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Mayor Droste called the meeting to order with Council Members Riley, Shoe- Corrigan, and Strayton were present. Also in attendance were City Administrator Verbrugge, Code Enforcement Officer O'Brien, City Planner Pearson, City Engineer Brotzler, Police Chief Kalstabakken, and Engineering Consultant Weiss from WSB Engineering. Hawkins Pond Homeowners Association Dan Huberty spoke for the Hawkins Homeowner Association. Engineer Brett Weis recalled that the pond had a sand bottom and the Association requested a clay liner so it would hold water. Two years ago, storms caused flood conditions and water had to be pumped out to cut property damage. The whole area was looked at after that, a pump station was installed, and natural plantings were: started around the pond. The .plantings, which have .not flourished; are under warrantee. Staff will contact them to reseed. No sod will be installed. Cable Franchise - Fiber to the Home City Administrator Verbrugge reported that Fiber to the Home (FTTH) has agreed to wire the City and provide access channels. FTTH has asked the City what type of programming will be included. Verbrugge introduced Mark Moore, the City's Cable Coordinator, who gave an informational presentation. Moore recommended using the same programming as now shown on public channels 16, 22, 12, and 10. By sharing this programming, less additional costs will be incurred. If, at a future date, custom programming is desired, it could be added. FTTH is not involved with broadcasting and will take an estimated eight years to build out the fiber optics system throughout the City. Moore was directed to contact Charter Cable about shared programming. Liquor Ordinance City Administrator Verbrugge stated that off -sale liquor licenses can be limited by city government and the policy now in place is based on one off -sale license per 6,500 population. Police Chief Kalstabakken noted that the population is based on Metropolitan Council's estimate that now stands at 15,270. Staff-has received requests from the two establishments now licensed, Rosemount Liquors Inc. and Shenanigan's Fine Wine & Spirits, to increase the population limitation. They noted that the drinking population is shrinking and if more off -sale liquor stores were allowed the risk of lost revenue would damage their businesses. In addition, they noted that because liquor is restricted by State laws it is not a free market situation. Some on Council were concerned-about regulating private business but they also did not see a great need for additional liquor stores. A survey compared population with the number of liquor stores in several metro cities. The average population per store was about 5,000. The City Council consensus was to leave the established ordinance intact and review this again next year after Metropolitan Council updates Rosemount's population. Police Chief Kalstabakken noted that he spoke to all on -sale liquor license holders about the new 2:00 a.m. closing time enacted by the legislature. Most owners are not convinced that this will be a moneymaker for them and that most will only have extended hours Wednesday through Saturday nights for 2:00 a.m. closings. None of the liquor establishments have applied for the 2 a.m. closure at this time. Council viewed this as a business option to be determined by each 1 ROSEMOUNT CITY PROCEEDINGS COMMITTEE OF THE WHOLE JUNE 11, 2003 individual owner and there was consensus to adopt the 2:00 a.m. closing time in the Rosemount ordinance to allow the business owners the option of remaining open later. Police Chief Kalstabakken presented the option to change the current liquor violations penalties. These penalties are determined on a case -by -case basis. Other cities have adopted a step system to guide the council. This also allows the business to know what to expect with fines and/or suspensions and protects the Council from having the appearance of favoritism. Staff will obtain more information on what other cities are doing for review at a future meeting. RV Parking /Storage and Waste Container Enclosure Ordinance Code Enforcement Official O'Brien reviewed the background and history relating to the recreational vehicles (RV) parking/storage ordinances for the past two year. An amendment to allow seasonal storage was reviewed and discussed, but it was generally felt that it would be too difficult to enforce. Other options were discussed including allowing storage in front driveway areas, except for large oversized RV's, with consideration of setback and visibility concerns. Another proposal incorporating the discussion will be brought to a work session in July. The waste storage container enclosure ordinances and their requirements were discussed. Council Members had received complaints that the ordinances were too costly for local businesses to implement. Code Enforcement Official O'Brien and City Planner Pearson explained that the current requirements had been in effect for many years and that the recent amendments were designed to reduce the cost to businesses to come into compliance. Council directed staff to continue the current enforcement efforts. Minimum Building Size Zoning Districts City Planner Pearson presented a staff