheduled. In addition, the division provides a sample press release to all trainers and next year it will be mandatory that trainers issue a press release. Commissioner Doll commented on the excellent article published in the Council Bluffs Nonpareil newspaper regarding tobacco compliance.

Mr. Walding stated he believes retailers could do better with training and he is not satisfied that only 1,000 people have been trained. There is money set aside from the civil penalty fund to provide the training. Although retailers can do their own training program, they get the "get-out-of-jail-free" pass one time in 4 years if they participate in the division's training program. ABD will also provide training on an individual basis at the retailer's establishment if the retailer has 40 or 50 people they want to train. Ms. Gehl added that Quik Trip is training 250 people this month in special classes in Des Moines.

The division is participating in a 4-state study through the Responsible Retailing Program. A 20 page document is given to members of the control groups with questions about their store policies, hiring and management practices and alcohol and tobacco training. While participating in this study, Ms. Gehl discovered in talking with the store managers at convenience stores that their training consisted of 3 hours of training including everything from training on how to use the register to how to keep people from stealing gas. Alcohol and tobacco training were a very small part of the 3 hours training; however, upon further questioning, she learned that the retailers were sending their employees to the ABD program which provides in-depth training on how to check an ID and refuse the sale. It was promising to see that the training is effective for those people who take advantage of it.

Mr. Walding commented that bar owners in college communities continue to ask for training because they want that "get-out-of-jail-free" pass. Last time the division offered training, the division paid the registration and the cost of getting certified. Commissioner Doll suggested that the positive attributes be posted on the website and also mentioned when profiling an account for the Eye on Iowa articles. Although, there is nothing currently focusing on the retailers, the division does have an "Iowa Icon" that recognizes the law enforcement trainers.

Financial Report

Through October liquor sales are up almost 9% with wine tax collections up about 11% and beer tax collections down approximately 1%. Strong growth in liquor sales continues and is expected to continue. Contributing to the growth is premium purchases as well as the 21 - 29 year old segment which has a growth rate of 2% per year.

Revenue is outpacing gallonage increases due to trade-ups in the market place. Jim Kuhlman commented Iowa tourism increased significantly in the last year and liquor sales and tourism go hand-in-hand. In addition, the young crowd is now drinking more of the sweeter spirits rather than beer.

When Commissioner Collins asked about the practice of selling a full bottle of vodka for $120 in a bar, Ms. Seib replied bars are not licensed to sell liquor by the bottle. A bar check, done by local law enforcement or the Department of Public Safety, probably would not be looking for this type of violation as long as the bottle was not leaving the bar. Commissioner Doll stated that it is common practice in Las Vegas where bars have a rule that a person cannot sit at a table unless a bottle of liquor is purchased.

Lyle Stutzman stated that the new generation is definitely drinking sweeter wines and distilled spirits. Flavored products are big. Although native wineries are growing at about ½ of 1%, it is such a small percentage that it is not really a factor. Mr. Stutzman commented that some wineries are buying the wine in bulk and bottling the wine in Iowa. Ms. Seib stated that a native winery is a defined term under the Statute because it's wine that is fermented and processed in Iowa. Although people do bring in juices, they are supposed to ferment it in Iowa. One winery was fined by the ABD and the federal government for buying wine in bulk that was fermented and bottled in California and then putting it in a bottle marked as an Iowa native wine. That winery has now been properly licensed, not as a native winery, and can legally bring wine in bulk and label it under the proper licensure. The industry has asked for some rule making and Judy Seib is going to work with them to get some things clarified.

Liquor Sales
Three years ago liquor sales exceeded the $100 million mark. Four months into this fiscal year, sales are already at $50 million. Gallonage sales are at 1.2 million gallons through October.

Wine and Beer Tax Collections
Beer tax collections were down slightly for the first time since 2001. Wine tax collections continue to grow in fiscal year 2005.

Sales Comparison
August and September sales increased 14% over the same period last year. The bulk of the holiday items were shipped in October.

Product Buy-Outs

Due to no buy-outs during the month of September, profits are down slightly.

Jim Kuhlman explained the division tries to average an 8% return on the investment and sell the product in 30 - 60 days. Product that doesn't turn within 60 days is not purchased.

