Page | 1

AGENDA IOWA ALCOHOLIC BEVERAGES COMMISSION MEETING

Boardroom

Iowa Alcoholic Beverages Division

1918 Hulsizer Road

Ankeny, Iowa 50021

January 25, 2017 – 1:00 PM Dial in Number: 1.866.685.1580

Conference Code Number: 0009991572

Call to Order ......................................................................................................... Chairperson Wilson

I. Announcements/Opening Remarks

II. Approval of Agenda – ACTION ITEM

III. Approval of November 17, 2016, and December 6, 2016 Minutes – ACTION ITEM

Administrator’s Report ...................................................................................... Administrator Larson

IV. Financial Management Update

V. Alcohol Reform Update

a. Overview

b. Next Steps

VI. Public/Private Partnership Update

VII. Attorney General’s Report

Public Comment… ................................................................................................ Chairperson Wilson

Old Business ......................................................................................................... Chairperson Wilson

New Business ....................................................................................................... Chairperson Wilson

Next Meeting Date ............................................................................................... Chairperson Wilson

To Be Determined

Adjournment ........................................................................................................ Chairperson Wilson

NOTE: Committee and Board agendas may be amended any time up to 24 hours before the meetings. Agenda items

may be considered out of order at the discretion of the chair. Meetings will not convene earlier than stated above.

If you require accommodations to participate in this public meeting, call 515.281.7407 or TTY at (toll-free)

866.IowaABD to make your request. Please notify ABD at least 48 hours in advance.

1

IOWA ALCOHOLIC BEVERAGES COMMISSION

M I N U T E S

Iowa Alcoholic Beverages Division 1918 SE Hulsizer Road, Ankeny, IA

November 17, 2016 – 1:00 p.m. Dial In Number: 1.866.685.1580

Conference Code Number: 0009991572

Commission Members Present

Jay Wilson: Chair

Gary Nystrom: Vice Chair

Rachel Eubank: Secretary

Tami Doll: Member (via phone)

John Pauli: Member

Division Staff Present

Stephen Larson: Administrator

Tyler Ackerson: Assistant to the Administrator

Robert Bailey: Public Information Officer

Leisa Bertram: Accountant 2

Jeff Cam: Compliance Officer 1

Jodi Christensen: Purchasing Agent 3

Karen Freund: Deputy Administrator of Regulatory Affairs

Josh Happe: Public Service Manager 2

Todd Halbur: Comptroller

Jake Holmes: Education and Outreach Program Planner

Pam Koehn-Miller: Secretary

Lolani Lekkas: Compliance Officer 1

John Lundquist: Assistant Attorney General

Heather Schaffer: Compliance Officer 2

Stephanie Strauss: Executive Officer

Guests Present

Nathan Cooper: Iowa Wholesale Beer Distributors Association

Rep. Jake Highfill: Iowa House of Representatives

Ron Mark: Summerset Winery

Karla Fultz McHenry: Iowa Restaurant Association

Mackenzie Nading: Iowa House Republicans Staff

Brittany Telk: Iowa House Republicans Staff

Christin Mechler: Legislative Services Agency

2

Guests Present via Phone

Matt Eide: Iowa Wine Growers Association and Kum & Go

Jeremy Thompson: Sazerac

Tod Wolter: 7G Distributing

CALL TO ORDER

Chairperson Jay Wilson called the meeting to order at 1:01 p.m. and roll was taken. There was a quorum.

APPROVAL OF AGENDA

MOTION: A motion was made by Commissioner Nystrom and seconded by Commissioner Eubank to

approve the agenda for the November 17, 2016, Commission meeting.

Motion approved.

APPROVAL OF MINUTES

MOTION: A motion was made by Commissioner Pauli and seconded by Commissioner Eubank to

approve the minutes for the September 22, 2016.

Motion approved.

Chairperson Wilson recognized Administrator Stephen Larson for the Administrator’s Report.

ADMINISTRATOR’S REPORT

Administrator Larson recognized Comptroller Todd Halbur for a financial management report. Mr. Halbur

provided an overview of the FY2016 Annual Report draft. He noted that the format of the report followed the

previous year’s report format with figures updated to reflect Fiscal Year 2016. The targeted release date is the

week of December 5.

Mr. Halbur reported that Year-to-Date through October FY17, the Division had $93,943,954 in total liquor

sales, which was a 5.26 percent growth in sales over October FY16. The average monthly order volume for

FY17 was 4,932 compared to 4,133 in FY16, a 19.33 percent increase.

Administrator Larson recognized Division Executive Officer Stephanie Strauss. Ms. Strauss provided the 2017

Iowa Legislative Session Timetable. The 87th Iowa General Assembly will convene January 9, 2017. Ms.