initiated recommendation to create a minimum building size standard for the General Industrial District. This is a reaction to the most recent industrial developments with disproportionately small principal buildings. The Council directed staff to proceed with the zoning text amendment process. Policy Prohibiting Firearms at Work City Administrator Verbrugge reported that the Conceal Carry Bill does not allow local governments to prohibit weapons on public property. However, the bill does allow local governments to prohibit employees from carrying weapons in the workplace as a condition in the personnel policies. He said that the City's primary concern is for our employees and that violence in the workplace continues to be one of the leading causes of death in the job place. For this reason, Verbrugge asked the City Council for direction to draft an amendment to the personnel policies that will prohibit weapons in the workplace. City Council directed staff to draft a personnel policy for- future consideration prohibiting weapons in the workplace. A draft policy was presented to Council that restricts employees from possessing or carrying a firearm while working in any capacity as a city employee, volunteer or contracted employee. Sworn police officers are given an exception to carry firearms. This policy is modeled after the League of Minnesota Cities sample policy. Council gave direction to have the policy ready for adoption at one of the next Council meetings. 2 CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION COMMITTEE OF THE WHOLE MEETING DATE: June 11, 2003 AGENDA ITEM: Liquor Ordinance ^` � AGENDA SECTION: ISG KSS � mss✓ PREPARED BY: Gary D. Kalstabakken, Chief of Police AGENDA NO: ATTACHMENTS: Ordinance APPROVED BY;00 % Xa&J_5 There are three issues related to the ordinance regulating liquor licenses to be discussed to receive Council direction. Off — Sale Liquor License The current ordinance limits the number of off -sale liquor licenses based on the population estimate of the Metropolitan Council. One license is authorized for every 6500 residents. The Met Council estimate of Rosemount's population as of April 2001 is 15,270. Staff is attempting to get a more current estimate. Based on the estimate, two (2) off -sale license are permitted and there are two licenses currently held for off -sale. Council received a letter from the existing off- sale'license holders requesting that the population limit be raised. A realtor representing a potential off -sale license applicant has made an inquiry of city staff on how to have the ordinance changed to eliminate the license limit. There was also discussion early in the legislative session this year to prevent cities from limiting the number of off -sale licenses. Attached are the letters previously sent to Council from the current license holders. Staff compiled the attached spreadsheet comparing data from surrounding communities and other similar metro area cities. Extended Hours Legislation The 2003 legislature passed a bill authorizing municipalities to extend bar hours to 2:00 a.m. A survey of the licensed bars indicates that the majority are interested in having Rosemount's ordinance amended to allow for the later hours. However, the owners /managers also indicated that they probably will not stay open every night until 2:00 a.m. even if the ordinance is amended. The most likely dates that hours would be extended are Wednesday, Thursday, Friday and Saturday. License Violation Penalties An administrative fine, license suspension and license revocation are all actions that may be taken by Council when a license violation occurs. The existing ordinance does not contain any type of predetermined penalty system to guide Council. Penalties are determined on a case -by -case basis. Other cities have adopted a matrix showing the presumed penalty for any violations that occur within a specified time period. This matrix system informs license holders of what to expect for violations and establishes a set system for Council to follow; this may prevent accusations of favoritism when any penalties are imposed. Council is asked to discuss adopting a "penalty matrix." RECOMMENDED ACTION: Discussion COUNCIL ACTION: LLi 1 r,: .►une u4, /_w.J TO: Gary Kalstabakken, Chief of Police FROM: Linda Jentink, City Clerk SUBJECT: Off -Sale Liquor License Survey 2004 %I$) U 1 1 1 13. 651 -675 -5000 Apple Valley Municipal stores N/A 2 952- 953 -2500 only Farmington Municipal stores N/A 46,600 - . only Burnsville $200.00 10 8 Free standing 952- 895 -4400 None 11 651 -437 -4127 buildings 60,434 18,503 1 mile minimum Chaska $150.00 None 6 Two with on -sale 952- 448 -2851 business 18,380 Lakeville Municipal stores Cottage Grove $200.00 One per 4 651- 458 -2800 44,751 7,500 30,753 $100.00 population 5 651- 982 -2400 r✓agan None 13. 