Liquor sales bolster DL, Perham, Wadena
Detroit Lakes, Perham and Wadena all did well with their city-owned liquor stores last year.
The Detroit Lakes liquor store had sales last year of $6.3 million and made $758,000, a 12 percent profit margin. That allowed it to transfer $484,000 to its general operating fund.
"We're fortunate that we have great management and strong community support," said Detroit Lakes Alderman Jamie Marks Erickson, who chairs the city's liquor control committee. "I think we made the right decision in building a new liquor store ... People forget why we're in the liquor business, and where the profits go."
The city would have to raise property taxes by 10 percent to make up for the loss of that $484,000 annual transfer, if the liquor store suddenly went away, said Detroit Lakes Finance Officer Pam Slifka.
"Between the public utilities transfer and the transfer from the liquor fund, we'd have to raise our levy between 20 and 25 percent (to make up for it), so it's huge for us—they really do a nice job over there."
The Detroit Lakes liquor store has the highest sales volume of any city in outstate Minnesota, only eight or nine metro cities do better, Slifka said.
Wadena made about $299,000 on sales of $2 million. That's a 14.9 percent profit margin, allowing it to transfer $156,000 to city coffers, according to the State Auditor's report on municipal liquor stores for 2016.
Perham made about $414,000 on sales of $3.3 million, a 12.5 percent profit margin. It transferred $269,000 to its general fund. Wadena, Perham and Detroit Lakes all boasted profit margins among the best in the state.
Ogema made about $41,000 off sales of $366,000, a profit margin of 11.2 percent. It made no transfers. Callaway made about $34,000 on sales of $474,000, a 7.1 percent profit margin. It transferred $17,000 to city coffers.
Lake Park made about $28,000 off about $780,000 in sales, a 3.6 percent profit margin. It made no transfers.
New York Mills made $45,000 off sales of $653,000, a profit margin of 6.9 percent. It transferred $54,000 to its general fund.
Vergas made about $5,000 on sales of about $500,000, a 1.1 percent profit margin. It made no revenue transfers.
Ulen made about $7,000 on sales of $389,000, a 1.8 percent profit margin. No transfers were made. Hitterdal lost about $3,000 on sales of $370,000.
Frazee lost more than $40,000 on sales of about $636,000. Audubon, which has since sold its liquor store to a private buyer, lost about $30,000 on sales of about $408,000.
Wolf Lake lost more than $16,000 on sales of $312,000. It transferred $3,000 to its general fund.
Sebeka lost about $2,000 on sales of $532,000.
Park Rapids made about $240,000 off sales of $3.2 million, a profit margin of 7.6 percent. It transferred $297,000 to its general fund.
In 2016, the average net profit of metro area municipal liquor operations was $154,894, compared to $88,793 for municipal liquor operations in Greater Minnesota. Net profits and losses among Metro Area liquor operations ranged from a net loss of $106,175 in Savage to a net profit of $893,563 in Apple Valley.
Net profit and losses among Greater Minnesota municipal liquor operations ranged from a net loss of $90,770 in Parkers Prairie to a net profit of $945,939 in Elk River.
Forty-five Minnesota cities reported net losses for 2016, including Mahnomen, which lost about $1,000.
Mahnomen and Frazee are among those cities required to hold a public hearing on the future of their liquor store before Nov. 17. Audubon would have been among them, too, if it hadn't sold its liquor store to private party.