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HomeMy WebLinkAboutCCMinutes_2008_05_13 V � Brookings City Council May 13, 2008 The Brookings City Council held a meeting on Tuesday,May 13, 2008 at 5:00 p.m., at City Hall with the following members present: Mayor Scott Munsterman, Council Members Julie Whaley, Mike Bartley, Ryan BrunneY,Tim Reed,Mike McClemans,and Tom Bezdichek. City Manager JeffYey Weldon, City Attorney Steve Britzman, and Deputy City Clerk Bonnie Foster wexe also present. 5:00 P.M. WORK SESSION Oath of Of�ce and Presentation of Certificate of Election. Incoming Council Members Mike Bartley and Mike McClemans (5/1/2008-5/1/2011) and Ryan Brunner (5/1/2008-5/1/2009) recited the Oath of Office and received their Certificate of Election. Discussion regarding lic�.uor issues. The City Council requested further discussion of various liquor issues, specifically a further analysis of Senate Bill 126 (SB126) regarding restautant liquor licenses. City Attorney Steve Britzman provided his interpretarion. Britzman gave a handout to the council and members of the public stating the intent of this document was to put the key provisions of SB126 on one piece of papex in a format that would facilitate discussion. Britzman commented that he's made some good progYess over the last two weeks. The steps he's tried to accomplish were to identify some of the issues that were discussed at the last council meeting, to continue to reread the bill, and to hold a discussion with the SD Department of Revenue Attorney,Michael Kenyon. Some of the topics that he covered with Kenyon stemmed from the Council's previous discussion. He refexred to a new handout entided, "Significant SB 126 Provisions" and indicated those were the key issues and that he didn't diink there were not as many issues to resolve as there weYe at the last meeting. City Attorney Britzman's handout is as follows: SIGNIFICANT SB 126 PROVISIONS Full-Service Restaurant Facility must be Full Service (defined): 1) Waiter ox waitress must deliver food and drink; (Secrion 2(2),(3),6) 2) Printed menu xequired; 3) Food menus must include more than fry ordexs,sandwiches and salads; 4) Smoking is pxohibited;and 5) Restauxant must be advertised as a Restaurant. Restaurant(defined): 1) Restaurant must have a dining room and kitchen;and (Section 2(3)) 2) Not more than 40%of restaurant sales can come from sale of alcoholic beverages. Application: Applicant shall supply documentation that"primary"(60%) (Section 3) souxce of revenue will be from sale of food(documentation is confidenrial). Renewal Requirements and Fee Renewal of license conditioned on xeceipt of (Section 4) documentation that revenue from sales of alcoholic beverages does not exceed 40%of total sales of the restaurant. Again,documentation is confidential. Department of Revenue a�ees xenewal fee would be $1,500.00 per year. Service Area for Alcoholic Beverages Alcoholic beverages must be consumed in bar and diiung (Section 5) axea. Patio or deck dining acceptable to Dept.of Revenue. License Fee: Municipality shall set the price at ox above current faix (Secitons 7&9) market value. Minimum License Fee: At least$1.00 pex person residing in the municipality ($18,504.00) Current Fair Market Current fair market value means the price of the license Value: most recenfly sold between January 1,2003 and January 1,2008. 81 Putchase Price of Licenses Licensees who�uxchased a license between January 1, purchased between Januaty 2003 and January 1,2008 shall report under oath,with 1,2003 and January 1,200$: supporting documentation,the price pud for the on-sale (Sections 8&9) license to the municipality and the date of purchase of said license. Registry: Registry is requixed and is for each on-sale license being (Section 10) offexed fox sale at the current fair market value as determined by the City pursuant to Section 9. Registry is available to anyone who requests a license. Municipaliry may issue a new license if no on-sale license is on the registry or prospective licensee can't purchase a Gcense listed on the Registry foxm a willing seller.) Britzman said a couple of things that he did learn from the SD Depaxtment of Revenue's (SDDOR) is that theit position is since the City of Bxookings has adopted the local option that these restaurant licenses would also be subject to operating agreements just like our curxent licensing structure. Britzman said he had not reached that conclusion the last time the council met,but SDDOR felt because of an e�sting statute, even though the language in the bill appears to issue the licenses to retail licensees, the xestaurateuxs, that would qualify under SB126, that in fact in a local option community,we have to observe the statute that would indicate that the municipality would technically control those licenses. And therefore,if the city is controlling those licenses they would be subject to an operating agreement. Bxitzman commented that he thinks that everyone understands how the operating agreements work. One of the key provisions,with respect to an opexating agreement,would be that the city to have a greater degree of control over the licensees. It would not prevent the sale of the licenses, at least under the way the statute reads, that these licenses could be offered £or sale. He noted that he hasn't quite tesolved that point yet. But at least it appears the statute contemplates that these licenses could be transferred or offexed for sale because of the registry language and so forth. He also noted the point that if these agreements would be under the operating agreement, they would be puxchasing theit alcoholic bevexages from the city. He felt that would provide the city a smoother operating mechanism than if the City had two different types of ptocedures going on at the same time;this new group of licenses and the operating agreements. He said that it is not difficult for him for to reach agreement on that point with the SDDOR,because he thinks that will make it easier for the city to administer those. Britzman stated another issue is the full-service restaurant defuutions. He did visit with the SDDOR Attorney about the size of dining facilities,because there were discussions about, for example, the Shamrock and how they would `fit'within this statute. Britzman xeferred to the full-service restaurant definition 1-5 on his handouts,and felt those would indicate the key provisions that any potential SB126 licensee would have to follow,which he felt was a pretty short list of requirements. He said the dining facilities and the printed menu;there axen't any procedures as to exacdy how large or how self-contained the dining area would be, or the fact that it doesn't have to be partitioned away from facilities fot banquets,wedding dances,etc. He though if a person followed statutes 1-5, they would be able to qualify under the law. However,he noted they'd have to hold out their facility as a restaurant, so thexe'd have to be some signage and advertising that would indicate that within any facility there is a restaurant. He said a good e�sting example would be the Minerva's that are found at several of the curxent largex Ramkota restaurants/convention facilities, such as in Watertown. There is specific language (advertising� for a restaurant within those facilities and that he would expect the state would look for that type of advertising. Britzman said the point that the SDDOR legal counsel made was that they would like to facilitate that this works without much difficulty. In other words,if one can meet these basic requirements (type of food menus,waiters and waitresses, etc.), he felt anyone applying for a license should be able to review those provisions and either determine if they can comply or not comply on theit own. He feels that would be their obligation if they are going to apply for the license,to make that determuiation on their own,because they have the best knowledge of theix facilities. They would submit that to the city, and the city will be issuing the licenses assuming that they met the requirements, and the council decided they are an eligible patty to receive the license. Munsterman asked Britzman in his discussion with the SDDOR, as long as these 5 points are made, then they should be covered. Yes. Munsterman noted in the case of the Shamrock, they would have to look at their operations,review these requirements to determine if they comply and then submit that application to the city. He also asked Britzman if he had direction conversations with the SDDOR specific to the Shamrock facility. Britzman responded that he didn't mention the name of the facility, but did talk about large-banquet facilities as the example. The SDDOR thought if a wedding parry was there, for example, and they had a short printed menu that the wedding couple 82 had approved or they had reached agreement on what was going to be served, they wouldn't expect that every attendee would have a menu in their hand before they placed an order during a wedding dance, etc. He said that gives a flavor of the SDDOR's view is that that would seem to meet the requirements. Britzman referred back to requirements 1-5, noting there is nothing else in the statute that futther defines these provisions, so he felt if one could meet these basic requirements,it should be acceptable. Bardey commented on those that hold themselves out to be a full-service restaurant or a restaurant in their advertising. He commented that we know full well that the name Applebee's (it doesn't' say Applebee's Restaurant in the ad),but we know it is a restaurant. Buffalo Wild Wings doesn't say restaurant, but we know it's a restaurant. Minerva's,we know is a testaurant. Bardey said in some of the testimony in Pierre, those issues were btought up and everyone sort of agteed it was common sense that if it's a restaurant—it's a restaurant;but the Legislators wanted it to be a Yestaurant and not a place that served pickled eggs out of a barrel and cold sandwiches heated up in a microwave oven. The state isn't going to come down on someone if their advertising doesn't say the word restaurant; the idea is of common sense that food is served, because we're not going make all these places who apply in the future to change their name to include the word `xestaurant'. It's a common sense sort of an issue. Bardey noted that Britzman said the sale and transfer would be available with this operating agreement. He felt that was still something that the City needs to woxk on with the state. He said it's kind of a mute issue as they discussed in