Alcohol Beverage Services warns of sharp drop in general‑fund transfer as post‑COVID sales normalize

Alcohol Beverage Services (ABS) presented the FY26 operating budget for the liquor fund and two CIP items: a retail store refresh program and a conveyor system upgrade. ABS Director Kathy Durbin and administration staff explained that the FY26 earnings transfer to the general fund is projected at $14.6 million (down from prior years) because a post‑COVID normalization of sales coincides with sizable increases in personnel costs over recent years.

Staff noted the liquor fund is an enterprise fund and that FY26 operating increases reflected compensation adjustments and other centrally managed costs (for example, Microsoft license allocations that were moved onto the liquor fund). Beginning fund balance is currently projected at roughly $2.4 million for FY26, down sharply from prior years, and staff said the fund has been using balances in recent years to boost general‑fund transfers. The packet includes a six‑year plan showing transfers declining without corrective action.

ABS staff described a reduced‑scope retail store refresh CIP to lower near‑term costs (flooring, shelving, lighting and checkout reconfiguration rather than higher‑cost wine libraries and tasting rooms) and a technical funding‑source correction for the conveyor upgrade project. Committee members expressed concern about relying on fund balance and asked staff for a concise written explanation, transfer history and options to stabilize the fund. The committee accepted the county executive’s recommendations for the operating budget and CIP but requested more detailed financial analysis for the full council and follow‑up work sessions.