HomeMy WebLinkAbout5D - Refund of Liquor License Fees to Jazz Co. Cafe
MEETING DATE:
AGENDA #:
PREPARED BY:
PRESENTER:
AGENDA ITEM:
DISCUSSION:
4646 Dakota Street SE
Prior Lake, MN 55372
CITY COUNCIL AGENDA REPORT
SEPTEMBER 7,2010
5D
JERIL YN ERICKSON, FINANCE DIRECTOR
JERIL YN ERICKSON, FINANCE DIRECTOR
CONSIDER APPROVAL OF A RESOLUTION GRANTING JAZZ
COMPANY CAFE A PARTIAL REFUND OF THEIR LIQUOR LICENSES
FOR YEAR 2010-2011
Introduction
The purpose of this agenda item is to consider the request of John and
Camille Myser, the owners of the Jazz Co. Cafe to have 2010-2011 liquor
license fees refunded.
Historv
In May 2010, a request was made by Camille Myser to have the City issue
an on-sale wine license and an on-sale 3.2 malt liquor license for a partial
year. Camille indicated that the Jazz Co. Cafe intended to permanently
close following the Lakefront Days event so they were interested in having
the licenses issued for the period July 1 through approximately August 7.
Staff reviewed City ordinance and State Statute. State Statute 340A.412
(8) states that all intoxicating liquor licenses issued by a county or a city,
other than cities of the first class, must expire on the same date.
Therefore, a request for a license to expire on a date other than June 30
would be prohibited. Staff confirmed this interpretation with the MN
Department of Public Safety - Alcohol & Gambling Enforcement which
approves liquor licenses.
Based upon the above State Statute, Jazz Co. Cafe was advised that they
could not apply for a partial year license.
Jazz Co. Cafe subsequently renewed the following liquor licenses and paid
the following amounts for the license period of July 1, 2010 through June
30, 2011.
On-sale wine license $1,250
On-sale 3.2 malt liquor $ 200
The Jazz Co. Cafe liquor license applications were approved by the City
Council at its June 21, 2010 meeting.
Due to the fact that a partial year license could not be issued, the issue
regarding refunds was brought up.
City Code Section 301.502(7) allows a partial refund for unused liquor
license fees under certain conditions.' On January 16, 2007 the City
Council adopted this ordinance to address a situation brought forth when a
refund was requested for the on-sale intoxicating liquor license held by
R:\Council\2010 Agenda Reports\09 07 10\Jazz Co Cafe License Refund Agenda.doc
Dockside LLC at the Captain Jack's location The ownership of the
business was changing but the location was staying the same. Liquor
licenses are issued to specific owners and locations so if either change, a
new license application must be submitted and approved.
It is not the City's intent to collect fees multiple times (double dip) on the
same business location. Therefore, the ordinance that was subsequently
adopted reflected this specific situation---"an existing licensee discontinues
their license before the termination date AND a new license is issued for
the remainder of the license period. .." In addition, the ordinance included
specific requirements about the timing of the request, which types of
licenses were eligible, administrative fees, etc. A copy of City Code
Section 301.502(7) has been included with this agenda report. The Jazz
Co. Cafe situation does not appear to meet both criteria.
An email received from John Myser on May 2010 acknowledged his
interpretation of the City Code that the refund provisions only applied to on-
sale intoxicating liquor licenses. (The on-sale wine license and on-sale 3.2
malt liquor license are not considered intoxicating liquor licenses.)
Hence, the request for licensing for the period July 1 to August 7 only.
Staff acknowledged that the interpretation of the refund provisions in the
City Code was not absolutely clear. The Myser's were advised by staff that
when they terminated their business and wanted the Council to consider
granting a refund, a written request for the refund must be submitted to the
City during the period for which the license was issued and that any refund
granted would be based on the number of remaining full (not partial)
months in the current license period.
