HomeMy WebLinkAbout8B - Narayan Gas and Grocery
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
4646 Dakota Street SE
Prior Lake. MN 55372
CITY COUNCIL AGE~A REPORT
June 7,2010 rf'v \ '
8B ~_~
Frank Boyles, City Manager
Public Hearing to Consider an Appeal to Presumptive Civil Penalties
for Tobacco Sales to a Minor by B.K. Shah dba Narayan Gas and
Grocery
Introduction
The purpose of this agenda item is for the City Council hearing to consider
an appeal from B.K. Shah dba as Narayan Gas and Groceries to
Presumptive Civil Penalties set forth in the Prior Lake City Code (attached).
Historv
Prior Lake City Code Section 308 regulates the sale of tobacco in Prior
Lake. The ordinance is based upon State statutes and attempts to
dissuade licensees from selling to minor in two ways: 1. the clerk who
actually makes the sale is prosecuted criminally in District Court, and 2. the
owner is subject to civil sanctions.
In the case of Narayan Gas and Groceries, we have been informed that a
clerk has been convicted for sales to a minor. This is the third violation
which has taken place in 36 months an Narayan Gas and Grocery. The
City Code identifies civil penalties associated with each violation as follows:
First Violation. The first violation of this section shall be punishable by a
civil penalty of at least $150, but no more than $500.
Second Violation. A second violation of this section within any 36-
month period shall be punishable by a civil penalty of $700 and a
suspension of the license of at least seven days, but not more than
twenty days.
Third Violation. A third violation or subsequent violation of this section
within any 36-month period shall be punishable by the revocation of the
license. Any licensee whose license is revoked under this Section shall
not be eligible for renewal for a period of two license years after
revocation.
For Narayan Gas and Groceries, this is the third conviction in a 36-month
period. Below is a summary of the criminal proceedings:
RICouncil12010 Agenda Reportsl06 07 10lNarayan Gas and Grocery Tobacco - FINALdocR:\Council\2010 Agenda Reports\06 07 10\Narayan
Gas and Grocery Tobacco - FINAL.doc
Date Clerk Violation Penalty
Nov 13, 2006 Asron Mathew Pled guilty sold to minor $380
Schlossin
Dec 18, 2008 Curtis Duane Pled guilty sold to minor $385
Rank
Oct 27, 2009 Rajesh Pled guilty sold to minor $115
Pravinbhal Shah
Following confirmation of a criminal conviction, the staff prepares a letter to
the business owner informing them of the:
1. provision of the law.
2. civil penalty to be imposed.
3. owners' right to appeal the staff-proposed penalty to the City
Council.
The civil penalties which have been imposed for Narayan Gas and
Groceries have been:
First offense: $150
Second offense: $700 fine and seven-day suspension. The seven-day
suspension was stayed indefinitely if Mr. Shah agreed to purchase an
electronic identification card reader.
Third offense: the ordinance calls for revocation of the license for two
years.
Current Circumstances
The ordinance allows the licensee to appeal the civil penalty to the City
Council. Mr. Shah has requested the appeal hearing which is scheduled
for this evening. The ordinance further provides that, ... "the license holder
shall be afforded an opportunity for a hearing before the Council within
thirty days of such written request. If a committee of the Council conducts
the hearing, it shall report its findings and make a recommendation to the
Council."
The ordinance further provides that, "Findinas. If after the hearing the
applicant or license holder is found ineligible for a license, or in violation of
this ordinance, the Council may affirm the denial, impose a fine, issue a
suspension, or revocation or impose any combination thereof as set forth in
Subsection 308.700."
Conclusion
The City Council should hear the staff report, request any additional
information desired, open the hearing and allow anyone present to be
heard, close the hearing and then make a determination of the appropriate
penalty. Mr. Shah has submitted a letter which is attached for your
consideration.
ISSUES:
The ordinance does provide that an affirmative defense to a charge in this
section if the license holder shows by a preponderance of evidence that the
license holder reasonable and in good faith relied upon proof of age
described in 340A.503, subd. 6 of the Minnesota Statutes, in making the
RICouncil12010 Agenda Reportsl06 07 10\Narayan Gas and Grocery Tobacco - FINAL.doc
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sale. In short, some sort of false identification is used to make the sale. In
this case an identification card was requested, but the clerk miscalculated
the age.