Counsel's Report

Waterloo Police Department did a number of age-compliance checks that are reflected in the status report. Also, the Department of Criminal Investigation did a state-wide inquiry into the status of electronic amusement devices, things that look like slot machines, in bars and other licensed establishments. DCI did a sweep of those to assure that the devices were compliant with new state law regarding registration and placement of a registration sticker through the Department of Inspections and Appeals. There were a number of devices that were found needing corrective action. Problems with the devices include: 1) devices may not be registered properly; and 2) a registration sticker doesn't necessarily mean the device is legal.

In response to Commissioner Collin's inquiry about what constitutes an illegal activity, Mr. Lundquist replied the majority of illegal activities on the status sheet is either failure to cooperate with law enforcement officials or violations of the nudity statute.

Mr. Lundquist reported that under the Iowa Statute, there are two different entities authorized by law to prosecute a violation of liquor offense. The local authority can choose to try the case before the city council or county board of supervisors and impose a sanction that then would be subject to review by the Alcoholic Beverages Division. Or sometimes, the local authorities will prosecute the hearing in front of the ALJ and that's also subject to review by the ABD Administrator. The other entity is the agency itself through the Department of Public Safety can prosecute offenses and that's where Mr. Lundquist gets involved. The majority of the local authority cases on the status sheet will involve license denials. Primarily, if the local authority chooses to deny a license, then it is up to the local authority to come forward and present the case.

Mr. Walding added that the A-1 code on the status sheet denotes sales to minors and the B-1 code signifies gambling first offenses. Notices of hearings will go out soon with an offer to settle and that will clear many of the cases from the docket. In checking with the Waterloo Police Department, Mr. Walding found that about 40% of the time the youth were able to buy alcohol from the retailer when the police did the compliance checks. Compared to tobacco compliance, that is a very high rate. Mr. Walding attributes part of the reason for the high noncompliant rate to the recent lack of enforcement efforts. Retailers tend to get sloppy when enforcement is lax. He cited an instance with the Iowa City Yacht Club which was the initial feature story in the "Eye of Iowa". The doorman mistakenly let an underage youth in and the bartender relied upon that and made a sale. Johnson County did not prosecute it but the Yacht Club still faces administrative penalties. It doesn't mean the Club is not a good establishment but it did catch the division's attention.

Mr. Lundquist commented that enforcement is the key. For years the Iowa City Police Department wrote tickets for possession under the legal age and it never hurt the person selling the product. When the police did a great deal of enforcement and started ticketing the establishments, some bars were soon facing license revocation.

South Beach in Carter Lake was recently shut down. When the Carter Lake city council previously tried to shut the bar down, the division overruled the city and granted the license until South Beach proved they were not good operators. There were two recent shootings at the bar and ABD shut them down because of the violence at that location. Apparently there is an attempt to sell the property and change the ownership; however, the division may hold on issuing the license to a new operator depending on what actually happens with South Beach.

In addition, Club Statik in Des Moines is facing a suspension for sales to minors and violation of the local ordinance on the wet tee-shirt contest.

Rule Making

Judy Seib reported that in the year 2000 the City of Des Moines was working with Dream Works to bring GameWorks into the Court Avenue district. The division initiated a rule making in August 2000 to allow industry members who had some ownership interest in a wholesaler or manufacturer's license to also hold a retail license if the ownership was so small that it had no influence over the day-to-day activities. After the rule became effective in December 2000, the Iowa Beer Distributors Wholesale Association sued the Iowa Alcoholic Beverages Division. When the District Court affirmed the division's rule making, the beer wholesalers appealed the decision to the Supreme Court. The Supreme Court ruled that the division had gone beyond its statutory authority and remanded the case back to District Court for the court to give direction to the agency to rescind the rule.

A corrected copy of the "Notice of Intended Action" was distributed and explained to the Commission members. The rule will be amended so that the language is the same as it was prior to the rule making in August 2000. Iowa Code Section 123.45 states that if a person has a wholesaler or manufacturers license, that person cannot hold any interest in a retail license. There is a strict timeframe for the "Notice of Intended Action" to be filed and published in the Administrative Rules Bulletin. If the rule is filed on December 3, 2004, it will be published in the Bulletin on December 22, 2004. The public hearing would be held on January 11, 2005 with the first possible adoption date by the Commission occurring on January 26 and the last possible date on January 28, 2005. Following the Commission approval, the rule would be published as adopted in the February 16, 2005 Bulletin with the first possible effective date March 23, 2005. The Commission can adopt the rule via a teleconference meeting if they wish to.