Strauss reported that the Division will introduce a technical bill intended to clarify the types of records licensees

need to maintain, incorporate consistency in language, and adopt new definitions into Code found in the

Division’s administrative rules pertaining to growlers. Ms. Strauss announced that an event for commissioners

to meet with legislators will occur in March.

Administrator Larson reported that he and Debi Durham, director of the Iowa Economic Development

Authority, are co-chairs of a working group that is conducting a comprehensive review of Iowa Code chapter

123. The objective of the working group is to bring all stakeholders to the table to openly discuss ways to

modernize Iowa’s alcohol laws while maintaining focus on public safety and public health concerns. The goals

3

of the review are to clarify the law, streamline and remove red tape, consolidate or eliminate some state licenses

and permits, identify areas of the law impeding business growth, and maintain the three-tier system.

Administrator Larson presented the Division’s updated organizational chart. Administrator Larson introduced

Joshua Happe, the new bureau chief for the Division’s regulatory compliance program, who began in the

position on November 4.

Administrator Larson presented an update regarding the metrics in reference to a possible public/private

partnership. The Division will be tracking trends in annual growth of liquor sales, distribution outlets, and

SKUs. Administrator Larson reported that the Division is working in partnership with the Iowa Department of

Administrative Services to develop an RFP to determine the feasibility of a public/private partnership in the

distribution of spirits.

Administrator Larson recognized Assistant Attorney General John Lundquist. Mr. Lundquist addressed a ruling

entered by the district court in Valero, a case where the owner of retail convenience stores in the state of Iowa is

also the owner of a business engaged in manufacturing wine in the state of California. The Division denied the

renewal of the retail beer permits for the convenience stores until such time as the ownership of either the

convenience stores or the winery was divested. The owner appealed the denial of the permits and the case

moved through the appeals process, eventually reaching district court. The district court remanded the case back

to the Division for the administrator to provide his interpretation of Iowa Code § 123.45. The administrator

interpreted Iowa Code § 123.45 as unambiguously prohibiting a manufacturer or wholesaler from having an

ownership interest in a retailer. The district court judge affirmed the administrator’s interpretation and denial of

the beer permits. The convenience store owner has 30 days from the district court judge’s ruling to appeal the

case to the Iowa Supreme Court.

PUBLIC COMMENT

None

OLD BUSINESS

None

NEW BUSINESS

None

NEXT MEETING DATE

Wednesday, January 25, 2017 at 1:00 p.m.

ADJOURNMENT

MOTION: A motion was made by Commissioner Nystrom and seconded by Commissioner Doll to

adjourn the meeting.

Motion approved.

4

The meeting adjourned at 2:06 p.m.

Commissioner Eubank, Secretary

1

IOWA ALCOHOLIC BEVERAGES COMMISSION

Telephonic Meeting

M I N U T E S

Iowa Alcoholic Beverages Division 1918 SE Hulsizer Road, Ankeny IA

Training Room December 6, 2016 – 2:30 p.m.

Dial In Number: 1.866.685.1580 Conference Code Number: 0009991572

Commission Members Present:

Jay Wilson: Chair (via phone)

Gary Nystrom: Vice Chair (via phone)

Rachel Eubank: Secretary (via phone)

Tami Doll: Member (via phone)

John Pauli: Member (via phone)

Division Staff Present:

Stephen Larson: Administrator (via phone)

Stephanie Strauss: Executive Officer (via phone)

Robert Bailey: Public Information Officer (via phone)

Todd Halbur: Comptroller (via phone)

Tyler Ackerson: Assistant to the Administrator (via phone)

Pam Koehn-Miller: Secretary (via phone)

Guests Present:

None

CALL TO ORDER

Chairperson Jay Wilson called the meeting to order at 2:30 p.m. and roll was taken. There was a quorum.

Chairperson Wilson noted that the meeting was being held telephonically due to the short agenda and the

impracticality of meeting face-to-face.

2

APPROVAL OF AGENDA

MOTION: A motion was made by Commissioner Nystrom and seconded by Commissioner Doll to

approve the agenda for the December 6, 2016, telephonic Commission meeting.

Motion approved.

Chairperson Wilson recognized Division Public Information Officer Robert Bailey for an overview of the Fiscal

Year 2016 Annual Report.

NEW BUSINESS

Mr. Bailey provided an overview of the Fiscal Year 2016 Annual Report. He noted that the format of the report

followed the previous year’s report format with figures updated to reflect Fiscal Year 2016. The Top 50 Brands

list was revised to reflect clearer descriptions for some brands and Total Gallons Sold by County includes a

Retailers Selling Spirits comparison.

MOTION: A motion was made by Commissioner Nystrom and seconded by Commissioner Doll to adopt

the Fiscal Year 2016 Annual Report.

A roll call vote was taken with the following results:

Commissioner Wilson: Aye

Commissioner Nystrom: Aye

Commissioner Eubank: Aye

Commissioner Doll: Aye

Commissioner Pauli: Aye

The motion passed and the Fiscal Year 2016 Annual Report was adopted.

