ABS outlines budget pressures, declining liquor revenues and CIP cost increases

Alcohol Beverage Services (ABS) briefed the committee on its FY27 operating budget and three capital projects.

Staff said the county executive proposed a 5.1% increase over the FY26 approved ABS operating budget — roughly a little under $4 million — driven primarily by service cost increases including compensation and contracts. At the same time, ABS projects a 5.8% decrease in liquor fund revenues compared with last year: sales peaked during COVID and are trending downward toward pre-pandemic levels, staff said.

ABS’s retail strategy emphasizes product diversification (ready-to-drink and low/no alcohol products), refreshes of selected retail stores to improve customer experience and more promotion of local manufacturers. Scott Corum, a county budget analyst, said two early refreshes (Montrose and another site) returned to or exceeded pre-COVID sales; other recent refreshes have not been open long enough to assess full impact.

On CIP items, ABS reported a $1.7 million cost increase for a conveyor system upgrade in FY27. Staff explained the project was initially considered as a sole-source procurement but rebidding led to higher bid results and increased material/labor costs; contract execution occurred in January 2026 and the schedule projects completion in January 2027. The department is pausing broader store refresh spending ($1.2 million reduction proposed) to re-evaluate rollout timing.

Next steps: Committee members requested additional details on license-fee revenue drivers and store performance and noted the department may need to return in the fall with a plan to address ongoing revenue declines.