July 1, 2013

Hyde County ABC stores are finally in better financial shape


The Hyde County ABC stores are in the black after years of deficits and mismanagement, thanks to Ocracoke islander Keith Parker-Lowe’s management.

“The ABC stores are in the best shape they’ve been in in several years,” noted Bill Rich, Hyde County manager after the first part of a public hearing on the ABC’s budget June 24.

 “They paid off all of their debts and they are current on rent,” Rich said about the management under Parker-Lowe.

The hearing was continued until Friday to further refine the budget, the accounting of which is now the job of Gary Davis, a CPA on Ocracoke whom the ABC board hired several weeks ago to straighten out the books.

Meeting both in Swan Quarter and Ocracoke via teleconferencing in the Ocracoke School, the board approved the budget Friday, which will be presented to the Hyde County commissioners at the regular monthly meeting Monday evening, July 1.

Rich noted that after expenses in 2011, the board had a profit of $12,119.  The profit for 2012 was $9,893, he said.  By comparison, the board in 2010 had a $30,199 deficit and deficits in all the previous years. 

The estimated profit for next year is $18,948, according to Parker-Lowe’s budget.

However, as of Friday and looking at annual income for the fiscal year through Tuesday, the estimated total for 2013 will be a deficit of $3,470, Parker-Lowe said. However, that number could change to break-even in the four days before the fiscal year ended on June 30 because of liquor sales from Wednesday through Saturday.

Parker-Lowe, who is the chairman of the three-member board, explained that the negative figure is primarily due to a $5,404 penalty the board will have to pay for late-filing of taxes by Davis’ predecessor and paying more for Davis’ accounting services.

“Ultimately, for the first time in more than 20 years, the financial records for the board are accurate,” Parker-Lowe said. “We absorbed quite a bit of penalties and fees this year.”

Appointed two years ago by former county commissioner Darlene Styron, Parker-Lowe instituted new management practices that have resulted in efficiencies and an accounting system that shows what’s actually going on. 

Moreover, in next year’s budget with its projected profit, Parker-Lowe has included another “first” -- $2,000 scholarships for both Ocracoke and Swan Quarter if the profit projection holds.

The complications of management have to do with the separation between the mainland where the liquor is warehoused and Ocracoke, where most of the liquor is sold.

“We’ve looked closely at the staffing and adjusting the store hours, and we’ve had to become more efficient in ordering and stacking,” Parker-Lowe said. “Ocracoke is the main pain in this.”

Sometimes, he said, the liquor orders have been so large they’ve needed two trucks to bring it to the island and then have to pay for employees to stay overnight.

Nevertheless, the budget shows that total liquor sales from both stores is estimated to be $816,238 this year and $979,000 for 2014.   By comparison, gross sales in 2011 were $553,000, Rich said.

The addition of three restaurants on the island that began serving mixed drinks when they opened this year also will dramatically boost the bottom line, Parker-Lowe noted. Those three are The Flying Melon, El Faro Mexican Restaurant, and The Jolly Roger.

All restaurants must purchase their alcohol from ABC stores, and Hyde County has two -- one in Ocracoke and one nine miles north of Swan Quarter. 

The stores are overseen by an appointed board and the budget is set up to pay for the county to purchase the liquor as well as all the costs involved. After that, the state returns two percent of the sales taxes to the county. In 2012, the county received $43,768 in tax revenues, and for this year the county expects to receive $37,660.

A computer programmer by trade, Parker-Lowe has done programming for retail stores in the past and he also came up with the system that put the state register of deeds online.

For the ABC stores, Parker-Lowe has beefed up the inventory with more expensive offerings.  Two years ago, when the shelves on Ocracoke were about empty, what was there was nonstandard, inexpensive liquor.

“If you get cheap stuff, you can’t make a profit,” he said. “You have to manage that $5.99 bottle just like a $53 bottle of (top-shelf liquor).”

ABC stores can charge only what the state tells them to charge, and they can’t put liquor that’s not moving on sale, he said.

“So, you have to watch the inventory closely,” said Parker-Lowe, who is managing the system as a volunteer. He and the other board members receive stipends to attend the monthly meetings.  Vickie Gibbs of Swan Quarter is the paid manager.

He also said the board is thinking of converting the Swan Quarter store into a self-serve store, which would yield more sales.

“People like to shop,” Parker-Lowe said.

Currently, the store is a request-only store with customers needing to tell employees behind a glass window what they want.

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