What is not clear is why the clerk did not use the identification machine
which was purchased and installed according to an invoice supplied to us
in April 2009.
What appears to have taken place is a $295 CA V-2800 "Age Verifier" was
purchased on March 25, 2009 and placed into operation approximately two
weeks thereafter. In his April 26, 2010 letter requesting this hearing, Mr.
Shah refers to a new Ruby System which cost $6,500, which does not
allow the cash drawer to open without entering the birth date. Mr. Shah
also indicates that they passed the tobacco check which took place on
February 26, 2010 and is confirmed by letter from Sergeant John Stanger.
Mr. Shah has indicated that loss of the tobacco license would cause
closure if the store. On the other hand unlike other portions of the city code
regarding civil penalties, this provision does not identify optional and
alternative penalties.
FINANCIAL
IMPACT:
There would be a minor loss of revenue to the city if the license is revoked.
Court fines and civil penalties have generally reimbursed the City for its
cost of enforcement.
ALTERNATIVES:
1. Direct the staff to prepare a resolution including findings of fact
supporting revocation of the license for a two-year period.
2. Direct the staff to prepare a resolution including findings of facts
supporting one or a combination of other penalties.
RECOMMENDED Alternative #1 or #2 depending upon information offered at the hearing.
MOTION:
RICouncil12010 Agenda Reportsl06 07 10\Narayan Gas and Grocery Tobacco - FINAL.doc
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Date: 5/20/1 0
To,
Attn: Mr. Frank Boyles
City Manager
City of Prior Lake
4646 Dakota Street SE
Prior Lake, MN 55372-1714
Subject:
Leniency for our business due to Sale of Tobacco to a Minor by our
employee on October 27, 2009
Dear Mr. Boyles,
We have received a letter/ notice from you few days ago regarding civil violation of
Section 308.703 of the Code of Ordinances for the City of Prior Lake.
We would like to request you and Prior Lake City Counselors team to take soft approach
on us being our business is not doing so well in recent years. We had other employee
theft issues and in-house charge account issues last year in which we have lost more than
$60,000 + amount.
Please forgive us this last time.
Action has been taken:
. Installed a new Ruby System which is $6,500 worth cash register machine which
doesn't allow cashier to sale Cigarette without entering birth date. Please see
attached photo for old and new system.
. Passed recent compliance check on F eb 26, 2010 for Cigarette inspection. (see
attached copy)
. Started Training to talk with each employees about minor age and precautions
methods
. Started to keep receipts for younger people for their tobacco sale- verification
. Maintained record keeping for each employee for training for each month- sign
off
. Started more often video camera checking by owner
Other Community Service:
. Giving away 3% donation to St. Michael Church for their School Program for
each $1,000 worth gift certificates
. Giving away $2 off coupon for 1,500 families from PLSHA (Prior Lake and
Savage Hockey Association) for whole year for any purchase
. Giving Gift certificates for $100 worth (2 -3 times per season) for Fishing Contest
and Classic Car shows
. Let People use our parking lot for parking during Fanners Market
. Let them use our toilet during Fanner Market season
. Let them use our water line to flower shop vendors during Fanner Market season
. During any public event (like Parade, Ladies Night out, 4th July celebration), we
donate 300-500 bottle waters to people -especially kids in summer events
. Paying regular city taxes and support all good safe activities
The revocation of the tobacco license will be very hard punishment to us which would
put us out of business completely. We have about 30-40% tobacco sales directly.
Rajesh (our employee) has asked for driver license ID to that customer, but he did wrong
calculation year count. He is very sad due to this mistake and felt very guilt about it.
We sincerely request you to hear our situation.
We strongly believe in following rules and make stronger community.
Please forgive us and allow surviving in this poor economy. We again apologize for
honest mistake.
God bless you and your family.
With sincere regards,
~~,
BK Shah
Narayan Gas and Groceries
16176 SE Main Ave
Prior Lake, MN 55372
CC - Mr. Bill O'Rourke
OLD Cash Register- Casio Brand ($500 worth machine from previous owner)
Added - New sticker as training and reminder to employees to check year and date
(Bought this machine to check Driver Lie ID during year 2008-09. But, not very
effective. It doesn't work half of times.)
(Bought new Ruby System with latest technology in it on November 2009 time frame
after 3rd compliance check failure.)
