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Page 2 City Council Minutes August 3, 1994 POLICY AGENDA PROPOSED REVISIONS TO THE CITY'S CODE REGARDING TOBACCO LICENSING AND SALES OF TOBACCO TO MINORS, CHAPTER 5, SECTION 1.03, SUBD. D AND CHAPTER 5, SECTION 4.01 SUBD. (A), BUSINESS LICENSE FEES Mayor Baldwin outlined the proposed ordinance regarding an increase in tobacco licensing fees and penalties to salespersons and vendors that sell tobacco products to minors. City Attorney Filla stated that he believed the ordinance, as presented, was practical and enforceable. Mr. Ken Balma, representing Super America, asked 1) will the underage buyers of the tobacco be penalized under this ordinance; 2) what is the timeline of the increasing penalties; and 3) has the city considered any form of "positive motivators" or rewards for passing compliance checks? Super America has its own compliance training program and have found about a 50% compliance rate metro wide. Mr. Balma contended that, sooner or later, someone at the Falcon Heights store will be penalized. Mayor Baldwin responded that penalties are cumulative within a 12 month time frame. As for rewards for passing checks, the city can't financially reward clerks or vendors, but may have the resources to post signage at sites where checks have been successful. License fees are set to recover only the costs associated with regulating a business; they are not excess revenue to the city. As for minors, the city will have knowledge only of those minors used in compliance checks. Councilmember Hustad asked why Super America has such a high failure rate in its own compliance checks. Mr. Balma cited the high employee turnover rate and the desire of clerks to avoid conflict as the primary reasons. Mr. Martin Hill, representing Tom Thumb, explained his store's training policy regarding tobacco and alcohol sales to minors. He asserted that the proposed license fee and penalties would be a burden on retailers who are already trying to regulate themselves. He stated his belief that fines should instead be placed upon the minor buying the product, not the clerk selling it. Finally, Mr. Hill implied that this local regulation might drive his business out of Falcon Heights. Councilmember Gehrz asked Mr. Hill to describe the problems in his current training program, as Tom Thumb has failed compliance checks in Falcon Heights. Mr. Hill asserted that he does a good job of training, but that there is only so much he can do. The retail public is often offended by requests for age identification. Councilmember Hustad asked how much revenue Tom Thumb would lose in a five day cigarette suspension. Mr. Hill answered that the loss would be several thousand dollars each day, plus the loss of future