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HomeMy WebLinkAbout2.b. Liquor Regulations - Penalty MatrixROSEMOUNTEXECUTIVE SUMMARY CITY COUNCIL City Council Work Session: March 10, 2010 AGENDA ITEM: Liquor Regulations — Penalty Matrix MV=1A- PREPARED BY: Gary Kalstabakken, Chief of Poli e VO' Amy Domeier, City Clerk AGENDA NO. ATTACHMENTS: Spreadsheet — Draft Matrix and Lakeville's Matrix/Code, City Attorney APPROVED BY: Comments RECOMMENDED ACTION: Discussion BACKGROUND Rosemount City Code 3 -1 regulates and licenses liquor establishments within the City. Minnesota State Statue 340A regulates liquor on a state wide basis and provides the authority and limitations that cities have to impose penalties when a violation of a liquor regulation occurs. MSS only provides the maximum of penalties that may be imposed. ISSUE The City has not adopted a presumptive penalty matrix for violations of liquor regulations. Without a penalty matrix each violation is considered upon the totality of the circumstances involved. Even absent a matrix the penalties imposed in prior cases do provide guidelines when penalties are set for new cases. Presumably, if there are no unusual circumstances a similar penalty is likely to be imposed. This approach has worked quite well but the exceptions have been notable. Two cases were taken to a hearing officer upon the request of the license holder. Although both cases focused upon the look back period and penalty being proposed, the reasons were different. The opinions of the hearing officers were also quite different. In the first opinion, the Rosemount Liquor case, the hearing officer found that the City had adopted a 36 month look back period and his findings also indicated that the hearing officer felt the penalties imposed by the City were severe. The second opinion was the Applebee's case. In that instance the hearing officer essentially stated that even if the City had a 36 month look back period it did not limit the penalty that the City may impose in any case. The hearing officer went on to say that the City may impose up to the statutory maximums for any violation. Over the last ten years some cities have begun to adopt presumptive penalty matrixes. The matrix lists the penalty that is likely to be imposed for a violation and the period that will be used to determine which penalty, i.e. first, second, etc. the violation will be considered. While the matrix does establish a presumptive penalty, each City's Code also includes a clause to clarify that the matrix only is a guideline and the Council may impose a penalty that is different from the presumptive penalty based upon the circumstances of the violation. The penalties established in matrixes adopted by cities are varied in both the penalties and the look back periods established. Look back time periods range from two (2) to five (5) years and some increase the time period if violations continue at a business. Penalties established in a matrix also vary based upon the type of violation that occurs. The most serious violations typically result in a license revocation. This includes violations such as commission of a felony related to the license, sale of alcohol while license is under suspension or sale of intoxicating liquor where the license held is for 3.2 malt liquor and wine. Another violation that is often treated more severely is refusal to allow inspectors (building, fire marshal, food) or police officers on the premises to inspect the premises. Most often other violations are considered equal and penalties are set accordingly. This includes the violations of service to under age persons, sales to obviously intoxicated person, serving or allowing alcoholic beverages outside the licensed premises, etc. The most common violation for which penalties are imposed is service to under age person, which is most often discovered during compliance checks. Some cities have also adopted a "Best Practices" program for liquor license holders. While the particulars to the programs vary slightly, one of the incentives included in the program for participants is a reduction in the penalty imposed if a violation does occur. However, each program also removes the licensee from the Best Practices program if violations occur repeatedly. Participation in the program typically requires the business to agree to provide training and have policies in place for identification of purchasers. The training is sometimes provided by the police department but other training programs may be approved that meet the requirements of Best Practices. Additional components of a program are left to the individual businesses to select and may include automated ID scanning system use, internal