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City Council Staff Report, Liquor Ad Hoc Committee Page 1 of 5 CITY COUNCIL STAFF REPORT AUGUST 10, 2015 ORDINANCE 970 Amending Chapter 5.16 Of Douglas Municipal Code Creating A Process For The Renewal, Suspension And Revocation Of Liquor Licenses By The Council For The City Of Douglas, Wyoming SUMMARY PREPARED BY: Karen Rimmer, City Clerk MEETING DATES: April 10, 2014; May 8, 2014; June 10, 2014; July 10, 2014; August 28, 2014; March 26, 2015; June 4, 2015 – Ad Hoc Committee March 24, 2014; October 27, 2014; February 23, 2015; June 22, 2015 – City Council (Adoption of Resolutions to create, appoint members to, and extend timeline of the Ad Hoc Committee) March 14, 2014; May 28, 2015 – Converse County Liquor Dealers Association PURPOSE: To rewrite Chapter 5.16 of the Douglas Municipal Code in its entirety to create a more concise process for the renewal, transfer, application of, revocation, and suspension of liquor licenses and one-day permits. COMMITTEE MEMBERS, INCLUDING ALTERNATES: Karen Rimmer; Doug Olson; Leroy Kingery; David Angiolillo; Eric Nelson; Ron Casalenda; Todd Matthews; Tom Montoya; Kelly Hunt; Denny Harts; Crimson Miller; Martin Roessing; Margie Taggart; Kenny Simonton; and Neb Simonton. Other Reviewers: Tony Tolstedt, City Administrator; Lisa Patterson, Converse County Prevention Management Organization; Peg Trent, previous City Attorney HISTORY: The Ad Hoc Committee held a number of meeting s spanning over the last year and a half in order to create this ordinance presented to you now . The goal of the Committee has been to create a document that is easy to understand and implement as well as provide protections for all parties involved, including the City as the local licensing authority and all license es. Following is a synopsis of the major changes to Title 5.16 of the Douglas Municipal Code as well as mention of the minor changes. The Committee encourages any and all questions regarding the document, process, implementation, or any other item pertaining to Ordinance 970. SUMMARY OF MAJOR CHANGES: The following chart shows changes listed in order as they appear within the ordinance. Any references to State Statute unless otherwise stated pertain to Title 12. ---PAGE BREAK--- City Council Staff Report, Liquor Ad Hoc Committee Page 2 of 5 ITEM PAGE # DESCRIPTON OF CHANGE Definitions 1-2 Revised language; f ollows state statute other than what is stated; now refer to “24 hour” permits as “one day” permits (e.g. malt beverage, catering, open container permits). General Provisions 2-5 Some r evised language, although m uch of this is new; considered “standard language”; significant changes are noted further. Hours of Operation 3 Revised language; r emoved Sunday restricted hours; hours of operation 7 days a week would become 6:00 a.m. to 2:00 a.m. This eliminates the “Extended Sunday Hours Permit”. Right of Entry/Inspection 3 New language; grants authority to Fire Marshall to determine occupancy limits and grants authority to others for inspection (Fire Marshall, Clerk, Police, Building Official, etc.) Right of entry and inspection also granted via State Statute. Other Fees 3 New language; creates a $25 fee for replacement copies of liquor licenses. Alcohol Certification Required 3 Revised language; b roadens allowed certification programs to any approved by the W Y Liquor Division vs. TIPS training/certification only. Also reduces amount of allowed time for certification of owners, supervisors, and managers from six months to three months within ownership or employment. Gambling on Licensed Premises 4 New language; currently referred to only in Title 9 of Douglas Municipal Code. Open Container Prohibited 4-5 New language; currently referred to only in Title 9 of Douglas Municipal Code; also ties in with Chapter 5.18 – Special Events and addresses open containers on private property without permission of the property owner. Corked Wine 5 New language taken directly from State Statute ; the “Merlot to Go” law . A llows off-premise consumption of wine when purchased with a meal. 12-4-413 Occupancy Loads – Signs 5 New language; occupancy is referred to within adopted 2012 International Building Code . This language would require licensees to post occupancy in a visible location at the premise. The Building Official would assist licensees in determining occupancy limits; documentation typically provided by the State Fire Marshall’s office will be sufficient signage so long as the certificate/document was visible and posted in a location as required by the Fire Marshall. There would be no fee due to the City for the determination of the occupancy; not aware of Fire Marshall fees, if any. Occupancy Issues NA Recommendation of the Committee that the Clerk , Chief of Police, and other parties as necessary work with licensees and hold discussions prior to events that have historically caused over-occupancy issues (e.g. Wyoming State Fair). Goal is to have open communication with licensees via the Converse County Liquor Dealers Assoc . and explain expectations in order to avoid potential restrictions and/or violations for licensees (e.g. requirement to close until occupancy is reached; closing early; require a “head counter”; etc.) Licensees need to be part of the discussion as well as the