SUBSECTIONS:
308.100:
308.200:
308.300:
308.400:
308.500:
308.600:
308.700:
308.800:
308.900:
308.1000:
308.100:
308.200:
Business Regulations
SECTION 308
TOBACCO
PURPOSE
DEFINITIONS
LICENSE REQUIRED
LICENSE FEE
PROHIBITED SALES
MOBILE SALES
VIOLATIONS AND PENALTIES
HEARING ON DENIAL OR VIOLATION
AFFIRMATIVE DEFENSE
SEVERABILITY
PURPOSE: The City Council finds that substantial scientific evidence exists that the use
of tobacco-related products causes cancer, heart disease, and various other medical
disorders. It is further finding of the City Council that the present legislative scheme of
prohibiting sales of tobacco-related products to persons under the age of eighteen (18)
has proven ineffective in preventing such persons from using tobacco-related products.
The City Council has concluded that minors have ready access to self-service
merchandising, including vending machines, which sell tobacco-related products. The
City Council has also concluded that the prohibition of the sale or dispensing of tobacco-
related products through vending machines and the regulation of sales through self-
service merchandising will thereby promote the health, safety and welfare of the residents
of the City, particularly those residents under eighteen (18) years of age.
DEFINITIONS: The following words and terms when used in this Section shall have the
following meanings unless the context clearly indicates otherwise:
Adult A person 18 years of age or older;
Applicant A person as defined herein, who completes or signs an application for a
license to sell tobacco-related products individually or on behalf of a business.
Business: The business of selling tobacco-related products;
License Holder. The owner of the business licensed to sell tobacco-related products.
Movable place of business: A business whose physical location is not permanent or is
capable of being moved or changed.
Person: One (1) or more natural persons, a partnership, including a limited partnership, a
corporation, including a foreign, domestic, or nonprofit corporation, a trust, a political
subdivision of the State, or any other business organization.
City of Prior Lake
308/p1
308.300:
308.301
308.302
308.303
308.304
Business Regulations
Self-service Merchandising: A method of displaying tobacco-related products so that
they are accessible to ten public without the intervention of an applicant, license holder or
their agents or employees.
Tobacco-related products: Cigarettes, cigars, cheroots, stogies, perique, granulated,
plug cut, crimped cut, ready, rubbed and other smoking tobacco; snuff, snuff flower,
cavendish, plug and twist tobacco, fine cut and other chewing tobaccos, shorts, refuse
scripts, clippings, cuttings, and sweepings of tobacco, and other kinds and forms of
tobacco prepared in such manner as to be suitable for chewing, sniffing, or smoking in a
pipe; rolling paper or other tobacco-related devices.
Vending Machine: Any mechanical, electric or electronic, self-service device which,
upon insertion of money, tokens or any other form of payment, dispenses tobacco
products and including vending machines equipped with manual, electric or electronic
locking devices.
LICENSE REQUIRED. No person shall keep for retail sale, sell at retail or otherwise
dispense any tobacco-related product at any place in the City without first obtaining a
license and paying a license fee.
Aoolication. An application for a license to sell tobacco, tobacco products, or tobacco-
related devices shall be made on a form provided by the City. The application shall
include, but is not limited to requiring the full name of the applicant, the applicant's
residential and business address and telephone numbers, the name of the proposed
license holder, the business location for which the license is sought, and a copy of the
educational materials the applicant intends to use to educate employees. The completed
application along with the application fee shall be submitted to the City Manager or his
designee for approval. If the City Manager determines that an application is incomplete,
he or she shall return ten application to the applicant with notice of the deficiencies.
Action. The City Manager may either approve or deny the license, or may delay action
for such reasonable period of time to permit the City to complete any investigation of the
application or the applicant deemed necessary. If the Manager approves the license, a
license shall be issued to the applicant. If the Manager denies t~application, a notice of
denial shall be sent to tR(q..applicant at tftn business address provided on the application
along with the reasons for the denial. The notice shall also inform the applicant of their
right to appeal the Manager's decision to the Council pursuant to the process set forth in
subsection 308.800. If a license is mistakenly issued or renewed to an applicant or
license holder, it shall be revoked by the City Manager upon the discovery that the
person, applicant or license holder was ineligible for the license under this Section.
Term. All licenses are issued for a period of one (1) year. The license period is from
January 1 to December 31.
Revocation or Susoension. Any license issued under this Section may be revoked or
suspended as provided in the Violations and Penalties subsection of this Section pursuant
to the process set forth in subsection 308.800.