NEXT MEETING DATE

Wednesday, January 25, 2017 at 1:00 p.m. at ABD headquarters in Ankeny.

ADJOURNMENT

MOTION: A motion was made by Commissioner Eubank and seconded by Commissioner Doll to

adjourn the meeting.

3

Motion approved.

The meeting adjourned at 2:36 p.m.

Commissioner Eubank, Secretary

Financial Overview YTD through December FY17

Metric FY2016 FY20175 Year

Average

4 Year

Average

Total Liquor Sales YTD $142,799,389.00 $151,428,173.00 5.50% 4.50%

12 Month Moving Average

December$23,750,093.73 $24,794,798.04 5.50% 4.50%

Split Case Fee $716,422.00 $759,653.00

Bottle Deposit Revenue $1,260,024.00 $1,373,697.00

Substance Abuse Reversion $10,046,106.75 $10,653,148.00

Liquor Profits Reversion $46,200,000 $47,200,000

Total General Fund Reversion $56,246,107 $57,853,148

Average Monthly Order Volume 4,112 4,944

Average Monthly Case Volume 177,165 170,587

Average Monthly Bottle Volume 1,889,743 1,986,686

Total Freight Cost per Case $1.21 $1.26

Driver Cost per Case $0.63 $0.68

Total Warehouse Operation Cost

Per Case$0.75 $1.06

Warehouse Worker Cost per Case $0.69 $0.96

Metric ABD FY2016 Actual ABD FY2017 ActualBest in Class

Benchmark

Median Industry

Benchmark

Distribution Cost as a % of Sales 3.16% 3.39% 2.04% 5.00%

Distribution Cost as a % of Cost of

Goods Sold5.22% 5.51% <1.6% 6.05%

Distribution Cost Per Unit Shipped $0.400 $0.430 $0.30 $1.04

Key Performance Indicators (KPIs) Benchmarks

Trend

7.94%

4.13%

5.13%

-3.71%

20.23%

2.86%

2.16%

6.04%

9.02%

6.03%

6.04%

FY 17 Current YTD Financial Analysis

ABD Metrics July 1, 2016 - December 31, 2016

41.33%

39.13%

4.40%

Iowa ABD

Monthly Financial Meeting

Category FY 2017 FY 2016 % Change

Liquor Sales 30,297,590 29,787,248 1.71%

Split Case Fee 145,982 149,507 -2.36%

Bottle Dep and Sur 263,810 257,512 2.45%

Total Revenue 30,707,382 30,194,267 1.70%

Orders 5,123 4,406 16.27%

Cases 197,856 211,881 -6.62%

Bottles 2,354,084 2,256,830 4.31%

JUL -2AUG 2SEP -2OCT -1NOV 1DEC -1

Total For FY through DEC -3

Category FY 2017 FY 2016 % Change

Liquor Sales 151,428,175 142,799,389 6.04%

Split Case Fee 759,653 716,422 6.03%

Bottle Dep and Sur 1,373,698 1,260,024 9.02%

Total Revenue 153,561,526 144,775,835 6.07%

Orders 29,666 24,672 20.24%

Cases 1,023,526 1,062,995 -3.71%

Bottles 11,920,116 11,338,458 5.13%

JUL-DEC Average Sale Days Comparison

FY 2017 DECEMBER SALES COMPARISON - YEAR OVER YEAR- CASH BASIS

JULY - December SALES COMPARISON - YEAR TO DATE

23456789

$5.99 $5.18

$6.85 $5.87

Tho

usa

nd

s

Revenue per Order

FY17 FY16

YTD YTD DEC July 0

50

100

150

200

$155.20 $150.03 $142.51 $136.20

Revenue per Case

FY17 FY16

YTD

0

5

10

15

20

$13.04 $13.38

$12.88 $12.77

Revenue per Bottle

FY17 FY16

YTD

DEC

DEC

15171921232527293133

JUL AUG SEP OCT NOV DEC

Mill

ion

s

Liquour Sales Revenue per Month by FY

FY 15

FY 16

FY 17

Net Income Analysis YTD December 2017* * Total amounts have been adjusted to exclude one time expenses

Category FY2016 FY2017 % Change Amount Change

Gross Profit 56,187,157 58,200,765 3.58% 2,013,608.00$

Operating Income 52,436,337 53,897,512 2.79% 1,461,175.00$

Net Profit 53,694,859 55,224,685 2.85% 1,529,826.00$

Net Sales 142,799,389 151,428,173 6.04% 8,628,784.00$

Percent Of Sales FY2016 FY2017 % Change Amount Change

Gross Profit 39.35% 38.43% -2.32% -0.92

Operating Income 36.72% 35.59% -3.07% -1.13

Net Profit 37.60% 36.47% -3.01% -1.13

39.35%

38.43%

36.72%

35.59%

37.60%

36.47%

33%

34%

35%

36%

37%

38%

39%

40%

FY2016 FY2017

Per

cen

t o

f Sa

les

Net Income Analysis Gross Profit

OperatingIncome

Net Profit

N:\ABD Shared Perm\Financial Mgmt\Reports\FY 2017\6-December FY 17 Net Income Analysis

Iowa ABD

FY 17 Profit and Loss Statement

Through December 31, 2016

December

FY 2016

December

FY 2017

December

FY17 vs. FY16

% Chg.

