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Montgomery County Organizational Reform Commission The ORC discussed DLC finances and the resident's view that the reported profits, adjustments and fund transfer numbers if reported differently - could have changed outcomes. ).- We recommend the contracting out of a financial and petformance audit for the Department ofLiquor ControL Conclusions Privatization The ORC discussed the privatization of DLC operations and acknowledged that State law would have to be amended for privatization to take place, and that Montgomery County would not necessarily have control over the outcome o f any legislative amendments. The sale of alcohol is a controversial issue. Some people feel that the County should not be in the liquor business, while others fear a liquor store on every comer. Those holding the former view are of the opinion that if the County withdrew from the business, the County retail stores would be operated more efficiently and that operators could save money by buying directly from suppliers. This argument is mitigated by the fact that Maryland is a one-price state that makes savings moot, though one could argue that the increase in retail stores would increase profits. Those concerned about privatizing the sale of liquor believe that incidents involving drunken behavior might increase, thereby leading to an increase in public safety concerns. An argument against privatizing DLC operations is that the change could reduce the County's ability to control the wholesale, distribution and retail of alcoholic beverages in the County. Maintaining such control has been an essential element of the County's current policy regarding alcoholic beverage sales in the County. A counter-argument is that the licensing and enforcement functions would nor disappear and that enforcement functions exist for the sale oftobacco. Privatization would provide a one-time revenue infusion from the sale of the warehouse and the inventory. But under total privatization, it is unlikely that $25-30 million - the surplus revenues that DLC now transfers to the County's General Fund - could be generated from investment income, shared taxes from increased sales, and additional license fees. The proposal for privatization brought to us by the resident who addressed this issue at our public forum would continue to provide the same level of surplus revenues currently generated by DLC operations. His assumptions include: • Doubling o f sales, due to increased retail convenience and selection. • Imposing a 6% fee on wholesale sales. • Requiring licenses for wholesalers. • Imposing additional license fees from retailers. • Increased revenue gained in property taxes from retail stores. • Writing off the Crabbs Branch property, which DLC does not own. • A gain of$47.6 million in transition assets. - 56PDF Image | Montgomery County Organizational Reform
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