Battle Lines Drawn Between LCB, Business Owners

SNOW HILL — Local liquor licensees in Ocean City made it
apparent last week that they’d like to see the Liquor Control Board for
Worcester County (LCB) abolished. This week, the LCB intensified the debate
with a vehement “bring it on.”

LCB Executive Director Brian Sturgeon said he would
welcome the possibility of another referendum to determine the fate of the LCB
and his group fired back on Wednesday in Snow Hill against allegations that
surfaced last week concerning the dispensary’s current operations and their
future financial viability for Worcester County.

“The people should decide whether or not we continue to
exist and operate,” said Sturgeon. “The same people who are doing this now
tried to get rid of us in 1998, and the people voted and said that they wanted
us to be around, so in that sense, I say bring on another referendum.”

At the weekly meeting at the LCB’s Snow Hill headquarters,
Sturgeon, along with Board members Don Hastings, Larry Wilkinson and Joe
Jackson, took turns attempting to shoot holes in accusations presented at last
week’s Worcester County License Beverage Association (WCLBA) meeting, by
contesting that once the 2010 financial reports are released, the organization
will be seen in a different light.

“What’s disconcerting to me is that everything brought up
[last week] is comparing fiscal year 2008 and 2009,” said Wilkinson. “We went
over that problem, if you will, last year with the County Commissioners. So to me,
those numbers are all water over the dam. What we need to be talking about is
the fiscal year 2010 numbers, and we haven’t even gotten those back yet.”

Wilkinson said that the 2010 audited financial reports,
which are expected to be released in the next few weeks, will show that a
perfect storm of adverse market conditions created the LCB’s lowest revenue
output in decades at just $110,000 (compared to roughly $410,000 in 2009 and
more than $777,000 in 2008).

“Our sales were down dramatically, and at the same time
our costs went up in 2010,” said Wilkinson. “If everything had stayed the same,
meaning we didn’t make any changes in our operations, we would have actually
ended up showing a $200,000 or $300,000 loss, so that’s telling me that we cut
expenses enough during FY 2010 that we still created, albeit a small one, a
profitable year.”

Critics of the LCB were up in arms last week when it was
revealed that in FY 2009, according to audited financial reports, the
quasi-governmental monopoly increased its payroll by more than $220,000 in the
midst of a recession, including more than $20,000 in employee bonuses and
$35,000 in travel expenses in a fiscal year when it showed a $367,000 drop in
revenue from the previous year.

LCB officials contested this week that the 2010 financial
reports will show that they cut salaries by more than $122,000, travel expenses
down to $5,000, and had a 4-percent, across-the-board reduction in mark-up
price for liquor (the markup for a bottle of liquor had been reduced in March of
2009 to 18%, but later shot back up in June), but they vehemently denied any
bonuses being levied to their employees despite the report.

“We haven’t gotten bonuses of any kind since December of
2007, which was before this recession started,” said Wilkinson. “If you look at
the fiscal year report, however, those bonuses would end up on the 2008

County Commissioner President Bud Church blasted the LCB
last week, saying that he was upset that the LCB gave itself pay raises and
bonuses in a time period when the county had cut all such practices in the name
of cost cutting and fiscal responsibility.

“We haven’t given raises or bonuses for 20 months in
Worcester County, and the fact that they continued to do that is very
concerning to me,” said Church this week. “I have some questions that need
answers and I want accountability for these dwindling numbers and questionable

It was also reported this week that when Hastings returned
from vacation, he called Church and commenced with an angry rant concerning
Church’s comments and the licensees’ accusations.

“I’ve known Don Hastings for a long time and we’ve been
friends for a long time and I have a great deal of respect for him, but he
called me up and he was very angry and he said that he never told any licensee
that the County Commissioners had ordered the LCB to raise prices in June,”
Church said. “But, respectfully, I heard from three different people the exact
same story that he did say that we told him to raise prices, which is just not
true in any way.”

Hastings told The Dispatch this week that WCLBA
President Doug Buxbaum was lying about their alleged conversation, in which
Buxbaum said last week that Hastings had told him personally of the County
Commissioners ordering a price hike in liquor. When Church heard of this
conversation, he was reportedly angered to the point of prompting County Chief
Administrative Officer Gerald Mason to pen a letter to Hastings on June 21,
2010, stating clearly that the county had levied no such order on a price hike.

“I know what he said to me, and so does [Hastings],” said
Buxbaum. “Where I come from all you have is your word, and I stand by mine, and
everything I’ve said about the LCB to this date is the honest to God’s truth.”

Accountability has always been one of the hot button words
in the debate over the merits of the LCB’s existence in Worcester County, as
many argue that the entity is autonomous and isn’t held accountable to anyone
in the area.

However, in a 2008 letter penned to Delegate Jim Mathias
from Senior Policy Analyst Tinna Marie D. Quigley for the General Assembly in
Annapolis, it appears to answer the question of “who is the LCB accountable to”
as well as the exact steps that would have to be taken to truly abolish the

Concerning the accountability issue, the letter reads,
“these sections seem to indicate that the dispensaries in Worcester County are
accountable to the liquor control board that established them and that the
liquor control board is accountable to the county commissioners.”

Church said this week that he’s seen this letter and will
be discussing the interpretation of Quigley’s 2008 findings with his fellow
commissioners at a future closed session meeting.

In addition, Church said this week that Hastings has
agreed do all of the future discussion between the LCB and the County
Commissioners in “open session” meetings, although Hastings said this week that
due to the 2010 financial reports not being completed, the LCB will more than
likely push back the County Commissioners’ request to talk with them at their
July 6 meeting.

Finally, the letter also addressed the steps that must be
taken if the LCB is to be abolished in Worcester County. It seems to indicate
that the referendum that the LCB called for this week, would not suffice.

“The liquor dispensary system in Worcester County may not
be repealed by referendum,” said Quigley in the letter. “The liquor dispensary
system may only be changed by an Act of the General Assembly.”

Church said that this fact would essentially make this topic
the big issue in the fall elections for the local delegate and senator seats.

“This debate is going to be the hot potato if you are
running for office, and people are going to want to know where the candidates
stand, and anyone running for those seats is going to have to make where they
stand perfectly clear, but, we can’t abolish the LCB through a referendum, it
has to go through the state legislators,” Church said.