City of Prior Lake
308/p2
Business Regulations
308.305 Transfers. All licenses issued under this Section shall be valid only on the business
premises for which the license was issued and only for the person to whom the license
was issued. No transfer of any license to another location or person shall be valid'without
the prior approval of the City Manager.
308.306 DisDlav. Every license shall be conspicuously posted at the place of business for which
the license is issued and shall be exhibited to any person upon request.
308.307 License Renewals. Any person intending to renew a cigarette license must submit a
renewal application, on a form provided by City, and pay the application and license fee.
A license renewal application and license fee must be submitted to the City no later than
forty-five (45) days prior to the expiration of the license. The renewal of a license under
this Chapter shall be handled in the same manner as the original application. The request
for renewal shall be made at least thirty (30) days but no more than sixty (60) days before
the expiration of the current license. The issuance of a license under this Chapter shall
be considered a privilege and not an absolute right of the applicant and shall not entitle
the holder to an automatic renewal of the license. (Ord. 97-2, 1-6-97)
308.308 Late Fee. A late fee of Fifty Dollars ($50.00) will be imposed on any licensee who fails to
submit a timely renewal application.
308.309 Instructional Proaram. No person shall be issued a license or renewal license to sell
tobacco-related products unless an applicant or license holder has an approved program
for instructing all employees at the business premises for which the license was issued, in
the legal requirements pertaining to the sale of tobacco-related products, including, but
not limited to, reviewing the law on the sale of tobacco-related products, providing
information on the health risks of using tobacco-related products, and requiring
employees to request identification from every customer who appears to be under 27
years of age. No license shall be issued unless the applicant or license holder signs a
City form attesting that each employee of the applicant or license holder has received
training and instruction on the sale of tobacco-related products and the date such training
occurred. The training shall include information that the sale of tobacco-related products
to minors is illegal, explains what proof of age is legally acceptable, and that a sale to a
minor can subject the applicant or license holder and their employees to criminal and/or
civil liability.
308.310 Denials. The following shall be grounds for denying the issuance or renewal of a license
under this Section. The following list is not exhaustive or exclusive:
(1) The applicant is under the age of 18 years.
(2) The applicant has been convicted within the past five years of a violation of any provision
of this Section or a violation of a Federal, State, or local law, ordinance provision, or other
regulation relating to tobacco or tobacco products, or related tobacco devices.
(3) The applicant or license holder has had a license to sell tobacco, tobacco products or
tobacco-related devices revoked within the preceding twelve (12) months of the date of
application.
City of Prior Lake
308/p3
Business Regulations
(4) The applicant fails to provide any information required on the City license application, or
provides false or misleading information.
(5) The applicant or license holder has outstanding fines, penalties or property taxes owed to
the City.
308.400: LICENSE FEE: The application fee shall be determined by the City Council and shall be
paid at the time of application. License fees are not pro-rated.
308.500: PROHIBITED SALES: No person shall sell, offer for sale, give away, furnish or otherwise
deliver any tobacco, tobacco product, or tobacco-related device:
(1) To any person under the age of eighteen (18);
(2) By means of any type of vending machine;
(3) By means of self-service merchandising or any means whereby the customer may have
access to such items without having to request the item from the license holder, their
agents or employees. All tobacco related products shall be stored behind a counter or
other area not freely accessible to customers.
(4) By any other means, or to any other person, prohibited by Federal, State or other local
law, ordinance provision, or other regulation.
308.501 Exceotion. A license holder who operates an establishment that sells only tobacco-
related products is exempt from the self-service merchandising provision if the license
holder prohibits anyone under eighteen (18) year of age from entering the establishment,
unless accompanied by a parent, and the license holder conspicuously displays a notice
prohibiting persons under eighteen (18) years of age from entering the establishment
unless accompanied by a parent.
308.600: MOBILE SALES: No license shall be issued for the sale of tobacco-related products at a
movable place of business, including but not limited to motorized vehicles, mobile sales
kiosks, or trailers.
308.700: VIOLATIONS AND PENALTIES.
308.701 Revocation or SusDension. Any violation of this Section shall be grounds to revoke or
suspend a license.
308.702 Criminal Penaltv. As set forth in Minnesota Statues Chapter 609:
(1) It shall be a gross misdemeanor for anyone to sell tobacco-related products to a person
under the age of eighteen (18) years.
