2015 | Politics

DLC Management, Controls Criticized at Latest Liquor Control Committee Meeting

The director of the department received tough questions from council members, but a discussion about the public health benefits highlighted possible positive effects of the Department of Liquor Control

Bulk orders of beer stacked inside the Montgomery County Department of Liquor Control's warehouse in Gaithersburg.

Andrew Metcalf

George Griffin, the director of Montgomery County’s Department of Liquor Control (DLC), faced a barrage of questions from members of the County Council’s ad hoc liquor control committee on Friday.

The council questioned Griffin on a number of problems within the department that controls the distribution of liquor, wine and beer in the county; as well as handling the exclusive retail sale of liquor at its county-run stores.

The problems, including lax inventory controls, failing to deliver orders accurately and struggling to implement a new digital inventory management system, were detailed in a comprehensive report by the county’s Inspector General’s Office in February.

Already the county executive’s office has begun to address the problems. County Executive Ike Leggett has assigned Edgar Gonzalez, a longtime traffic engineer with the county, to examine and address problems at the DLC. Gonzalez said Friday that he officially starts at the DLC on Monday and described the problems as “manageable.” Council member Hans Riemer, the chair of the committee, described Gonzalez as a “legendary” traffic engineer.

Patrick Lacefield, the spokesman for the county executive’s office, said Gonzalez will serve as the DLC’s deputy director and will be tasked with tightening up inventory controls and handling management issues.

Reforming or privatizing the DLC has been a touchy issue in the county. The department generates about $30 million for the county general fund. It also employs about 400 union workers.

Early on in the committee meeting Friday, possible health and societal benefits of the DLC were highlighted in testimony by David Jernigan, the director of Johns Hopkins University’s Center on Alcohol Marketing and Youth.

Jerningan testified that data showing lower alcohol consumption rates in the county compared to the rest of the state indicate that the control system seems to be working. He said there’s a strong correlation between alcohol consumption and negative effects like cancer, traffic accidents and domestic violence.

He told council members that it’s important to balance the benefits of making alcohol convenient against protecting the general population from alcohol’s negative effects.

So far, council members on the committee have seemed receptive to the idea of maintaining the DLC in its current form to sell liquor and deliver bulk products, such as Bud Light and Beringer wines, while loosening restrictions on special order products to enable private distributors to handle those sales and deliveries in the county.

Last week, restaurant and retail store owners who sell a variety of craft beers and small-order wines, complained about the department’s special order process. And on Friday a representative from the Office of Legislative Oversight, said recent survey results of privately-owned retail stores and restaurants served by the DLC found that a majority were dissatisfied with overall product availability and with the special order process.

Inspector General Edward Blansitt Friday described the special order process as a system in which a restaurant first orders a specialty beer or a relatively unique wine, which is then delivered by a local distributor in a box or case to the DLC. Then the product is admitted to the warehouse and finally delivered to the restaurant.

“It creates additional risk, it creates additional delay,” Blansitt said. “It’s something that accomplishes only one purpose—to make sure that the box that was ordered physically rests on the floor of the DLC warehouse before it’s transferred to the final customer.”

Griffin called it the “come-to-rest provision.”

Blansitt said his department regularly found situations where inventory would be listed at one location in the system, but actually be located somewhere else in the warehouse. He said employees are making “constant adjustments” to inventory records without any investigation as to why the inventory discrepancies occurred. “What you’ll ideally want is an inventory that precisely matches the count on the floor,” Blansitt said.

Council members questioned Griffin at length about the inventory problem and the new Oracle digital inventory system it implemented in February.

“We’re struggling to get Oracle right,” Griffin said.

Council member Roger Berliner expressed frustration that the department lacked concrete performance metrics.

“How is it that we should have confidence in this organization in the absence of metrics that drive you to perform better?” Berliner asked.

Griffin responded that recently they’ve brought in Gonzales, a “high-level manager from another county department” and are working to develop productivity measures.

Berliner pressed again, asking if Griffin knew of any other control jurisdictions in the country that have performance-based metrics.

“We’ll survey them and report back,” Griffin said.

Council President George Leventhal said he didn’t sense urgency from the DLC and Griffin that the problems are being addressed.

“To maintain confidence… you have to show results,” Leventhal said. “Although you’re constructively engaged in the conversation, I don’t sense urgency in developing a response. That’s unsatisfactory.”

“We know how important this is,” Griffin responded.

Riemer said the committee would like a set of recommendations to act upon to reform the department by this summer.

“We want most users [of the DLC], if not all, to be satisfied,” Riemer said. “These are small business in our community—thousands of them—and they rely on these products. The county should not be making it unduly difficult for them to succed.”

Leventhal said the ad hoc committee’s objective is to find the balance between limiting the negative effects of greater access to alcohol while also allowing restaurants, bars and private stores to easily operate in order to bolster the nighttime economy in the county.

As for privatizing special orders of beer and wine, Leventhal said, “I don’t necessarily see how that would increase consumption or the social cost [of alcohol.]”