The state recommends that Columbus’ operating expenses be reduced to less than $95,000 per year and revenues increased to greater than $700,000 per year.
Columbus’ ABC board showed a profit in fiscal year 2011, the audit said, with total liquor sales at $527,845 and income from operations at $7,141.
The Columbus store does not meet the state’s targeted profit percentage to sales ratio, according to the audit. Recommendations included that the store be open on every day allowed and advertise that the store will be open on those days. The other recommendation to increase profitability was to merge with another store.
“Merging has always been an option for local ABC boards,” Stevens said. “The new legislation gives the state ABC the authority to mandate it if performance standards are not met.
“At this time, the recommendations in the audit with regard to merger are just that, along with the several other strategies to improve the board’s profit percentage to sales.”
According to N.C. General Statute Chapter 18B 52, if the commission determines that the established performance standards identified in the statement of findings cannot be met after a performance improvement plan has been implemented and adequate time has been given, but in no case less than 12 months, the commission shall take appropriate action to avoid insolvency.
“This action may include closing the board pursuant to G.S. 18B-801(d), closing a store or multiple stores or merging the local board with another local board in order to maintain solvency,” states the remedy section of the statute.
McIntyre said he and town manager Jonathan Kanipe are going to sit down with the ABC board chair and go over the audit item by item to ensure everything is done as the state requires.
Kanipe said the state is becoming more interested in the consolidation/merger idea but the town would consider that option only after serious analysis.
“Before any consolidation or mergers are considered, there would have to be a serious analysis done to determine if it is in the best long-term interest of Columbus citizens, as well as whether the end result would be a positive for the town and the ABC board,” he said.
Stevens said in addition to the performance audit, the Columbus board, along with all ABC boards, will submit an annual financial audit for the fiscal year in September and the ABC Commission will review financials at that time.
Kanipe said the audit raised a significant number of questions in terms of overall operational performance and identified several specific things that the ABC board and the town need to look at to ensure the store is operating as effectively and efficiently as possible.
“I think there are areas ripe for growth and adjustment, just as there would be within any organization,” said Kanipe.
The Columbus ABC Store was organized after a referendum was held on April 18, 1989 and the vote was 253 to 188 in favor of an ABC store. The first retail sale was made on June 1, 1990.
A mixed beverage referendum was also held on April 18, 1989 that passed 269 to 177. Mixed beverage sales began in Columbus on Oct. 7, 1992, according to background information provided in the audit.
The ABC board, which oversees the store, includes a chair and two members to serve for three-year terms.
The ABC board staffs four part-time employees to operate the store.