Mr. Walding commented that GameWorks never came into Iowa and no-one ever received a license under the rule. Mr. Walding acknowledged that it was an important issue to the Beer Wholesalers due to the 3-tier system.

Electronic Update

Beer and Wine Tax Collections Software Information Technology Enterprises (ITE) is working with the division to automate the beer and wine tax collections and reports so all reports will be on-line. The process is nearly 90% complete. According to Mr. Walding, the project should be completed by the end of this fiscal year.

On-Line Licensing Program
Karen Freund reported that the current licensing system will be replaced with a new electronic on-line licensing accessible through the division's website. All renewal and new licenses will be completed on-line. Dram shop companies will have an access code to click into files to approve dram shop insurance. Licensees will not be able to submit their applications to their local authorities without the proper attachments. Electronic licensing will transfer the burden to the licensee to get all their paperwork correct before it can be submitted for approval. It should take approximately 18 weeks to build the program, get it on the website and do some initial testing. Eighteen cities and five counties in central Iowa have agreed to participate in the pilot program. An informational meeting will be held in early December to discuss the role of the cities and counties in the process. Although there will be major changes, the process should be easier and faster for everyone.

According to Mr. Walding, a system has been devised for people who do not have access to a computer. Those individuals will go to the city offices or to the local library or, as a last resort, to the division office to enter their information. Part of the test is to see how well the program is received. Basically, the division is forcing the cities, counties and licensees to go electronic. The obvious benefit is staff can be redirected to more important functions other than inputting data that can be entered by others. The project started about 3 years ago when the license application was reduced from 12 pages to 4 pages. The drawing of the licensee's premises required on the application will now be retained at the local jurisdiction rather than retained at the division.

Ms. Freund stated that the lease, the sketch and the notary page for a new license can not be kept electronically; they will have to be printed and left at the local authority. In reply to Commissioner Doll's query about whether the new system would be daunting for a new retailer, Ms. Freund responded that the system is self-explanatory and very user-friendly with helpful aids. She commented that some licensees are unable to read or speak English and they have their children fill out the application. Commissioner Doll commented that for a small percentage of the licensees, the applications needs to be very simple. Also the toll-free number is available for licensees to call for help in completing the license application. Ms. Freund commented that the system is designed so the local authority, as well as the division, can assist licensees in completing the application. New license applications will require more steps to complete the license application; however, if something is entered incorrectly, the system will not let the applicant proceed until the information is entered correctly. Renewals will all be preprinted and licensees will verify the information is correct.

All fees will be collected electronically - no checks or credit cards will be accepted. If a licensee is uncomfortable with submitting their banking information, they can pay the local authority and the local authority will enter their banking information.

In response to Commissioner Collins inquiry if the license application was in any other language, Ms. Freund responded at this time the application is only in English. Ms. Freund will suggest the possibility of another language at her next meeting with the IT people.

Previously the notice of renewal was mailed to the city clerk who forwarded it to the licensee. The new procedure notifies both the licensee and the city clerk by e-mail that it's time to renew the license which will save time and eliminate postage costs. The renewal notice will print all the information and the licensee will only need to update information. Certain information fields cannot be changed and if the licensee tries to change the field, a message will pop up advising the licensee to contact the Iowa Alcoholic Beverages Division. If everything is in order, the license could possibly be issued the next morning.

Commissioner Hunter thanked Ms. Freund and the licensing staff for the help they have given a Hy-Vee employee in her transition of taking over for a former employee.

Mr. Walding added that the division is still working toward on-line orders for liquor products. As a charter agency, the division received a grant in the amount of $110,000 for computers and those will be ordered soon. The warehouse tracking system will also be reviewed in the near future.

Legislative Update
Nicole Gehl reported on the implications of the recent elections with the Senate being evenly split. It appears there will be co-committee chairmanships and that committees will be evenly divided. Anything getting out of committee will have to have bipartisan support. The Republicans are divided because of the continuum of conservatives, moderates and even liberals which will moderate the agenda. The Governor is in a unique position to influence policy during the coming session because of the way the elections turned out.

Drink Promotions
Lynn Walding is working with the Governor's Office, as a part of the Charter Agency, on drink promotions that were part of the White Paper. Ms. Gehl and Mr. Walding recently presented the paper to the Iowa Coordinating Council and to the private college presidents and they are pressuring the division to do something, particularly regarding drink promotions. The Iowa Coordinating Council assumed that since the Commission had made the recommendations they would go to the legislature and advocate those; however, Mr. Walding thought the Commission's intent was to let the various special interest groups do what they wanted with the White Paper. Mr. Walding will meet with the Governor's Office to see if the Governor has a position on this.