Current Circumstances
On August 17, 2010, the Myser's sent an email to staff stating that the Jazz
Co. Cafe officially closed Saturday August 7, 2010 and they were
requesting that the City Council refund the following amounts based on 10
months remaining for each license:
On-sale wine license ($1,250.00 x 10/12) $1,041.66
On-sale 3.2 malt liquor ($200.00 x 10/12) $ 166.67
City Code does not provide clear, unambiguous direction for staff and the
City Attorney to determine if City Code Section 301.502(7) allows a partial
refund in this situation. Therefore, the City Council must determine the true
intent of this ordinance.
If the partial refund applies only "in circumstances where an existing
licensee discontinues their license before the termination date AND a new
license is issued for the same establishment for the remainder of the period
. . ." then Jazz Company Cafe would not be eligible for a refund. The City
has not received an application for a new licensee at this same
10cation.Subdivison (b) of the ordinance addresses refunds for "on-sale
intoxicating liquor licenses." Jazz Co. Cafe has on-sale wine and on-sale
3.2 malt liquor licenses. These are not considered part of an "on-sale
intoxicating liquor license as they are separately licensed."
Subdivision (c) states that the minimum reimbursement is $1,000. The on-
sale wine and on-sale 3.2 malt liquor license fees are $1,250 and $200,
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respectively. Based on 10 months, the prorated fees would be $1,042 and
$167, respectively. The prorated on-sale 3.2 malt liquor license is less than
$1000 and would not be eligible for refunding.
Subdivision (d) states that the administrative fee of $400 shall be charged
for every reimbursement. Should the administrative fee be deducted from
the prorated fee when considering the refund eligibility under subdivision
(c)? For the on-sale wine license, the prorated fee was $1,042 but when
the $400 administrative fee is deducted, the fee would not be eligible for
refunding because $642 is less than the $1000 minimum.
Subdivision (e) states that a license fee may be refunded if the reason the
license was discontinued is a result of the issuance of a new license at the
same location. An application has not been received by the City for a new
license at the same location.
Another approach would be to say that the license types, minimums,
proration, administrative fees, etc. do not apply because an existing
licensee has discontinued their license before the termination date BUT
another business has not applied for a license in that same location. The
conjunctive "AND" hasn't been met. Therefore, the Council can consider
issuing a refund or rejecting the refund request since the ordinance does
not address this specific set of circumstances.
As you can see, this particular Ordinance can be interpreted a number of
different ways.
Conclusion
The City Council should consider whether or not it wishes to grant the
request to partially refund the liquor license fees paid by Jazz Co. Cafe for
2010-2011.
Consideration should also be given to whether or not an administrative fee
should be charged.
The City Attorney and staff recommend that the Section 301.502(7) be
updated to provide clarity regarding the City's intent for reimbursement of
liquor licenses and the process for requesting a refund and determining the
appropriate amount.
ISSUES:
Due to the ambiguity noted above in City Code 301.502(7), Staff
recommends issuing a refund as follows:
On-sale wine license:
Original license fee paid
Less Administrative Fee
Subtotal
Prorated at 10/12
Refund
$1,250.00
( 400.00)
$ 850.00
x 10/12
$ 708.00
On-sale 3.2 malt liquor license:
Original license fee paid $ 200.00
License fee is less than $1000; not eligible for refunding.
FINANCIAL
Financial impact would be determined based upon Council's decision on
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3
IMPACT: the request.
ALTERNATIVES: 1. Approve a resolution granting the request for a refund.
2. Deny the request on the basis that the ordinance does not provide for a
refund in this particular situation.
