Tuesday, January 31, 2012

Booze boss delivers sobering news on DABC, privatization

Posted By on January 31, 2012, 1:57 PM

The good news, said Francine Giani, interim director of the Department of Alcoholic Beverage Control, was that since taking over from the previous director six months ago over issues of mismanaged funds, the DABC has found efficiencies that will have prevented the closure of six stores, three packaging agencies and reduction of hours that would have gone into effect Feb. 1. ---The bad news she says, is that employees are underpaid and the DABC commission just doesn’t work. She also didn't believe privatization of alcohol sales would help the state.

The DABC commission, Giani acknowledged, has broad discretion over policymaking and issuing licenses, but with such a complex endeavor -- one that brings the state roughly $60 million a year in funding -- the five-person commission can’t manage the booze business effectively if they only meet once a month.

“I don’t agree with the model,” Giani said. “You can’t run an agency with a ‘part-time commission.’”

Giani emphasized that she was speaking from personal opinion and not on behalf of the DABC, or the Department of Commerce for which she is the full-time director, but offered her opinion to members of a business-appropriation subcommittee Tuesday. She also weighed in to say that, with the help of DABC staff and legislative auditors, efficiencies found in the department made her think that privatizing the sale of alcohol in the state wouldn’t be necessary.

“I think you would lose money when it comes back to the state,” Giani said of the idea that is expected to be presented at the Legislature and that was one considered by a recent citizen-run, independent DABC Review Committee.

The recommendations were unusual for a budget-briefing meeting, and Giani only offered the recommendations upon request. She did also point out, however, that she found it “ridiculous” that state liquor agency employees are only paid at roughly $8 an hour and have no benefits. “In reality, they are state employees and they aren’t paid benefits,” Giani said. “They should be paid more.”

While some on the committee agreed, Sen. Jerry Stevenson, R-Layton disagreed. “The number we pay is what the market establishes,” Stevenson said, comparing clerks at state liquor stores, grocery-store employees and other clerks in the private sector. Giani also agreed it would be an issue to be better-addressed at a future session when the economy improves.

Giani emphasized that, as far as the budget process goes, the committee approve $1.8 million as part of the governor’s budget to keep the liquor stores running. She also agreed with a recommendation by a fiscal analyst that the DABC budget be realigned in a way to make it easier to track funding expenses inside the department -- a pressing concern, given mismanagement by the previous director, Dennis Kellen, who Giani replaced after it was discovered that he had been directing no-bid maintenance contracts to a business owned by his son.

“I support Dr. Wilko’s recommendation to realign the DABC budget to give a better view of where money is being spent,” Giani said “and to give a little less play money to executive directors going forward.”

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