Agenda - 01-15-2008-3b - Laserfiche WebLink

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Narrative for the Orange County ABC Board's Trial Distribution Plan, October 10, 2007 Explanation of Column A: 1. Column A will be the calculation used in the budgeting process in May/June preceding the upcoming fiscal year. 2. Line 1 - "Projected Net Income Before Distributions" is derived from forecasted sales of products and interest income, less the projected expenses involved. 3. Line 2 -because Retiree Health Insurance expense is considered by the BOCC to be a distribution, this amount is added back to the net income amount. 4. Line 3 =line 1 plus line 2. S. Line 4 -ABC Board's share: The ABC Board is self-sufficient, which means that all of the ABC Board's funds are derived from income generated by the entity. Therefore, as with any small business, a percentage of net income must be retained for expansion and for working capital purposes. Currently, the Board has three major real estate projects either in-progress or the planning stages (Renovation of the Village Plaza Store, new office/distribution center and an additional ABC store for the southern side of Hillsborough). Hopefully, the percentage retained by the Board can be reduced after these capital expenditures have been completed. 6. Line 5 =line 3 minus line 4. 7. Lines 6 & 7 -Alcohol Law Enforcement & Alcohol Rehabilitation and Education distributions. In accordance with NC General Statute 18B, paragraphs 80S-c(2) and c(3), the Board is required to distribute S% of its remaining gross receipts for law enforcement and 7% of the same for education (after making certain other statutory distributions). The Board tends to provide substantially more than the amounts required by state statutes; however, this plan limits the amounts to 1 S% each of net income. If the amounts requested from law enforcement or education providers are less than 1 S%, then the remainder flows through to the General Fund. These amounts are set in advance of the fiscal year and do not change even if net income is exceeded or less than expected. It should also be noted that the ABC Board is considering education distributions to entities other than the public schools based on a grant process. The ABC Board will share the education grant policy/procedure with the BOCC after it is fmalized. 8. Line 8 -Retiree Health Care Expense: This amount will be calculated by a third parry actuary and will be known in advance for budgetary purposes. This amount is added back because the BOCC allows this to be a distribution. 9. Line 9 =total of lines 6e, 7c and 8. 10. Line 10 =line 4 minus line 7. 11. Line 11 -General Fund distribution: This amount will be computed once for budgetary purposes and again near fiscal year-end based on actual. projected net income. For budgetary purposes, 9S% of the calculated amount will be guaranteed. Near the end of Page 1 of 2 page(s) Attachment "B"