CITY COUNCIL AGENDA REPORT. Honorable Mayor and City Council Members. 8 D - Motion to Approve Findings of Fact, Conclusions and

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1 City of RE CITY COUNCIL AGENDA REPORT TO: Honorable Mayor and City Council Members FROM: Kathy Johnson, City Clerk Agenda Item No.: 8 D - Motion to Approve Findings of Fact, Conclusions and Recommendation in the Matter of the Liquor License Violation of Applebee' s Neighborhood Grill & Bar Meeting Date: April 27, 2015 ACTION REQUESTED: Motion to Approve Findings of Fact, Conclusions and Recommendation in the Matter of the Liquor License Violation of Applebee' s Neighborhood Grill & Bar ATTACHMENTS: Findings of Fact, Conclusions and Recommendation in the Matter of the On -Sale Liquor License held by Applebee' s Neighborhood Grill & Bar, 156 Tyler Road North, Red Wing, Minnesota BACKGROUND: Staff was made aware of a liquor license violation by Applebee' s Neighborhood Grill & Bar that would result in a penalty (fine and license suspension) in November of The process dictated by the City Code and state statutes entitles the licensee to a contested hearing before any suspension becomes effective. The hearing is only necessary if the licensee requests one, which they did. Council appointed a committee of three members to hear background information on the issue and report back to the City Council. Council members Peggy Rehder, Dean Hove, and Ralph Rauterkus were appointed. Council Member Dan Munson attended the hearing in place of Council Member Rauterkus due to Council Member Rauterkus' s inability to attend because of a work conflict. DISCUSSION: The contested case hearing was held at City Hall on Wednesday, April 15, 2015 at 5: 30 p. m. before the Committee of the Council as referenced above. In addition, Abby Novak of the City Attorney' s office was present as well as City Clerk Kathy Johnson; Police Patrol Officer Jeffrey Mund; Katy Sienko, Applebee' s Director of Operations; Rory Stearns, Applebee' s Area Director; Jeremy Kanne, Resident Manager of Applebee' s; and Julie Hatch, Executive Director

2 for the Chemical Health Initiative of Goodhue County. As a result of the hearing, the attached Findings are presented to the Council for approval. RECOMMENDATION: Staff recommends Council Approve the Findings of Fact, Conclusions and Recommendation in the Matter of the Liquor License Violation of Applebee' s Neighborhood Grill & Bar.

3 In the Matter of: the On -Sale Liquor License held by Applebee' s Neighborhood Grill & Bar FINDINGS OF FACT, CONCLUSIONS 156 Tyler Road North AND RECOMMENDATION Red Wing, Minnesota Pursuant to Minnesota Statutes and the City Code, a contested hearing in regard to the On - Sale Liquor License held by Applebee' s Neighborhood Grill & Bar ("Applebee' s") was conducted before a Committee of the Red Wing City Council on Wednesday, April 15, 2015 at 5: 30 p. m. in the Jordan River Conference Room at Red Wing City Hall, 315 West 4t" Street, Red Wing, Minnesota FINDINGS OF FACT Based on the evidence submitted at the contested hearing, the undersigned make the following Findings of Fact: 1. The City has adopted Chapter 5 of the City Code which regulates the sale of alcoholic beverages and, among other things, provides for sanctions to be imposed against licensees for violations of the City Code and state laws. 2. On or about November 18, 2014 Officer Mund and Officer Sullivan of the Red Wing Police Department conducted an alcohol compliance check at Applebee' s at 156 Tyler Road North in the City of Red Wing, State of Minnesota. 3. The Officers instructed two persons under the age of 21 (" underage buyers") to enter Applebee' s and each order an alcoholic beverage. The underage buyers were instructed not to lie, to use their identification cards if asked and to provide their correct age and date of birth if asked. 4. The two underage buyers entered Applebee' s at 5: 53 p. m. and each underage buyer ordered an alcoholic beverage from an Applebee' s employee. 5. The employee did not ask the underage buyers for identification or ask the underage buyers their age before selling the alcoholic beverages to the underage buyers. 6. After purchasing the alcoholic beverages, the underage buyers sent Officer Mund a text message stating "got buy." 7. The Officers entered Applebee' s and approached the underage buyers who had two beers in their possession. 8. The underage buyers identified the Applebee' s employee who sold them the beer.

