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Program Contacts

Contact Courtney Orsini of the Department of Liquor Control at 240.777.1921 or Jennifer Nordin of the Office of Management and Budget at 240.777.2779 for more information regarding this department's operating budget.

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Mission Statement

The mission of the Department of Liquor Control (DLC) is to provide licensing, wholesale and retail sales of beverage alcohol products, enforcement and effective education and training programs, while promoting moderation and responsible behavior in all phases of distribution and consumption. The Department diligently promotes, enforces, and obeys all laws and regulations governing beverage alcohol while generating revenue for the benefit of Montgomery County's General Fund. The Department strives to provide its customers with the added benefits inherent with the oversight provided by the Montgomery County Government.

Budget Overview

The total approved FY18 Operating Budget for the Department of Liquor Control is $65,161,319, an increase of $2,044,058 or 3.24 percent from the FY17 Approved Budget of $63,117,261. Personnel Costs comprise 53.65 percent of the budget for 305 full-time position(s) and 143 part-time position(s), and a total of 438.20 FTEs. Total FTEs may include seasonal or temporary positions and may also reflect workforce charged to or from other departments or funds. Operating Expenses account for the remaining 46.35 percent of the FY18 budget.

The Department of Liquor Control began an organization-wide improvement effort in 2015 focused on customer service, retail, delivery, and warehouse operations. The approved FY18 budget reflects a continued commitment to creating a customer focused and efficient operation.

In FY18, the Department of Liquor Control will transfer $22.7 million to the General Fund and make $10.9 million in debt service payments on Liquor Control Revenue Bonds for a total contribution of $33.6 million.

The above projections and expenditures form the basis for working capital decisions concerning the Liquor Enterprise Fund.

The following information is provided to facilitate County Council and public input for final County Executive decisions on the determination of adequate working capital within, and use of resources in, the Liquor Enterprise Fund and net proceeds to be deposited to the General Fund. Consistent with Article 2B, Section 15-207, the County Executive must make resource allocation decisions for the Fund.

Linkage to County Result Areas

While this program area supports all eight of the County Result Areas, the following are emphasized:

  • Healthy and Sustainable Neighborhoods
  • A Responsive, Accountable County Government
  • Safe Streets and Secure Neighborhoods
  • Strong and Vibrant Economy

Department Performance Measures

Performance measures for this department are included below (where applicable), with multi-program measures displayed at the front of this section and program-specific measures shown with the relevant program. The FY17 estimates reflect funding based on the FY17 approved budget. The FY18 and FY19 figures are performance targets based on the FY18 approved budget and funding for comparable service levels in FY19.

Accomplishments

  • Net sales for FY16 were $292.5 million. This represents growth over the previous year of $15.8 million or 5.71 percent
  • Hired a Director with private sector experience, a pricing team to improve accuracy and competitiveness, and an administrative team to improve oversight and analysis
  • Developed a Strategic Plan for Retail Operations
  • Developed a long-range plan for the replacement of delivery vehicles to reduce maintenance costs and improve delivery operations
  • Implemented a Communication Center in FY16 to centralize customer service inquiries and issues
  • Decreased overtime expenditures for the first two quarters of FY17 by 31 percent when compared to the same period in FY16.
  • Opened three new retail stores in FY17 featuring upscale designs to enhance the shopping experience and increase access to retail locations

  • Received two National Association of Counties (NACo) awards in FY17 for the Drunk Driving Prevention Program and the Mystery Shopping Incentive Program

Initiatives

  • In FY18, DLC will transfer $22.7 million to the General Fund and make $10.9 million in debt service payments on Liquor Control Revenue Bonds for a total contribution of $33.6 million.
  • Rebrand DLC with a customer service focus
  • Establish additional customer service and product knowledge classes for retail staff
  • Improve marketing and pricing strategies

Innovations and Productivity Improvements

  • Streamlined case movement and improved inventory management through new warehouse racking systems
  • Established a 24-hour order-to-delivery standard, replacing the previous 48-hour cycle, enabling licensees to receive merchandise more quickly
  • Implemented rigorous cycle counts to improve inventory control

Collaboration and Partnerships

DLC Action Plan and DLCStat

DLC worked with the County Executive's Office, CountyStat, Internal Audit, Technology Services, Finance, Office of Management and Budget, and General Services to implement an action plan for service improvement. DLCStat meetings are held every other month to review performance data and implementation updates.