December

FY17 vs. FY16

Amount Chg.

YTD

FY 2016

YTD

FY 2017

FY17 vs. FY16

% Chg.

FY17 vs. FY16

Amount Chg.

Liquor Sales Revenue 29,787,248 30,297,589 1.71% (510,341) 142,799,389 151,428,173 6.04% 8,628,784

Cost of Sales

Bailment 18,069,602 18,772,031 3.89% 702,429 87,751,756 94,324,183 7.49% 6,572,427

Less: Bailment Fees (189,207) (194,105) 2.59% (4,898) (954,734) (1,006,402) 5.41% (51,668)

Less: Special Handling Fees (17,874) (5,511) -69.17% 12,363 (157,698) (77,062) -51.13% 80,636

Less: Defective Products (6,129) (878) -85.67% 5,251 (27,092) (13,310) -50.87% 13,782

Total Cost of Sales 17,856,392 18,571,537 4.00% 715,145 86,612,232 93,227,409 7.64% 6,615,177

Gross Profit 11,930,856 11,726,052 -1.72% (204,804) 56,187,157 58,200,765 3.58% 2,013,608

Gross Profit % 40.1% 39% -3.37% -1.35% 39.3% 38.4% -2.32% -0.91%

Operating Expenses

Freight Expenses 216,966 194,643 -10.29% (22,323) 1,283,260 1,299,684 1.28% 16,424

Warehouse Expenses 144,684 197,220 36.31% 52,536 805,384 1,090,221 35.37% 284,837

Other Expenses Related To Distribution - - #DIV/0! - - - #DIV/0! -

Total Operating Expenses 361,650 391,863 8.35% 30,213 2,088,644 2,389,905 14.42% 301,261

General and Administrative Expenses

Warehouse Administration 31,913 24,363 -23.66% (7,550) 368,461 387,567 5.19% 19,106

Product Administration 37,703 30,791 -18.33% (6,912) 216,292 216,901 0.28% 609

Accounting 32,968 46,753 41.81% 13,785 193,717 222,201 14.70% 28,484

Information Technology 93,564 199,894 113.64% 106,330 669,458 885,655 32.29% 216,197

Buildings and Grounds 45,896 36,956 -19.48% (8,940) 214,248 201,025 -6.17% (13,223)

General and Administrative Expense Total 242,044 338,757 39.96% 96,713 1,662,176 1,913,348 15.11% 251,172

Income from Operations 11,327,162 10,995,432 -2.93% (331,730) 52,436,337 53,897,512 2.79% 1,461,175

Other Revenues

Split Case Fee 149,507 145,982 -2.36% (3,525) 716,422 759,653 6.03% 43,231

Bottle Deposit/Surcharge 257,512 263,810 2.45% 6,298 1,260,024 1,373,697 9.02% 113,673

Recycling 2,837 1,565 -44.84% (1,272) 10,734 8,542 -20.42% (2,192)

Fuel and Lease Reimbursement 280 -100.00% (280) 22,226 - -100.00% (22,226)

Lease Revenue - - 0.00% - 19,988 19,988

Total Other Revenues 410,136 411,357 0.30% 1,221 2,029,394 2,161,879 6.53% 132,485

Other Expenses

Bottle Deposit Fee 40,619 45,584 100.00% 4,965 237,576 257,758 8.49% 20,182

Recycle Surcharge Fee 91,636 101,927 100.00% 10,291 535,972 576,348 7.53% 40,376

Liquor Refunds (807) -100.00% 807 (2,676) 600 3,276

Substance Abuse Transfer 1,671,374 1,912,518 14.43% 241,144 7,950,533 8,522,096 7.19% 571,563

Total Other Expense 1,802,822 2,060,029 14.27% 257,207 8,721,405 9,356,802 7.29% 635,397

Net Profit 9,934,476 9,346,760 -5.92% (587,716) 45,744,326 46,702,589 2.09% 958,263

Return on Sales 33.4% 30.8% -7.50% -2.50% 32.0% 30.8% -3.72% -1.19%

Iowa ABD

FY 17 Net Income Statement

Through December 31, 2016

December

FY 2016

December

FY 2017

December

FY17 vs. FY16

% Chg.

December

FY17 vs. FY16

Amount Chg.

YTD

FY 2016

YTD

FY 2017

YTD

FY17 vs. FY16

% Chg.

