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June 16 2015 Board Meeting MinutesNew Hanover County ABC Board Meeting Minutes June 16, 2015 I. Call to order Chairman Cedric Dickerson called to order the regular meeting of the New Hanover County Alcoholic Beverage Control Board at 9:30arn on June 16, 2015 at the Cape Fear Community College Union Station Building, Room 512, Wilmington, NC II. Roll call Carol Martin, Board Secretary, conducted a roll call. The following Members of the Board were present: Cedric Dickerson, Chairman Robert W. Martenis, Vice Chairman Thomas Wolfe, Member Augustus C. Everett, Jr., Member William A. Kopp, Jr., Member Others in attendance were: Dan Sykes, Chief Executive Officer Gary Cain, Retail and LBD Operations Manager Charles Hill, Interim 2nd Retail and LBD Operations Manager Carol Martin, Board Secretary Wanda Copley, Legal Counsel Maj. Donald Taft, NHC Sheriff's Department Sergeant Joe Jewell, NHC Sheriffs Department Mark Francolini, New Hanover County Human Resources Director Tracy Dawson, New Hanover County Human Resources Analyst Kathy Clark, Finance Specialist Tim Buckland, Wilmington Star News Reporter David Matthews, Former Board Member Chris Harrison, ABC LBD Manager Absent with notice: Avril Pinder, Ex- Officio Member III.Apnroval of minutes from last meeting Mr. Dickerson presented the minutes from the last Regular Meeting of May 12, 2015 and the minutes from the Special Meeting of June 2, 2015. Mr. Everett made the motion to approve both sets of minutes as written. Mr. Martenis seconded the motion, and all approved. IV. Conflict of Interest Reminder Mr. Dickerson verbally confirmed that the Board members had read the following ethics reminder: "In accordance with General Statute I8B -201, it is the duty of every Board member to avoid both conflicts of interest and appearances of conflicts. Does any member hove any known 11 Page conflict of interest or appearance of conflict tivith respect to any matters coming before the Board today? If so, please identify the conflict or appearance of conflict and refrainfrom any undueparticipation in theparticular matter involved. " Let it be recorded that no conflicts were identified by any Board member regarding this Board meeting. V. Allproval of proposed agenda Mr. Martenis made the motion to accept the proposed meeting agenda as written, with the addition of item 3i. Presentation by Mr. Dickerson and the need to enter into closed session at the end of the regular meeting. Mr. Everett seconded the motion, and all approved. VI.Administrative Reports A. ABC Law Enforcement O f f i c e r s' Unit Monthly (ALE) Report for May was presented by Det. Jewell. Officers performed the following activities for the month of May, 2015: *616 Store Visits X325 Bank Deposits * 14 Change Deposits * 17 Video Investigations *70 Charges *46 Arrests * 1 I Searches (Consent or Probable Cause) *Cited 1 "Sell to Underage" ABC Law Violation *Cited 35 "Underage Possession" ABC Law Violations *Cited 7 "Unauthorized Possession" ABC Law Violations *Cited 26 "Other Alcohol" ABC Law Violations *Cited l "Possession" Controlled - Substance Violation *Cited 1 "Paraphernalia" Controlled- Substance Violation *Cited 10'Traffic" Other Offenses *Cited 15 "Criminal" Other Offenses *Noted 4 "Seller /Server" Alcohol Education *Assisted 37 ABC Law Agencies *Assisted 7 Controlled Substance Agencies *Assisted 8 "Other" Agencies *Performed 5 4 Business Inspections *Reported 3 Violations Submitted *Performed 100 Business Compliance Checks *Completed 12 Training Hours B. Mr. Sykes presented the Board with Financial Statements for May, 2015. Mr. Sykes reported for May, the Actual -to- Budget comparison showed Gross Sales better than projected by $189k (5.51 %), Operating Expenses less than budget by $27k (6.75 %), and Income from Operations better than budget by $136k (29.77 %). Year to date, Gross Profits were more than projected by about $709k (8.32 %), and "Change in Net Position before Profit Distributions" had a positive variance of $1.076 million (56.44 %). C. Mr. Sykes presented the Board with his Financial Projections thrar Year -End (as of 611 112 0 1 5) for discussion purposes. Actual financial figures are shown for the fiscal year's first eleven months, and budgeted financial figures are shown for the