compliance check programs and reward programs. To assist in the discussion of the Best Practices, staff is conducting a survey of all current liquor license holders within the community. The intent of the survey is to determine the number of businesses that are already following significant portions of a best practices model. Results from the survey will be tabulated prior to the meeting. A Best Practices matrix is not included but can easily be created if a presumptive penalty is established for non -Best Practices. SUMMARY Council is asked to discuss the concept of a penalty matrix and a Best Practices program for the City Code regulating liquor license holders. Attached is a penalty matrix that is based upon the history of penalties imposed in the City and a penalty matrix from the City of Lakeville. The Lakeville matrix is included because it is relatively new, having been adopted in September 2009 and it also has penalties that are consistent with the average of other cities. OA ORDINANCE NO. 858 CITY OF LAKEVILLE DAKOTA COUNTY, MINNESOTA AN ORDINANCE REGULATING THE SALE OF ALCOHOL AND ESTABLISHING PRESUMPTIVE CIVIL PENALTIES FOR LICENSE HOLDERS THE CITY COUNCIL OF THE CITY OF LAKEVILLE, MINNESOTA ORDAINS: SECTION 1. Section 3 -1 -14-4 B of the Lakeville City Code is amended as follows: B. Best Practices Program: The best practices program is a program offered by the City of Lakeville with the intent to eliminate sales of alcohol to youth. It is a voluntary program offered to liquor establishments in the City. The program offers incentives to the licensees to undertake certain practices believed to be helpful in avoiding sales to minors. Establishments participating in the best practices program will benefit. Specially trained officers will .provide training to participating license holders. The officers provide a training program targeting illegal sales of alcoholic beverages to persons under the age of twenty -one (21). Participating license holders will also be given the advantage of a different set of presumptive penalties. Those who choose to participate in the program will have the opportunity to enroll anytime during their licensure period and at the time of their license renewal. The licensee will indicate in writing to the Lakeville Police Department their intent to participate. The first four (4) items in the grid are mandatory. The licensee must choose items from the list of electives to equal a total of sixty (60) points. The City will conduct random compliance checks to verify compliance. Doc. #146587 EBK — 7/14/09 R uired Items Inspection of records to verify compliance Minimum of 75 percent of all alcohol selling, employees trained by Lakeville Police Department or an alternate training program roved by the Lakeville Police Department Internal program in place for ongoing training of new and current alcohol sellin employees Policy requiring identification checks for anyone appearing to be 40 or under Points Electives 20 Participation in TIPS or similar (City approved) training program — 75 percent of alcohol serving employees certified 10 Internal employee reward and recognition program (program to reward any employee who catches any underage customer attempting to purchase alcohol 10 Approved internal compliance check program Doc. #146587 EBK — 7/14/09 10 Automated identification card scanners stem 20 Automated identification card scanner system integrated into 4th register system' 10 Prearrangement to meet immediately on violations (meet with Violation Police Department and City Staff immediately instead of waiting Commission for criminal court proceedings) 10 Policy requiring identification checks for every alcohol transaction regardless of apparent age 10 Prearrangement to work with police on preventing secondary alcohol sales 10 Minimum age of 21 for employees selling alcohol products 10 Use of an application for employment that requires disclosure of N/A criminal history information, previous convictions for crimes related to serving alcohol, and a commitment not to hire persons with relevant criminal convictions Note: 'Cannot do both automated identification card scanner system and automated identification card scanner system integrated in to register system. SECTION 2. Section 3- 1 -14 -4 C of the Lakeville City Code is amended as follows: C. Presumed Penalties For Violations: 1. For a licensed establishment enrolled in the City's best practices program at the time of the violation, the presumed penalties for violations are as follows (days below indicate consecutive days' suspension): Type Of ist 2° 3rd 4th Violation Violation Violation Violation Violation Commission of a felony related to the Revocation N/A N/A N/A