YTD

FY17 vs. FY16

Amount Chg.

Revenues Operating Revenues

Liquor Sales 29,787,248 30,297,589 1.71% 510,341 142,799,389 151,428,173 6.04% 8,628,784

Split Case Revenue 149,507 145,982 -2.36% (3,525) 716,422 759,653 6.03% 43,231

Bottle Deposit/Surcharge 257,512 263,810 2.45% 6,298 1,260,024 1,373,697 9.02% 113,673

Recycling Revenue 3,152 1,739 -44.83% (1,413) 12,933 9,492 -26.61% (3,441)

Fuel and Lease Reimbursement - #DIV/0! - 2,352 817 -65.26% (1,535)

Total Operating Revenues 30,197,419 30,709,120 1.69% 511,701 144,791,120 153,571,832 6.06% 8,780,712

Non-Operating Revenues

Lease Revenue - - - 19,988 19,988 0.00% -

License Fees 1,133,886 1,289,244 13.70% 155,358 6,650,513 6,990,231 5.11% 339,718

Wine Tax 661,428 705,243 6.62% 43,815 2,955,573 3,369,509 14.01% 413,936

Fines/Penalties 24,729 540 -97.82% (24,189) 27,269 37,050 35.87% 9,781

Misc. Funding Sources 108,047 5,934 -94.51% (102,113) 165,040 143,819 -12.86% (21,221)

State Appropriations - - - 1,220,391 1,214,106 (0.01) (6,285)

Inter Department Transfers - - - 453,067 25,936 -94.28% (427,131)

Prior Year Liquor Control Fund Carry forward - - - 1,035,004 - -100.00% (1,035,004)

Total Non-Operating Revenues 1,928,090 2,000,961 3.78% 72,871 12,526,845 11,800,639 -5.80% (726,206)

Total Revenues 32,125,509 32,710,081 1.82% 584,572 157,317,965 165,372,471 5.12% 8,054,506

ExpensesOperating Expenses

Purchase of Spirits 17,856,392 18,571,537 4.00% 715,145 86,612,232 93,227,409 7.64% 6,615,177

Freight Expenses 216,966 194,643 -10.29% (22,323) 1,283,260 1,299,684 1.28% 16,424

Warehouse Expenses 144,684 197,220 36.31% 52,536 805,384 1,090,221 35.37% 284,837

Other Expenses Related To Distribution - 0.00% - - - #DIV/0! -

Warehouse Administration 31,913 24,363 -23.66% (7,550) 368,461 387,567 5.19% 19,106

Product Administration 37,703 30,791 -18.33% (6,912) 216,292 216,901 0.28% 609

Accounting 32,968 46,753 41.81% 13,785 193,717 222,201 14.70% 28,484

Information Technology 93,564 199,894 113.64% 106,330 669,458 885,655 32.29% 216,197

Buildings and Grounds 45,896 36,956 -19.48% (8,940) 214,248 201,025 -6.17% (13,223)

Bottle Deposit Fee 40,619 45,584 12.22% 4,965 237,576 257,758 8.49% 20,182

Recycle Surcharge Fee 91,636 101,927 11.23% 10,291 535,972 576,348 7.53% 40,376

Liquor Refunds (807) 0.00% 807 1,062 600 -43.50% (462)

Substance Abuse Transfer 1,671,374 1,912,518 14.43% 241,144 7,950,533 8,522,096 7.19% 571,563

Liquor Profits Transfer 9,000,000 9,000,000 0.00% - 38,200,000 38,200,000 0.00% -

Total Operating Expenses 29,262,908 30,362,186 3.76% 1,099,278 137,288,195 145,087,465 5.68% 7,799,270

Non-Operating Expenses

Sunday Sales Transfer - - - - 944,257 927,378 -1.79% (16,879)

Payments to City and Counties 563,547 194,594 -65.47% (368,953) 1,470,484 1,432,664 -2.57% (37,820)

Non-Operating Expenditures 207,127 208,502 0.66% 1,375 1,138,500 1,285,493 12.91% 146,993

Inter-Department Transfers - - - - - - -

Non-Operating Expenses Total 770,674 403,096 -47.70% (367,578) 3,553,241 3,645,535 2.60% 92,294

Total Expenses 30,033,582 30,765,282 2.44% 731,700 140,841,436 148,733,000 5.60% 7,891,564

Net Income 2,091,927 1,944,799 -7.03% (147,128) 16,476,529 16,639,471 0.99% 162,942

Reversion Analysis

FY2017 / FY2016

FY 15 FY16 FY17 FY 15 FY16 FY17 FY 15 FY16 FY17

FY 17 vs. FY 16 %

Change

July 17,153,367.31$ 17,354,626.80$ 16,182,779.47$ 97,739.50$ 95,011.00$ 85,098.50$ 17,251,106.81$ 17,449,637.80$ 16,267,877.97$ -6.77%