solution. Habitual Violation of Over Occupancy Limits 5 New language; Over -occupancy becomes a violation of law as any warnings would serve as evidence ; although it is not a criminal violation per penal code, it would be considered a violation per this ordinance. Ethyl Alcohol 5-6 New language; standard and used in many other communities. Annual License Fees 6 Revised language; “satellite wineries”, “distilleries”, and “rectifiers” have been added; fees are within the range allowed per State Statute and recommended by the Committee. Applications for 6-7 Sections and (B contain revised language to better reflect language ---PAGE BREAK--- City Council Staff Report, Liquor Ad Hoc Committee Page 3 of 5 Licenses and Permits – New and Transfer within State Statute. Section is new language and would require a criminal background check for each individual who owns 10% or more of the licensed premise and/or license, at the applicants expense , for new a nd transfer applications only. Council would have the authority to deny a new or transfer license based upon the results of the criminal background check but denial would not be mandatory if the applicant was in fact a felon . State Statute does not address criminal background checks; however, this is a common practice nationwide and strongly recommended by the Committee. License Transferability - General 7 Revised language to better reflect State Statute to include language stating bar & grill licenses cannot be transferred and that restaurant licenses cannot transfer location. This section is a bit redundant with the section titled “Transferability – when permitted”; however, the Committee feels the redundancy may reduce confusion for the reader and reiterate the law. Ownership of Licenses 9 New language to reflect the Committee’s recommendation to allow individuals who own multiple corporations to hold more than one liquor license so long as all State Statute s are complied with . To do otherwise could stifle development. Council must approve all licenses and would be able to address any concerns at that time and deny if they so choose. Applications for Licenses and Permits – Renewal 7-8 Revised language: Creates a violation if any changes to licensee information is not reported within 30 days. New language: Refers to the progressive penalty section of the ordinance and the potential effect o n license renewal when violations have occurred. Annual License – Retail 8 New language created to reflect State Statute and to address “slushies”; only applies to retail licensees as only retail licensees are able to sell this product , which is for off premise consumption. Language is similar to language regarding “Merlot to Go” law except no receipt is required. Annual License – Restaurant 8 New language created to reflect State Statute and requires a copy of the menu be provided with any new or transfer application. Annual License – Bar & Grill 8 New language created to reflect State Statute. Microbrewery or Winery Permit – Additional Council Finding and Action 8-9 New language created to reflect State Statute and addresses distilleries and rectifiers. One-Day Permits – General Provisions 9-11 New and revised language; changed name of permits from “24-hour” to “one day” permits to reduce confusion. Sections , and are all revised to better reflect state statute as well as the intent of this ordinance and other sections herein. Section is new language as Chapter 5.18 of Douglas Code was adopted in 2014. Section is new ; the Committee recommends no longer issuing any Extended Hours permits, which per State Statute are determined via Resolution for up to four specific dates to allow extended hours w/an approved permit. One-Day Permits – Posted Sign 9 Refers to an issued one-day permit in which the placement of signs is stated on the permit itself . This would likely be a rare occurrence . The signs being referred to read “No one under the age of 21 years allowed” or something similar, and are provided to licensees via the Wyoming Liquor Commission. One-Day Permits: All Types 9-11 New language created to reflect State Statute specifically for each type of permit in order to reiterate the number of each type of license allowed per year per State Statute as well as a brief description of each type of permit within the ordinance. ---PAGE BREAK--- City Council Staff Report, Liquor Ad Hoc Committee Page 4 of 5 Suspension/Revocation of License or Permit, Violations, and Penalties 11-14 New language created by the Committee. This section represents the most significant change s to Chapter 5.16 of Douglas Municipal Code and is further explained in the next table. VIOLATIONS, PENALTIES, SUSPENSION/REVOCATION: These changes are listed in order as they appear in the ordinance. Any references to State Statute unless otherwise stated pertain to Title 12. Note that the word “criminal” is not mentioned as this would restrict what Council could consider a violation. Also note that the process for revocation of a liquor licenses is spelled out specifically in State Statute. ITEM PAGE # DESCRIPTON OF CHANGE Sections B. 11 States the purpose and intent of the violation section. Section C. 11 Authorizes Council to use their discretion to determine what the penalty of a licensee would be. Section D. – Progressive Penalties 11 States that a three-year