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12-08-08 SCCNORTHWEST ASSOCIATED CONSULTANTS, INC. 4800 Olson Memorial Highway, Suite 202, Golden Valley, MN 55422 Telephone: 783.231.2555 Facsimile: 783.231.2581 planners@nacplanning.com MEMORANDUM TO: Otsego Mayor and City Council FROM: Daniel Licht, AICP DATE: 3 December 2008 RE: Otsego — City Code; Liquor Violations NAC FILE: 176.08 — 08.14 BACKGROUND The City Council held a hearing regarding license violations for the sale of alcohol to minors for Riverwood National and Riverview Liquorette at their meeting on 24 November 2008. Wright County staff responsible for the compliance check program was present at the City Council meeting as were Riverwood National and Riverview Liquorette. Section 7-3-11.13 of the City Code establishes a schedule of penalties to be imposed for violations of the liquor license regarding the sale of alcohol. The City Council adopted a resolution imposing a $1,000.00 fine and best practices training for Riverwood National for their first violation within five years according to the schedule. The City Council further discussed the scheduled penalty for Riverview Liquorette of a $2,000 fine and 14 day license suspension �elrcense holdersat is their lrd andlolation within five the discussion of the years. Based on the issues presented by t City Council, City staff was directed to review the City's existing liquor license penalty provisions and provide this information for a Special City Council meeting to be held on 8 December 2008 at 5:00 PM. All liquor license holders within the City are to be noticed of this meeting. Exhibits: A. Example Minnesota IDs B. Ordinance 2008-23 ANALYSIS Enforcement. At the meeting on 24 November 2008, Wright County staff said that two compliance checks are done per year. The compliance checks are not announced in advance to ensure effectiveness of the program to verify compliance with liquor laws versus passing the inspection. Minors attempt to purchase alcohol and present the server with a valid Minnesota stated that cards gross m sdeme'nthem as anunder 21 years of or cha ges arenow being e. st brought Wright County staff 9 against servers failing compliance checks. Statutory Penalties. Minnesota Statutes 340A.415 states that upon a finding that a liquor license holder has violated a statute, rule or ordinance regulating alcohol, the licensing agency may revoke the license or impose a civil penalty of up to $2000.00, suspension of the license for up to 60 days or combination thereof following a hearing. Existing City Schedule. Section 7-3-11.6 of the City Code establishes a schedule of penalties for intoxicating liquor violations (as well as Section 7-2-13.13 of the City Code for 3.2 malt liquor license) based on the provisions of Minnesota Statutes 340A.415. This schedule was adopted in 2006 and amended in 2007 to create standard penalties for liquor violations to ensure consistent enforcement and also allow licensees awareness of the consequences of a liquor violation. The schedule is based a five year period to allow for the penalties to be stepped up to the maximum $2,000 fine and 60 day suspension allowed by Minnesota Statute 340A.415. B. Penalties. Upon a finding that a licensee of any license granted pursuant to the City's Liquor Ordinance has failed to comply with an applicable statue, regulation or ordinance relating to alcoholic beverages the City Council may issue a civil penalty not to exceed two thousand dollars ($2, 000.00) and may suspend the license for up to sixty (60) days. 2. The civil penalty and/or Council's discretion, be related to the licensee's preceding five (S) year November 26, 2007) suspension imposed may, at the City based upon the following guidelines total number of violations within the period as follows: (Ord. 2007-23, FA P Violation $1,000 fine and Best Practices training. 2" Violation $2, 000 fine, Best Practices training and one (V day suspension. ? Violation $2, 000 fine, Best Practices training and fourteen 14 day sus ension. 4` Violation $2, 000 fine, Best Practices training and thirty 30 day suspension. S` Violation $2, 000 fine, Best Practices training and or more six 60 day suspension. 3. Best Practices training required by Section 7-3-11.B.2 of this Section shall be completed within sixty (60) days of the City Council's decision to impose penalties or the license shall be suspended for seven (7) days in addition to other penalties, including completion of Best Practices training. 