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58 MEMORANDUM TO: Mayor and Members of the City Council Michael Mornson; City Manager FROM: Jerome P. Gilligan DATE: January 7, 2003 RE: Liquor Ordinance At its meeting on January 14t'the City Council will consider first reading of the ordinance amending the City Code to provide for the issuance of on-sale liquor licenses to restaurants and hotels. The ordinance also contains provisions with respect to issuance of wine licenses, off-sale.and on-sale 3.2 beer licenses and temporary wine and on-sale 3.2 beer licenses, which licenses are presently authorized to be issued under the City Code. Many of the provisions concerning the issuance by the City of on-sale liquor licenses and other licenses for the sale of alcoholic beverages are set forth by Minnesota Statutes, Chapter 340A and are incorporated expressly or by reference into the ordinance. The City can place additional restrictions beyond those contained in Minnesota statutes, Chapter 340A with respect to certain matters. Additional restrictions proposed to be included in the ordinance are the following: (i) alcohol awareness training is required for employees of the licensed establishment (Section 1000.12, subd. 2), (ii) no more than 15% of the seating capacity of the establishment may be located at a bar or service counter(Section 1000.12, subd. 1.C), (iii) at least 50% of the gross receipts of the establishment for the sale of food and non-alcoholic and alcoholic beverages shall be attributable to food and non-alcoholic beverages (Section 1000.12, subd. 3), (iv) no license may be issued to any property located within 300 feet of a church or school (Section 1000.09, subd. 1.C) or to any property used as a sexually oriented business as defined in Section 1605 of the St. Anthony Code(Section 1000.09, subd. 1.G), and(v) adult entertainment is prohibited on the licensed premises or in adjacent areas that can be viewed by the patrons of licensed premises (Section 1000.10, subd. 16). . The ordinance provides for investigation fees of up to $500 for an in-state investigation and up to $10,000 for an out-of-state investigation. This is the maximum investigation fee permitted by Minnesota law. The annual license fee for an on-sale liquor license is proposed to be $8,000,with a reduction of$500 on the license fee for an annual renewal if compliance checks have been passed in the prior year with no violations carrying a penalty of$500 or greater. Sunday license fees are proposed to be$200, which is the maximum permitted by Minnesota law. Minnesota law City staff conducted a survey of a number of cities concerning license fees. Under Minnesota law the license fee is to be set at an amount that is intended to cover the cost of issuing liquor licenses and costs of inspecting the licensed premises and other directly related costs of enforcement. Once the City has some experience with the issuance of liquor licenses it DORSEY & WHITNEY LLP