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Liquor funds important to cities

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opinion Detroit Lakes,Minnesota 56501 http://www.dl-online.com/sites/all/themes/dlonline_theme/images/social_default_image.png
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Liquor funds important to cities
Detroit Lakes Minnesota 511 Washington Avenue 56501

Detroit Lakes residents can be proud of their municipal liquor store -- it's an example of a government-run business that works well.

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The Detroit Lakes store is very well run -- it had one of the highest profit margins in the state, according to a recently-released state auditor's report, which looked at city-run liquor store operations in 2009.

That year, the Detroit Lakes store saw net profits of $887,000 on sales of $5.1 million -- a profit margin of 17.4 percent.

It transferred $678,000 to the city's general fund -- money that otherwise would have had to be raised through property taxes.

That kind of performance is the envy of much-bigger cities like Eden Prairie (population 63,000) and Edina (population 50,000). They each had profit margins on sales of less than 10 percent.

How important are liquor store operations to outstate Minnesota? Take a look:

Perham made $257,000 that year, a profit margin of 11.4 percent, and transferred $120,000 into its general fund.

Vergas made $81,000 from its liquor store that year, a profit margin of 15 percent, and transferred $28,000 into its general fund.

Wolf Lake made $45,000 that year, a profit margin of over 10 percent, and transferred $37,000 to its general fund.

Frazee made about $13,000 that year, a profit margin of just under 2 percent. It did not make a transfer to its general fund.

Fergus Falls made $371,000 that year, a profit margin of about 7 percent, and transferred $350,000 to its general fund.

Callaway made about $28,000, a profit margin of just under 6 percent, and transferred $31,000 into its general fund.

Battle Lake made about $87,000 that year, a profit margin of about 8 percent, and transferred $80,00 to its general fund.

Lake Park made $33,000 a profit margin of about 5 percent, and made no transfer to its general fund.

Wadena made $162,000 that year, a profit margin of about 10 percent, and transferred $100,000 into its general fund.

Pelican Rapids made about $89,000 that year, a profit margin of about 10 percent, and transferred $21,000 to its general fund.

Park Rapids made $238,000 that year, a profit margin of about 8 percent, and transferred $58,000 to its general fund.

All told, city liquor stores in outstate Minnesota transferred $9.8 million to support city services that year.

That supports the quality of small-town life, and it's worth remembering how important that money is when politicians start making noises about how cities should not be in the liquor store business.

Most city liquor stores make money, but unfortunately, some do not, and the report provides recommendations to city officials on how to compare their operations with similar-sized cities to boost profitability -- or else close down.

Minnesota law requires cities to hold a public hearing on the future of their liquor store if the liquor operation shows a net loss in at least two of the past three years. Audubon, Hawley and Twin Valley were required to hold such hearings in 2009.

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