Mound's muni store about more than beverages

Buying a pack of craft beer or a bottle of wine at Harbor Wine and Spirits in Mound offers more than just something to look forward to come happy hour—it helps lower the tax levy and supports the community. But how?

“The profit generated from the liquor store contributes to the city’s enterprise fund, which can be allocated at the council’s discretion,” said Mound Mayor Jason Holt.

In 2023, Mound’s municipal liquor store contributed $300,000 to the city’s operating budget, specifically allocated for street maintenance, thereby reducing the need for additional levies.

Additionally, $60,000 of the city funding for grading work and sod for the Eli Hart Memorial Playground project, which was recently completed, came from the liquor fund.

According to the city’s community handbook, the City of Mound, like many other cities across Minnesota, has operated a municipal liquor store since 1937. Harbor Wine and Spirits (HWS) has been situated at its current location in the Mound Market Place Plaza since February 2003.

A store remodel was completed in 2020, well-timed to help boost sales during the COVID-19 pandemic, has played a pivotal role in enhancing customer experience and community support. HWS claimed the title of the most profitable municipal liquor store in the seven-county metro area for both 2021 and 2022, as reported by the Minnesota Office of the State Auditor (the 2023 report has not yet been released).

Sales data from the first half of 2024 indicates that HWS is maintaining its momentum, with overall sales up five percent compared to the previous year and a four percent increase in customer traffic.

According to Ron Gust, manager at HWS, several factors have contributed to the store’s success, including strategic purchasing enabled by ample storage capacity to secure larger deals and maintain competitive pricing.

Gust noted that the store offers deals aligned with historical sales, closely monitored through its Point-of-Sale (POS) system. He also highlighted the store’s commitment to staying current with trends by offering interesting and sought-after products that consistently draw customers back.

As the city begins budget preparations for fiscal year 2025, it intends to rely even more on the liquor store to fund operations compared to last year.

“The council recently completed a workshop where we reviewed our long-term financial plan, and the liquor store plays a significant role in helping us stay on track and meet our financial obligations,” said Holt.

In 2025, the city is reallocating liquor transfer funds as follows: $135,000 towards street maintenance projects and $60,000 to the parks capital fund for future park projects. Additionally, alongside restructuring its water rates, the city plans to transfer $165,000 annually to the water utility fund through 2029 to help pay off water fund debt.

Holt believes that using liquor store funds to gradually restore the water fund to solvency will greatly benefit Mound taxpayers, who already face some of the highest water rates in the county for water that is not suitable for consumption.

“I’ve been wracking my brain on how to address the $4 million deficit in our water fund since I joined the council in 2021,” Holt reflected. “Previous councils didn’t adjust rates for inflation, and no one wants to be the one to raise them. The liquor fund allows us to tackle necessary, albeit less glamorous, projects that are crucial for our city.”