ST. PAUL — Combined net profits of all Minnesota municipal liquor stores were $29 million in 2018, an increase of $5.9 million, (25.6%), over the 2017 amount, according to a Minnesota Office of the State Auditor report.

On-sale operations net profits were $3.5 million in 2018, a $1.2 million (50.4%) increase form 2017, read the report. Total net profits were $25.5 million in 2018, a $4.7 million increase (22.8%) from 2017.

Over the past five years, net profits rose 6.4%.

Municipal liquor operations in the Twin Cities metro area are considerably larger and more profitable than those in Greater Minnesota.

The Lakeville municipal liquor store led Minnesota with $15.3 million in sales and showed a $2.7 million profit in 2018.

The strong growth in net income is, in part, due to the closing of liquor stores and the sale of their land and buildings and, as in Lakeville, a new financial arrangement where the building and land were sold to the HRA (Housing and Redevelopment Authority), and leased back to the liquor store.

Municipal liquor stores in the area with 2018 net losses included Sleepy Eye ($83,104); Fairfax ($23,109); Buffalo Lake ($21,318); Walnut Grove ($15,977); and Butterfield ($13,357).

Sleepy Eye discontinued municipal liquor operations during 2018.

Of the 38 cities with 2018 net losses, 28 were on-sale operations.

During 2018, Minnesota’s municipal liquor operations reported a 23rd consecutive year of record sales, totaling $360.2 million.

Total sales generated in 2018 increased by $11.3 million, or 3.2%, over 2017.

In 2018, 38 Minnesota cities report net losses (16 fewer than 2017). Of those 38 cities, 37 were located in Greater Minnesota.

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.

While the report is based on 2018 data, an examination of losses in 2016, 2017 and 2018 shows that 36 cities should hold public hearings on or after Nov. 17, 2019.

Of the 36 cities required to hold hearings in 2019, 31 were also required to hold hearings in 2018.

Cities required to hold 2019 hearings are Boyd, Butterfield, Caledonia, Cleveland, Clontarf, Dawson, Elizabeth, Ellendale, Elmore, Erhard, Fairfax, Fifty Lakes, Frazee, Goodridge, Hanley Falls, Hanska, Hitterdal, Howard Lake, Kiester, Mahnomen, Millerville, Ogilvie, Okabena, Osakis, Proctor, Remus, Sacred Heart, Savage, Sebeka, Sherburn, Tracy, Walnut Grove, Waverly, Wells, West Concord and Wolf Lake.

Hanska City Clerk Candie Martinka said a public hearing was held in October.

“We had to hold a hearing because we had losses two of the last three years,” Martinka said. “It wasn’t a big thing. We cut back on hours and hired a new manager, Beth Tyner last year. Last year, we had a $13,331 profit. If we have a profit this year, we don’t have to have a hearing. So far, so good this year.”

The Hanska Municipal Liquor Store is open at noon to 11 p.m. Monday through Thursday, noon Friday to 1 a.m. Saturday, and 10 a.m. Saturday to 1 a.m. Sunday.

For more information, visit www.auditor.state.mn.us