Civil Penalty Fund
Another issue Mr. Walding intends to pursue with the Governor's Office is the Civil Penalty Fund. Approximately $160,000 in civil penalties is collected each year and Mr. Walding wants that money returned to the division to use for educational training with a get-out-of-jail-free pass for the alcohol servers. He had requests in Iowa City, Cedar Falls, Ames, Dubuque and several other communities to do training and there were no funds to do it. The money for the Iowa City training conducted a year ago came from a special $10,000 grant.

Military Liquor Sales
The division would like to sell liquor to the two military bases in Iowa; however, the division is only authorized to sell liquor to Class E licensees. It is not clear whether the division can or cannot sell to the military. Mr. Walding would be willing to discount the liquor and sell in other states as well as Iowa if the division can be competitive and be their supplier. The benefit to the state is the revenue that would be made from those sales. Federal law requires the military to buy its liquor from the cheapest source available. The bases currently purchase their liquor from AFIS in Waco, Texas. AFIS would entertain an option to purchase from ABD; however the 50% markup is too high.

Because of the equal protection argument, the division has not sold to any military bases at this point. If the division does sell to the military at a discount, then all the licensees would be able to come in and make the argument that it is unfair for the military to buy at a discounted rate; whereas, if the division can get a law that says that the division can specifically negotiate with the military, that would be different. The division can't charge the military a license fee and a licensee fee for a Class E license is fairly expensive. The division will have to get special legislation to carve out a category specifically for military sales.

Native Wineries
The division will meet with native winery owners to determine if they want the Iowa Alcoholic Beverages Division to assist them in marketing their product throughout the state and sell the product directly to class "E" licensees. This issue was discussed last year and some members were interested; however, it is not known whether it is the interest of all Iowa wineries.

Liquor License Consolidation
Ms. Freund has consolidated liquor licenses to eliminate the need for different licenses due on different dates. If a licensee previously had three licenses, the licensee now receives a primary license with the others added as privileges. The licenses have been prorated to synchronize the expiration date and all licenses should be consolidated before the end of the year. Consolidation of licenses was something former Commissioner Bob Cramer of Fareway had pushed for during his term on the Commission.

Sunday Deliveries
It was recently brought to the attention of the division that when J. A. Jones was contracting the warehouse, there were two occasions when J. A. Jones made liquor deliveries on Sunday contrary to state law. In the future, the division cannot deliver on a Sunday, even though a Sunday delivery is requested by the licensee. Although the issue is only really important in connection with holidays, the division would like the option to deliver on Sundays.

Enterprise Fund
Mr. Walding will visit with the Governor about the possibility of operating the Iowa Alcoholic Beverages Division in the same manner as the Lottery. All operating expenses would be paid from the trust fund rather than from a separate appropriation. Currently Iowa ABD gets funding from tobacco and 3 - 4 other sources. The legislature would still control the budget and the division would still be accountable to them.

Liquor Penalties
The ABD liquor penalty fund allows the division to fine up to $1,000 civil penalty. In the past, the division has negotiated deals with gaming boats allowing them to continue to operate but initiating large civil fines that went to the civil penalty fund. As an example, when Mr. Walding was the Assistant Attorney General representing the Iowa ABD he could have suspended the license of a Council Bluffs Riverboat, but the money actually benefited the community. Suspending the boat's alcohol sales would have penalized the citizens for the actions of an individual employee as opposed to a normal licensee who has a profit incentive. That was the main basis for recognizing that there is a difference between gaming institutions and smaller operators. Every indication is that the large fines get the attention of the riverboats and effectively changes their behavior through fines rather than a suspension period. With the recent press regarding the Cass County sheriff who was negotiating deals and the money going to the sheriff's department, the division is rethinking whether this is appropriate or if the division needs to seek authority from the legislature to continue the practice.

Mr. Lundquist commented that the law is gray since the division only as the authority to impose a penalty up to $1,000. The settlements with the riverboats are in conjunction with the Iowa Racing and Gaming Commission who does have authority to issue large penalties of violations of the gaming code thus allowing the division authority to collect the large fine. The division has collected $50,000 - $60,000 in penalties which has gotten the attention of the riverboats. The civil penalty money is deposited in the General Fund and does not come back to the agency. In the past riverboats and other gaming facilities have been treated the same.

