Appointed Committees

LIQUOR ORDINANCE AD HOC COMMITTEE November 9, 2016 Page 1 Committee Members Present: Dean Frantsvog, Shaun Sipma, Chad Thompson, George Withus, Chuck Vennes, Wayne Whitty, Jesse Zwak Members Absent None Others Present: Kelly Hendershot, Kelly Matalka, Cindy Hemphill, Chief Olson, Derek Hackett, Alderman Hedberg, Alderman Schuler, Alderman Straight, Josh Wolsky, Jill Schramm Chairman Frantsvog brought the meeting to order at 2:00 pm. Approval of Minutes from September 14, 2016 Meeting Alderman Withus moved the committee approve the minutes from the September 14, 2016 committee meeting. Motion seconded by Alderman Sipma and carried unanimously. Discussion on Capping Various License Types Chairman Frantsvog began by stating, City staff did research on all of the issues presented by the committee during the previous meeting. Information was gathered from other municipalities inside and outside of North Dakota. The biggest issue to discuss will be the caps on licenses so that will be the topic of discussion for this meeting. He said he understands there are two sides to the issue and that is why the committee was composed to represent both sides. He gave an overview of the capped licenses and asked the City Attorney to explain the transfer process. She stated, when a transfer occurs, a transfer document is provided for consideration by the Liquor and Gambling Control Committee and then gets final approval from City Council. The new owner would then need to provide information on the new business. Alderman Frantsvog then asked what would happen if a license holder defaulted on their payment and how often that occurs. The City Clerk stated, license holders have the option to split annual fees into two payments, one due in June with the renewal paperwork and the other due by October 15th. She added, there is currently only one license holder that has not made the second payment this cycle. The City Attorney stated, staff would not be able to revoke a license in that situation but the Liquor and Gambling Control committee could take action. Chairman Frantsvog opened the floor for discussion on regulating the caps on licenses. Josh Wolsky spoke in opposition of the quota system. He said the city is encouraging growth and investment but the regulations are restricting business. He questioned the reason for the quota and what it accomplishes and he spoke in favor of new businesses. Chad Thompson stated, he feels for those with a license as a valuable asset but would like to come up with a valuation in order to level the scale and open up the availability of licenses. 1|Page LIQUOR ORDINANCE AD HOC COMMITTEE November 9, 2016 Page 2 Alderman Sipma brought up the financial ramifications for the City since the licenses are defined as defeasible property. He suggested further defining the types of licenses to add more options, for example, a Liquor Store license, which would increase the number of Retail Liquor licenses available without popping the cap. Chairman Frantsvog asked Mr. Wolsky if he has come up with any solutions, for instance how would the current license owners be compensated for the loss in value to their asset. Mr. Wolsky stated, the ordinance could set a one-time application fee, at the approximate value of a current license. That way a potential buyer has the option to purchase a license from the City or transfer from a current owner. He also said the City could set a lower renewal rate or waive the renewal fee for the current owners to allow them to recoup the costs over time. Mr. Whitty stated, the plan is feasible as long as the initial fee is reasonable enough to make a transfer equitable. Mike Miller suggested waiting until the 2020 census reveals a higher population which will allow for more licenses without needing to change anything. The committee discussed the various options and determined the next meeting will take place on November 23rd at 2:00 pm to continue the conversation. Wayne Whitty said he will speak to the Liquor Association about their thoughts on the issue and share that information at the next meeting. Adjournment There being no further business, the meeting was adjourned at 2:39 p.m. Respectfully Submitted, Kelly Matalka City Clerk 2|Page