Sunday, August 14, 2022

ABC Board doles out nearly $2M to local governments, sales on the rise

New Hanover County manager Chris Coudriet (third from left) accepts a profit distribution check for $956,232 from the ABC board. (Port City Daily/Amy Passaretti)

NEW HANOVER COUNTY — Representatives from the county, city and three beach towns accepted checks Thursday from the New Hanover County ABC Board, totaling nearly $2 million.

The money comes as an added bonus to the board’s regular profit distributions, given to New Hanover County, City of Wilmington, Wrightsville Beach, Carolina Beach and Kure Beach, quarterly. The ABC board was dispersing a little over $1-plus million from the sale of an unused Carolina Beach Road property (initially planned for an ABC store) and $875,000 in unused operation expenses for the fiscal year ending June 30, 2021.

“That’s the wisdom of the system that the ABC board is here to support law enforcement and mental health and all the things we do, but the benefactors are the local governments, as it should be,” member Bruce Shell said at the morning meeting.

As the local regulator of alcohol sales, the ABC board is required by state law to distribute a portion of its profits annually. Those distributions are divided amongst the five municipalities it serves and dispersed based on the amount of alcohol sold at bars, restaurants and ABC stores within each location.

Within the fiscal year 2022 budget, ABC finance director Kathy Clark said sales were projected to garner $3.5 million in regular profit for distributions. That’s $875,000 doled out at the end of October, January, April and July, based on each municipalities’ portion of sales. It’s also more than half a million more than the prior year.

“We try to get it as close as we can but because sales fluctuate over the years, it’s unpredictable,” Clark said.

ABC sales are on the rise, which is good news for local governments’ budgets. The ABC board must distribute its excess profits as well.

“It used to be 10, 15 years ago, there was about a $2 million increase every year, which is small,” Clark explained. “In the past three years, it’s been over $4 million more than the usual [distribution amount].”

State laws regulate a minimum and maximum working capital for the county ABC board and everything extra gets distributed to the municipalities. It ends up equaling close to 75% of ABC’s net profits that get handed out.

“We don’t get to hold anything except enough to operate,” Hill said.

In the last 18 months, the ABC board has dispersed $6.1 million in extra profit distributions, on top of its regular share.

“The ones we give our distributions to really need it,” ABC board general manager Charles Hill said. “It keeps tax bases low for everyone, even the citizens that don’t participate or indulge. If we were to go for-profit, the distributions we’re giving out, would disappear.”

Hill said the municipalities count on the added funds for town operations, and they are not regulated on how it must be spent.

Officials from each of the recipients confirmed the received checks simply get funneled into their general funds.

The county always winds up with a bigger share since it receives a portion of profits from all ABC stores and ABC-regulated bars and restaurants. If a business is within the unincorporated county, 100% goes to the county.

If it’s located within the city limits, the city receives 50%. For the three beach towns, net profits from stores and establishments in their areas earn them 75%. The county gets the other portions.

As of last month, New Hanover County ABC board is ranked fourth statewide for overall sales; seventh for retail sales. Revenues increased year over year for March 2022 by $312,000 or roughly 8%.

New Hanover is also ranked third for liquor-by-the-drink sales (or sales within restaurants and bars). The county has roughly 380 establishments versus the No. 1 Wake County with 1,000.

The following is what each municipality has received over the last 18 months, followed by Thursday’s check amount:

  • New Hanover County: $3 million ($956,232)
  • City of Wilmington: $1.8 million ($582,278)
  • Town of Wrightsville Beach: $654,876 ($194,115)
  • Town of Carolina Beach: $645,474 ($178,686)
  • Town of Kure Beach: $9,953 ($3,629)

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