history period will be considered by Council when reviewing renewal liquor license applications. Violations within this time period may have bearing on whether a license is renewed and/or if there are other penalties and/or restrictions (e.g. suspension, restricted hours). Council would review each license on a case by case basis and decisions would be b ased upon various information received, including “testimony” from the licensee . It is the goal of the Committee to avoid any arbitrary penalties for specific violations ; a clearer picture of all things consider ed will be available to Council resulting in a more fair assessment and decision. Note that documentation of any and all violations from the City to the licensee become imperative under this ordinance; if violations are not documented, they may not be able to be considered as such during review. Section E. – Violation Chart 11-12 These are the violations that Council may consider. The applicable section of State Statute and/or Douglas Municipal Code has been referenced for ease of the reader. Section F. – Sales Tax Failure to pay sales tax violations are handled by the WY Liquor Division in conjunction with the WY Dept. of Revenue. The City will be notified at the same time as the licensee of any such issue . Failure to pay sales tax would be considered a violation during review of renewals. Failure to collect sales tax is handled through the WY Dept. of Revenue and in this context would pertain to one-day malt beverage permits only. Sec. of State The WY Secretary of State handles failure to pay taxes for corporations and LLC s in order to conduct business within the State of Wyoming. Failure to pay these fees and maintain good standing would be considered a violation. Hearings Council may set a hearing with the licensee for a violation(s), but a hearing will not be mandatory. Council needs to have the discretion to determine what constitutes a hearing on a case by case basis. The hearing will be the setting at which Council takes action; these would coincide with regular City Council meetings whenever possible. Suspension If a license were suspended by Council, a ny liquor remaining at the establishment could be removed from the premise or boxed up and “stored” at the premise pending approval by the Police Chief or designee . ---PAGE BREAK--- City Council Staff Report, Liquor Ad Hoc Committee Page 5 of 5 No alcohol could be consumed or sold on the premise until the suspension was lifted by the City. Appeal s by the licensee would be to City Council via a public hearing. Revocation Council can only recommend a revocation as revocations must go through District Court. Revocations are extremely rare. Violations – Consideration Need to ensure that the following are types of violations considered: 1. Failure to pay sales tax; 2. Criminal violations; 3. Other violations. OVERVIEW OF SIGNIFICANT ITEMS NOT REVISED: The following items will remain the same: 1. The license term for the City of Douglas would still be April 1st to March 31st annually; 2. All license and permit fees would remain the same, although there are new additions to this section; 3. Dispensing room restrictions would still be in place: the “21 Rule” and the “10 o’clock Rule”; 4. Open container laws would still be in effect. OVERVIEW OF OTHER MAJOR DISCUSSION POINTS: The following items were discussed at length during this process: 1. Points System: The Committee decided n ot to implement d ue to overwhelming disappointment in the effectiveness per communities tha t are using this type of system, including enforcement issues and difficulty in assessing points. The violation seems to need to be extremely severe in order for any penalty to be assessed. 2. Policy & Procedure vs. Code : Processes were discussed at length as the Committee did not want to create something difficult to use “on the ground”. Processes are implicit within code and policies and procedures reflect code language but do not have to be expressly stated within code. 3. Proof of Insurance: Most insurance questions and issues are addressed privately and are not addressed in State Statute as that existing language has been in place for a long time. The Committee recommends no language be stated within code and to continue to allow insurance matters to be addressed by the private sector. These would include whether a licensee carries liquor liability coverage or not, additional coverages for special events or off-premise dispensing (one-day permits), and liability issues occurring as a result of failed compliance checks or over-service issues. 4. Dispensing Room Drawings – Renewal Applications: This issue was previously discussed and left out of the ordinance as the WY Liquor Division conducts on-site inspections of every licensed room annually statewide. T he Clerk is notified of any issues with the dispensing rooms at that time; therefore, i nclusion of this would be redundant. Both parties already work with the licensee to remedy any and all issues pertaining to dispensing rooms. CONCLUSION: The Ad Hoc Commi ttee recommends that Ordin ance 970 be approved as presented. Upon adoption of this ordinance, the city shall prepare processes for the issuance of liquor licenses and permits in accordance with city code and Wyoming State Statute. Thank you for your consideration.