The URL can be used to link to this page

Home My WebLink About8A Public Hearing to Consider Modifications to Liquor License Fees4646 Dakota Street SE Prior Lake. MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: March 7, 2011 AGENDA #: 8A PREPARED BY: Frank Boyles, City Manager PRESENTED BY: Frank Boyles AGENDA ITEM: Public Hearing to Consider Modifications to Various Liquor License Fees DISCUSSION: Introduction The purpose of this public hearing is to receive input regarding a proposal to in- crease certain liquor license fees. History Annually the City Council reviews and approves the City's official Fee Schedule. This year at its annual meeting the Council approved the Fee Schedule, but di- rected that the staff return to the Council with the liquor licensing portion of the fee schedule. On January 18, 2011 an agenda report (attached) was provided to the City Coun- cil which identified those liquor license fees which the City could change and those which are set by State Statute. The City Council discussed the report, which affirms that the liquor license fees, with few exceptions, have not been updated for many years. Accordingly, the staff was directed to schedule a public hearing to consider adjustments to the ex- isting license fees. In accordance with State Statute, each licensee received notice of the March 7 public hearing in a letter dated February 2, 2011. Each licensee was provided no- tice of the proposed fee changes and invited to attend the public hearing or other- wise provide comments about the proposed revisions.. A letter was received from Mr. Bill Perron with Sul Lago (attached) suggesting that the City's on -sale fee be based upon sales volumes. Current Circumstances The notifications to the licensees proposed fairly significant revisions to various license fees as shown below: Current Proposed Consumption and Display (set up) $100 $550 Off -sale Liquor $150 $380 Off -sale 3.2 Malt Liquor $50 $100 On -sale 3.2 Malt Liquor $200 $500 Temporary On -sale $25 $75 On -sale Wine $1,250 $2,000 No increase was sought on the $6,300 on -sale license because that fee was ad- justed up in 2008, 2009 and 2010 Conclusion The City Council should conduct the public hearing and determine if the staff should prepare an ordinance amendment revising licensing fees for the 2011- 2012 license renewals effective July 1, 2011 or for any new license following the date of the ordinance amendment. ISSUES: One need only read the newspaper to know that the vast majority of crimes against people and property involve drugs and alcohol in one form or another. There are many public costs which are difficult to quantify. For example, federal statistics reveal that 22% of men arrested in association with a crime across the nation are under the influence. A significant portion of the domestics to which the police department responds involve drug and /or alcohol usage by one or both par- ties. The costs are not limited to one level of government. Virtually every level is im- pacted. For example the county attorney and Attorney General are involved in numerous areas of drug and alcohol litigation daily. The county jail incurs costs for keeping intoxicated persons in custody until their blood alcohol level is zero which can be from four to twelve hours for each person. Both jail operating and capital costs are increased accordingly. We have attempted to quantify some of the more significant city costs narratively and in the table below. The city provides a DARE officer to the school district. The annual cost of the of- ficer including benefits and vehicle is $103,000. Annually the Prior Lake Rotary has defrayed $15,000 of the city costs from its DARE Day Fundraiser. The city's net cost is therefore $88,000. The police department is responsible for transporting inebriated persons to detox. Annually we budget $3000 for this purpose. Every year the police department is involved in 208 DWI arrests more or less. On the average, each arrest involves a minimum of 2.5 police hours just to process the driver and convey them to a hold- ing facility. This is 520 work hours or $25,750 minimum each year. Each of these incidents (unless plea bargained) results in police hours in the Court and costs to the Scott Joint Prosecution Association. About 20% of the cases are adjudicated which requires the arresting officer to be present. We estimate 42 cases times three hours a case resulting in an approximate annual cost of $6300. To operate breath testing equipment our officers must be certified every three years. Including transportation this costs the city three hours for seven officers each year or $1050. The breath testing equipment requires one hour