651 -675 -5000 64,300 Farmington Municipal stores N/A 2 651- 463 -7111 only 13,279 Hastings $200.00 None 11 651 -437 -4127 18,503 Inver Grove Heights $200.00 None 5 651- 450 -2500 30,150 Lakeville Municipal stores N/A 3 952- 985 -4400 only 44,751 Lino Lakes $100.00 None 5 651- 982 -2400 17,380 Northfield Municipal stores N/A 1 507 - 645 -8832 only 17,509 North St. Paul $200.00 4 3 651 - 770 -4450 11,923 Oakdale $200.00 None 10 651- 739 -5086 26,906 South St. Paul $200.00 12 2 651 -554 -3200 20,174 West St. Paul $200.00' 7 7 651 -552 -4100 19,624 City Population Est.2001 Met Council Limit Current Stores Per Population Burnsville 60,434 10 8 7554 Eagan 64,300 None 13 4946 Hastings 18,500 None 11 1682 Inver Grove Heights 30,150 None 5 6030 South St. Paul 20,284 12 2 10142 Cottage Grove 30,753 Pop. 7500 4 7688 Lino Lakes 17,380 None 5 3476 North St. Paul 12,780 None 3 4260 Oakdale 26,906 None 10 2691 Chaska 18,380 None 6 3063 West St. Paul 19;600 7 7 2800 Average 4939 Rosemount 15,270 6500 2 7635 Munical Liquor Stores Apple Valley 46,600 Muni 2 23300 Farmington 13,279 Muni 2 6640 Lakeville 44,751 Muni 3 14917 Northfield 16,051 Muni 1 16051 Average 15227 Rn H 15070 Chippendale Ave. � � un � om, r P.O. Box 14 U A. I %WO■ Rosemount, MN 55068 Phone 651- 423 -9065 Fax 651 - 423 -1003 To: Rosemount City Council: Mayor: William (Bill) H. Droste Council Members: Mary Riley, Mark DeBettingnies, Kim Shoe - Corrigan, Kevin Strayton Re: Rosemount Off -Sale Liquor Ordinance Date: April 7, 2.003 Dear Mayor and Council Members: .FP. 'F SD MAY 2 9 2003 f r hip& EMOU€ T My name is Rishi P. Mohabir, a resident of Rosemount and Chief Executive Officer of Rosemount Liquors, Incorporated. I am writing with respect to modification of the current off -sale liquor ordinance, and perhaps assist in providing a rationale for preamble findings in the liquor ordinance revision and amendment to the issuance of liquor licenses based upon population as determined by the most recent Metropolitan Council population estimates. BACKGROUND In the mid 1990's I considered opening an off -sale liquor store in Rosemount. I contacted city administration and was advised that there could only be two.off -sale licenses, with a distance limitation of their not being within one mile of one another as a requirement. City administration informed me that an ordinance change to allow another liquor store was unlikely. Accordingly, I negotiated with McFarland, the owner of Mac's Bottle Shop for the purchase of his licensed business. I paid a premium price for the business believing for the foreseeable future, Rosemount would allow two off -sale liquor establishments. Thus, I had investment- backed expectation in investing in a business in Rosemount based upon the current ordinance. However, since 1999 off -sale liquor ordinances have changed several times, costing Rosemount Liquors, Inc. thousands of dollars. One of those ordinance changes was the issuance of license based upon population. The guidelines and standards set were that off- -sale intoxicating liquor licenses may be issued dependent upon the population of the City of Rosemount where an off -sale liquor license may be issued for each 6,500 of city population attained, as determined by the more recent Metropolitan Council population count (estimates) for said city. The population numbers were not based upon any objective criteria or Your one -stop ioeation for aii your ,Wine, Liquor, and Beer needs. • - 1 rationale, but one that was arrived at" arbitrarily. There was no open discussion or input from affected parties for the rationale at arriving at the current population numbers per off -sale liquor license. FINDINGS OF FACT A survey of the surrounding communities concerning off -sale retail liquor restrictions was indeed instructive. I have surveyed and researched the communities surrounding the city of Rosemount because it clearly reflects the same trade area with somewhat.identical demographics. Thus, the comparison is relevant, fair and equitable. The following represents population data per off -sale liquor licenses: City Name Population (Approx.) No. of Licenses Avg. Po ./U Store Apple Valley 42,000 2 21,000 Burnsville 60,500 8 7,500 Farmington 16,200 2 8,100 Lakeville 60,500 3 15,333 TOTAL 164,700 15 10,980 The above statistics showed that the average population per off -sale liquor licenses is 11,000 (approximately). Rosemount ordinance is 6,500 attained population per liquor license, a number far less than the average by 4,500 population estimate. Burnsville's ordinance does an admirable job in balancing the occasional proliferation of liquor stores and the investment- backed expectations of current liquor store owners. Among Burnsville's notable restrictions, liquor stores must be one mile apart, and be located in a free standing building. The owners are, in essence, required to make a substancial investment in the business, and in return, the distance limitation provides for equitable competition within a reasonable trade area. In short, the ordinance fosters successful and presentable businesses in that community. Although Farmington, Apple Valley, and Lakeville are municipal liquor cities, their desire to have well run and profitable businesses serving their community have resulted in liquor store per population figures of one liquor store per eight thousand, twenty -one thousand, and fifteen thousand of,population respectfully. As in the case of Farmington, one of the two stores is very small and serves as a convenient stop rather than a profitable store. This indicates that those cities realized, by their cost/benefit analysis, that it takes a large population to support a reasonably successful'retail liquor store in their communities, especially as the drinking population is continually decreasing. 