Committee at the Legislature,because if a municipality has an unlimited number of licenses available, they wouldn't have to transfer one in order to get one. He stated it would probably be a mute issue,unless for some reason the City established a price and the business was going to sell it for under that price to get out of it. He said it's an operating agreement and believes the council will work through this issue in the next few weeks or months before the July 1" Britzman stated the application and renewal requirements do provide for confidential disclosures on rhe part of applicants. The City of Btookings will have policies to maintain files that preserve that confidentiality. There is supporting documenta.tion that the City will be developing and the City will be working with the SDDOR to develop the forms for this. He didn't think the SDDOR has reached a conclusion as to whether they will be doing model forms. They are looking at the model ordinance Britzman had prepared,but SDDOR hadn't decided whether they would just review ordinances that are submitted to them, or whethex they would try to prepare a model ordinance. He said part of this is because the SDDOR has other issues they are dealing with right now with limited staf£ Britzman said he is confident that the City can develop both the initial application form and any renewal documentation or annual report forms that would meet all requirements of the statute without much difficulty. He stated there are two things to keep in mind: 1) all documentation will be submitted under oath (Britzman feels this is of great significance when one certifies what they are submitting is accurate.), and 2) ,good documentation must be received with respect to the breakdown of food/beverage sales. Britzman stated the service area issue is somewhat significant. He did raise the question since the statute talks about"within the dining area" or"within the building" as to the question if it could include outside service. The SDDOR has no ptoblem with that,and outdoor service is well accepted at places in Brookings such as Applebee's and BraVo's with their outside dining. Britzman commented the most significant issue is the initial license fee. The renewal fee wasn't set forth in statute, but they agreed it would be set by current state law,which is the $1,500.00. He didn't think there was any disagreement on that. This was one of his questions to the SDDOR; what will the initial license fee be. What are the choices in terms of price? We've heard discussion and public comments about whether the minunum license fee of$1/peYSOn in the municipality would be the fee that the ciry would be utilizing, or if the Ciry would be at some different value. Britzman stated he has already gone on record that he felt initially that the ciry would be eligible for the minimum license fee at a$1/person because since the City of Brookings has not transferred its own retail license in the past five years, that there wouldn't be any other market value for licenses that had transferred. He stated the SDDOR said,in all honesty, felt that wasn't consistent with their thinking,in other words, they disagreed with him on this issue. Britzman feels there's more room for more debate on that point,but what theit thinking was and he feels it stems from legislative discussions that occurred and thexe was a lot happened that he wasn't privy to during that time in Pierre. The SDDOR felt that even in communities such as Brookings,with local option opeYating agreements, that if there had been sales or transfers, (noting this was Don McCarty's argument) which it is likely there were sales in the last five years where there was some value attributed to the 83 ability to sell alcoholic beverages on-sale pursuant to an operating agreement. It was built into the selling price. He noted that this was Don McCarty's interpretation and that he had listened and considered his points, but had not agreed with him at that time. Reading the statute, he didn't reach the conclusion that any licenses that any licenses that had actually been sold. But he thinks the SDDOR agrees with Don McCarty's point-of-view. Britzman would like tq ox prefer that this be the remaining issue that he thinks still needs to be worked out,because the City hasn't had other comments. Britzman feels that is an honest summary of a point that is contrary to the position the City took earlier. With all the people that are willing to come to the meeting and are paying attention to this issue, Britzman felt he needed to shaxe that summary publicly. He feels the city will see more fYOm the SDDOR and hear from other people about that point of view. Britzman is not sure if other communities of similar size to Brookings that will take a firm stand on that issue, because Sioux Falls doesn't have this issue. Sioux Falls has sales and current market values that will be on the "registry" and will play a part in the issuance pxice/current fair market value that would apply to these restaurant licenses. Britzman said it's good to raise all the points out,because the city found out that was one issue that the City assumed there wasn't an issue with,and that's likely going to be something that plays a part in the city setting the pxice fot the restaurant