August 18,380,277.05$ 22,356,614.25$ 27,281,631.01$ 100,043.00$ 118,488.65$ 147,015.18$ 18,480,320.05$ 22,475,102.90$ 27,428,646.19$ 22.04%

September 25,457,498.46$ 23,416,184.80$ 23,307,167.10$ 127,235.50$ 126,235.50$ 119,399.50$ 25,584,733.96$ 23,542,420.30$ 23,426,566.60$ -0.49%October 25,690,240.09$ 26,121,615.89$ 27,172,377.07$ 114,111.90$ 113,501.00$ 127,098.54$ 25,804,351.99$ 26,235,116.89$ 27,299,475.61$ 4.06%November 20,651,637.18$ 23,763,098.87$ 27,186,630.66$ 101,687.30$ 113,678.50$ 135,059.96$ 20,753,324.48$ 23,876,777.37$ 27,321,690.62$ 14.43%

December 28,171,760.10$ 29,787,248.48$ 30,297,589.74$ 146,915.50$ 149,507.00$ 145,982.00$ 28,318,675.60$ 29,936,755.48$ 30,443,571.74$ 1.69%

January 21,191,600.40$ 19,833,010.93$ 120,299.50$ 116,620.50$ 21,311,899.90$ 19,949,631.43$

February 20,875,688.63$ 23,719,843.36$ 106,295.00$ 121,820.04$ 20,981,983.63$ 23,841,663.40$

March 23,561,799.69$ 22,973,373.17$ 120,034.58$ 123,716.00$ 23,681,834.27$ 23,097,089.17$

April 21,459,454.81$ 21,406,364.63$ 118,045.00$ 114,130.00$ 21,577,499.81$ 21,520,494.63$

May 23,254,740.64$ 24,735,346.31$ 113,258.82$ 124,648.50$ 23,367,999.46$ 24,859,994.81$

June 26,729,729.02$ 27,409,272.32$ 135,026.50$ 142,132.50$ 26,864,755.52$ 27,551,404.82$

July-Aug (H/O) 5,128,722.61$ 6,032,190.85$ 26,209.50$ 34,450.00$ 5,154,932.11$ 6,066,640.85$

Total 277,706,515.99$ 288,908,790.66$ 151,428,175.05$ 1,426,901.60$ 1,493,939.19$ 759,653.68$ 279,133,417.59$ 290,402,729.85$ 152,187,828.73$ 34.95%

Total Budget % of Budget

285,000,000.00$ 53.13%

FY 15 FY16 FY17 FY 15 FY16 FY17 FY 15 FY16 FY17

FY 17 vs. FY 16 %

Change

July 1,537,471.88$ 1,221,474.65 1,138,751.46 6,000,000$ 6,000,000$ 6,000,000$ 7,537,471.88$ 7,221,474.65$ 7,138,751.46$ -1.15%

August 1,481,850.27$ 1,573,257.20 1,920,005.23 6,000,000$ 7,000,000$ 7,000,000$ 7,481,850.27$ 8,573,257.20$ 8,920,005.23$ 4.04%

September 1,543,474.94$ 1,647,969.42 1,639,859.66 7,000,000$ 7,500,000$ 7,500,000$ 8,543,474.94$ 9,147,969.42$ 9,139,859.66$ -0.09%

October 1,930,458.45$ 1,836,458.18 1,910,963.29 8,500,000$ 8,700,000$ 8,700,000$ 10,430,458.45$ 10,536,458.18$ 10,610,963.29$ 0.71%

November 1,409,326.77$ 1,671,374.42 1,912,518.34 6,000,000$ 9,000,000$ 9,000,000$ 7,409,326.77$ 10,671,374.42$ 10,912,518.34$ 2.26%

December 2,128,966.06$ 2,095,572.88 2,131,050.02 6,000,000$ 8,000,000$ 9,000,000$ 8,128,966.06$ 10,095,572.88$ 11,131,050.02$ 10.26%

January 1,286,706.08$ 1,396,474.20 8,000,000$ 6,000,000$ 9,286,706.08$ 7,396,474.20$

February 1,479,646.53$ 1,668,916.44 8,000,000$ 7,000,000$ 9,479,646.53$ 8,668,916.44$

March 1,670,587.37$ 1,616,796.24 8,000,000$ 8,000,000$ 9,670,587.37$ 9,616,796.24$

April 1,598,409.60$ 1,506,434.62 7,500,000$ 7,500,000$ 9,098,409.60$ 9,006,434.62$

May 1,571,640.16$ 1,740,199.64 9,000,000$ 8,000,000$ 10,571,640.16$ 9,740,199.64$ June 1,774,967.03$ 1,928,598.34$ 9,000,000$ 8,000,000$ 10,774,967.03$ 9,928,598.34$ July-Aug (H/O) 125,834.09$ 424,664.86$ 697,323$ 760,077$ 823,157.09$ 1,184,741.97$

