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i <br /> I <br /> ORANGE COUNTY ABC BOARD—AGENDA FORM <br /> Meeting Date: January 17,2023 Agenda Item # 7a <br /> Regular Session X <br /> Closed Session_ <br /> Increases in lease amortization (+$20,507) and lease interest ($3,658) were generally <br /> offset by decreases in rent (-$11,573), a result of the implementation of GASB 87 (lease <br /> capitalization). <br /> Net income for the month(after depreciation)was $298,951,down-$43,108(42.60%). <br /> 3. Actual to Budget Comparison for Year-to-Date 2022 (Attachment"C"): <br /> The mid-year point of the fiscal year is the time in which we review the annual budget <br /> and present the Board a budget amendment for review and approval. Our annual budget is not <br /> symmetrical, however, in that the second quarter of the fiscal year-October through <br /> December- is our highest volume period while the third quarter-January through March-is <br /> our lowest. Nevertheless, evaluating the budget at the mid-year mark allows us to forecast <br /> trends for the remainder of the year. <br /> At the close of the holiday season, sales are approximately 8.54% above those <br /> projected as are sales-related costs (taxes, cost of goods). As overall sales volumes have <br /> remained at or above those of the previous year, we expect sales for the remainder of the fiscal <br /> year to continue at similar levels. <br /> Total payroll expenses are approximately 4.94% above those allocated, due in part to <br /> pay incentives and increases related to the competitive job market. This trend is expected to <br /> continue. While several ancillary expense accountss (health reimbursement, flex spending) <br /> were rolled into "Human Resources" (a new department this year),the overall budget for this <br /> account will need to be increased for the year. <br /> Total operating expenses for the year are approximately 6.69%above projected, due <br /> primarily to GASB 87 created categories (lease amortization, interest on leases) which need to <br /> be added to the budget. Credit card processing fees are trending 14.22%higher than expected, <br /> although these expenses will lessen in the third quarter. Office supplies and expenses related <br /> to the setup of two"new"offices should be increased as should store supplies related to the <br /> setup and opening of the new Southern Village store. <br /> Capital expenses will be examined and discussed as part of the budget amendment <br /> agenda item. <br /> Action Requested: <br /> 1. Consent Agenda Item. <br /> 2. Review and discuss as needed. <br /> Financial Impact: See Above <br /> Staff Recommendations/Comments:None <br /> Page 2 of 6 pages <br />