Licenses & Fees Committee (Meets as needed, often on the 3rd Monday of the month at 3:30 p.m.)

Licenses and Fees Committee Meeting Minutes City of Superior, Wisconsin The meeting was called to order by Chair Fennessey at 3:31 pm on December 12, 2022 in Government Center Room 217. 1 ROLL CALL MEMBERS PRESENT: Brent Fennessey (Chair), Mike Herrick (Vice Chair), Jack Sweeney Lindsey Graskey (Alternate), MEMBERS ABSENT: N/A CITY STAFF PRESENT: Mayor Paine, City Attorney Frog Prell, City Clerk Camila Ramos, Chief Building Inspector Peter Kruit, Director, Nick Rhinehart, Acting Director Deb Kamunen, Chief of Staff Becky Scherf, and Paralegal Starr Bowers OTHERS PRESENT: Council President Jenny Van Sickle (via teleconference), Nicole Loukes, Andrew Watson, Shelley Nelson, Bruce Barron, Maria Letsos, Dillon Beesley and Steven Pool. 2 APPROVAL OF MINUTES 2.1 Licenses & Fees Committee (Meeting held November 14, 2022) MOTION by Councilor Sweeney to approve, seconded by Councilor Graskey, carried. 3 OLD BUSINESS 3.1 Review of City Code Pertaining to lodging and corresponding tax collection in Article II, HOTELS, MOTELS AND ROOMING HOUSES. Acting Director Deb Kamunen reviewed portions of the agenda packet offering an updated and enhanced Article II. Hotels, Motels, and Rooming Houses that would incorporate the Short Term Rental License instead of hosting it as a separate item and license. She offered that the green highlighted areas of the updated Article II came direct from state statute language. This was done to clean up and align with state requirements from the Department of Revenue. Chief Building Inspector Kruit mentioned to the group that the advantage of combining the two ordinances for Hotel/Motel Rooming license and Short Term Rentals would ensure all licensees are treated through taxing in the same way. The state statutes is all covered under room sales tax ordinance. The definitions of the sales tax ordinance can help guide the option to cover these licenses under one ordinance. Our hotel motel license is a long standing ordinance. Chair Fennessey asked if lumping hotels/motels together would force us to enact codes that would not apply to short term rental properties, such as the parking availability requirements hotels have. Chief Building Inspector Kruit advised no, that those regulations would not apply within the ordinance as it addresses the differences between these businesses separately through multiple headings, paragraphs, and the definitions. Page 1 of 4 Member of the Public Barron addressed the committee and advised the state has already prescribed the law on licensing for businesses declared as short term rentals. In that law, he states, the health department is the one that issues the license and does the inspections. He added that Douglas County has been offering licensing information on short term rentals to the marketplace providers most short term rental owners utilize, such as Airbnb, a vacation rental company. Barron proposed that if a different county wasn’t offering the licensure, maybe it would be right of a city to declare a licensure ordinance or compare them to hotel/motels. He asked the group: Where does it say in the statute that a city can impose further than the county? Mayor Paine responded that he is not aware of any statute that would not allow the city to add licensure for short term rentals on top of the health department county licensure. His understanding is that providing uniformity across the rental commerce, such as the city does with hotels, is in place so that the city knows who the business are, where they are, and to better administer the taxation. Member of the Public Barron advised the taxes are not collected by the individual short term rental business owner, but instead through the vendor marketplace service companies. Instead of the city licensing the short term rental business owners, the city should require the marketplace the task of ensuring the county licensure is valid. Chair Fennessey agreed with Mayor Paine that it is legal for the city to build a licensure for short term rentals on top of the county licensure process. Mayor Paine offered that he has found examples of overlap between the city and county licensures and added it would be strange for the city to not license one type of short term rental within a hotel versus the same type of product in a private home. However, he worries if it remains unregulated, problems could arise, such as the number of short term rental properties increase dramatically, increased parking issues, or transient traffic complaints. The point he wants to express is that licensing commercial activity throughout the city is common practice for a multitude of reasons. Member of the Public Letsos questioned if the ordinance has a specific item that is not already been inspected by the city that are not within the county licensure. Mayor Paine added that the city could add extra levels to the license, for example fire or building inspection. This ordinance does quite a bit to protect the smaller businesses. Member of the Public Barron described and the Mayor agreed that Short Term Rental properties would move from the general rental property business, into a commercial business. Councilor Sweeney asked for clarification from the city to confirm if the committee would be on strong legal grounds by adding the short term rental license. City Attorney Prell advised the first draft of the ordinance was not ideal, specifically in the initial addition to allow building inspection. However, we are not barred from adding a licensure. Based on what’s in the document, Mr. Prell say he needs more time to further review the ordinance changes. Licenses & Fees Committee Meeting, 12/12/2022 Page 2 of 4 MOTION, to hold in committee until next meeting, allowing City Attorney Prell the opportunity to further review ordinance change proposal, by Councilor Sweeney, seconded by Vice Chair Herrick, and carried. 