RECOMMENDED Alternatives #1
MOTION:
Reviewed by:
Frank Boyles, City Manager
R\Council\2010 Agenda Reports\09 07 10\Jazz Co Cafe License Refund Agenda,doc
4
4646 Dakota Street SE
Prior Lake, MN 55372
RESOLUTION 10-xxx
A RESOLUTION GRANTING JAZZ COMPANY CAFE A PARTIAL REFUND OF THEIR
LIQUOR LICENSES FOR YEAR 2010-2011
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
WHEREAS,
Motion By:
Second By:
In May 2010, Camille Myser of Jazz Co. Cafe requested the City issue partial year on-
sale wine and on-sale 3.2 malt liquor licenses due to their intent to relocate or close the
business in August, 2010 which is prior to the expiration of the 2010-2011 liquor license
period; and
State Statute 340A.412 (8) states that all intoxicating liquor licenses issued by a county or a city,
other than cities of the first class, must expire on the same date. Therefore, a request for a
license to expire on a date other than June 30 would be prohibited; and
Staff advised Camille Myser of Jazz Co. Cafe that a request for refund of liquor license
fees could be submitted to the Council for the portion of the unused 2010-2011 liquor
license period in whole months; and
Liquor license application was made and appropriate fees submitted; and
Jazz Co. Cafe closed permanently on August 7,2010 and Camille Myser is
requesting a refund of the portion of the unused 2010-2011 liquor license period
in whole months; and
The Council has determined that there are ambiguities in the city code with
respect to this specific application.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. A refund shall be made to Jazz Co. Cafe as follows:
On-sale wine license:
Original license fee paid
Less Administrative Fee
Subtotal
Prorated at 10/12
Refund
$1,250.00
( 400.00)
$ 850.00
x 10/12
$ 708.00
On-sale 3.2 malt liquor license:
Original license fee paid $ 200.00
License fee is less than $1000; not eligible for refunding
PASSED AND ADOPTED THIS 7th DAY OF SEPTEMBER 2010.
R:\Council\2010 Aftenda Reports\09 07 10\Jazz Co Cafe License Refund Resolution.docR:\Co~nGiI\2010 I',gcnda Roports\09 07 10\Jazz Co Calc License
Ref~nd Rcso JER L YN H.^,3 NOT 3EE~J IT Y=T,3e€
YES
NO
Myser
Erickson
HedberQ
Keeney
Millar
Myser
Erickson
HedberQ
Keeney
Millar
Frank Boyles, City Manager
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Business Regulations
only if the applicant demonstrates financial responsibility as defined in Minnesota
Statute s340AA09 for the applicant's liability under Minnesota Statute s340A.801
(Dram shop liability). Such proof of financial responsibility shall be filed with the
Minnesota Commissioner of Public Safety and a copy filed with the application for
a license. The sale of alcohol-related products without having on file with the City
effective proof of financial responsibility is subject tot he provisions of subsection
301.1003.
30 I c:; ();;L (7) Partial Refund. In circumstances where an existing licensee discontinues their
license before the termination date and a new license is issued for the same
stablishment for the remainder of the license period, a refund of the unused
portion of license fee may be granted at the discretion of the city Council subject
to the following:
a. The request for reimbursement must be made during the year for which the
license was issued.
b. A reimbursement will be considered only for on=sale intoxicating and liquor
license fees.
c. The minimum reimbursement is $1,000.
d. An administrative fee of $400 shall be charged for every reimbursement.
e. The reason the license was discontinued is a result of the issuance of a new
license at the same location.
f. License discontinuation is not the result of a violation of this ordinance.
(Ord 107-04 - adopted 1/27/07)
301.503 Action. If the City Manager determines that an application is incomplete or without
property supporting documentation, he or she shall retum the application to the
applicant with notice of the deficiencies.
The City Manager shall review the application, supporting documents, and the
result of a background investigation, and may recommend to the City Council
either approval or denial of the license, or may recommend the City Council delay
action for such reasonable period of time to permit the City to complete any
additional investigation of the application or the applicant deemed necessary.
Following written notice to the applicant, the City Council shall review the
application and supporting documents and shall hear testimony from any person
who requests to be heard for or against the granting of the license. After the
investigation and hearing, the Council shall, in its discretion, grant or deny the
issuance of the license. No "on-sale 3.2/wine" license or "off-sale" license shall
become effective until approved by the commissioner of public safety. The City
Council may impose reasonable conditions on the issuance of any license to
protect the public. If the City Council approves the license, and all required
approvals are received by the City, a license shall be issued to the applicant. If the
City Council denies the application, a notice of denial shall be sent to the applicant
at the business address provided on the application along with the reasons for the
denial. 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.
No license shall be issued transferred or renewed if the results of the background
City of Prior Lake
301/p7