Minutes of the Meeting of the Utah s3

MINUTES OF THE MEETING OF THE UTAH ALCOHOLIC BEVERAGE CONTROL COMMISSION HELD TUESDAY, MARCH 24, 2015, AT 1625 SOUTH 900 WEST, SALT LAKE CITY, UTAH.

[Copies of the proposed agenda for this meeting were emailed to all persons on the regular email list (a copy of which is located in the front of the minute book) and to all of the individuals and groups on the agenda (applicants, those with violations, etc.) on Wednesday, March 18, 2015. A copy of the final agenda was posted on the bulletin board at the DABC Administrative Office, emailed to the Salt Lake Tribune and the Deseret News, and posted on the Utah Public Notice Website by 10:00 a.m. on Monday, March 23, 2015.]

Chairman David Gladwell called the meeting to order at 10:00 a.m.

Commissioners Present: David Gladwell, Jeff Wright, Kathleen McConkie Collinwood, John T. Nielsen, Constance White and Olivia Agraz.

Staff Present: Sal Petilos, Director; Tom Zdunich, Deputy Director; Nina McDermott, Compliance, Licensing and Enforcement Director; Chris Kamens, Finance Director; and Man Diep, Internal Audit Director.

Also Present: Sheila Page, Asst. Attorney General.

PLEDGE OF ALLEGIANCE:

Vickie Ashby led the group in the Pledge of Allegiance.

1 APPROVAL OF MINUTES:

Upon motion of Mr. Nielsen, seconded by Ms. McConkie, it was unanimously voted to approve the minutes of the Commission Meeting held February 24, 2015.

ANNOUNCEMENTS:

Mr. Gladwell made the following announcements: a. Proposed Future Meeting Schedule: (subject to change) - Tuesday, April 28, 2015 - Tuesday, May 26, 2015

PARENTS EMPOWERED UPDATE:

Doug Murakami gave an update on the Parents Empowered campaign. The Governor participated in a video and work continues on the mini-grant program that begins in the next fiscal year.

Mr. Murakami also distributed a flyer for a Fetal Alcohol Spectrum Disorders Parent Seminar. Funding for the seminar came from a $10,000 grant from the National Alcohol Beverage Control Association.

LEGISLATIVE UPDATE: [not on the agenda]

2 Mr. Petilos updated the commission on the recent legislative session. Two bills passed that affect the department. One bill allows the department to use the BCI system to get notifications of disqualifying offenses. The second bill bans powdered alcohol with limited exceptions such as manufacturing. The department also received authorization to build a liquor store in West Valley City.

Mr. Petilos continued with an overview of the budget that was allocated to the department. He explained that the department received reduced funding and will have some hard choices to make in order to realize the savings. Mr. Petilos was very clear that the department does not intend to close stores or cut operating hours.

ADMINISTRATIVE RULES: a. Proposed Rules to Approve for the Rulemaking Process:

(1) R81-7 Single Event Permits.

Ms. McDermott explained that action on the proposed administrative rule amendment was delayed pending the status of a proposed bill in the legislature. The bill did not pass.

Ms. McDermott summarized the proposed rule amendment. The changes are based on recommendations from the Advisory Board and staff. She noted that the rule is not in final form and asked that the commissioners provide any comments or additional suggestions to her. The commissioners, Mr. Petilos, Ms. Page and Ms. McDermott discussed possible permit requirements. Ms. Page also explained the actions taken when a permit holder has a violation during an event.

Mr. Gladwell encouraged the commissioners to review the proposed rule amendment and provide individual feedback to Ms. McDermott. b. Rule Discussion and Public Comment Period:

3 (1) R81-1-6 Violation Schedule

Ms. McDermott stated that the first rule amendment related to raising the fine for employees is currently in the public comment period.

Ms. McDermott explained that the discussion today is based on additional recommendations from the Advisory Board and other stakeholders to consider adjusting the penalty classification for club CUB violations, amending the three year expungement period, and changing the classification for “failure to scan” from serious to a moderate violation.

The commissioners, Ms. Page and Ms. McDermott discussed the recommendation to have the three year expungement period begin on the date of the referral/notice to the agency rather than on the date of adjudication. They also discussed the recommendation to allow a violation to drop off after three years; or to continue requiring a clean history for three years before a violation can be expunged.

The commissioners, Ms. Page and Ms. McDermott also discussed the possibility of rolling the violations for minor on the premise/unaccompanied minor into the first sale to minor violation for CUB operations in clubs similar to other on-premise licensee penalties.

Mr. Gladwell invited the public to comment on the proposed amendments.

David Morris, owner of Piper Down and a member of the Advisory Board came forward to address the commission. Mr. Morris advocated for rolling together the CUB violations for a club. He stated that the goal isn’t to lessen the penalties for real minors on a premise, just lessen the penalties for CUB operations. The CUB program is a good compliance tool.

Pat Bird, member of the USAAV and fills in on the Advisory Board for MaryLou Emerson came forward to address the commission. Mr. Bird reinforced USAAV’s statement of opposition against combining the CUB violations. The USAAV also would like the penalty for “failure to scan” to remain as is and not lowered.

Art Brown from MADD came forward. Mr. Brown expressed opposition to lowering the penalty level for CUB operations. He is concerned that minors may get alcohol through friends that may

4 legally order drinks and then drive. The crash risk for a minor is dramatically different than for adults. Mr. Brown also advocated for a three year expungement system.

Fred Boutwell, a member of the Advisory Board, came forward. Mr. Boutwell agreed with Mr. Morris noting minors are not served during a CUB operation so there isn’t a public safety issue. He added that after many meetings, the Advisory Board voted to approve the change to CUB penalties for clubs 8 to 1.