licensed activity Sale of alcoholic beverages Revocation N/A N/A N/A while license is under suspension Sale of alcoholic beverages to underage person: 2 - on -sale $500 $750 and 3 $1,000 and Revocation intoxicating days 6 days liquor - on -sale beer $500 $750 and 3 $1,000 and Revocation and wine days 6 da - off -sale 3.2 $500 $750 and 3 $1,000 and Revocation beer days 6 days Sale of $500 $750 and 3 $1,000 and Revocation alcoholic days 6 days beverages to obviously intoxicated arson After hours $500 $750 and 3 $1,000 and Revocation sale of days 6 days. alcoholic beverages After hours $500 $750 and 3 $1,000 and Revocation display or days 6 days consumption of alcoholic beverages_ Refusal to $2,000 and Revocation N/A N/A allow 6 days governmental inspectors or police admission to inspect remises Illegal $500 $750 and 3 $1,000 and Revocation gambling on days 6 days premises Failure to $500 $750 and 3 $1,000 and Revocation. take days 6 days reasonable steps to stop person from leaving premises with alcoholic beverages Sale of $2,000 and Revocation N/A N/A intoxicating 6 days Violation Violation Violation liquor where only licensed for 3.2 Revocation N/A N/A N/A percent malt liquor The penalty for violations without a presumptive penalty shall be determined by the City Council. 2. For licensed establishments not enrolled in the City's best practices program at the time of the violation, the presumed penalties for violations are as follows (unless otherwise specified, numbers below indicate consecutive days' suspension): Type Of 1$` 2 nd 3 rd 4 Violation Violation Violation Violation Violation Commission of a felony related to the Revocation N/A N/A N/A licensed activity Sale of alcoholic beverages Revocation N/A N/A N/A while license is under suspension Sale of alcoholic beverages to underage person: - on -sale $1,000 $1,500 and $2,000 and Revocation intoxicating 6 days 12 days liquor - on -sale beer $1,000 $1,500 and $2,000 and Revocation and wine 6 days 12 days - off-sale 3.2 $1,000 $1,500 and $2,000 and Revocation beer 6 da s 12 days Sale of $1,000 $1,500 and $2,000 and Revocation alcoholic 6 days 12 days beverages to obviously intoxicated person After hours $1,000 $1,500 and $2,000 and Revocation sale of 6 days 12 days alcoholic beverages After hours $1,000 $1,500 and $2,000 and Revocation display or 6 days 12 days consumption of alcoholic beverages Refusal to $2,000 and Revocation N/A N/A allow 12 days. governmental inspectors or police admission to inspect remises Illegal $1,000 $1,500 and $2,000 and Revocation . gambling on 6 days 12 days remises Failure to $1,000 $1,500 and $2,000 and Revocation take 6 days 12 days reasonable steps to stop person from leaving premises with alcoholic beverages Sale of $2,000 and Revocation N/A N/A . intoxicating 12 days liquor where only licensed for 3.2 percent malt liquor The penalty for violations without a presumptive penalty shall be determined by the City Council. SECTION 3. Section 3- 1 -14 -4 F of the Lakeville City Code is amended as follows: F. Subsequent Appearances: Upon a second or subsequent appearance before the Council by the same licensee, the Council must impose the presumptive penalty for the violation or violations giving rise to the subsequent appearance without regard to the particular violation or violations that were the subject of the prior appearance. However, the Council may consider the amount of time elapsed between appearances as a basis for deviating from the presumptive penalty imposed by this section. SECTION 4. Section 3 -1 -14-4 G of the Lakeville City Code is amended as follows: G. Computation Of Violations: Violations are computed as follows: 1. For a licensed establishment enrolled in the City's best practices program at the time of the violation, any violation which occurred within two (2) years of the current violation will be counted. 2. For licensed establishments not enrolled in the City's best practices program at the time of the violation, any violation which occurred within three (3) years of the current violation will be counted. SECTION 5. This ordinance shall be effective immediately upon its passage and publication. ADOPTED this 8th day of September, 2009 by the City Council of the City of Lakeville, Minnesota. CITY OF LAKEVILLE m ATTEST: Charlene Friedges, City k City of Rosemount — Liquor Violations Presumptive Penalty Draft Type of Violation is 2 Id violation 3'd Violation 4th violation Violation* Within 24 mos. Within 36 mos. Within 48 mos. Commission of Revocation N/A N/A N/A Related Felony Sale of alcoholic Revocation N/A N/A N/A beverage while under suspension Refusal to allow Revocation N/A N/A N/A Inspection by Authorized Person Sale of Intoxicating $2000 ** Revocation N/A N/A Liquor when and 15 days licensed for 3.2 and wine Sale to Under Age $500 $1000 & 3 days $2000 & 15 Revocation Person days Sale to Obviously $500 $1000 & 3 days $2000 & 15 Revocation Intoxicated Person days Failure to prevent $500 $1000 & 3 days $2000 & 15 Revocation alcoholic beverages days from leaving remises After hours sale or $500 $1000 & 3 days $2000 & 15 Revocation consumption of days alcoholic beverages * The matrix is laid out in a table format. However, when determining the violation level violations are considered across violation types. For example, if a business has a violation for sale to under age person and then a violation for sale to an obviously intoxicated person it will be considered a second violation for the sale to intoxicated person violation. ** There is a proposal in the legislature to raise the maximum penalty amount to $10, 000 from the current $2000. Domeier, Am From: LeFevere, Charlie L. [clefevere @Kennedy - Graven.com] Sent: Thursday, March 04, 2010 11:31 AM To: Domeier, Amy Cc: Kalstabakken, Gary Subject: Liquor violation penalty matrix Amy, Chief Kalstabakken asked me to comment on the advantages and disadvantages of establishing a schedule of sanctions, or punishments, for liquor code violations. These sanctions typically take the form of a specified penalty for a specified number of violations over a given period of time. It seems to me that the advantages of such a schedule are that: there is no need to exercise judgment about the appropriate penalty in response to a specific offense; it is easier to explain to violators why a given penalty is proposed; and the imposition of penalties appears to be more uniform and therefore more objective. The disadvantage of establishing a schedule is that it is relatively inflexible. Even if the schedule policy states that departures from the scheduled sanction may be made in exceptional circumstances, some violators will argue that the scheduled sanction is too severe given the circumstances of their offense. Additionally, violators tend to see the sanctions as an entitlement and will argue against any increase in the sanction above that set on the schedule. The reasonableness of the sanction on the typical schedule depends on an assumption that all offenses deserve the same punishment or sanction. That is, it considers only one factor - the number of violations occurring during a specific period of time. It does not take into account factors such as: 1. The kind of offense being punished. An after -hour sale is treated the same as a sale to a minor. 2. The kinds of offenses being counted to determine the level of punishment. One licensee with three offenses might have sold to a minor three times, while another with three offenses might have sold to a minor once, had an after -hour sale violation and made a sale on a legal holiday. 3. The magnitude or seriousness of the offense. In one case, an after -hour sale might be a single sale five minutes after legal closing. Another case might be a party going two hours after closing and involving twenty people. 4. How recently past offenses occurred. If a three -year time period is considered, one licensee might have committed one offense per year for three years, while another might have just received a license within the last year, and committed three offenses during that time. 5. The attitude and response of management. In some cases, management responds to being caught in a violation by challenging the arrest and complaining about being entrapped or picked on by police. In other cases, management takes the matter very seriously, immediately discharges the employee who committed the offense and cooperates with police in establishing procedures to assure that offenses do not recur. 6. Mitigating or aggravating factors of the offense. In one case, a sale to a minor might be the result of inadvertence or a mistake about the correct cut -off date for the birthday of a person of legal age. In another case, a sale might have clearly been made intentionally with full knowledge that the buyer was a minor and intended to take a large amount of liquor to a high school graduation party. Whether to adopt a schedule of punishment for liquor violations is within the discretion of the city council. If the council decides that, on balance, it is preferable to have a schedule of penalties, it may wish to consider treating different kinds of offenses differently in the policy, depending on the seriousness of different offense in the view of the council, and to consider including in the policy a list of factors that will be considered in deciding whether an upward or downward departure from the standard sanction is appropriate.