City of Prior Lake
308/p4
308.703
_- (2)
--
---
Business Regulations
(2)
It shall be a misdemeanor to furnish tobacco-related products to a person under the age
of eighteen (18) years.
(3)
It shall be a petty misdemeanor for anyone under the age of eighteen (18) years to use,
purchase, attempt to purchase, or possess tobacco-related products. This Section shall
not apply to a person under the age of eighteen (18) years who purchases or attempts to
purchase tobacco-related products while under the direct supervision of a responsible
adult for training, education, research, or enforcement purposes.
(4)
It shall be a petty misdemeanor for anyone under the age of eighteen (18) years to sell,
furnish, or give away any tobacco-related products. This Section shall not apply to an
employee of ten license holder under the age of eighteen (18) years while stocking
tobacco-related products.
(5)
Upon discovery of a suspected violation, the City Police shall issue a criminal citation to
the individual who made the prohibited sale and, where appropriate, to the minor who
purchased the tobacco as set forth in the previous paragraphs of this subsection.
Civil Enforcement. The license holder shall be responsible for the conduct of its agents
or employees while on the licensed premises. Any violation of this Section shall be
considered an act of the license holder for purposes of imposing a civil penalty, license
suspension, or revocation. Each violation, and every day in which a violation occurs or
continues, shall constitute a separate offense.
(1 )
Notice of Violation. Upon the occurrence of a suspected violation, the Police
Department shall inform the City Manager of the suspected violation. The City Manager
shall then send to the license holder a written notice of the civil violation. The notice shall
advise the license holder of the penalty and the license holder's right to request a hearing
regarding the violation of this ordinance pursuant to subsection 308.800.
Civil Penalties. Each license issued hereunder shall be subject to suspension or
revocation for violation of any provisions of this Section or the laws of the State of
Minnesota as follows:
a. First Violation. The first violation of this Section shall be punishable by a civil
penalty of at least $150 but no more than $500.
b. Second Violation. A second violation of this Section within any 36-month period
shall be punishable by a civil penalty of $700 and a suspension of the license of at least
seven days but not more than twenty days.
c. Subseouent Violation. A third or subsequent violation of this Section within any
36-month period shall be punishable by the revocation of the license. Any licensee
whose license is revoked under this Section shall not be eligible for renewal for a period of
two license years after the revocation.
(3)
Any civil penalty, suspension or revocation or combination thereof under this Section does
not preclude criminal prosecution under this ordinance or Minnesota Statute Section 609-
685.
City of Prior Lake
308/p5
,- 308.800:
L
308.801
-------
308.802
308.900:
308.1000:
Business Regulations
HEARING ON DENIAL OR VIOLATION. Following receipt of a notice of denial issued
under subsection 308.300 or a notice of a violation and penalty issued under subsection
308.700, an applicant or license holder may request a hearing before the City Council. A
request for a hearing shall be made by the applicant or license holder in writing and filed
with the City Manager within ten (10) days of the mailing of the notice of denial or alleged
violation. Following receipt of a written request for hearing, the applicant or license holder
shall be afforded an opportunity for a hearing before the Council within thirty days of such
written request. If a committee of the Council conducts the hearing it shall report its
findings and make a recommendation to the full Council.
(Ord Amd 107-12, publ 072107)
Findinas. If after the hearing the applicant or license holder is found ineligible for a
license, or in violation of this Ordinance, the Council may affirm the denial, impose a fine,
issue a suspension or revocation, or impose any combination thereof as set forth in
subsection 308.700.
Default. If the applicant or license holder has been provided written notice of the denial
or violation and if no request for a hearing is filed within the 10-day period, then the denial,
penalty, suspension or revocation imposed in subsection 308.700 shall take immediate
effect by default. The City Manager shall mail notice of the denial, fine, suspension or
revocation to the applicant or license holder. The City Police shall investigate compliance
with the suspension or revocation.
AFFIRMATIVE DEFENSE. It is an affirmative defense to a charge under this Section if
the license holder proves by a preponderance of the evidence that the license holder
reasonably and in good faith relied on proof of age as described in Chapter 340A.503,
subd. 6 of the Minnesota Statutes, in making the sale.
SEVERABILITY. If any provision of this Section is for any reason held to be invalid, such
decision shall not affect the validity of the remaining provisions of this Section.
(This Space Intentionally Blank
For Future Amendments)
City of Prior Lake
308/p6