for monthly certification. In addition there are expendable replacement parts. Taken together this cost is $1100.Twice a year each licensee is tested for sale to minors. The cost for both tests is $2000 annually. Every night at bar closing time our officers including at least two cars monitor the areas around on sale liquor establishments for two hours. The purpose is to as- sure that incidents do not occur between persons whose inhibitions may be re- duced and that impaired persons do not drive to the extent such an assessment can be made by observation. The cost of this work annually is $73,000. Administratively about 42 licenses either annual or temporary are issued. Includ- ing periodic appeals, these renewal permits require about 60 hours for an annual cost of $3500. FINANCIAL In an effort to show the costs more clearly, the below table is provided: IMPACT: DARE officer annually $88,000 Transport to detox $3000 DWI Processing $25,750 Court Time $6300 Officer Certification $1100 Monthly breathalyzer cert. and supplies $1050 Liquor sales check $2000 Monitoring at closing $73,000 License renewals or appeals $3500 TOTAL $203,700 These costs are not complete, but do illustrate that a portion of the annual budget costs do relate to the sale and consumption of alcohol. By contrast, the city's annual fee for liquor licenses exclusive of investigation costs (which are charged on an actual cost basis and not included above) is $56,756. The City is entitled, through its license fees, to collect the costs it incurs in connec- tion with the licensed activity unless otherwise constrained by state statute. ALTERNATIVES: 1. Conduct the public hearing and direct the staff to prepare amendments to the 2011 Fee Schedule incorporating the recommended license fee increases. 2. Conduct the public hearing and leave the liquor license fees as is if input is provided at the hearing justifies such action. RECOMMENDED MOTION: As determined by the City Council. VENTURE r;d MANAGEMENT SERVICES 12219 Wood Lake Drive • Burnsville, MN 55337.952- 894 -9052 LIMITED 21306 Cold Canyon Lane • Lead, SD 57754 • 605 - 584 -1811 February 15, 2011 Frank Boyles, City Manager City of Prior Lake 4646 Dakota Street SE Prior Lake, MN 55372 Dear Frank: Re: Liquor license I know you do not and cannot afford to drop the revenue you get from liquor license. I would, however, like to ask you to consider the following: Base the license on the volume of business the establishment does. With a fixed cost, it means it uses a large percentage of our profit. If our volume were larger, it would be a smaller percentage. The fee could be based in such a way as to give you the same amount of revenue, but it would help people like us stay in business. Thank you for considering this alternative. Sincerely, VENTURE MANAGEMENT SERVICES LTD / !IIiam Perron For Perron's Sul Lago Ltd. ch ?Cf , a `•.�; hq_ .', ^. ...''.� ':: .': ::'�:. ';'!i "1' !.' .,.. ' iii:.,. .,.. .. ....' �I: ...;E�... �:`.. ,. ..�:'`.•'.� _ :``.i: �. - 4646 Dakota Street SE Prior Lake. MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: PRESENTED BY: AGENDA ITEM January 18, 2011 9A Frank Boyles, City Manager Frank Boyles, City Manager CONSIDER APPROVAL OF THE OFFICIAL FEE SCHEDULE WITH RESPECT TO LIQUOR LICENSES DISCUSSION: Introduction The purpose of this agenda item is to have the Council consider liquor license fees for 2011. Until the City Council adopts new fees, the existing fees remain in force. History At its annual meeting on January 3, 2011, the City Council reviewed and approved all aspects of the 2011 fee schedule except that portion related to liquor licenses. The Council directed that the staff research any State limitations on such license fees and report back to the Council with respect to any adjustments which could be made to have them better correspond with costs of enforcement. Current Circumstances Minnesota Statutes Chapter 340A addresses liquor - related matters. This section identifies what the city can do with respect to liquor licensing and fees. I have iden- tified where the Statute does not specify limits or expressly indicates that the li- censing authority may establish the fee. Shown in the table below is each of the City's liquor licenses, the related fees, limi- tations on fees and number of licenses presently issued by type: Type of License Description 2010 Fee State Fee Limits 2011 Fee Proposed Present # of Licenses Club 340A, 101, subd.7. $650 MS 340A, 408.2b (1- $650 1 Congressionally char- 7) tered vets organiza- License fee limited tion that has more based on number of than 30 members, club members. own or rent space $650 for clubs with adequate for its 501 to 1000 mem- members for more bers. Fee maybe than one year, is non- from $300 to $3,000 profit, directed by a depending upon board and sells beve- club membership. rages only to mem- bers or their guests. 