2 The liquor industry differs from most other commercial activities by virtue of the numerous regulations and constraints imposed upon them. Although a free market approach is seductive, the liquor industry is not. It is regulated at all levels of government, from the Federal government level to the local government level. Unlike most commercial activities which cities may regulate through land use zoning ordinances, Minnesota law through legislative enactment, rule- making regulations, and court decisions has long upheld the requests of cities and local governing jurisdictions to regulate the sale of liquor, a controllable substance under Minnesota law.- The liquor industry is not a free enterprise sector, and as such severe constraints are placed upon liquor businesses by these regulations. These regulations impact all aspects of the business, including but not limited to the purchase, sale, distribution, payment, and day -to -day operations of liquor establishments. These regulations reduce flexibility and make it much more difficult for liquor retailers to compete amongst themselves in the same manner as other commercial activities compete amongst themselves in a free inaiket system. Rosemount has limited commercial retail space and efforts should be directed to business diversity, rather than duplicating businesses. The city of Rosemount should ,expend efforts to carefully plan for balanced business activities: This will retain disposable incomes and increase our tax base for the City of Rosemount. Although population growth is the best measure used to make determination on the issuance of liquor licenses, the industry research shows that the drinking population is diminishing annually. This is due to many factors and the most predominant is that of restrictive regulation, new laws and safety factors. The current population definitions in. the city of Rosemount's ordinance and its demographics cannot support more than two off-sale liquor establishments today or the foreseeable future. The current ordinance will result in a possible issuance of another off -sale liquor license very soon; givm the current population growth of the city of Rosemount. If this license is issued to a "big box" that engages in unfair pricing, it is possible that axone of the current off -sale liquor establishments will.be operational. Thus, we will end up with the same practices that have plagued the city of Rosemount of replacing one business with another without a.ny possible advantage to the community. EFFECT / IMPACT The current population.definitions in the ordinance need to be re- examined in light of the above facts. Failure to re- examine and revise the current population definitions and provide equity will have the following impact: Major financial,loss and loss of tax revenue to the city can occur. Failure to . "level the playing field" can be extremely detrimental to the investment- backed expectation of our current liquor store owners without any benefit to. our community. • The city of Rosemount, with its limited commercial space, will not be able t6, attract a diverse business base. Business duplication is detrimental to the business community and to the residents. themselves. Business diversity retains shoppers in the community and provides for a stronger tax base for the city. • The city of Rosemount can hardly support two reasonably small liquor stores. Failure to revise the said ordinance will result in marginal liquor store business with reduced profitability, thereby hindering the ability of retail liquor stores to employ qualified individuals of suitable age and maturity to ensure compliance with liquor sales laws and regulations. • In view of the fact that liquor is a controlled substance, the issuance of any additional off -sale licenses will incur increased costs of the enforcement of its numerous laws, ordinances, and regulations at all levels of government. This, however, is not appropriate or responsible under the current budget cuts that:all . levels of government are experiencing. IkPCOMMENDATIONS The above compelling facts and the impact of the current ordinance relaging to the population standard on the issuance of off -sale liquor licenses support the review, deliberations, and revisions of the liquor ordinances. I am recommending that the population standards be revised from 6,500 to 11,000 attained per retail liquor store. This will provide for a fair and equitable playing field consistent with our surrounding cities. The revision will foster effective competition, convenience, and accessibility to our city's residents, while protecting the investment- backed expectations of our current liquor store retail businesses. The revisions will send a strong message to current and prospeefive small busindss owners that the City of Rosemount values its business community. Thank ,you for your time and consideration in addressing this matter. I would appreciate the obport-unity to discuss and answer any questions on this matter. I hope we can adopt the recommended revisions as early as possible. Again, thank you. Very truly yours, Rishi Paulohi'bar cc: Jamie Verbrugge 2 J Oliw, April 11, 2003 To: The Rosemont