CONCORD — Pay raises of nearly 5 percent for top executives in the New Hampshire Liquor Commission will be on hold at least until the fall, thanks to a 3-2 vote of the Executive Council.
Wednesday’s vote came after Democratic councilors Mike Cryans and Andru Volinsky peppered liquor commission Chairman Joseph Mollica and Chief Financial Officer Christina Demers with a series of questions on the agency’s performance in recent years.
They were joined in the 3-2 vote by fellow Democrat Debora Pignatelli. Republican councilors Russell Prescott and Ted Gatsas voted against the delay.
Wednesday’s vote was prompted by concerns over the commission’s failure to meet its budgeted revenue targets, implement mail-order sales and install new inventory and sales management software that has been promised for years.
Cryans and Volinsky first raised the issue at the council meeting two weeks ago, but no one from the liquor commission was present to answer questions so the matter was tabled to the Feb. 6 meeting.
Mollica described how the competition from Total Wine & More, which started opening Massachusetts locations in 2017, has cost the NHLC an estimated $175 million a year in sales. In addition to six stores in eastern Massachusetts, Total Wine also has a robust mail order business for wine.
Mollica has said in the past that the revenue estimates provided by the commission in recent years were accurate and could have been achieved, but legislative budget writers raised the revenue figure to a number that was unrealistic.
“So what you are saying in your own defense is that the Senate inflated expected revenue from liquor and you couldn’t meet those numbers,” said Volinsky. “It’s really saying the Senate fudged the number.”
That drew an angry response from Gov. Chris Sununu, who recommended the raises.
“The Legislature has the power to move the revenue expectations around,” he said. “It has happened every year in every Legislature for every department through history. The implication you are making is completely inappropriate.”
Volinksy also pressed Mollica on why the commission has failed to launch a mail-order program; has tried unsuccessfully for years to launch a new cash register and inventory management system; and has opened or renovated stores in ways that have diverted traffic from existing stores.
Since 2012, the NHLC has relocated or renovated 30 of its 79 stores, which has put a strain on the bottom line.
Volinsky moved that the raises be tabled until the audited state financial report for the fiscal year ending July 31 is completed, which usually doesn’t occur until December.
Gatas and Prescott protested, claiming the NHLC was being unfairly singled out, as the council routinely approves the pay raises presented by the governor and agency chiefs.
“This is unreasonable and inappropriate,” Prescott said, as he tried to formulate a question. “I’m so upset that the words are not coming very easily.”
After the meeting, Volinksy said the council was acting in its fiduciary duty to the state.
“The state really depends on the revenues that come from liquor sales. It’s six to seven percent of our state budget,” he said. “And when we are directly told that mail-order will be instituted or new computer enterprise software will be instituted, we have a right to hold the managers to those things.”
Mollica pointed out that the overall NHLC sales are up by $192 million since 2010, and that the millions spent in new store construction or renovation is paying off.
“I think the proof is in the pudding,” he said. “Look around at what we’ve done for the past eight years … the stores and the numbers. We invested 1.5 percent of profit and grown sales by more than $190 million.”
Volinsky expressed a concern that the state is over-invested in brick and mortar stores, when mail-order is gaining traction with consumers.
“I want to see some bottom line growth,” he said, “and that we’re on the way to mail order, and that there is at least a schedule in place for this new software that’s been mucking around for two or three years by the commissioner’s own admission.”
The executives whose raises were delayed include: Mollica, from $118,707 to $124,579; Director of Enforcement and Licensing Mark C. Armaganian, from $103,059 to $108,149; Deputy Commissioner Michael R. Milligan from $112,255 to $117,805; and Director of Marketing, Merchandising and Warehousing Nicole Brassard-Jordan, from $103,059 to $108,149.