last fiscal month. Based on the current year end projections it appears that Gross Sales will exceed the budget by over $1.05 million, and that 2 1 P a g e Operating Income (Change in Net Position Before Distributions) should be better than budget by $1.2 million at year end. D. Mr. Sykes presented the Board with updates regarding the 17th Street /Castle Street Renovation Project: • The construction contract was e- mailed by LS3PAssociates, LTD to Bordeaux Construction Co., Inc. shortly after the Board's June 2, 2015 vote to award the contract. • A pre - construction meeting is scheduled on -site at 10:00am Wednesday, June 24, 2015. Several staff members, and T.J. Land, Architect and Board's Construction Manager, will be in attendance. VII. New Business A. Mr. Sykes proposed that based on the May financial statements, the Board may choose to distribute an additional profit distribution to its beneficiaries. Mr. Sykes' supporting bar graph depicted six (6) fiscal years' "Tax, Profit & Law Enforcement Distributions ", and included his suggested additional profit distribution amount, $300k for FY2015. Mr. Kopp made the motion to approve an additional profit distribution to the Board's beneficiaries in the total amount of $300,000.00. Mr. Martenis seconded the motion, and all approved. B. Mr. Sykes apprised the Board that the Risk Management Services Contract is up for renewal. In addition to reviewing all of the Board's insurance policies for appropriate coverages and pricing, the County's Risk Management Office also reviews all Board Contracts to assure the Board is sufficiently covered by the vendors' insurance protection. Mr. Wolfe made the motion to authorize the Chair /Vice Chair to renew the Risk Management Services contract with the County's Risk Management Office for the year July 1, 2015 through June 30, 2016 for 3.00% of the Board's total insurance premiums. Mr. Martenis seconded the motion, and all approved. C. Mr. Sykes presented the Board with Koonce, Wooten & Haywood, LLP's Audit Engagement Letter and a letter to the Finance Committee both dated June 9, 2015. The engagement letter confirms the understanding of services the CPA firm will provide; a copy of the Peer Review report assures the Board that the CPA firm has passed a recent Peer Review. The letter to the Finance Committee encourages direct communications between the Board Members and the independent auditor. The FY2015 audit contract was executed in November, 2014. No Board action was necessary regarding this agenda item. D. Mr. Sykes informed the Board that he had answers from the N.C. ABC Commission regarding "land banking" and ABC store lease restrictions - -- questions from recent Board real estate discussions. The state was unable to find restrictions as to how far in advance land can be purchased [land banked] for future use by an ABC Board. Legal Counsel Kemp Burpeau advised, "Pursuant to 04 NCAC 02R.1203, it might be best to post the proposed acquisition property prior to closing to give the 30 day public notice and get Commission approval before purchasing the parcel. The signage indicating proposed ABC store use would then be maintained on site until such time as construction starts. The statute and administrative code provision set forth no time constraints as to when construction must commence. " Mr. Sykes stated that it is often mentioned that government leases in North Carolina cannot be ten years or longer, to which the ABC Commission answered, "This is actually incorrect. The language is "but not for longer than 10 years (except as otherwise provided herein) ", and that the statutes do 31 Page apply to ABC Boards, although not an "under I 0- years" law." Mr. Sykes stated that a conversation among Mr. Burpeau, Ms. Copley and himself prior to the Board meeting, revealed that the ABC Commission was focusing on leasing surplus Board property to a another party, as opposed to acquiring a lease for an ABC Store. Mr. Sykes stated that this matter will require additional research to clarify the issue. No Board action was necessary regarding this agenda item. E. Mr. Sykes asked the Board to consider a one -time productivity bonus to eligible employees for the successful and efficient fiscal year 2014 -2015. Mr. Sykes recused himself from the additional pay. Mr. Wolfe made