4 9. The employee admitted to Officer Mund that she sold the underage buyers the two beers and did not ask for their identification cards or age. 10. Officer Mund completed an incident report which was sent to the City Clerk for review and processing of City Code and State law violations. 11. Kathy Seymour Johnson, Red Wing City Clerk, reviewed Officer Mund' s incident report and determined that Applebee' s violated Chapter 5 of the City Code for selling alcoholic beverages to underage persons. Ms. Johnson also confirmed that this was Applebee' s second violation of Chapter 5 of the City Code in 36 months. 12. The City previously imposed a sanction of $750 against Applebee' s for selling alcoholic beverages to underage persons on November 30, 2012 in violation of Chapter 5 of the City Code. 13. On February 6, 2015 the City sent Jeremy Kanne, Resident Manager of Applebee' s, a letter informing him that the City was imposing a civil fine of $ 1, 500 and intended to suspend Applebee' s liquor license for ten ( 10) business days for violating provisions of Chapter 5 of the City Code. contested hearing on the ten day suspension of the liquor license. The letter also informed Mr. Kanne of his right to request a 14. On February 11, 2015 Applebee' s sent Ms. Johnson a letter requesting the opportunity to discuss the violations with the City Council. 15. On March 11, 2015 the City sent a letter to Katy Sienko, Director of Operations, and Rory Stearns, Area Director, in response to Applebee' s request for a contested hearing on the liquor license suspension. The letter included a Notice and Order for Hearing informing Applebee' s that a contested hearing had been scheduled. 16. At the hearing on April 15, 2015 Officer Mund and Ms. Johnson testified for the City. Ms. Seinko, Mr. Stearns, and Julie Hatch, Executive Director for the Chemical Health Initiative of Goodhue County, testified on behalf of Applebee' s. Exhibits were offered by the City and received by the Committee as part of the record. The hearing was audio - recorded. 17. Neither Ms. Seinko nor Mr. Stearns contested the facts in paragraphs During her testimony, Ms. Seinko testified that the employee who sold the alcoholic beverages to the underage buyers on November 18, 2014 was terminated as a result of this sale. 19. Ms. Seinko and Mr. Stearns both testified that, after this violation on November 18, 2014, Applebee' s implemented additional liquor sale procedures for its employees. 2

5 20. Mr. Stearns testified that, pursuant to these additional procedures, all patrons must have their identification cards electronically verified by a manager before being served alcoholic beverages. 21. Mr. Stearns stated that this procedure was originally adopted after Applebee' s first violation in November 2012, but admitted Applebee' s did not continue this procedure because it slowed down service time. 22. Ms. Hatch testified about the additional liquor sale training Applebee' s provided its employees after the November 18, 2014 violation. CONCLUSIONS Based upon the foregoing Findings of Fact and applicable provisions of Minnesota Statutes and the City Code, the undersigned makes the following conclusions: 1. That Subdivision 4 of Section of the City Code provides that any sale of alcoholic beverages from the licensed premises by any employee authorized to make such sale is the act of the employer as well as of the employee making the sale and every employer is liable for all of the penalties provided by law for such sale. 2. That Subdivision 26 of Section defines " underage person" as any individual under 21 years of age. 3. That Subdivision 2B of Section 5.05 of the City Code provides that it is unlawful for any person to sell, furnish or give alcoholic beverages to an underage person. 4. That Subdivision 3C of Section of the City Code provides that it is unlawful for any licensee to fail, where reasonable doubt of legal age could exist, to require adequate proof of age of a person upon licensed premises. 5. That Subdivision 2F of Section of the City Code provides that proof of age for purchasing or consuming alcoholic beverages may be established only by a valid driver's license, a Minnesota identification card, or, valid passport. 6. That on November 18, 2014 an Applebee' s employee failed to require adequate proof of age and sold alcoholic beverages to underage persons in violation of Section of the City Code. 7. That this violation is established by substantial evidence, including the documentation and testimony provided by the Red Wing Police Department. 8. That this violation is Applebee' s second violation of Chapter 5 of the City Code within 36 months.

6 9. That the City has established a presumptive penalty for a licensee's second Code violation; the presumptive penalty is a civil fine of $1, ten business days. [ City Code Section 5. 02, Subd. 4E3] 500 and a license suspension of RECOMMENDATION Based upon the foregoing Findings of Fact and Conclusions, the undersigned Committee members recommend that the City Council suspend Applebee' s liquor license for ten days in addition to the $ 1, 500 civil fine. It is the opinion of the Committee that the particular facts of this case, that is, Applebee' s second violation of selling alcoholic beverages to underage persons in two years, warrant the City Code' s presumptive minimum suspension period of ten consecutive days and a $ 1, 500 civil fine. 1 ::: r Dated Peggy ' Dean Hove n Munson

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