The commissioners and public were invited to send any additional input to Ms. McDermott.

OPERATIONS AND PROCUREMENT SUBCOMMITTEE BUSINESS:

Constance White reported on the Operations and Procurement Subcommittee meeting. A quorum was not present so the subcommittee made recommendations for full commission approval. a. Operations Update.

Staff reported on the store covert underage buyer (CUB) operations. One store failed and disciplinary action was taken. Staff also reported on package agency audits and monthly listed items. b. Financial Update.

Staff gave an overview of the February financials. c. Type 5 Package Agency Application.

The subcommittee recommended that the full commission approve a Type 5 package agency license for Outlaw Distillery in Midvale.

5 Ms. White moved to approve a Type 5 package agency license for Outlaw Distillery in Midvale. Mr. Wright seconded the motion which passed unanimously. d. Package Agency consignment Increase Requests.

The subcommittee recommended that the full commission approve consignment increases for PA114 in Helper and PA306 in Centerfield.

Ms. White moved to approve a $10,000 consignment increase for PA114 in Helper. Mr. Wright seconded the motion which passed unanimously.

Ms. White moved to approve a $5,000 consignment increase for PA306 in Centerfield. Mr. Nielsen seconded the motion which passed unanimously. e. Other Business

The subcommittee, staff, and those in attendance discussed store inventory and sales practices. No resolutions or recommendations were made. Changes will continue as the agency moves toward professional management and continued best practices training.

CLUB LICENSE APPLICANTS:

License Transfers: (1) Black Sheep Bar & Grill, West Jordan. STRIKE Previous Applicants: (1) ‘Bout Time Pub & Grub, Park City. (Dining/Holds Summer Seasonal) (2) Salt Flats Grill, Salt Lake City. (Dining/Holds Summer Seasonal) (3) Pelican’s Pub, Vernal.(Social) (4) The Big Z, West Haven. (Social/Holds Summer Seasonal) (5) The Bistro @ Courtyard Ogden, Ogden (Social) (6) Proper Bar, Salt Lake City. (Social) (7) East 69th, Salt Lake City. (Social/Conditional) (8) Uinta Brewhouse Pub, Salt Lake City. (Social/Conditional) (9) 50 West, Salt Lake City. (Dining/Conditional) (10) Josephine’s, Kamas. (Dining) (11) Pins & Ales Restaurant & Nightclub, Tooele. (Dining) New Applicants: (1) The Fallout, Salt Lake City. (Social)

6 Dan Oberg noted that no new club licenses are available. Staff received notice that a licensee has closed their doors but didn’t have time to notify club licensees of the available license. Action on the license will be continued to next month.

Ms. McDermott invited commissioners to tour dual licensed premises. A site tour will be set up prior to the next commission meeting.

Mr. Oberg asked the commissioners to strike #1 Black Sheep Bar & Grill. Staff expressed concern that the buyer asked to be stricken from the agenda as they will be unable to open in time to meet the statute requirements for a license transfer.

COMPLIANCE, LICENSING AND ENFORCEMENT SUBCOMMITTEE BUSINESS:

John T. Nielsen reported on the Compliance, Licensing and Enforcement Subcommittee meeting. Mr. Nielsen noted that as a commission quorum was present, these items were dealt with during the subcommittee meeting. a. Violations.

The violation consent calendar was approved. b. Hearing.

After a report from Ms. Page on the hearing for Silver Dollar Sports Page in Price, the subcommittee voted to adopt the Hearing Officer’s Findings of Fact, Conclusions of Law; approve the recommended suspensions, fines and costs to be paid by May 1, 2015; and order that the 34 consecutive day suspension of the Silver Dollar Sports Page club license begin on May 1, 2015.

7 c. Compliance Update.

Ms. McDermott gave a brief update on the division’s activities and goals. d. Defined Premise Discussion.

Ms. McDermott summarized the adjacent and dual licensed premise issues. Mr. Gladwell gave an overview of the legislative intent beginning with the 2009 compromise noting that each year there seems to be push back against the 2009 legislative actions.

Ms. McDermott will prepare a chart comparing the requirements of club versus restaurant licenses. Ms. McDermott will also coordinate a tour of dual licensed premises for the commissioners. e. Manufacture Distillery Application.

A manufacture distillery license was approved for Distillery 36 in Salt Lake City. f. Transfer of Location Request. STRIKE g. Request for Change of Club License. STRIKE h. License Applications.

The license applications for full service restaurant, on-premise beer recreational, on-premise tavern, banquet catering, and limited service restaurant were approved with the exception of those stricken from the agenda.

Two dual license premise applicants came forward to explain why they need to have multiple licenses in their facilities.

QUESTIONS/COMMENTS FROM COMMISSIONERS AND PUBLIC:

8  Tim Ryan from ‘Bout Time Pub & Grub came forward and expressed concerns about having a club license go unused for a month. Ms. Page explained that the department may want to make sure the licensee forfeited the license. She added that the commission has plenary power over the issuance of licenses.

 Jerry Eldridge came forward to express frustration about the stores, treatment of employees, and the special order program. Ms. McConkie asked Mr. Eldridge to write up his concerns and send them to the commission.

 Tim Buckingham from Vista Lounge/Buck’s Grill House came forward. He advocated for the development of a specific procedure for remodel closures.

There being no further business, Mr. Nielsen moved to adjourn the meeting at 11:20 a.m. Mr. Wright seconded the motion which passed unanimously.

______Chairman