ITEM 2 Park LiquorTo: Otsego City Council
From: Andy MacArthur, City Attorney
CC: Lori Johnson, City Administrator
Date: January 4, 2013
Re: Issues Related to Park Liquor
The City Council will convene a special meeting on Wednesday, January 9, 2013 to discuss issues
related to liquor within Prairie Center and Prairie Park. The Council has requested that staff propose a
policy regarding rental of the facility and use of the facility to include functions where liquor is served or
sold. Following are various legal issues that should be considered by the Council prior to approving
overall policies.
1. Liquor is currently allowed (not specifically prohibited) within Prairie Park. Most cities prohibit liquor
within public parks unless a special permit is issued. Without a general prohibition on liquor within
the park there is no way to control large groups of legal aged persons from having parties in the
Park which may not be in accord with overall family use of the facilities. Obviously, a prohibition on
liquor within the park is dependent upon the ability of the City to enforce the policy which would be
in most cases very limited; however it would provide law enforcement with the tools to shut down
large parties.
2. The City is looking at a policy of allowing controlled liquor use within the Prairie Center building.
The City is not currently allowing rental use of that facility. In the event that rental is allowed for
events that include service of liquor, either where the liquor is ligivenli away or sold, the City must
be sure that it has adequate protection from both general liability and dram shop coverage. Dram
shop coverage is liability based upon the sale of liquor to an obviously intoxicated person.
Arguably, this liability does not come into play unless there is a "sale" of liquor; however payment
of a fee for the event, tips to service people or any other exchange of money in a party or gathering
can be construed as a sale. If no sale is made the dram shop act does not apply but general
liability issues would still arise.
3. The City's insurance coverage under I-MCIT specifically excludes claims made under the dram
shop act. Further, the municipal tort liability statute specifically indicates that it does not modify the
dram shop act, which means that there could be unlimited liability for the City under a dram shop
claim. Although there are cases that would limit liability this is not a settled legal matter. It is
important that the City require adequate dram shop and liability coverage from anyone selling
liquor on City property. The dram shop act does not cover liquor provided in social setting and not
for sale. However, if injury or damage occurs because of liquor provide at such a gathering that
does not preclude liability by way of negligence or any other legal theory besides the dram shop
act. Therefore, even if use of liquor was allowed not as a sale, the City still needs to have general
liability coverage from the responsible parties. Because of the nature of the potential liability from
alcohol use the City should require at least one million dollars in coverage.
elebrations and festivals aren't just
for summer. Hearty Minnesotans
know that there is fun to be had
even in the dead of winter. Many
N/hime ota cities host holiday lighting
celebrations, ice fishing contests, snow-
mobile swaps, and more.
Festivals can beep us going through
those long winter nionths, They can
also create an important sense of
coii.mumty, attract tourism, and provide
an economic boost.
With all the value that celebrations
provide, it's important to n ake sire
they go rightMinter celebratiol]s, lire
sunmier events, can pose special liability
risks and safety hazards. Here are
considerations to keep in mind.
Whose, event is tris? Many cel-
ebrations are the cooperative effort of
several groups. Often, everyone from
the faire department relief association to
local churches to the boy scorns pitch
its to Male the event a success.
While these volunteer groups take
charge of specific aspects of the evezit,
the city may provide facilities, publicity,
and financial support. Iii addition, publ c
work may set Ftp barricades or tables
and chains, while police officers provide
traffic control.
The efforts ofall these diverse groups
may be necessary for a successftil festival,
but may also create confusion about who
is actually in chane of the evert and who
is bable. if somedling should go wrong.
Evaluate the city's role. To help
you get a handle on who is in charge
(aged who may be liable if an accident
occurs) it is important to carefully eval-
ttate all aspects of the event, The city's
role is determined by identifying the
extent of its involvern exit in the event.
Once the city's rale is established,
risks and exposures can be detemined
and minimized.To determine the
city's role, the city should answer a
few questions.
0 V E N1 B E R -DECE M BER 201 1
0
aa
By Rachel Carlson
Toes the city manage or sponsor
the event? If the city controls the event,
fires a contractor for services, or has
the primary responsibility for organiz-
ing and planning the overall celebration,
theta the city must take appropriate
safety and planning nica ure .
A spomor provides resources, which
may include money, personnel, prod-
ticts, equipt.-.ent, and other things. If the
city is a sponsor hitt not inanaging the
event, this should be clear. Failrlre to
qualify who is responsible for the event
could be a source of liability.
Does the organization tion i ork on eha!f
of the city? Organizations Participat-
ing in a celebration ni-ay include cl.virch
groups, service organizations, celebra-
tion committees, and more. Often,
multiple organizations are involved in
a single event. It is itilportant to define
the city relationship to these organiza-
tions. Questions to help define the
relationships include:
o Is the organization working oil behalf
of the city?
Is the celebration comm-nittee a sepa-
rate and distinct organization or a
city's volunteer group?
Does the cite pvoilide city property or
e, rrippent f'or° the event Does the event
occur oil city property while the city
has no direct involvement? Even if the
city does not sponsor or matlage the
celebration, there is a good chance its
facilities --streets, sidewalks, patks, equip-
ment, and building -may be used. If
another organi atiota uses city facilities,
the city should have a pern-iit process for
the user.The application should ask for
the information regarding the celebra-
tion that may affect the city.The city cail
place reasonable conditions relating to
public safety oil the permit.
Take steps to address the city's risk.
Once the city has determined its role in
the celebration, it can. evaluate and
address risks associated with its level of
involver -lent. If the city has control over
MINNESOTA CITIES
the event and is acting as an event
manager, the city has the responsibility
to ensure that the event is conducted in
a Safe manner.
Planning for the event should begin
Nvell in advance. In addition to pre -
event planning, checklists shoutd be
developed and used to determine if
policies, procedures, and loss exposures
have been addressed.
If the city is not managing the event,
but acting as a spen or or irrcrely
providing facilities, special attention
should be given to ilMlrance and
liability considerations. Generally,
liability should follow the organization
or contractor that hosts the event.
The city shouldensure that the
evert organizers have adequate insur-
ance in place. As part of this process, the
city should real the insurance policy,
obtain a certificate of insurance, and
request the city be rained as an
additional ilISLi 'ed under the organiza-
tions policy. Before the event, all parties
should agree in writing how liability
claims Nv111 be handled.
The League of Minnesota Cities
InsuranceTrust L IT offers
TULIP the Tenant User Liability
Program.The program helps individuals
and groups (called tenant users) protect
themselves and their guests at everts
held at city -owned facilities. LMCIT
member cities automatically are eligible
to offer T 'LIP to tenant users at no cast
to the city.T LIP provides private
individuals and groups with access t
low-cost liability coverage, including
liquor liability coverage, tip to $1 million
for special events held at city facilities.
Rachel Cadsm is L11CIT loss control
err iur qer ivith the Leet ure of Allimresota
Cities hismance r rffsf. Phone: (651)
28 1 - 12 10. E-mail: rearlsoii@b w.or ,
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