Napa County’s winery audits long-gone but not forgotten

Gone are the days when Napa County randomly chose 20 or so wineries annually to see if they followed the rules — and it's a question mark whether the practice will return.

The last winery audit in 2014 looked at 18 wineries. Three produced more wine then their use permits allowed. Two of those three also failed to use at least 75% Napa County-grown grapes. All stayed within their visitor caps, the audit found.

And then the annual audit went into limbo. The county Board of Supervisors wanted a beefed-up version and in 2018 instructed staff to create an audit that included all 400-plus rural wineries. But nothing happened.

The Board of Supervisors on Oct. 10 is set to revisit the winery audit issue.

Brian Bordona, the county's planning, building and environmental services director, recently explained why. He cited competing priorities relating to the COVID-19 pandemic, the 2017 and 2020 wildfires, and the county's voluntary code compliance push.

"I would not consider it dead," Bordona said.

Neither would Board of Supervisors Chair Belia Ramos. She said supervisors are scheduled on Oct. 10 to address the winery audit issue as part of a code compliance discussion.

The questions are whether a winery audit is needed in today's wine world to catch rulebreakers and, if so, what it should look like.

Time ripe for a comeback?

Napa Valley's wine world is highly regulated. Wineries secure use permits from the county establishing how much wine they can make and how many visitors they can entertain. Most wine production approved after 1990 must be made from at least 75% Napa County grapes.

But county rules have changed across the decades. Wineries established before the 1990 winery definition ordinance might have certain rights grandfathered in that are no longer available to newcomers.

To further complicate things, some of those older wineries have expanded since 1990. They may have parts of their operations under older rules and parts under newer rules.

The winery audit caught scofflaws and alerted those who were unclear on what rules applied to them. Violators had the chance to come into compliance.

Napa Valley Vintners represents more than 500 members. When asked if and how the winery audit should return, Rex Stults of the Vintners said the group hasn't discussed the issue recently to take a stance.

"We've just been so focused on wildfire resiliency and keeping our members afloat during the pandemic and wildfires," he said. "And we're still focused on wildfire resiliency."

He believes the majority of wineries try to follow the rules. The ones that don't make it worse for everyone, Stults said.

"I think we've been consistent in messaging to our membership and the community that we value compliance within the industry," he said. "It's important the rules are well understood and followed and are consistently and evenly enforced. That viewpoint hasn't changed."

Eve Kahn is co-president of Napa Vision 2050, a coalition of environmental and community groups that has long taken an interest in winery compliance. She wants the audit to return to help ensure all wineries follow the rules.

"I think it's just a level of fairness," Kahn said.

She'd like the audit to include groundwater use, though she acknowledged requiring all wineries to have meters on their wells might prove controversial. This might be something the county can do in the future, she said.

Kahn also said she believes food is an issue at wineries. The county allows food-and-wine pairings, but requires that food service be incidental to wine tasting. A winery can't be like a café or restaurant.

Ramos isn't yet ready to state her position on rebooting the winery audit.

"As this is an item that will appear on a future agenda, to be discussed by the entire board, I will refrain from commenting prior to the issuance of the staff report and board deliberation," she said.

Changes over time

The wine audit's roots go back to Jan. 4, 2006, when the county Planning Commission decided which wineries would be examined that year. Commissioners drew the names of 10 wineries out of a hat.

Napa County would check to make sure those wineries were staying within their production limits. Rob Paul, the assistant planning director at the time, said the exercise wasn't a punitive move, but rather an attempt to see if the use permit process was working.

Planning Director Hillary Gitelman, who had taken the job the previous year, didn't see a Wild West of winery rulebreaking.

"When I came to Napa County, I felt we had wineries that were doing a pretty good job," she told the commission. "It's a challenging endeavor."

Names of the audited wineries picked from the hat for the audit usually remained a secret. The county, when revealing annual results, might refer to winery L or winery O. Violators received notices of what they needed to do to come into compliance.

But one name and at least one punitive action emerged. The 2009 audit revealed 110,000-gallon-a-year Caymus Vineyard winery produced 650,000 gallons. By 2012, that amount had reached 1.3 million gallons.

The parties disagreed over whether the local bottling of wine made elsewhere by the winery family should count as production. A settlement over this and other issues included a $1 million fine for the winery and allowed the winery to phase the disputed production to Solano County.

In 2010, the Planning Commission expanded the winery audit to include seeing if wineries remained within their visitor caps. A year later, it also had the audit track the requirement that 75% of grapes used are from Napa County.

The 2012 audit showed almost all 20 wineries checked were in compliance for production, with some technical issues to be decided. Gitelman called the Caymus case "unusual."

"I'm actually really happy that the audit this year confirmed what I believe, which is that most wineries are really good about complying with their use permits," she said.

Then came the 2013 audit. Eight of 20 wineries spot-checked had various violations. Stults called the results an "embarrassment to the industry."

But the number of violators in the 2014 audit dropped to three of 18 wineries. Stults said three was still too many, but that the previous year's showing looked like an anomaly.

The 2014-15 grand jury had doubts all was well in the county's wine world. It released a report entitled "Are Napa County Wineries Following the Rules?" and called for a beefed-up audit to help provide the answer.

"The audits are limited in scope and all the conditions specified by the use permits are not reviewed," the grand jury said. "This coupled with the relatively small number of wineries audited may not give a full picture of compliance."

At about the same time, Napa County had an Agricultural Protection Advisory Committee looking at wine country issues. This group of grape growers, vintners, environmentalists and community members recommended expanding the audit to include all 400-plus Napa County wineries annually.

The winery audit went on hiatus after 2014 as the Board of Supervisors discussed what changes to make. The effort culminated on Dec. 4, 2018, when supervisors asked staff to come back with a new version of the audit.

Specifically, supervisors wanted all wineries in the unincorporated county to:

  • Submit by July 1 of each year how many gallons they produced the previous year.
  • If subject to the 75% rule, submit how much wine crushed and juiced the previous year came from Napa County grapes.
  • Submit U.S. Department of Agriculture California Grape Crush Inquiry Reports and U.S. Alcohol and Tobacco Tax and Trade Bureau records as verification. None of this information would be made public.
  • Send a notice of violations to violators and describe how to achieve compliance. The county could do further investigations on violators into such areas as visitation.

The first year was supposed to be 2019. But the pandemic and Glass Fire hit the following year, and the retooled audit program never launched.

County supervisors are soon to tackle the issue again. Either the winery audit will return, or it will remain a historical footnote in the county's efforts to deter rulebreakers.

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