Date: 08-21-2016
GOING WET
More Kentucky cities, counties OK liquor sales
Before 2016 ends, it could become one of the wettest years on record, and not because of the copious amounts of rain that have fallen this summer, but for the number of cities and counties that are voting in favor of alcohol.
According to the Kentucky Department of Alcoholic Beverage Control, there have been 12 cities or counties in the state to approve alcohol sales through wet-dry elections since January. And there are more wet-dry elections slated across the state before the end of the year. If at least two more cities or counties go wet, that would be more than the two previous years combined — seven in 2015 and six in 2014.
The state’s sudden wet trend isn’t lost on Secretary David Dickerson, who heads the Public Protection Cabinet that oversees the Department of Alcoholic Beverage Control.
Dickerson said economic development, changing attitudes and new state laws have led to the rising interest in expanding alcohol sales throughout the commonwealth.
“… It’s an unfettering of Kentucky’s economic development and entrepreneurial spirit to allow a community to benefit from the expansion of sales,” Dickerson said. “We’re not in the business of saying sales are right or sales are wrong. The local people decide that. Our business is to administer the law and to regulate.”
Senate Bill 11 impact
Prior to this year, incorporated cities in Kentucky with less than 3,000 people could not independently petition for a wet-dry election unless the county was already wet.
It was Senate Bill 11, which passed the 2016 General Assembly, that eliminated the population requirement. The law went into effect July 15.
Two small western Kentucky cities taking advantage of SB 11 are Rockport in Ohio County, with a population of 300, and Sacramento, in McLean County, with a population of 450.
However, it’s the counties that are paying for the wet-dry elections, not the cities.
McLean County Judge-Executive Kelly Thurman said the legislature did the smaller rural counties a disservice by passing SB 11.
“From strictly a fiscal standpoint, I am concerned about it,” Thurman said. “We’re looking at these elections running anywhere between $5,000 and $15,000. The new legislation has really opened the door for a problem for county governments already strapped for money.”
McLean County is dry with four incorporated cities, all having less than 1,000 people.
Sacramento’s wet-dry election has been set for Sept. 27.
Thurman said McLean Fiscal Court didn’t budget for a wet-dry election because there’s no way to know if a petition will be certified.
“Somewhere in this (county) budget I’ve got to come up with about $5,000 for this one election,” Thurman said. “There goes monies that could’ve been used for some other project in the county.”
When Rockport has its wet-dry election on Oct. 4, it will make the third wet-dry election of the year for Ohio County.
Beaver Dam held its local option on Feb. 2, with voters passing the measure 562-435.
On April 12, Ohio County conducted a countywide wet-dry election that failed — 2,512 voting against going wet and 2,173 voting in favor.
Both wet-dry elections have cost Ohio Fiscal Court about $40,000 — $33,000 for the countywide and $7,000 for Beaver Dam. The Rockport wet-dry election is expected to run between $4,000 and $5,000.
Ohio County Judge-Executive David Johnston said the county has been forced to tap into its reserves to pay for the wet-dry elections.
“It does bother us that the county has to pay for a city’s wet-dry election,” Johnston said. “It doesn’t seem fair in some ways.”
Beaver Dam seeing economic potential
Beaver Dam, Ohio County’s largest city with 3,500 people, wasn’t affected by SB 11.
But according to Beaver Dam Mayor Paul Sandefur, it was a contentious time leading up to the wet-dry vote.
“We had people lined up and down the streets with signs picketing,” Sandefur said. “And then on the Sunday before the election, someone spray-painted– in great big letters — ‘DRY’ right across my blacktop driveway.”
The state allows third- and fourth-class cities to charge up to a 6 percent regulatory fee to help fund policing and other alcohol-related expenses.
Beaver Dam, a fourth-class city, has gotten a glimpse of the potential revenue since it began selling beer and wine coolers inside its convenient and grocery stores since mid-May.
Sandefur said Beaver Dam sold $220,000 in beer and wine coolers in June. That added up to $13,000 in regulatory fees for the month.
“I’m anxious to see what will happen when the wine and spirits come on board,” Sandefur said. “I’ve had some communities tell us that could be 60 percent of the revenue. If that’s the case, $13,000 is only 40 percent of what we can expect.”
As of Friday, the state had not approved Beaver Dam’s package store licenses.