7T Type of Description 2010 State Fee Limits 2011 Fee Present License Fee Proposed # of Licenses Con- MS340A, 414, subd. $100 MS340A, 414, subd. $250 0 sumption 1 -3. 6. 300 and Permits the estab- Not to exceed $250 $550 Display lishment to permit and the City or Permit consumption and County may add up (aka display of intoxicating to $300. set -up liquor on premises, license) but not off -sale. This permit is issued by the Commissioner with City consent. One Day MS340A,414,subd.9 $25 MS340A, 414, subd. $25 0 Con- Issued to non - profit in 9 Sets maximum sumption conjunction with so- fee at $25. and Dis- cial activities. City play (aka limited to issuing 10 set -up each year. license Off Sale Liquor stores. Sold $150 MS340A.408.subd.3 $380 6 Intoxicat- by bottle or can for (3). _$100 ing consumption off pre- Cities of over 10,000 $280 mises population in metro for vendor area sets max of training and $380. policy on I.D. carding Off Sale MS340A.403.subd.1 $50 MS 340A.408, Subd. $100 1 3.2 Malt Allows for sale of 7 Liquor malt -based 3.2 prod- City may set fee. uct for consumption off premises. On Sale MS340A.404 $6,300 MS340A, 408, subd. $6,300 8 Intoxicat- Provides for sale of 2. ing liquor, beer or wine The license fee for for consumption on retail on -sale intox- premises. icating liquor license is set by the City. On Sale MS340A,403,subd.1 $200 MS 340A, 408, $200 2 3.2 Malt Allows for on- subd. 1. Liquor premises sale and Fee set by City consumption of malt - based products. Sunday MS340A,504 $200 MS340A,504,subd.3 $200 9 Authorizes serving of (b) establishes a intoxicating liquor on maximum fee of sale on Sundays $200. This is typi- within prescribed cally purchased with hours an on -sale intoxicat- ing license. Conclusion The Council should determine if it wishes to adjust any of the fees that are within the City's control. ISSUES: State Statute is very specific about the process to be used for increasing fees. The Statute provides both that notice be given and a public hearing conducted. The notice must be mailed to all affected licensees at least 30 days before the hearing date. The fees the City charges have not been changed for many years. Although the on sale intoxicating liquor license was increased over a three -year period with the final adjustment in 2010. Other licenses have not been adjusted for a considerably longer period of time. The fees that can be changed by the City include: Con- sumption and Display Permit (no current license holders), Off Sale Intoxicating Liq- uor License (six license holders), On Sale Liquor Licenses (eight license holders), and all 3.2 Malt Liquor Licenses (three license holders). If the Council desires to amend the license fees, an option could be to conduct the public hearing and make the increases effective for the license period beginning July 1, 2011. On the other hand, license increases could be stepped in over mul- tiple license periods to make them somewhat less impactful. Type of Description 2010 State Fee Limits 2011 Fee Present License Fee Proposed # of Licenses Tempo- MS340A,404,subd. $25 MS 340A.404, subd. $75 NA rary 10 10 On Sale Provides for tempo- License fee may be rary sale and on- imposed by the is- premise consumption suing municipality. of liquor, beer or wine by a club, charitable, religious or other non- profit organization in existence for at least three years. The license may not ex- ceed four days. On Sale MS340A,404,subd.5 $1,250 MS340A,408,subd.2 $2,000 1 Wine (a) (c) Provides for the on- The license fee for sale consumption of the issuance of a wine up to 14% alco- wine license may hol for the same not exceed 'h the hours allowed for on- fee for an intoxicat- sale liquor for a res- ing on sale license taurant having facili- or $2,000 ties seating at least 25 guests. (b) City may allow the holder of wine license to also sell intoxicating malt liquors if they secure an on sale 3.2 malt liquor license. Conclusion The Council should determine if it wishes to adjust any of the fees that are within the City's control. ISSUES: State Statute is very specific about the process to be used for increasing fees. The Statute provides both that notice be given and a public hearing conducted. The notice must be mailed to all affected licensees at least 30 days before the hearing date. The fees the City charges have not been changed for many years. Although the on sale intoxicating liquor license was increased over a three -year period with the final adjustment in 2010. Other