Liquor License Fees
District Court recently ruled that cities cannot add additional fees to a license. The city of Des Moines was trying to add an additional fee for processing the license and for doing bar checks; however, the Court determined that the license fee structure is set by state law. No other fees can be charged. The practice is also occurring in the Davenport area. Mr. Walding will be watching to see if municipal authorities or any of the industry associations bring the issue forward during the legislative session.

Commissioner Doll asked if the city can impose additional fines on a retailer who is caught for underage selling. He told about a retailer in Mills County who received a $1500 fine for the retail establishment, $500 for the employee and a city fine of $300. Judy Seib said she didn't believe they could impose a fine in addition to the state fine unless it was for an underage tobacco sale which is a $300 fine. Commissioner Doll replied the offense was only for alcohol. Ms. Seib commented that many local authorities' ordinances still mirror old state statutes. Mr. Lundquist added the penalty for underage selling used to be $300. Ms. Seib asked if there was a possibility the retailer also sold cigarettes and the $300 fine Commissioner Doll commented it was only alcohol and he would check further with the individual.

Future Commission Agenda Items
Chairperson Collins and Administrator Walding met recently to talk about the direction of the Commission and issues to address in the future. Issues that the Commission could consider are listed below.

Dram Shop Insurance
Commissioner Stoffer asked for a status report on the Dram Shop Insurance White Paper.

Civil Penalty Fund
Explore the importance of the Civil Penalty Fund. The penalties are derived from the licensees and Mr. Walding would like to see the money returned to the division to provide educational training for the licensees. Commissioner Doll requested more information on the civil penalty fund and how it works.

After-Hours Bars
The Division has no regulatory control over the after-hour bars. Patrons can bring their own beer and drink all night if they chose to do so.

Keg Registration
Missouri and Nebraska recently enacted keg registration laws and the issue will be discussed this legislative session. Does the Commission have a view regarding keg registration laws?

Substance Abuse Funding
ABD's appropriation language in 123 specifically identifies that $9.2 million should go to substance abuse and with the amount of alcohol sold last year, $9.6 million was contributed to the General Fund. The legislature then appropriates only about $3 million dollars to the Department of Public Health for substance abuse programs. Substance abuse groups complain they are under funded and are on waiting lists for funds. Commissioner Collins stated she has talked with senators who have told her there may be some viability to increase the funding this legislative session. Ms. Gehl cautioned the group to remember there is still a $283 million hole in the budget even though tax revenues are up. Mr. Walding commented the money could be taken from increased liquor profits.

Commissioner Collins asked for a written report summarizing the history of the appropriations for substance abuse and how the amount went from over $9 million to the General Fund to less than $3 million appropriated for substance abuse programs.

It was suggested that individuals from substance abuse programs be invited to attend a commission meeting to talk about their programs, funding sources, rehab and their needs.

NAS Study
Mr. Walding suggested that the Commission could review the National Academy of Science Study (NAS) dealing with underage drinking issues to determine if it merits further study by the Commission.

OJJDP Funding
The federal government provides the state of Iowa with money to deal with underage drinking. The money comes through the Office of Juvenile Justice and Delinquency Prevention (OJJDP) and is currently funneled to the Department of Human Rights for distribution. It is frustrating to Mr. Walding because substance abuse people will call and say they have money for server training and ask for the division's help in implementing the training. When the money became available about ten years ago, this division did not take advantage of the opportunity and the money went to different state agencies. It will be difficult to get this money now; however, the federal government is considering funding states with additional money and Mr. Walding would like the Alcoholic Beverages Division to get some of those funds.

Jim Clayton from the Stepping Up Project in Iowa City suggested that additional money from revenue sources be applied to enforcement as well as education. He suggested that if local police departments knew they would receive a certain amount of money to conduct alcohol bar checks, more checks would be done. Mr. Walding agreed that without enforcement there is no incentive to attend the educational classes.

Lynn Walding reported that Anheuser Bush has given the division $10,000 to use as the division chooses which will probably be server training. Mr. Walding commented that several entities in Iowa City contributed to the training done there. The hotel provided the facility free and the Iowa City Stepping Up Project and Iowa City programs also contributed as well as industry.