Beaver Dam has separated itself from other communities by allowing Sunday package liquor sales. Owensboro doesn’t permit Sunday package sales, but its restaurants can sell alcohol by the drink.
With the extra revenue from the alcohol sales, Sandefur said the city is planning a building expansion of its police department. Before that happens, this city is in the process of giving pay raises to its six officers, with the goal to make them the highest paid in the county. Its lowest paid officer receives $16 per hour, but the city doesn’t offer hazardous duty pay.
“We have struggled to keep officers, and I understand when you can go make $2 or $3 more an hour somewhere else,” Sandefur said. “The raises are our No. 1 priority and getting them up to where they need to be.”
The state’s Department of Alcoholic Beverage Control issues nonquota licenses that aren’t restricted by population.
The state, however, does consider population size with quota licenses that are meant to restrict the number of package liquor stores or bars in a wet area.
Because Beaver Dam is wet within a dry county, the state will go by the city’s population, limiting it to two package liquor stores that can sell wine and spirits. Although there can be no bars in Beaver Dam, restaurants can be issued by-the-drink licenses for wine and spirits.
Deidra Roman, who’s owned Los Mexicanos in Beaver Dam for 16 years, said she has seen a noticeable increase in business since the city went wet.
“I’m busier now than I have been in the past 15 years,” Roman said. “… It was odd at first seeing beer here in my restaurant, but now I’m used to it.”
State’s workload, costs expected to increase
In Daviess County, Whitesville, a city of 550 that had been dry since the 1930s, voted 114-56 to go wet on June 21. The Whitesville City Commission held the second reading of its new alcohol ordinance on Aug. 10.
Along with Rockport and Sacramento, other pending wet-dry elections across the state include Casey County on Aug. 23, Robertson County on Aug. 30, Owen County on Sept. 13, Shelby County on Sept. 13 and the city of Campbellsville on Sept. 20.
Dickerson said there will likely be a cost and workload increase for the Department of Alcoholic Beverage Control as more cities and counties go wet.
“The statutes allow us to recover administrative costs,” Dickerson said. “We don’t expect the general citizenry to pick up that cost; that’s not for the taxpayers to do. We have the responsibility to regulate, and we also have the authority to set fees for that regulation.”
If the state has to increase its licensing fees, that could trickle down to the producers, distributors and retailers raising their costs.
“I don’t know if that’s going to be the case yet,” Dickerson said about increasing the state’s liquor fees. “We’re going to do some different things with regard to the enforcement division that will allow us to be more efficient.”
Dickerson said he understands the concerns about the state trending wet.
He, however, said it’s nothing that Department of Alcoholic Beverage Control won’t be able to handle.
“I know it’s a challenging time for our citizens,” Dickerson said. “But the wild, wild West is not going to come to Kentucky. We’re going to make sure we regulate this responsibly.”
Don Wilkins, dwilkins@messenger-inquirer.com, 270-691-7299, Twitter: @DonWilkinsMI
Passed and pending wet-dry elections in 2016
• Jan. 19 — Russell County, passed 3,849 to 3,432 votes
• Jan. 26 — city of London in Laurel County, passed 1,105 to 771 votes
• Feb. 2 — city of Beaver Dam in Ohio County, passed 562 to 435 votes
• Feb. 23 — city of Harrodsburg in Mercer County, passed 813 to 534 votes
• March 22 — Adair County, passed 3,384 to 2,755 votes
• June 21 — city of Leitchfield in Grayson County, passed 682 to 524 votes
• June 21 — city of Whitesville in Daviess County, passed 114 votes to 56 votes
• June 28 — city of Mayfield in Graves County, passed 1,356 to 968 votes
• June 28 — Cumberland County, passed 1,441 votes to 1,069 votes
• June 28 — city of Williamsburg in Whitley County, passed 448 to 241 votes
• June 28 — Metcalfe County, passed 1,839 to 1,658 votes
• July 12 — Breathitt County, passed 2,323 to 1,717 votes
• Aug. 23 — Casey County, pending
• Aug. 30 — Robertson County, pending
• Sept. 13 — Owen County, pending
• Sept. 13 — Shelby County, pending
• Sept. 20 — city of Campbellsville in Taylor County, pending
• Sept. 27 — city of Sacramento in McLean County, pending
• Oct. 4 — city of Rockport in Ohio County, pending
By Don Wilkins, The Messenger-Inquirer
