'It's a group effort'
The word “Medford” appeared only once in a recent story about the performance of municipal liquor stores in the state of Minnesota, but its placement said volumes.
The little city-owned bar was at the top of the list released by the state auditor – ranked No. 1 in the percentage of change in operating revenue from 2022 to 2023, the most recent numbers available.
Over the course of that year, the Medford “Muni,” as it’s known colloquially, increased its revenue 34%.
By contrast, the operating revenue at the muni in Spring Grove dropped 55%, and it closed in 2023.
“Most municipal liquor stores make their money from their off-sale, and we hardly have one,” said Elizabeth Jackson, city administrator. That’s the area where customers purchase cans or bottles of liquor to consume elsewhere, off the property.
“The majority of our profit is right there,” she said, pointing behind the bar, “and these guys, right here.”
She was referring to Angela Bohlman, the bar lead, who also handles the scheduling, ordering, inventory and finances, and Nola Olson, the assistant bar lead. She also handles marketing, social media and promotions.
“These are the two that make it all happen around here,” Jackson said.
Enterprise fund
Municipal liquor stores are a throwback to a Prohibition-era arrangement that allowed cities to control the sale and distribution of liquor and run the business – later learning the stores could be a method of generating needed non-tax revenue.
In 2023, 176 Minnesota cities operated a total of 210 stores. More have closed since – including the bar in Keister, just last month. More than 30 cities reported net losses that year, all but three of them in greater Minnesota.
Known as an enterprise fund, the Medford Muni spends only the money it makes.
“It is city-owned, but not taxpayer-owned,” said Jackson. “That’s the misconception. Taxpayer money has nothing to do with the Muni. If you never step foot in here and spend a dime, then you have not a dime invested in this. Not one dime of taxpayer money comes in this door.”
The 2023 numbers indicate Medford pulled in nearly three times the liquor fund’s minimum target cash balance of $85,390. The target cash balance is half of the operations expense, plus the next year’s debt payment, should there be one.
The 2024 number, as presented at the audit in March, was also triple its $90,200 target cash balance.
Changes
While the Medford Muni has not lost money in the past, its profits were unremarkable.
Typically, other than the COVID years, the business showed profits of $10,000 to $20,000 annually.
“One of the first changes that happened in early 2021 was to bring in (more) pull tabs,” Jackson said. “That started the significant change in the gambling revenue.”
When Bohlman joined the staff in May of 2021, there were two boxes of $1 pull-tabs. There are now three boxes of $1 tabs, two boxes of $2 tabs and a $5 box.
Run by the Medford Fire Relief’s charitable gambling association, the Muni staff manages the pull-tabs, including the accounting, sales and restocking – and is compensated with a percentage of the total sales.
“When I first started (working for the city), those box rent checks were about $350 a month,” said Jackson, who has been a city employee since 2016.
“Now those checks are $4,000 a month, on average, which goes into the Muni fund,” she said.
It isn’t just a gambling change, though.
Former manager Rachel Heinrichs gave the bar a much-needed makeover in 2023, painting, cleaning and adding new shelving. It was instantly brighter and more inviting, and word got out.
“We have Saturdays where you can come in and play euchre, and when euchre ended, horse racing would start, and when horse racing was over, the live music would start,” Jackson said, listing off additions to the activity calendar.
“We’ve made it a place you want to be, because there’s always something going on.”
There are also loaded bloody Marys on Saturdays; a beer garden in the park during Straight River Days; a customer appreciation day with food and prizes; a Halloween costume contest, Sunday football viewing and more.
“We added sandwiches to the menu for lunch hour,” Bohlman said, “and food trucks in the summer.”
A bean bag league was created for Tuesday evenings during the summer; the pool league is gaining more teams.
The hours remain consistent, including from noon to 7 p.m. on Sundays.
“We need two bartenders, minimum, until at least 9:00 every Friday and Saturday night, no matter what,” Bohlman said of the increased business.
Muni unicorn?
State officials and other muni managers pointed to the popularity of THC beverages and gummies for the hike in store revenues.
The claim is that the sale of cannabis-infused drinks and gummies are buoying declining sales in wine and beer, though liquor sales remain stable, said State Auditor Julie Blaha.
Overall, the state saw a 15.3% average increase in muni profits in 2023.
The Medford store saw its big boost without the THC products.
“We don’t do those, because it’s city-owned property,” Bohlman said, and the city has an ordinance prohibiting the use of cannabis on its properties.
“It’s not the products,” Jackson said. “It’s these two and the bartenders – I cannot stress that enough. Their strengths … that is why it happens.”
Bohlman is quick to include the other five bartenders.
“We’re doing everything as a team – and I mean every single bartender here,” she said. “If it wasn’t for them, we wouldn’t be where we are.”
Customers come from Hayfield, Prior Lake, Kenyon, Warsaw, Faribault, Owatonna, Mapleton and more.
“We’re a little town, so we have to be where people want to go, because they have so many options that are just minutes away – and we want them to come here,” Bohlman said.
They do, especially on weekends.
“They feel welcome, and they enjoy the bartenders – those are the compliments I love to hear, and I want (employees) to feel appreciated by me, as well,” she said.
The payoff
The Muni isn’t the only thing that profits from the increase in revenue, including the pull-tab sales.
The Medford Fire Relief Association uses its share for things like its truck and equipment fund for MFD. Those donations have increased from $15,000-$20,000 annually to about $100,000 per year, Jackson said.
That’s a burden eased on the taxpayers, who would otherwise fund the entirety of those purchases.
“It’s a group effort,” she said. “It’s not just the Muni and it’s not just the city. It’s the relief association that has money to contribute back to the school, to the pool, to scholarships, to the fire department.
“It’s a very big circle.”