licenses. Munsterman questioned when the ciry gets to the point of enforcement if the state law puts that responsibility on the city's shouldexs. Britzman responded,yes. Munsterman asked if the city would have to have some type of a policy, or something within our current policy, that would address enforcement and how we would carry that out. Britzman said the city has not had a lot of active steps in terms of enforcement and maybe we should be more assextive in managing our operating agteements in the enforcement area. This has been done tacitly with communication infoxmally with license holders if we disagreed with the way the opexating agreement was being perfoxmed. He said definitely, these stem from our ordinance and the ciry doesn't issue licenses unless the city has an ordinance and it would be incumbent upon us to enforce the provisions of the ordinance that lays out all of these provisions. Reed questioned with respect to the unrestricted licenses,if the city has the ability to charge for those atso, meaning the license that is on the shelf. Britzman answered there is no mechanism for setting any price on those in terms of value. He doesn't think he can found anything in statute and what he's always done is relied on the renewal fee as the price in a local option. Britzman stated he doesn't know where the SDDOR initially came up with probably the determination of what the price is,but he has found no statute that would allow the ciry to set the price. He understands that would seem to be consistent with what we're doing here in looking at a current fair market value. Reed asked if thexe could be a base price to the lease. Britzman answered that the operating , agreement could carry with it other fmancial obligations, so that is probably true. He stated that is because there's only one statute that sets forth what is to be contained in the operating agreement, . and that particular statute does allow a city to add additional ptovisions that it determines are appropriate. So he thinks the ciry could under that area. Brunner noted under SB126,it was mentioned that they could be subject to an operating agreement, and if that is the direcrion the council wants to go, how would that work with the xninimum licensing fee or the market value of that license, and how those two would interact. Britzman stated the operating agreement doesn't xeally spell out a gteat deal about the license fee. The operating agreement would be only issued following an application form and fee payment. There would be an application form is required for anyone that sells alcoholic beverages on-sale. Britzman restated the operating agreement would probably deal with other issues once that fee has been submitted with the application. The operating agreement deals with other issues and not necessaxily the price of the license. If an operating agxeement is issued and someone has a SB126 license,and 3-5 yeaxs from now that business person offers it for sale; they then could report the proposed selling price on the regis try. Baxtley stated on the June 10 Woxk Session thexe are 4 house bills on the agenda: HB 1203- Sidewalk Sales; HB 1126- On/Off Sale Wine;HB 1269- Off Sale Malt&SD farm winery licenses; and HB 1142 ("HyVee/grocery store bill"). He said he felt the council needs to work thxough these issues with some sort of effort prior to June 10 to be in compliance by July 1 to honor those bills. He hopes the councit can put together some mechanism to address that priox to that so the city is ready to go. He stated this would also work with SB126 to make sure there is public testimony of some sort and work through that issue before July 1" Bezdichek stated in the start-up year of a business,in regards to SB126, there are three items xelated to whether they go with a 40% or 60%in alcohol sales; thexe is a license fee and a dollar amount put 84 on that. He wanted to know where that goes in regards to equipment and food sales;is it 40% or 60%. He also asked what if they don't own the faciliry which is quite common and they pay rentJhave a lease; the license sale, equipment sale, and xent in first year, does it fall under 40% or 60%. Britzman believes there would be a requirement with a renewal period on the annual report to have a breakdown of just pure food sales. Most bars/restaurants have five, six, or seven functions/areas of income; e.g.video lottery, etc. The two they axe required to maintain to comply with this, food sales and liquor sales, could be determined by an accounting system that provides what accounts for pute food sales. Bezdichek asked what if they have 20% from those items; they would need 80%in food sales to get to the 60%requirement. For a new start up business,it would be a monumental task to get that 60% of food sales in that first year if you have a new building, new equipment, etc. to a tune of$200,000-$400,000. He feels it would be difficult to make. Britzman stated it is based on gross revenue; only looking at the revenue side and not the net ox the net profit. Public Te,rtimony: Don McCarty, attorney, said he feels many of the issues he's addressed before the council will be resolved, at least he hoped, from the things Britzman has said he believes that they will be. He did take the comment of Council Member Bardey at the