Expand Educational Training
Commissioner Doll remarked that the state should not bear the entire financial burden for educational training. In addition to trying to obtain federal and private grant money, he suggested that the division network with wholesalers and distributors to obtain additional funding. Commissioner Doll stated that retailers are asking for and really want this education and he would like to see the program expanded. He particularly likes the "get-out-of-jail-free" pass and thinks the publicity that goes along with the program is fantastic. Commissioner Doll wants to see law enforcement, wholesalers and distributors, retailers and licensees and industry associations' work together to provide the training.

The next meeting should focus on expanding educational training. The components to be discussed are: funding, type of program wanted and affirmative defense. The affirmative defense may need legislative action as a county attorney is not legally bound to the affirmative defense and could still prosecute the case. In the Iowa City area Mr. Walding got the city and the county attorney to agree to it before the affirmative defense was offered.

Mr. Walding suggested inviting people to identify funding sources and programs. In addition, an invitation should be extended to a representative from TIPS to speak at the meeting.

Governor's Traffic Safety Bureau
Sheila Douglas from the Iowa Wholesale Beer Distributors Association (IWBDA) commented that she had spoken with Denny Becker from the governor's Traffic Safety Bureau recently and learned that they had recently given Waterloo a $300,000 grant to do server training. Their goal is to hit 600 bars. Nicole Gehl commented that their program involves the health inspector talking to the manager and providing 15 minutes of server training. Ms. Douglas suggested that the different entities need to meet and discuss what each entity is doing. She also remarked that the IWBDA has an extensive survey out to distributors regarding server training.

The Iowa Hospitality Association has a program and would like the division to participate with them; however, Mr. Walding believes law enforcement needs to be included for the training to be effective. TIPS training was used in Iowa City because the Iowa City Police Department was TIPS trained. Mr. Walding would be open to other training methods as long as law enforcement personnel were involved in the training classes.

Warehouse Update

Lynn Walding appeared before the Government Oversight Committee last week to update them on the warehouse. Russ Eagen, the warehouse manager is working on changing the truck routes as well as switching from a 24-hour system to a 48-hour system. The business week would be compressed from 4 days to 3 days. When changes were discussed at the Coffee with the Administrator meetings, licensees were supportive of the changes as long as they did not have to go over the weekend without a delivery. In addition, some licensees did not want Friday deliveries because they made bar deliveries on that day. The delivery schedule was designed to accommodate those needs. Not everyone will be affected by the changes. Mr. Eagen's proposal would change the delivery day for 42% of the licensees and 33% would still receive 24-hour delivery. The benefit to customers is it will expand their hours for placing orders. Currently licensees have to call in their order between 7:30 AM and 2:30 PM with some licensees having to call before 12:00 noon. The new call in hours will be from 7:00 AM to 5:00 PM for everyone. If the division gets the automated Order Entry System, licensees may be able to call later than 5:00 PM. The division would like to work with Hy-Vee to take their electronic data and scan it so there is no phone call or faxes.

The new system would allow the warehouse workers to begin picking orders as soon as they arrived in the morning. The orders would all be in sequential order with the orders being loaded directly on the trucks eliminating the staging area. Other improvements would be: 1) the ABD will comply with DOT requirements even though the driver is not subject to the requirements; 2) drivers will work more daylight hours; 3) overtime will be reduced; 4) the state will cut about 114,000 miles a year from the routes savings approximately $1.00 per mile; and 5) pup trailers which have been used at several locations, will be eliminated with the exception of two places in Waterloo and Des Moines. The total savings will be approximately $250,000.

The Department of Corrections still needs to be consulted regarding the change to the 48-hour system. The ABD plans to implement the changes in January if all parties are in agreement. After the changes are implemented, the division will proceed with the bid process to see if the private sector can beat the division costs on the warehouse and truck routes. The Government Oversight Committee expressed interest that the bid proposal include all ABD costs so there are no hidden advantages such as the fuel cost. In addition, ABD never charged J.A. Jones rental space on the warehouse and there will be no rental charges assessed in the bid proposal.

The Department of Administrative Services has again visited the warehouse and has asked two architects to determine how to reconfigure the warehouse to maximize the use of vertical space. Doing so will provide space for other state agencies. In response to Commissioner Doll's statement that racking would free up a lot of space, Mr. Walding agreed; however, while warehouse costs go down, the labor can go up. He wants the warehouse designed so it doesn't overly inflate the labor cost.

Upcoming Meetings

The next meeting will be Wednesday, January 26, 2005 at 1:30 PM in the ABD Board Room.

Adjournment