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HomeMy WebLinkAbout[08] Liquor License Fee - American LegionCouncil Agenda Item s CITV Off ST. JOSEPH MEETING DATE: July 21, 2011 AGENDA ITEM: Liquor License Fee — American Legion SUBMITTED BY: Administration /Finance PREVIOUS COUNCIL ACTION: Council authorized the issuance of the full on -sale liquor license, with the exception of holding the charges for 30 days, allowing staff to research alternative license fees. BACKGROUND INFORMATION: City Staff conducted a survey via ListServe to other Minnesota cities with 39 respondents. The survey asked if they issue clubs such as American Legions, VFWs, Elks, Masons, Eagles a full on -sale intoxicating license or the Club on -sale intoxicating license. If the full on- sale intoxicating license is issued, are there any reduced fees given to the clubs. The following are the results of the survey: # Club License - 20 # Full On -Sale —19, 2 with reduced license fees Comments from respondents: City of Fairbault: "As for different rates for on sale liquor licenses, we do have a "Low Volume Liquor License" that we issue to on sale liquor licensees who only sell a few days a week, or a few months out of the year. With this license they can sell liquor on sale up to 150 days /year and the license costs about Y of the full on sale license fee." City of Pelican Rapids: "The City of Pelican Rapids does a Club On -Sale and charges based on number of members which gives a break to the club. Our other license holders who pay $1400 per year for an On -Sale Intoxicating Liquor License do complain about the VFW having a license that only costs $400 per year. It brings up a lot of issues about whether the "public" is being served or "members" only. I have heard Liquor Control speakers encourage clubs to put in a kitchen and get a regular restaurant On -Sale Liquor License as it removes the need to monitor "members "." City of Monticello: "Be careful that you do not discriminate in pricing for on -sale licenses." City of Fergus Falls: "We went through this in about 2008 but if my memory serves me correctly, we did give them a transition period. I vaguely remember talking to the Dept of Public Safety and they were trying to get rid of all club licenses so we took that as our starting block." City of Cold Spring: "Our golf course tried to get by with that same license, claiming they were a club. However, we challenged them to meet the definition of a "club" and at that same time we reviewed the Legion to make sure they were meeting the definition, knowing that if we enforced it for one we needed to make sure the other club license was legit. In the end, the golf course had to get the full on -sale license and 81 the Legion stayed a Club license. We did amend our ordinance, however, to give the golf course a break on the full on -sale fee, since they are closed 5 months out of the year, and we pro -rate their fee accordingly. On -sale fee is $2000 and we charge them $1166.67." City of Maple Lake: Staff spoke with the City of Maple Lake. Maple Lake was fined by the State for issuing the incorrect license to their American Legion and VFW (a club license). Someone reported the organizations were selling to the general public during their St. Patrick's festival and offering $1 burger nights. The events were hurting other businesses that paid the full on -sale fees. Maple Lake decided to reduce the full on- sale fee for all license holders by $1,000 ($3,500 to $2,500) and have the American Legion and VFW switch to a full on -sale license. The lesser cost was easier for the two organizations to transition and the City now receives more liquor license fees annually with their switch. The City is also not at risk for issuing the incorrect license. All other respondents only differentiate between Club or full on -sale. They do not provide a discount on the full on -sale licenses to organizations similar to the American Legion. Many of the cities indicated they are trying to transition their Club license holders to the full on -sale based on how the organization operates. ALTERNATIVES: From the comments collected from the Listserv, staff could not find one example of a different fee for a similar license. The only exception was two that responded prorated the license fee for establishments that were not open 12 months. Without completing any research, the City Attorney has indicted that it would not be appropriate to charge a different fee for an identical license.. Each establishment has their own client base. For example the El Paso is predominantly special event and the American Burger Bar is primarily food. The City can only issues licenses that are authorized by MN Statue so the options are Club or On Sale. The City Council has already taken the position, and the Legion concurs, that a club license does not apply. The Council has already issued the On Sale Liquor License with the only outstanding item the fee. The City could allow the Legion to make the license fee in quarterly payments rather than semi - annual. BUDGET /FISCAL IMPACT: $800 fee up to a $2,300 fee annually ATTACHMENTS: RCA — Liquor License Fee REQUESTED COUNCIL ACTION: Establish liquor license fee for the American Legion.