05-14-2025 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Fischer and Members of City Council FROM: Heidi Heller, City Clerk/HR Manager DATE: May 14, 2025 RE: Public Hearing - Consider an Increase in Liquor License Fees ACTION TO BE CONSIDERED: Hold the Public Hearing and consider an increase for 2025 Liquor License Fees. BACKGROUND: In 2006, the City Council declared that increases in On-Sale Liquor License and On-Sale Wine License Fees would be tied to annual gross levy increases. This plan continued and worked well for many years until the levy percentage increased and the pandemic hit. Liquor license fees have not been increased since 2019 due to the pandemic, and in 2023 the Council determined that a new plan for determining liquor license fees going forward was needed. At the February 14, 2024 Workshop, the Council discussed liquor license fee increases. Staff stated that a small annual increase was preferred by the license holders, rather than random large increases. Staff suggested that an annual 2% increase would be sufficient to contribute to increases in staff and policing costs. The Council agreed with the annual 2% increase and that began in 2024. Staff received one comment this year from one license holder asking why the liquor license fees needed to be increased every year. A survey of other metro cities on-sale liquor license fees is included for reference. Most cities do not increase their liquor license fees on a regular basis. The reason that on-sale liquor license fees have been increased in Little Canada on an annual basis is that there are many alcohol-related incidents in the city that have direct law enforcement and city attorney expenses that the City of Little Canada pays for. Off-sale (liquor store) license fees are capped per state statute. The history of fees and new 2% increase for on-sale liquor licenses is as follows: 2019-2023 2024 2% Increase 2025 2% Increase On-Sale Liquor License $5,284 $5,390 $5,498 On-Sale Liquor License – Billiard Halls only $1,061 $1,082 $1,104 On-Sale Wine License $763 $778 $794 *Per State Statute, the fee for an on-sale wine license cannot exceed half of the license fee charged for an on-sale liquor license, or $2,000, whichever is less. There are currently 6 full on-sale licenses, 1 on-sale billiard hall-only license and 0 wine licenses in Little Canada.