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Herald Journal | DC Enterprise-Dispatch | Delano Herald Journal
Auditors warn HL City Council about liquor store fund
Monday, June 25, 2012

By Jennifer Kotila
Staff Writer

HOWARD LAKE, MN – Although the city of Howard Lake took many steps last year to correct internal control issues at the Howard Lake Municipal Liquor Store, the city’s auditors informed the city council at Tuesday’s meeting that there are still some improvements which have to take place.

The only other issue the auditors found was a lack of itemized credit card receipts for the Good Neighbor Days fund, which has already been addressed, according to City Administrator Kelly Hinnenkamp.

Aside from these concerns, the city received a positive audit from Darrin Ogdahl and Christina Wordes of Conway, Deuth, and Schmiesing.

For the liquor store, the auditors suggested:

• reviewing the monthly summary on an accrual basis and recording the information in the general ledger;

• maintaining the documentation of adjustments in inventory, explaining the adjustment, and presenting it to city administration for approval;

• maintaining manual ledger transfers between off and on sale in order to reconcile off sale inventory records;

• strengthening food and miscellaneous inventory controls and sales analysis; and,

• discontinuing the practice of employees having free drinks.

Large net loss at HL liquor store in May

Along with being singled out in the audit as needing more controls, the liquor store had a negative report for the month of May.

The net loss at the store for May was $28,685, with a year-to-date net loss of $27,715, reported City Clerk Gene Gilbert.

Total revenue for May was $74,146, and expenses were $102,831. There was also an inventory of $85,934 at the liquor store in May.

“Inventory is really, really high,” Gilbert said.

She noted that a payment of $12,718 for dram insurance for the liquor store was made in May.

Not included in the monthly total was a payment to the auditors for $13,850, and an insurance payment related to the liquor store of $109,570.

Big bills for Howard Lake Estates owners

During the workshop following the council meeting, city engineer Barry Glienke, of Bolton & Menk was asked about the infiltration situation at Howard Lake Estates, the mobile home park.

The city has been experiencing severe infiltration of stormwater into the sanitary sewer from the mobile home park.

Infiltration occurs when stormwater, which is considered clean water, leaks into the sanitary sewer system through cracks or holes in the infrastructure.

Stormwater does not need to be treated at the wastewater treatment plant, but is sent there once it enters the sanitary sewer system, costing the city additional expense to treat it.

The city calculates a resident’s sanitary sewer bill by metering the water coming into the property, and assuming the same amount would be leaving through the sanitary sewer system.

In order to account for the additional water entering the sanitary sewer system at the mobile home park, Bolton & Menk placed a meter on the sanitary sewer line leaving the park to measure the amount of infiltration.

The city sent a letter to the owners of the mobile home park in early June informing them a meter would be installed, and they would be charged for the excess infiltration until the sanitary sewer is fixed.

The meter was installed June 6, according to Glienke. Between June 6 and June 14, the meter recorded 750,000 gallons of water that flowed through the sanitary sewer from the mobile home park.

“That’s $3,000 in wastewater treatment fees,” said Hinnenkamp.

The mobile home park owners are also being charged $350 per month for the rental of the flow meter from Bolton & Menk.

Hinnenkamp estimates that the sewer bill will be at least $6,000, and that doesn’t include the water bill and the flow meter rental charge.

To give the situation more perspective, Glienke informed the board that flows to the wastewater treatment plant in January were down to about 60,000 gallons per day.

However, the flows coming from the mobile home park at this time are 70,000 to 90,000 gallons per day.

Poles for parking lot near the Posey Patch

The council decided to move forward with adding six poles to the parking lot adjacent to the Posey Patch in order to stop people from running into the building.

Although it was discussed to place both poles and planters, the council decided to table purchasing planters until more quotes can be acquired and the matter can be further discussed with the owners of the Posey Patch.

The public works department has enough pipe to create six poles. Morris Excavating will dig the holes, at $50 per hole.

The pipe will be placed in the hole, and filled with cement, then painted.

The total cost of installing the poles will be $300, plus the cost of the cement needed to fill the pipe.

Odds and ends

In other business, the council:

• approved hiring Jason Danielson for the position of part-time police officer.

• appointed Gene Gilbert as head judge, and Dawn Horst, Ron Miller, Mike Main, Wanda Werner, and Jean Schmidt as election judges for the 2012 election.

• proclaimed the week of June 18 through June 24 Good Neighbor Days week, and encouraged the residents and businesses of Howard Lake to participate by celebrating the community’s history during the Good Neighbor Days celebration.

• reviewed the apartment rate utility analysis presented by Hinnenkamp during the workshop.

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