City Council Mayor. Bill Droste Council Members: Mark DeBettignes, Kim Shoe - Corrigan, Mary Riley, Kevin Strayton Dear Mayor and Council Members: My name is Sarah Dostal and I am representing my family's business, Shenanigan's Fine Wine & Spirits. I am writing this letter to ask for your consideration in a matter concerning the issu- ance of off -sale liquor licenses in the city of Rosemount. I am asking for a revision of Rosemount's current policy regarding the issuance of liquor licenses based upon population. Our family has been in operating our business in Rosemount for the past 17 years. My sisters. and 1 manage Shenanigan's along with our semi - retired parents, Fritz and Pat Dolejs. Al- though my parents are out of town during the winter months, they have kept. a long distance hand in the day -to -day operations of the business. A few years ago, we made the decision to invest in property on County Road 42 in order to build a new store.triple the size of our original location. A great deal of research and deliberation went into our decision as this was a major financial commitment for our family. We have not regretted our decision as we`have been able to expand our product lines in all categories due to the expanded size of our store. We are pleased with the look and feel of our building and believe the extensive selections of wine and spirits we offer is a significant enhancement to the city of Rosemount. Our intention is to con - tinue.to use this building design style as we continue to develop the rest of the lot. In a discussion with Rosemount's other off -sale liquor store owner, Richi Mohibar, it has come to my attention that the communities around Rosemount have also used population data to determine off -sale liquor licenses. As follows:. The figures above indicate that the average population in our neighboring communities per off - sale liquor licenses is approximately 11,000. Currently Rosemount's ordinance stands at 6,500 population per liquor license. This number is less than the average by 4,500. The 11,000 . population per store figure makes good business sense considering that a large population is required to support a successful liquor store. This, coupled with the fact that the drinking popu- lation is continually decreasing and that liquor retailers are limited by law to selling only liquor products, gives credence ,to the fact that it is in any community's best interest to place popula- tinn limit.,,- nn linnnr cfinn- mpninem P� °ulation (LiQ nses Average Population per Store Apple Valley 42,000 2 21,000 Burnsville 60,500 8 7,500 Farmington 16,200 2 8,100 Lakeville 60,500 3 15,333 - Total 164,700 15 10,980 The figures above indicate that the average population in our neighboring communities per off - sale liquor licenses is approximately 11,000. Currently Rosemount's ordinance stands at 6,500 population per liquor license. This number is less than the average by 4,500. The 11,000 . population per store figure makes good business sense considering that a large population is required to support a successful liquor store. This, coupled with the fact that the drinking popu- lation is continually decreasing and that liquor retailers are limited by law to selling only liquor products, gives credence ,to the fact that it is in any community's best interest to place popula- tinn limit.,,- nn linnnr cfinn- mpninem All liquor retailers have numerous constraints imposed upon them. Liquor is regulated at all levels of government.from Federal to Local. The liquor industry is unique in that it operates under highly restrictive laws and regulations that do not impact the free enterprise sector. . These regulations, important as they are,..make it highly. difficult for liquor retailers to offer a unique value proposition to..distinguish their business. Research proves that vibrant, .economically successful cities provide their residents with a diverse offering of businesses. We believe that the addition of another off -sale liquor store establishment will negatively impact Rosemount rather than enhance the city's current offer- ings. Research also indicates that the current population base of Rosemount would be unable to support three liquor stores within such close physical proximity. In this scenario, one of the three businesses would most certainly fail. Clearly, this outcome does not benefit the city nor any of the investors associated with the businesses. We recommend that the current ordinance relating to the population standard on the issuance of off -sale licenses be revised from 6,500 to 11,000 per liquor store establishment. This stsn - dard will allow our city's residents to continue to benefit from fair competition and convenience offered by the existing liquor stores, while also protecting investor's interests. The decision by _ the City Council to revise this ordinance will clearly demonstrate that the City of Rosemount values its business community and is interested in seeing the continued success of its existing businesses. We appreciate your thoughtful and serious consideration to this matter. We would be happy to discuss and answer any questions. We are hopeful that the recommended revisions can be adopted as soon as possible. Sincerely, Sarah .postal cc: Jamie Verbrugge