HOWARD LAKE, Minn. — Minnesotans in 2013 spent more than ever on booze at local government-owned bars and liquor stores. But in Howard Lake, the taps have run dry.
After running up about $400,000 in losses over the past decade, the Howard Lake City Council voted in October to shutter the on-sale outlet responsible for most of the red ink. The day after Christmas, city officials announced the last call for alcohol at the town’s 80-year-old bar.
“The City Council decided to close it because it was losing money, the bar. So they’re hoping to make money in the off-sale,” said Jennifer Nash, Howard Lake city administrator. “It’s only been a few days, so we’ll see, once we start working through this and see our profitability turn up here.”
The latest state audit of on- and off-site municipal liquor establishments operated by 205 cities reports a record $333 million in sales— up 1 percent over the previous year. It shows $27 million in profits, down $500,000, or nearly 2 percent.
Liquor-related net profits and losses ranged from a $44,000 deficit in the southern Minnesota city of Fairfax to a $1.5 million gain in the Twin Cities suburb of Lakeville. Metro area city-owned establishments were far more lucrative than rural liquor operations, averaging a net profit of $250,000, compared to an average of $86,000 outside the Twin Cities.
Cities used more than $18 million of their liquor profits for other purposes. The suburb of Edina, for example, spent $485,000 in liquor money to subsidize a now-defunct golf course and $600,000 to run Braemar Arena. Monticello has transferred more than $3 million in liquor money to keep the city’s struggling Fibernet broadband network online.
Yet 16 percent of cities that own and operate municipal liquor establishments lost money in 2013, requiring local taxpayers to subsidize the bars’ operations out of city budgets.
Overall, 33 cities reported losses, up from 25 cities in 2012, all outside the Twin Cities metro area in rural parts of the state.
By law, 21 cities incurring red ink in two of the previous three years were required to hold public hearings to discuss their taxpayer-funded liquor businesses.
