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ABS warns of tightened liquor fund, conveyor CIP cost jumps $1.7M
Summary
ABS staff told the committee the FY27 recommended operating budget includes a 5.1% increase while liquor‑fund revenues continue to decline; the ABS conveyor CIP project returned higher bids and the FY27 CIP cost rose $1.7M. The committee accepted staff recommendations.
Alcohol & Beverages Services (ABS) staff presented the FY27 operating and CIP proposals and warned the committee that the Liquor Fund is under increasing pressure as projected alcohol sales decline.
ABS staff reported the County Executive's recommended FY27 operating budget for ABS is about a 5.1% increase over FY26 driven primarily by contract and compensation costs. At the same time, ABS projects alcohol‑sales revenue (which makes up roughly 98% of Liquor Fund receipts) to decline about 5.8% year over year, squeezing the Liquor Fund transfer to the general fund to roughly $9.3 million for FY27, a sharp drop from pandemic-era transfers.
On capital projects, staff said the ABS conveyor system upgrade (already underway) showed a $1.7 million cost increase for FY27 driven by competitive bids and material/labor price increases after the project went back out to bid. ABS also plans to purchase three replacement delivery trucks (~$585,000, debt financed) and to pause or reduce store refresh funding in FY27 (a $1.2 million reduction) while continuing out‑year funding. ABS reported that early store refreshes returned to or above pre‑COVID sales for selected locations.
Council members asked about return on investment and equity implications for store conditions; ABS staff said refreshed stores have shown positive sales trends but some recently completed refreshes have not been open long enough to analyze. The committee accepted staff recommendations without objection.
Next steps: DPS/ABS will prepare follow‑up materials if markets deteriorate further and may return with a plan in the fall if additional actions are required.
