HD2 - Virginia Alcoholic Beverage Control Authority Transition: Human Resources and Procurement Policies and Procedures

Executive Summary:

The 15th enactment clause of Chapter 730 and Chapter 38 of the Acts of Assembly (HB 1776 and SB 1032), the Virginia Alcoholic Beverage Control Authority Act of 2015 (Authority Act) stipulates:

“That by January 1, 2017, the Department of Alcoholic Beverage Control shall submit to the General Assembly for its review the proposed personnel and procurement policies, including such policies to facilitate the participation of small businesses and businesses owned by women, minorities, and service disabled veterans in the Virginia Alcoholic Beverage Control Authority's procurement process, that are developed for the use of the Authority in place of Department policies currently governing personnel and procurement. The submission shall detail all instances in which the proposed policies and procedures materially differ from those governing state agencies."

To assist the agency with this transition, the agency embarked in strategic planning during the fall of 2015 and subsequently contracted with Human Resources, Procurement and change management consultants.

With the assistance of these external consultants, Virginia ABC has reviewed and updated all of its Human Resources and Procurement policies and procedures to reflect the intent of the legislation by achieving greater effectiveness and operational efficiencies.

This more business-minded approach has resulted in the proposal of new concepts such as “pay-for-performance," the elimination of mandatory procurement sources, as well as evaluation of overall employee compensation and benefits.

The Workforce Transition Act (WTA) continues to pose significant fiscal and operational impacts as Virginia ABC plans to transition to an authority on July 1, 2018. As the Authority Act is currently written, Virginia ABC employees who are not invited or who choose not to accept their invitation for employment at the Authority are entitled to WTA benefits. The latter portion of the above statement not only significantly increases the agency’s potential WTA payout but has the unintended consequences of delaying or initiating retirements for all to coincide on the single date of July 1, 2018.

Agency governance and organizational structure were also reviewed and modified to accommodate the change from a full-time three-member Board to a part-time five-member Board of Directors.

Further steps are necessary to ensure a “smooth and orderly transition" to become the Virginia Alcoholic Beverage Control Authority. Virginia ABC has external consultants under contract through April 2017 to continue to work on the creation of workforce conversion plans and implementation plans for the Authority’s newly proposed policies. ABC executive staff and consultants will also focus on rolling out the new mission, vision and values, developing divisional-level key performance indicators (KPIs), and refining workforce transition costs over the fourth quarter of 2016. A phased approach is anticipated with opportunities being identified for immediate implementation versus those that must be put on hold until enabling legislation is passed or resources become available.