4. In addition to the penalties set forth above, the City Council may also act to revoke a license for non-compliance with an applicable statute, regulation or ordinance. Surrounding Communities. Our office contacted the following communities regarding penalties for liquor violations. This survey shows that there is not necessarily a consistent approach to imposition of penalties for liquor violations within the limits established by Minnesota Statute 340A.415. The determination of the penalties a City will impose for liquor violations is ultimately a local policy decision. ■ Albertville. The penalty section of the City Code mirrors the language of Minnesota Statute 340A.415. ■ Champlin. The City imposes the following schedule of violations based on a 12 month cycle: (1) First violation within any 12 -month period. The city council shall impose a civil fine not to exceed $500.00. (2) Second violation within any 12 -month period. The city council shall impose a civil fine not to exceed $1,000.00. (3) Three or more violations within any 12 -month period. For each such violation the city council shall impose a civil fine not to exceed $2,000.00 and in addition, for each such violation may suspend the license for a period not to exceed seven days or revoke the license. ■ Dayton. The penalty section of the City Code mirrors the language of Minnesota Statute 340A.415. 3 Elk River. The City has adopted the following schedule for liquor violation penalties, which is similar in format to Otsego's existing schedule. The Elk River schedule does provide for a two year cycle and fewer steps. The penalties for the first, second and third liquor violations are less than Otsego imposes by its schedule, but the fourth violation results in revocation of the license. ■ Maple Grove. Maple Grove imposes a $2,000 fine and the following penalties for liquor violations based on a three year cycle: (1) For commission of a felony related to the licensed activity, sale of alcoholic beverages while the license is under suspension, sale of intoxicating liquor where the only license is for 3.2 percent malt liquor, the license shall be revoked. (2) The license shall be suspended by the council for at least the minimum periods set forth below after a finding that the licensee has failed to comply with any provision of this article or other applicable statute or regulation as set forth below: (3) For a first violation within any three-year period, at least a two -consecutive -day suspension, in addition to any criminal or civil penalties which may be imposed. (4) For a second violation within any three-year period, at least a five -consecutive -day suspension, in addition to any criminal or civil penalties which may be imposed. (5) For a third violation within any three-year period, at least a ten -consecutive -day suspension, in addition to any criminal or civil penalties which may be imposed. (6) For a fourth violation within any three-year period, the license shall be revoked. 4 ■ Monticello. The penalty section of the City Code mirrors the language of Minnesota Statute 340A.415. ■ St. Michael. The City has adopted the following schedule. The schedule provides for a two year cycle and lesser penalties than imposed by Otsego's existing schedule. The St. Michael schedule also establishes different penalties based on whether the license participates in Best Practices training programs. Draft Ordinance. Based on the issues raised at the meeting on 24 November 2008 by the City Council and licensees, information provided by Wright County staff and a review of surrounding communities, the following modifications to Otsego's schedule for liquor violations are proposed: ■ Cycle. The existing penalty schedule established by the City Code is intended to allow for the penalties to be stepped up with each violation to the maximum $2,000.00 fine and 60 day suspension allowed by Minnesota Statute 340A.415. Licensees object to the current five year cycle as being too long relative to staff turnover at their businesses. As Wright County indicates that there are a minimum of two inspections per year per establishment, a shorter cycle would be appropriate. City staff would recommend a six step process within a two year cycle related to the number of inspections performed during the period. ■ Fines. The current fee schedule was adopted in 2007 imposing a $1,000.00 fine for a first violation and $2,000.00 fine for each violation there after. City staff recommends no change to the imposition of the fines based on those fines previously imposed and for Riverwood National on 24 November 2008. 