the motion to approve the one -time productivity bonus as Mr. Sykes had requested, stating that part timers and employees serving the Board for less than 12months should be granted a pro -rated amount based on that position's productivity bonus. The motion was to authorize disbursement of Employee Productivity Pay and related expenses for the current year not to exceed $50,000. Mr. Martenis seconded the motion, and all approved. F. Mr. Sykes apprised the Board that the retail Point -of -Sale computer /cash registers are required to be upgraded by September 30, 2015 to accept charge cards with the embedded computer chips. Carolina Data Systems has offered a 4% discount (a savings of over $1,600) if the upgrades are purchased and paid in full by June 30, 2015. Mr. Sykes advised the Board too that its current charge card processor's (Heartland) software was slow with its upgrade to EMV /CHIP Initiative soflware, and that Ms. Martin is seeking quotes from merchant service providers that are compatible. The quotes will be summarized and Ms. Martin will make her recommendation at the next Board meeting, to be held on July 21, 2015. Mr. Martenis made the motion to authorize the Chair /Vice -Chair to execute appropriate documents to purchase EMVICHIP Initiative equipment and labor from Carolina Data Systems before July 1, 2015 for an amount not to exceed $43,000 (includes 4% discount). Mr. Everett seconded the motion, and all approved. G. Mr. Sykes presented the Board with the County's Human Resources Department invoice for the consulting services rendered during the initial recruiting for the Chief Executive Officer position. Mr. Sykes recommended the Chair /Vice Chair be authorized to disburse fiends for this expense for an amount not to exceed $3,600 and advised that there were sufficient budgeted funds available for the expenditure. Mr. Kopp made the motion to authorize the Chair /Vice Chair to disburse up to $3,600 for this consultant expense. Mr. Martenis seconded the motion, and all approved. H. Mr. Sykes apprised the Board that having properly advertised and held the public meeting, the FY2015 -16 Budget should be finalized by June 30, 2015 at the latest. Mr. Wolfe made the motion to adopt the FY2015 -16 Budget Document as presented. Mr. Martenis seconded the motion, and all approved. Ms. Martin will distribute the adopted FY2015 -16 Budget to both the NC ABC Commission and the New Hanover County Board of County Commissioners. I. Mr. Dickerson asked the Board to join him in thanking Mr. Sykes for his five (5) years of service and presented him with an engraved plaque. VIII. Closed Session Mr. Martenis made the motion to go into Closed Session. Mr. Wolfe seconded the motion and all approved. The purpose of the Closed Session meeting was two -fold; to discuss a personnel issue in accordance with NC GS 143- 318.11(a)(6), and to discuss potential real estate acquisition in accordance with NC GS 143.318.11(a)(5). Mr. Dickerson excused himself from the latter part of the Closed Session to attend to another commitment. 41 Page IX. Return to Open Session: Mr. Martenis made the motion to return to Open Session; Mr. Everett seconded the motion, and all present approved. Tile vote was not unanimous, as Mr. Dickerson was not present for it. The Vice - Chairman stated that the CEO position had not been filled following the initial recruitment process, and that it would again be advertised with a July 2, 2015 deadline for submission. Mr. Kopp made the motion to A) Proceed with advertising the second recruitment phase, B) Name Mr. Sykes as the interim CEO, beginning August I" following his June 30`x' retirement, for an hourly rate of $65 /11our and a 20 -hour per week maximum until the position is filled. C) Name Mr. Wolfe to serve as Board /Employees liaison for the month of July until Mr. Sykes steps into the interim position. Mr. Everett seconded the three (3) part motion, and all present approved. The vote was not unanimous, as Mr. Dickerson was not present for it. No Board action was taken regarding any real estate. X. Adjournment Mr. Kopp made the motion to adjourn the meeting; Mr. Everett seconded the motion, and all approved. Minutes submitted by: Id �Gpo-,,- Garol,E. Martin, Secretary Minutes approved by: Z,/. L Robert W. Marte"nis, Chairman 5 1 P a g e