licenses have not been adjusted for a considerably longer period of time. The fees that can be changed by the City include: Con- sumption and Display Permit (no current license holders), Off Sale Intoxicating Liq- uor License (six license holders), On Sale Liquor Licenses (eight license holders), and all 3.2 Malt Liquor Licenses (three license holders). If the Council desires to amend the license fees, an option could be to conduct the public hearing and make the increases effective for the license period beginning July 1, 2011. On the other hand, license increases could be stepped in over mul- tiple license periods to make them somewhat less impactful. FINANCIAL License fee increases can help to defray the cost of City associated with liquor li- IMPACT: censes whether through processing and monitoring the license throughout the year, traffic stops, monitoring liquor establishments or conducting sales checks. ALTERNATIVES: 1. Direct the staff to schedule and provide notice of a hearing to consider increas- es in certain liquor license fees. 2. Take no action to modify fees. RECOMMENDED Alternative #1. MOTION: February 2, 2011 4646 Dakota Street SE Prior Lake, MN 55372 Name of Business Street Prior Lake, MN 55376 Dear Sir or Madam, With the exception of the on -sale liquor license, the City has not increased liquor license fees for over a decade. After careful consideration of the current liquor license fees, the City Council has directed that a public hearing be conducted to consider increasing various liquor license fees (with the exception of on -sale liquor). You are receiving this letter thirty days or more before the proposed hearing in accordance with State Statute. You are invited to attend a public hearing on this topic at 6 p.m. on Monday, March 7, 2011 at Prior Lake City Hall, 4646 Dakota Street SE. Because this is a public hearing, you will have the opportunity to address the City Council on this subject. The license fees proposed for change are shown below: License Current Proposed Consumption and Display (set up) $100 $550 t Off -Sale Intoxicating $150 $380 Off -Sale 3.2 Malt Liquor $50 $100 On -Sale Intoxicating $6,300 $6,300 On -Sale 3.2 Malt Liquor $200 $500 Temporary On -Sale $25 $75 On -Sale Wine $1,250 $2,000 1 $250 remitted to the State and $300 to the City. 2 The fee may be reduced by $100 if the licensee agrees to have a private vendor train all employees within 60 days of hire and annually thereafter in the laws pertaining to the sale of alcohol, rules for identification checks and responsibilities of establishments serving intoxicating liquors. We appreciate that the proposed increases are significant. This is because they have not been adjusted for over ten years. We invite you to be present at the public hearing to share your views with the City Council. Any increases in license fee are anticipated to be effective for the 2011 -2012 license period issued in June of this year. Please let me know if you have any questions. S aoyles, Fty Manager Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com Licensee Basement Bar & Grill Captain Jack's The Cove Dakota Liquor Inc Extra Innings, Inc. Fong's Chinese Cuisine Holiday Station Store MGM Liquor O'Malley's On Main, Inc. Perron's Sul Lago LTD Prior Lake Amateur Baseball Assn Prior Lake VFW Post #6208 T.J. Hooligan's Viking Liquor Barrel Village Liquor Restan LLC -The Wilds Prior Lake Association Prior Lake Athletics for Youth Prior Lake Chamber of Commerce Prior Lake Rotary Church of St Michael Licensed Address 16691 Highway 13 South 3950 Green Heights Trail SE 15750 Highway 13 South 14065 Commerce Avenue 16299 Main Avenue SE 4770 Pleasant Street SE 16800 Duluth Avenue SE 14173 Commerce Avenue NE 16211 Main Avenue SE 16154 Main Avenue Suite 135 5181160 th Street SE 16306 Main Avenue SE 16731 Highway 13 South Suite 113 16290 Highway 13 South 16731 Highway 13 South Suite 102 3151 Wilds Ridge NW Mailing Address 16691 Highway 13 South 3950 Green Heights Trail SE 15750 Highway 13 South 14065 Commerce Avenue P 0 Box 411 4770 Pleasant Street SE 16800 Duluth Avenue SE 14173 Commerce Avenue NE PO Box 831 16154 Main Avenue Suite 135 PO Box 145 PO Box 116 16731 Highway 13 South Suite PO Box 68 16731 Highway 13 South Suite 3151 Wilds Ridge NW PO Box 88 4646 Dakota Street SE 4785 Dakota Street SE PO Box 271 16311 Duluth Avenue SE City State Zip Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Prior Lake, MN 55372 Proposed Liq uor L icense F ee R evisions Current Proposed Consumption and Display (set up) $100 $550 Off - sale Liquor $150 $380 Off - sale 3.2 Malt Liquor $50 $100 On - sale 3.2 Malt Liquor $200 $500 Temporary On - sale $25 $75 On - sale Wine $1,250 $2,000