5 Best Practices Best Practices Non - Participants Grid Participants Grid First Violation $250 $750 Second $500 $1,500, plus a three-day Violation suspension of license $1,500, plus a two-day $2,000, plus a ten-day Third Violation suspension of license suspension of license Fourth Violation $2,000, plus a suspension of Revocation not less than five days but no more than 60 days or revocation as determined by the City Council Penalty ...within the preceding 24 ...within the preceding 36 -month Calculation month period... period... Period Draft Ordinance. Based on the issues raised at the meeting on 24 November 2008 by the City Council and licensees, information provided by Wright County staff and a review of surrounding communities, the following modifications to Otsego's schedule for liquor violations are proposed: ■ Cycle. The existing penalty schedule established by the City Code is intended to allow for the penalties to be stepped up with each violation to the maximum $2,000.00 fine and 60 day suspension allowed by Minnesota Statute 340A.415. Licensees object to the current five year cycle as being too long relative to staff turnover at their businesses. As Wright County indicates that there are a minimum of two inspections per year per establishment, a shorter cycle would be appropriate. City staff would recommend a six step process within a two year cycle related to the number of inspections performed during the period. ■ Fines. The current fee schedule was adopted in 2007 imposing a $1,000.00 fine for a first violation and $2,000.00 fine for each violation there after. City staff recommends no change to the imposition of the fines based on those fines previously imposed and for Riverwood National on 24 November 2008. 5 Suspension. The current penalty schedule imposes a one day suspension for a second violation, then 14 days for a third violation, 30 days for a fourth violation and 60 days for a fifth violation. In that the City always has the option to revoke a license for repeated violations, the prescribed suspensions may be too severe effectively putting an operation out of business. A revised schedule for suspensions is proposed that also accounts for business days versus calendar days. And additional provision is proposed stating that the days upon which the license will be suspended will be determined by the City Council to allow flexibility in working with the licensee. On -Sale vs. Off -Sale. An issue not contemplated by the Otsego schedule or those of surrounding communities is the difference in effect of the penalties to on -sale businesses (bars and restaurants) versus off -sale businesses (liquor stores). The fines imposed by the schedule effect each type of business in the same way. However, suspension of a license will have a much different effect in that bars and restaurants may continue operations serving food or providing entertainment whereas a liquor store must cease business while the license is suspended. On -sale and off -sale businesses also have different schedules as liquor stores are not allowed to be open on Sundays. City staff recommends a revised penalty schedule differentiate between violations by on -sale and off -sale businesses for the purposes of suspension reflecting their different operational characteristics. RECOMMENDATION City staff recommends approval of an amendment to Sections 7-2-13.6 and 7-3-11.13 of the City Code regarding the schedule of penalties for liquor license violations. POSSIBLE ACTIONS A. Motion to approve Ordinance 2008-23 amending the schedule of penalties for liquor license violations B. Motion to take no action regarding Sections 7-2-13.6 and 7-3-11.13 of the City Code regarding the schedule of penalties for liquor license violations. B. Motion to table. C. Mike Robertson, City Administrator Judy Hudson, City Clerk/Zoning Administrator Sandy Lindenfelser, Special Licensing Andy MacArthur, City Attorney Tim and Patricia Philips, Riverview Liquorette Chris Bulow, Riverwood National 6 Hennepin County ywe (onrlocc boil to %row. . us I Hetwepin courity, e��'�rrlfT�'SUfCt, See New Minnesota Drivers' Licenses & IDs wINNEDRIVER'S LICENSE Standard Driver's License `w. INSTRUCTION PERMIT GAYLE ELVABE11H SAMPLE 127 MAIN STREET NORTHWEST MINNEAPOLIS, MIN 123454000 a Ow�w of 517.tw 65.22r 19154 Eyes Giass t. F 6L1t Im Heiom Wyiyhg DONOR 548 150 1k1e1rRrt 11-,7003 txcvHp� 11.11.x004 166513235374 Instruction Permit IDENTIFICATION OTA I}IVCEIN E GAYLE ELIZME I H SAMPLE 123MAIN STREET NORTHWEST AIINWAPOLIS, MN 12345-0600OaIhulOitL*t 115.22.5584 Sex eyes Glass F 61.0 10 1"01 Wargln Uo#w 91ryry e-08 150 askm0 114003 txwints 05.22.2005 J3235374 Z00! - Under 21 Identification Card Copyright © 2008 Hennepin County, Minnesota I www.Hennepin.us D616603235374 Page 1 of 1 N N E S P IDENTIFICAtlt�N C NOT A DRIVER 5 LICE GAYLE ELIZABETH SAMPLE 121 MAIN STREET NORTHWEST MINNEAPOLIS, ISN 123450404 rintoomirvi 0542.1998 Se Eyes Ctass F 61,15 10 HeiV'W-Vtl DONOR 5111 5-08 150 istiom 11.2003 Expirw$05-22•2007 I;, +. , .1 Identification Card w�. ORNEWS LICENSE pROVISICINAT, GALE ELIZABEtH SAMPLE 121 MAIN STREET NORTHWEST MINNEAPOLIS, MN 123450000 oet.ormi• 05.22.1957 Ac -1865-22-2005 Sex Sex Eyes Crass F e 1.0 Q Haight Wnigln 688 150 OAtrxn'114003 txvitiLs.11.11.2006 Under 18 Provisional Driver's License DRIVER'S LICENSE r7AFIF4I4 SAMM f MAIN STREET NORTHWEST MEAPDLIS, MN 12345-0600 ar Hf�tn 05.22-1984 eyes Class 641)D � M Waiylkt DONOR NJ d 150 ,eG111•,2403 cxwIRF305.22.2005 ”, wo Under 21 Standard Driver's License http://www.hennepin.us/portal/sitelHCIntemetlmenuitem.fl 7356dbe6a54966710eceO4b 1... 