Total 19,539,339.24$ 20,328,191.09$ 10,653,148.00$ 89,697,323 91,460,077 47,200,000 109,236,662.24$ 111,788,268.20$ 57,853,148.00$ -48.25%

Obligation 98,000,000 103,000,000 111,500,000

Over/Under Reversion 11,236,662 8,788,268 (53,646,852)

111.47% 108.53% 51.89%

Liquor Sales Split Case Revenues Total Revenue

Substance Abuse General Fund Reversion Total Reversion

Sales and Reversion Data Sheet

N:\ABD Shared Perm\Financial Mgmt\Reports\FY 2017\Reversion Analysis FY17

Liquor Control Trust Fund 6 month Review FY2017 July 1, 2016 – December 31, 2016 Deep Dive Freight and Warehouse

1

$7,200,000 $5,000

$16,400,000 $57,800

$79,950

$285,000,000

$21,000

$2,600,000 $2,100 0631 Revenue Budget

112 Liquor Tax

234 Gov Transfer In Other Agencies

401 Fees, Licenses & Permits

501 Refunds & Reimbursements

603 Rents & Leases

605 Liquor

606 Other Sales & Services

701 Unearned Receipts

704 Other

2.31%

.001%

4.27%

.02%

.03%

91.5%

.01%

.84%

.001%

$311,365,850

$3,369,510 $3,790 $7,749,890

$5,956

$19,988

$151,428,175

$8,543

$1,373,700 $3,450 0631 Actual Revenue YTD

112 Liquor Tax

234 Gov Transfer In Other Agencies

401 Fees, Licenses & Permits

501 Refunds & Reimbursements

603 Rents & Leases

605 Liquor

606 Other Sales & Services

701 Unearned Receipts

704 Other

53.15% $165,492,947 46.8%

75.8%

47.3%

10.3%

25%

53.1%

40.7%

52.8%

164%

2

$4,596,965

$79,026

$1,003,800

$5,520 $13,501 $1,500

$8,000

$6,200

$150,000

$30,000

$6,301

$71,179 $25,001 $130,000

$4,500

$2,940,967

$105,439,132

$70,000 $45,000

$701,777

$202,028

$2,753,278

$679,675

$5,251 $327,248

$8,000

$410,000

$500

$185,250,000

$2,500

$750,000

$3,750,000

$1,899,000

0631 Expense Budget

101 Personal Services202 In State Travel203 State Vehicle Operation204 State Vehicle Depreciation205 Out Of State Travel301 Office Supplies302 Facility Maintenance Supplies304 Prof. & Scientific Supplies308 Other Supplies309 Printing & Binding312 Uniforms & Related Items401 Communications402 Rentals403 Utilities405 Prof & Scientific Services406 Outside Services407 Intra-State Transfers409 Outside Repairs/Service412 Auditor Of State Reimbursement414 Reimbursements To Other Agency416 ITD Reimbursements418 IT Outside Services419 Intra Agency Reimbursement434 Gov Transfer Other Agencies501 Equipment502 Office Equipment510 IT Equipment & Software602 Other Expenses & Obligations603 Inventory701 Licenses705 Refunds-Other801 State Aid901 Capitals

1.48% 0.03%

0.3% .002% .004% .001% .002% .002% 0.05% 0.01% .002% 0.02% .008%

.0.04% .001% .001% 0.94% 33.9% 0.03% 0.01% 0.23% 0.06%

0.8% 0.22% .002%

0.1% .01%

0.13% .001% 59.5% .001%

0.2% 1.2% 0.6%

$311,365,850

3

$2,053,207

$35,753

$558,854

$2,205 $5,759

$0 $2,537

$1,080

$54,836

$11,042

$815

$44,566 $2,836 $51,931

$841

$941,466

$47,649,477

$34,610

$11,255

$204,131

$192,089

$650,463

$0

$30 $0

$0

$15,894 $0

$93,227,409

$3,519

$420,022

$1,432,617

$0

0631 Actual Expense YTD

101 Personal Services202 In State Travel203 State Vehicle Operation204 State Vehicle Depreciation205 Out Of State Travel301 Office Supplies302 Facility Maintenance Supplies304 Prof. & Scientific Supplies308 Other Supplies309 Printing & Binding312 Uniforms & Related Items401 Communications402 Rentals403 Utilities405 Prof & Scientific Services406 Outside Services407 Intra-State Transfers409 Outside Repairs/Service412 Auditor Of State Reimbursement414 Reimbursements To Other Agency416 ITD Reimbursements418 IT Outside Services419 Intra Agency Reimbursement434 Gov Transfer Other Agencies501 Equipment502 Office Equipment510 IT Equipment & Software602 Other Expenses & Obligations603 Inventory701 Licenses705 Refunds-Other801 State Aid901 Capitals

