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4646 Dakota Street S.E.
Prior Lake, MN 55372-1714
CITY COUNCIL AGENDA REPORT
January 16, 2007 ~
10B
Frank Boyles, City Manage
CONSIDER APPROVAL OF AN ORDINANCE AMENDING SECTION 301 OF
THE PRIOR LAKE CITY CODE RELATING TO LIQUOR CONTROL
Introduction
The purpose of this agenda item is to recommend amendments to the City
Code which would allow for partial reimbursement of on-sale liquor license
fees under certain circumstances.
Historv
Captain Jack's applied for and received an on-sale liquor license ($5,300),
Sunday sales license ($200) and off-sale liquor license ($150) for the period
July 1,2006, through June 30,2007. On October 20,2006, ownership of the
restaurant changed. The new owners applied for and received a new on-sale
liquor license and Sunday sales license for the period, October 20, 2006,
through June 30,2007. An off-sale liquor license request is scheduled on
tonight's consent agenda.
The former owners, IVEX, have requested reimbursement of the "unused"
portion of their licenses. They reason that they owned the restaurant for 112
days, or 30.1 %, of the license period and, therefore, should be entitled to a
reimbursement of 69.9% of all three licenses, or $3,949.35, because:
1. They did not receive the full year benefit of the licenses, and
2. The new owner purchased at least two of the three licenses for the
remainder of the license period and, therefore, the City will not
experience reduced revenues.
Current Circumstances
City Code does not address reimbursement of the unused portion of liquor or
any other of our licenses. Consequently, our practice has not provided for
reimbursement.
We have surveyed various communities. Shakopee, Savage, Lakeville,
Burnsville, Eden Prairie and Bloomington authorize reimbursement in one form
or another. Only Jordan and Belle Plaine, in our survey, did not.
If the Council desires to consider reimbursement of licenses, a number of
policy issues should be addressed:
- When should the request for reimbursement be honored? During the
license year only to encourage expeditious requests.
www.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245
FINANCIAL
IMPACT:
ALTERNATIVES:
RECOMMENDED
MOTION:
- Which licenses should be reimbursable? Since the on-sale license is
the largest and, therefore, the biggest potential hardship at $5,300, it
should be the only license reimbursed.
Should there be an administrative fee? Yes, $200 to cover the costs of
preparing agenda reports, verifying license status, bringing the matter to
the Council, and preparing and issuing the check.
Should there be a minimum reimbursable amount? Yes, $1,000. This
is consistent with our minimum for prorating new license fees.
Should there be eligibility criteria for the reimbursement? Yes. The
proposed ordinance would limit reimbursements to circumstances where a
business is sold by one party to another. It would not apply to a licensee
who goes out of business, or whose license is revoked or suspended as a
result of violation of the law.
The Council should determine if it believes that on-sale liquor license fee
reimbursement is appropriate. If so, then the Council should determine if the
conditions proposed in the ordinance amendment are satisfactory. If the
ordinance was approved, IVEX would be reimbursed $3,504.70 of their
$5,300.00 on-sale liquor license (once the $200 administrative fee is paid).
Because the ordinance provides for an administrative fee to reimburse the City
for the cost of administering this ordinance and because reimbursement is
limited to circumstances in which a new license is issued for the same time
period and for the same establishment, there should be no appreciable
financial impact.
1. Adopt the ordinance amendment as proposed or with amendments.
2. Take no action and direct staff to provide additional information.
Alternative #1.
CITY OF PRIOR LAKE
ORDINANCE NO. 107-xx
AN ORDINANCE AMENDING SECTION 301 OF THE PRIOR LAKE CITY CODE
RELATING TO LIQUOR CONTROL
The City Council of the City of Prior Lake hereby ordains:
Section 301, subsection 301.502
301.502
Documents to Accompanv Application is hereby amended by the addition of the
following:
(7) Partial Refund. In circumstances where an existina licensee discontinues
their license before the termination date and a new license is issued for the
same establishment for the remainder of the license period, a refund of the
unused portion of license fee may be aranted at the discretion of the City
Council subiect to the followina:
a. The reauest for reimbursement must be made durina the year for which
the license was issued,
b. A reimbursement will be considered onlv for on-sale intoxicatina and liauor
license fees.
c. The minimum reimbursement is $1,000.
d. An administrative fee of $200 shall be charaed for every reimbursement.
e. The reason the license was discontinued is a result of a transfer of the
business to another owner who has secured a license for the business.
f. License discontinuation is not the result of a violation of this ordinance.
This ordinance shall become effective upon passage and publication.
Passed by the City Council of the City of Prior Lake this 16th day of January, 2007.
ATTEST:
City Manager
Mayor
Published in the Prior Lake American on the 20th day of January, 2007.
www.cityofpriorlake.com
Phone 952.447.9800 / Fax 952.447.4245