3.2 REFERRAL FROM COMMON COUNCIL: Approval of an original Class “A” Beer and “Class A” Liquor (Cider Only) alcohol license application for Apple House LLC, dba Sutherland CBD, located at 5701 Tower Avenue (Agent: Craig Sutherland) for a period beginning on November 1, 2022 and ending on June 30, 2023. Mayor Paine advised that he very recently spoke with Mr. Sutherland who has decided to withdraw this application. Because this was simply a verbal interaction, we should not consider this an official withdraw until Mr. Sutherland reaches out with an official request. Because of this the Mayor recommended that the committee hold this for the next meeting. Mayor Paine offered further information about the conversation with Mr. Sutherland and they spoke about the concerns about mixing CBD with alcohol. The Mayor understood that the business model is shifting and they are currently operating as a bait and tackle shop. Councilor Sweeney questioned if CBD, alcohol, and tobacco businesses were enforcing a 21+ rule for behind the counter sales only. He visited 3 business and found this is happening at other locations. Mayor Paine advised federal and state laws changed related to CBD for all businesses. This is just the first time we’ve fielded a new alcohol license application for a CBD store wanting to add alcohol. All other class A, and class B alcohol licenses, including those who sell alcohol that have added CBD products, are up for renewal in June 2023. Vice Chair Herrick described visiting Mr. Sutherland’s store since the last meeting. He saw a wide array of hunting, tackle, and bait. There were some items related to CBD at the counter, but it was not overly promoted. He was assured no one under 21 could come into the building. IDs are checked. Children are allowed in the store if accompanied by parents. Councilor Graskey shared that at the time of the application, the business model of this license application was much different. Graskey appreciated the time this committee has taken to review and she agrees that the city should take time to gain understanding the commercial sale of CBD. We have duty to understand the industry of CBD and how it can be combined with alcoholic products. Chair Fennessey asked if the city has the ability to issue alcoholic licenses and specify they are not allowed to sell CBD. Mayor Paine advised the city has the ability to further regulate licensing. City Attorney Prell said he would need to review the parameters of renewal applications. Councilor Graskey shared that she knows of other municipalities who created CBD ordinances, but has not found any Wisconsin examples of a CBD business being granted to sell alcohol. But in reverse, alcohol offering business have added CBD products possibly due to the lack of regulation. Licenses & Fees Committee Meeting, 12/12/2022 Page 3 of 4 MOTION, to hold in committee until next meeting, by Councilor Sweeney, seconded by Vice Chair Herrick, and carried. 4 NEW BUSINESS 4.1 Review examples of Massage Therapy Business ordinances for consideration. Member of the Public Loukes brought an ordinance from Eau Claire, WI that was added to the meeting agenda as an example of how another Wisconsin city (Eau Claire) was adding “off-site” massage therapy into their licensing. “Off-Site” means that the therapist would travel to their client, in a setting like a home, or other space to perform massage. Mayor Paine brought up that the city Wellness Committee hired a massage therapist to come into the Superior Government Center to give city employees free chair massages. This was an example of massage therapy that is operating outside of what the city ordinance currently licenses. Councilor Graskey asked Loukes what potential negatives could exist for traveling massage therapists that we might need to take into consideration for building this part of our ordinance? Loukes helped offer advice for us that liability insurance would be very beneficial. Massage Therapists may also want to build an interview process to interview potential clients. Checking on registered sex offender information prior to going to a new residence could be a good idea. Vice Chair Herrick offered, could asking Massage Therapists to bring in their business models as a part of the application. Chair Fennessey offered the committee to ponder that although these are good suggestions, having the city build these suggestions as ordinance is a much farther reach than we place on other businesses that also send employees into private spaces. MOTION to hold in committee allowing time for city staff to draft new ordinance language, by Vice Chair Herrick, seconded by Councilor Sweeney, and carried. 4.3 Propose Future Meeting Topics Councilor Sweeney asked that the committee spend additional time pondering if alcohol licensure applications and/or renewals should go through a deeper renewal in committee prior to moving to the city council. Clerk Ramos and Councilor Graskey would like more research and learning on the topic of CBD businesses and products – what are other cities doing? This will build more understanding for the committee related to ordinances and licensure within the committee. 5 ADJOURNMENT Meeting was adjourned at 5:05 p.m. Respectfully submitted by Heidi Blunt, Deputy City Clerk Licenses & Fees Committee Meeting, 12/12/2022 Page 4 of 4