44.7% 45.2% 55.7% 39.9% 42.7%

0.0% 31.7%1

17.4% 36.6% 36.8%

12.9%662.6% 11.3% 39.9% 18.7%

32% 45.2% 49.4%

25% 29.1% 95.1% 23.6%

0% 0.6%

0% 0%

3.9% 0%

51.2% 140.8%

56% 38.2%

0%

47.9% $149,137,832

4

5

$811,410

$47,016

$240

$621

$217,576

$13,359

0631 - Unit 9206 Warehouse FY17 Expense

101 Personal Services

308 Other Supplies

312 Uniforms & Related Items

401 Communications

406 Outside Services

409 Outside Repairs/Service

Budget $1,901,754 Actual Expense 57.33% $1,090,222

74.4%

4.3%

0.01%

0.10%

20%

1.2%

6

$172,483

$45,047 $57,487

$602

Staffing, Temp Other ContractualServices

2345 2479

Class 406

$816

$529

$240

$621

0 100 200 300 400 500 600 700 800 900

Uniforms & Related Items

Communications

31

24

01

-70.6%

17.3%

$676,787

$56,869

$58,180

$12,203

$811,410

$47,016

$217,576

$13,359

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

Personal Services

Other Supplies

Outside Services

Outside Repairs/Service

10

13

08

40

64

09

0631 - 9206 Warehouse Expenditures by Class FY16 vs. FY17

YTD FY17

YTD FY16

274%

19.9%

-17.3%

9.5%

7

$666,407

$35,740

$558,366

$1,155

$2,259

$575 $10,726

$2,836 $841

$32

$4,854

$15,894

0631 -9207 Freight FY17 Expense

101 Personal Services

202 In State Travel

203 State Vehicle Operation

204 State Vehicle Depreciation

308 Other Supplies

312 Uniforms & Related Items

401 Communications

402 Rentals

405 Prof & Scientific Services

406 Outside Services

409 Outside Repairs/Service

510 IT Equipment & Software

51.3%

2.7%

43%

0.1%

0.2%

0.01%

0.8%

0.2%

0.1%

0.01%

0.4%

1.2%

Budget $2,783,248 Actual Expense 46.7% $1299,685

8

$636,243

$30,640

$570,195

$18,548

$5,613

$303

$17,043

$666,407

$35,740

$558,366

$2,259

$10,726

$4,854

$15,894

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000

Personal Services

In State Travel

State Vehicle Operation

Other Supplies

Communications

Outside Repairs/Service

IT Equipment & Software

10

12

02

20

33

08

40

14

09

51

00631 - 9207 Freight Expenditures by Class FY16 vs. FY17

YTD FY17

YTD FY16

-6.7%

1504.5%

91.1%

-87.8%

16.6%

-2.1%

4.7%

$924

$943

$2,778

$31

$1,155

$575

$841

$32

0 500 1,000 1,500 2,000 2,500 3,000

State Vehicle Depreciation

Uniforms & Related Items

Prof & Scientific Services

Outside Services

20

43

12

40

54

06

1.4%

-69.7%

-39%

25%

Draft RFP Time Table

Task Dates

# of Days Start End

Forming the RFP 12/01/2016 04/17/2017 137 Finalizing the RFP 04/19/2017 04/28/2017 9 Solicitation of Proposals 04/28/2017 07/28/2017 91 Evaluation of Proposals 07/31/2017 12/01/2017 123 Forming an Agreement 12/01/2017 TBD TBD Implementation/Integration 07/01/2018 12/31/2018 183

Fiscal Year Begins July 1 and ends June 30

SKU A stock keeping unit (SKU) is a product and service identification code for a store or product, often portrayed as a machine-readable bar code that helps track the item for inventory. In short, it is the number of products we have available.

• SKU growth is measured as an average growth over quarters

Distribution Growth7/1-9/30 10/1-12/31 1/1-3/31 4/1-6/30 Average

2014 1% 1% 1% 0% 1%E Class Licensees 1% 1% 1% 0% 1%

2015 1% 1% 0% 3% 1%E Class Licensees 1% 1% 0% 3% 1%

2016 0% 1% 1% 1% 1%E Class Licensees 0% 1% 1% 1% 1%

2017 1% 1%E Class Licensees 1% 1%

Average 1% 1% 1% 1% 1%

Quarter

Distribution Growth7/1-9/30 10/1-12/31 1/1-3/31 4/1-6/30 Average

2014 3% 2% 1% 1% 2%C-Store 3% 2% 1% 1% 2%

2015 1% 4% 3% 4% 3%C-Store 1% 4% 3% 4% 3%

2016 0% 5% 5% 4% 3%C-Store 0% 5% 5% 4% 3%

2017 2% 2%C-Store 2% 2%

Average 2% 4% 3% 3% 3%

Quarter