 
Communication Center

DLC and the Office of Public Information developed a Communication Center to respond to and track customer questions, comments and complaints.

 
Centralized Accounts Payable and Accounts Receivable

DLC and Department of Finance centralized Accounts Payable and Accounts Receivable functions and related reporting requirements via a shared services model.

 
Mystery Shopping Program

Partnered with the Responsible Retailing Forum to conduct a Mystery Shopping Program in the Bethesda area to ensure servers and sellers check IDs for all young buyers. Those who successfully checked IDs were rewarded with a small cash award paid from a National Alcohol Beverage Control Association grant.

 

Program Descriptions

  Administration

This program provides accounting, financial, and information technology services for the department. Finance and accounting staff perform special analyses, reporting, and preparation and monitoring of the department's budget. Information and technology staff provide the design, operation, maintenance, and protection of all information technology initiatives for the department.

  Warehouse Operations

This program involves management of the County's beverage alcohol warehouse and includes the purchase, receipt, and storage of over 20,000 different stock and special order items.

Program Performance MeasuresActual
FY15
Actual
FY16
Estimated
FY17
Target
FY18
Target
FY19
Inventory as a percent of Cost of Goods Sold (COGS)15.914.614.514.514.5
Inventory as a Percent of DLC Sales11.510.710.710.710.7

  Delivery Operations

This program includes the distribution of distilled spirits, wine, and beer to licensed establishments and County retail stores.

  Retail Sales Operations

This program oversees sales of distilled spirits, wine, and beer to retail customers through the operation of retail stores that are located throughout Montgomery County.

  Licensure, Regulation and Education

This program includes issuance of beverage alcohol licenses, inspecting, and investigating licensed facilities to ensure compliance with all applicable laws, rules, regulations, and serving as support staff and providing expert testimony at hearings for issuance, fining, suspension, or revocation of licenses. This program also encompasses community partnerships by defining issues and strategies, and monitoring efforts with various agencies, departments, civic organizations, businesses, and individuals to provide and coordinate innovative programs and measures to ensure safe and vibrant communities relative to the service and consumption of beverage alcohol.

Program Performance MeasuresActual
FY15
Actual
FY16
Estimated
FY17
Target
FY18
Target
FY19
Annual alcohol compliance checks to minors (under 21)400400400400400
Rating of licensees satisfied with ALERT Training (Average Score on a 1-5 Scale)4.924.7555
Rating of licensees satisfied with Licensing Application Process (Average score on a 1-5 scale)4.824.7555

  Office of the Director

This program provides the overall direction for the Department.

Program Performance MeasuresActual
FY15
Actual
FY16
Estimated
FY17
Target
FY18
Target
FY19
Annual growth in DLC retail and wholesale sales (percent)3.785.6555
Gross profit margin of DLC retail and wholesale operations (percent)27.926.9262626
Budget Summary
TitleActual
FY16
Budget
FY17
Estimate
FY17
Approved
FY18
%Chg
Bud/App
LIQUOR CONTROL
EXPENDITURES
Salaries and Wages24447496.0024144280.00 24742734.00 25601349.006.0
Employee Benefits8765210.009384535.00 8905252.00 9358163.00-0.3
Liquor Control Personnel Costs33212706.0033528815.00 33647986.00 34959512.004.3
Operating Expenses18140953.0018494065.00 21712321.00 18470926.00-0.1
Capital Outlay2006733.00161481.00 161481.00 738281.00357.2
Debt Service Other10718470.0010932900.00 10932900.00 10992600.000.6
Liquor Control Expenditures64078862.0063117261.00 66454688.00 65161319.003.2
PERSONNEL
Full-Time294.00296.00 296.00 305.003.0
Part-Time160.00160.00 160.00 143.00-10.6
FTEs426.72432.42 432.42 438.201.3
REVENUES
Bag Tax8027.000.00 0.00 0.000.0
Investment Income27920.0076670.00 16750.00 28710.00-62.6
Liquor Licenses1805302.001570197.00 1570197.00 1570197.000.0
Liquor Sales80949860.0084542843.00 82532427.00 86212495.002.0
Miscellaneous Revenues46183.000.00 0.00 0.000.0
Other Charges/Fees19220.008740.00 8740.00 8740.000.0
Other Fines/Forfeitures194402.00220560.00 220560.00 220560.000.0
Other Licenses/Permits88220.00156000.00 156000.00 156000.000.0
Liquor Control Revenues83139134.0086575010.00 84504674.00 88196702.001.9
 
