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Members of the City Council <br /> City of St. Anthony, Minnesota <br /> • <br /> Liquor Operations <br /> During the year, the City assumed responsibility for the food operation at its <br /> Stonehouse location. To facilitate management of this operation the City entered <br /> into a contract for management of this operation with an independent contractor. <br /> Since inception of the contract, invoices for food, supplies and other items have <br /> been paid directly by the contractor. The contractor, on a monthly basis, submits <br /> an invoice to the City requesting reimbursement. To strenghthen controls over <br /> payment of invoices and inventory, the City should begin paying these invoices <br /> directly to the vendors, in a manner similar to its food operation at Apache Wells. <br /> According to the terms of the contract, the City is responsible for providing the <br /> food and other supplies as needed for this operation. The inventory on hand is <br /> the City's and not of the independent contractor. Such a change in procedures may <br /> enable liquor management to better manage this operation and control inventory <br /> costs. Based on discussions with the liquor manager, food costs as a percentage <br /> of revenues have been higher than anticipated. <br /> A budget or plan for capital acquisition and improvements for the Liquor Fund <br /> should be approved and documented, similar to what the City requires of its other <br /> operations. This document should identify the equipment needed to be replaced, <br /> provide a time-table for replacement and identify source of funds for payment. <br /> In connection with this, a uniform capitalization policy based on cost and ex- <br /> pected life/duration of the asset should be developed to provide guidance when <br /> fixed assets are acquired. In this manner, perhaps the liquor department should • <br /> become more involved with the preparation of an operating budget to better con <br /> trol and manage costs. Controlling and maintaining costs of operations is a key <br /> element to increasing profitability and these costs need to be monitored closely <br /> to enable management to adjust or make changes based on existing conditions. <br /> Due to a change in procedures for liquor inventory, taking of the inventory was <br /> improved and appeared to be conducted more smoothly. Inventory observation and <br /> test counts were matched to the inventory records without much difficulty and dif- <br /> ferences were easily identified and resolved. As a result, the inventory test <br /> counts were much easier to trace and verify. <br /> Recycling Grants <br /> Better grant documentation is needed to support the reimbursements requested from <br /> county agencies for recycling grants. Copies of requests and sufficient supporting <br /> documentation should be maintained in the appropriate files. For Hennepin County, <br /> it appears the grant reimbursement received was for more than the amount expended <br /> for the program; as a result, the City may have to refund a portion of grant funds <br /> previously received or file amended reports to support the amounts received. For <br /> Ramsey County, it appears the claim for reimbursement had not been filed during . <br /> the year. This claim file was submitted in March 1996-, and the City was subse- <br /> quently notified there were still funds available to be reimbursed to the City. <br /> • <br />