11/12/2008 r.AYi F FI I.7ARF9*4 AAIAPt I- 112:1. MAIN STREET NORTHWEST MINNEAPOLIS, r*N 123450000 §n p„IearH.rr 958 Sex Eyes !:ages Sex F el LU HaiVa W.V11 DONOR � S 150 UVE0 11.2003 1xwleE1t 05.22.2007 "fG a TA Standard Driver's License `w. INSTRUCTION PERMIT GAYLE ELVABE11H SAMPLE 127 MAIN STREET NORTHWEST MINNEAPOLIS, MIN 123454000 a Ow�w of 517.tw 65.22r 19154 Eyes Giass t. F 6L1t Im Heiom Wyiyhg DONOR 548 150 1k1e1rRrt 11-,7003 txcvHp� 11.11.x004 166513235374 Instruction Permit IDENTIFICATION OTA I}IVCEIN E GAYLE ELIZME I H SAMPLE 123MAIN STREET NORTHWEST AIINWAPOLIS, MN 12345-0600OaIhulOitL*t 115.22.5584 Sex eyes Glass F 61.0 10 1"01 Wargln Uo#w 91ryry e-08 150 askm0 114003 txwints 05.22.2005 J3235374 Z00! - Under 21 Identification Card Copyright © 2008 Hennepin County, Minnesota I www.Hennepin.us D616603235374 Page 1 of 1 N N E S P IDENTIFICAtlt�N C NOT A DRIVER 5 LICE GAYLE ELIZABETH SAMPLE 121 MAIN STREET NORTHWEST MINNEAPOLIS, ISN 123450404 rintoomirvi 0542.1998 Se Eyes Ctass F 61,15 10 HeiV'W-Vtl DONOR 5111 5-08 150 istiom 11.2003 Expirw$05-22•2007 I;, +. , .1 Identification Card w�. ORNEWS LICENSE pROVISICINAT, GALE ELIZABEtH SAMPLE 121 MAIN STREET NORTHWEST MINNEAPOLIS, MN 123450000 oet.ormi• 05.22.1957 Ac -1865-22-2005 Sex Sex Eyes Crass F e 1.0 Q Haight Wnigln 688 150 OAtrxn'114003 txvitiLs.11.11.2006 Under 18 Provisional Driver's License DRIVER'S LICENSE r7AFIF4I4 SAMM f MAIN STREET NORTHWEST MEAPDLIS, MN 12345-0600 ar Hf�tn 05.22-1984 eyes Class 641)D � M Waiylkt DONOR NJ d 150 ,eG111•,2403 cxwIRF305.22.2005 ”, wo Under 21 Standard Driver's License http://www.hennepin.us/portal/sitelHCIntemetlmenuitem.fl 7356dbe6a54966710eceO4b 1... 11/12/2008 ORDINANCE NO.: 2008-23 CITY OF OTSEGO COUNTY OF WRIGHT, MINNESOTA AN ORDINANCE AMENDING THE CITY CODE REGARDING THE SCHEDULE OF PENALTIES FOR LIQUOR LICENSE VIOLATIONS. THE CITY COUNCIL OF THE CITY OF OTSEGO DOES HEREBY ORDAIN: Section 1. Section 7-2-13.B of the City Code is hereby amended to read as follows: B. Penalties. Upon a finding that a licensee of any license granted pursuant to the City's Liquor Ordinance has failed to comply with an applicable statue, regulation or ordinance relating to alcoholic beverages the City Council may issue a civil penalty not to exceed two thousand dollars ($2,000.00) and may suspend the license for up to sixty (60) days. 2. The civil penalty and/or suspension imposed may, at the City Council's discretion, be based upon the following guidelines related to the licensee's total number of violations within the preceding two (2) year period as follows: Violation Civil Fine Sus ension On -Sale Off -Sale 1S $1,000.00 None None 2" $2,000.00 One 1 da One 1 da 3 $2,000.00 Seven 7 da s Three 3 da s 4 $2,000.00 Seven 7 days Three 3 da s 5 or more $2,000.00 Fourteen (14) days Six (6) days 3. Best Practices training required by Section 7-2-13.B.2 of this Section shall be completed within sixty (60) days of the City Council's decision to impose penalties or the license shall be suspended for seven (7) days in addition to other penalties, including completion of Best Practices training. 4. Suspension of the license required by Section 7-2-13.8.2 of this Section shall be for those dates as determined by the City Council. 5. In addition to the penalties set forth above, the City Council may also act to revoke a license for non-compliance with an applicable statute, regulation or ordinance. Section 2. Section 7-3-11.13 of the City Code of the City Code is hereby amended to read as follows: B. Penalties. Upon a finding that a licensee of any license granted pursuant to the City's Liquor Ordinance has failed to comply with an applicable statue, regulation or ordinance relating to alcohelic beverages the City Council may issue a civil penalty not to exceed two thousand dollars ($2,000.00) and may suspend the license for up to sixty (60) days. 2. The civil penalty and/or suspension imposed may, at the City Council's discretion, be based upon the following guidelines related to the licensee's total number of violations within the preceding two (2) year period as follows: Violation Civil Fine Sus ension On -Sale Off -Sale i $1,000.00 None None 2" $2,000.00 One 1 da One 1 da 3 $2,000.00 Seven(7)days Three 3 days 4 $2,000.00 Seven(7)days Three 3 days 5 or more $2,000.00 Fourteen (14) days Six (6) days 3. Best Practices training required by Section 7-3-11.6.2 of this Section shall be completed within sixty (60) days of the City Council's decision to impose penalties or the license shall be suspended for seven (7) days in addition to other penalties, including completion of Best Practices training. 4. Suspension of the license required by Section 7-3-11.8.2 of this Section shall be for those dates as determined by the City Council. 0)