GRANT FUND - MCG
EXPENDITURES
Salaries and Wages13561.000.00 0.00 0.000.0
Employee Benefits1373.000.00 0.00 0.000.0
Grant Fund - MCG Personnel Costs14934.000.00 0.00 0.000.0
Operating Expenses5000.000.00 0.00 0.000.0
Grant Fund - MCG Expenditures19934.000.00 0.00 0.000.0
PERSONNEL
Full-Time0.000.00 0.00 0.000.0
Part-Time0.000.00 0.00 0.000.0
FTEs0.000.00 0.00 0.000.0
REVENUES
Federal Grants-337.000.00 0.00 0.000.0
State Grants5000.000.00 0.00 0.000.0
Grant Fund - MCG Revenues4663.000.00 0.00 0.000.0
 
DEPARTMENT TOTALS
Total Expenditures64098796.0063117261.00 66454688.00 65161319.003.2
Total Full-Time Positions294.00296.00 296.00 305.003.0
Total Part-Time Positions160.00160.00 160.00 143.00-10.6
Total FTEs426.72432.42 432.42 438.201.3
Total Revenues83143797.0086575010.00 84504674.00 88196702.001.9
FY18 Approved Changes
TitleExpendituresFTEs
LIQUOR CONTROL
FY17 ORIGINAL APPROPRIATION63117261432.42
Changes (with service impacts)
Add: Operational Enhancements19064600.00
Other Adjustments (with no service impacts)
Increase Cost: FY18 Compensation Adjustment8165060.00
Increase Cost: Annualization of FY17 Compensation Increases3158040.00
Increase Cost: Annualization of FY17 Personnel Costs1897160.00
Increase Cost: Retiree Health Insurance Pre-Funding1816500.00
Increase Cost: Risk Management Adjustment1312030.00
Increase Cost: Mid-Year Personnel Changes1280816.28
Increase Cost: Motor Pool Adjustment840100.00
Increase Cost: Debt Service600000.00
Increase Cost: Retirement Adjustment387700.00
Decrease Cost: Printing and Mail-142970.00
Decrease Cost: IT Cost Savings [Administration]-283540.00
Decrease Cost: Point of Sale System (POS) [Retail Sales Operations]-327190.00
Decrease Cost: Finance Chargeback for Accounts Receivable Shared Services [Administration]-58180-0.50
Decrease Cost: FY18 Operational Savings-16745920.00
FY18 APPROVED65161319438.20
Program Summary
Program NameFY17 APPR
Expenditures
FY17 APPR
FTEs
FY18 APPR
Expenditures
FY18 APPR
FTEs
Administration1649475325.201597513525.70
Warehouse Operations875703173.69981967679.23
Delivery Operations785436487.80833771093.00
Retail Sales Operations27140295230.3428379069227.88
Licensure, Regulation and Education201048912.3919398639.39
Office of the Director8603293.007098663.00
Total63117261432.4265161319438.20
Future Fiscal Impacts ($000s)
TitleFY18FY19FY20FY21FY22FY23
LIQUOR CONTROL
EXPENDITURES
FY18 Approved65161.00000065161.00000065161.00000065161.00000065161.00000065161.000000
No inflation or compensation change is included in outyear projections.
Elimination of One-Time Items Approved in FY180.000000-1330.000000-1330.000000-1330.000000-1330.000000-1330.000000
Items recommended for one-time funding in FY18, including operational enhancements, will be eliminated from the base in the outyears.
Debt Service0.0000003.000000-32.000000-290.000000-512.000000-512.000000
Debt service estimates include Liquor Control Revenue Bonds, Master Lease Agreements for Forklifts, Delivery Trucks, and ERP system.
Retail Store Leases0.000000153.000000309.000000469.000000631.000000631.000000
The leases for retail stores based on CPI assumptions (2.0%).
Retiree Health Insurance Pre-funding0.0000009.00000034.00000041.00000052.00000052.000000
Labor Contracts0.000000354.000000354.000000354.000000354.000000354.000000
These figures represent the estimated annualized cost of general wage adjustments, service increments, and other negotiated items.
Subtotal Expenditures65161.00000064350.00000064496.00000064405.00000064356.00000064356.000000