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I . I 51 MEMORANDUM TO: Michael Momson, City Manager FROM: Jerry Gilligan DATE: September 10, 2001 RE: Issuance of On-Sale Liquor Licenses The St. Anthony City Council has been reviewing the continued operation by the City of the City-owned Stonehouse and may consider calling a special election to submit to the voters of the City the question whether the City should be authorized to issue on-sale liquor licenses to hotels and restaurants. In connection with this request you have asked me to advise you with respect to certain questions regarding the holding of the special election and the issuance of on-sale liquor licenses by the City. Special Election Authorizing Issuance of On-Sale Liquor Since the City owns and operates municipal liquor stores, the issuance by the City of-on-sale liquor licenses is governed by Minnesota Statutes, Section 340A.601. This statute provides that a city which owns and operates a municipal liquor store may issue on-sale liquor licenses to hotels, clubs and restaurants. However, the City may not issue licenses to a hotel or restaurant until authorized by voters of the City voting on the question at a special election called for that purpose. The issuance of licenses to clubs does not require voter approval. The special election may be ordered by the City Council on its own motion or is required to be held by the City upon receipt by the City of a petition signed by a number of voters equal to 20% of the votes cast at the last City general election. The special election may be held in conjunction with the general election or may be held on a date selected by the City Council, other than a date within 40 days after the state general election. The question on the issuance of the on-sale liquor licenses passes if it is approved by a majority of the voters voting on the question. Issuance of Licenses if Referendum is Approved If the issuance of on-sale licenses is approved by the voters, and the City Council determines to authorize the issuance of on-sale licenses, the City Council will need to adopt an ordinance setting forth the requirements and regulations relating to the issuance of the on-sale licenses. The adoption of a licensing ordinance by the City Council is discretionary and there is no requirement that the City Council adopt such an ordinance if the voters approve the issuance of on-:sale liquor licenses. The number of on-sale liquor licenses that may be issued by a city is based,on its population. For cities, such as St. Anthony, with a population between 5,000 and 10,000, the maximum number of licenses is six, unless a higher number of licenses is approved DORS EY & WHITNEY L L P