last council meeting seriously when Bartley commented out of frustration,which was that many people are saying a lot of different things and no one was giving authority fox what theix opinion was. McCarty certainly understands when you sit on a board like this,when a lot of people are telling you things and take different avenues, that it becomes frustrating when no one is laying out for you why you should do what you are doing or what they are proposing. Since the last council meeting, he has put together the legal support for the argument he presented previously to the council. At the time he thought he was right, and since he's done the research, he is now more confident he is right. He has also had discussions with SDDOR and they have confirmed what he has said with regards to SB126 and the adoption of it by the Ciry of Brookings. McCarty gave a submission to the council to review. He tried to cite thxoughout the memoxandum, for every pzemise he gave a citation that supported his conclusion. McCarty feels this is why the SDDOR has ultimately agreed with what he has said in terms of setting the current fair market value for the licenses. McCarty stated there has been some confusion in Brookings in the past about what the local option laws mean, and what impact they have on the ability to regulaCe liquor operations within the municipality. This is not entirely Brookings fault. When McCarty discussed this with the SDDOR, they apologized multiple times for the current status of Tide 35,which is where all the alcohol laws are at,stating it is in tetrible shape and that it needs to be updated. One thing McCarty wanted to point out, despite the fact that some differences have been resolved,is that one of the few statutes in Title 35 that makes some of the issues moxe clear and has been misconstrued in Brookings in the past. (OVERHEAD) State Law 35-1-1.1 "Operating Agreement" defined—Number of operating agreements limited. For the purpose of this tide,an entity that has entered into an operating agreement with a municipality pursuant to SDCL 35-4-19 shall be deemed to be a licensee. The number of operating agreements that a municipality may enter into may not exceed the maxunum number of retail licenses that may be issued pursuant to the population quotas established in chapter 35-4. McCarty clarified Tide 35 is where all the laws are found for liquor regulation in the State of South Dakota. Chapter 1 provides a nuxnber of definitions;it defines operating agreements,which Brookings uses. Chapter 1 goes on to indicate clearly, that for purposes of the whole tide, the Alcohol Beverages Tide in the State of South Dakota, entities that enter into operating agreements with the City of Brookings are `iicensees'under State Law. McCarty doesn't know if any one has ever really discussed that in great detail in the past,but it needs to be remembered in relation to what is done going forward. That statute in his mind couldn't be a lot clearer, and was definitely passed for a purpose. It makes it clear that the people the council enters into operating agxeements with in the Ciry of Brookings are licensees under the state law, and they have to be counted against the City's quota. He feels that is important to consider in the future as the council proceeds through this pxocess. McCarty believes, and goes to the fact that he understands why there's been confusion on this issue, is because the term`licensee'is not defined in the South Dakota Code,and doesn't understand why not. He feels it certainly should be,and certainly should be in relation to alcoholic beverage laws. The council has obviously had a number of discussions that could have been avoided if it was. He stated the SD Supreme Court has used the defuution as stated for purposes of what a licensee is, 85 although he doesn't think it gives a lot of guidance hexe. The reality is that it is not defined in South Dakota Law for purposes of South Dakota alcoholic beverage laws. (OVERHEAll) The term `licensee'is not defined in the code. Black's Law Dictionary (7`n ed. 1)99), defines `licensee' as (o)ne to whom a license is granted." State of South Dakota v. I- 90 Truck Haven Seruice, Inc. 662 N.W.S 3d 288 2003 SD 51 Bardey commented that this came up during the legislative process too; this particular licensee issue. What the SDDOR, at that time as fax as guidance was concerned,put the term licensee into that bill to help them administrate more than anything else because they didn't want a separate definition of an operating agreement other than what they had. He stated they did agree `licensee'wasn't defined, but they said `licensee'was the same thing as far as they wexe concerned; they considered it more of an adinuustrative definition more than they did a license per se. It is difficult to know what their intentions wexe. McCaxty stated he doesn't dispute those things and thinks that is accurate in te�ns of South Dakota law, and it is in bad shape as fat as the code goes. McCarty stated he found in his research,because what he thought the City of Brookings was going to do in texms of SB126 was to disregard some of what he thought were the restrictions placed on a city before adopting SB 126, that being that you had to sell at a current matket value, and that you couldn't sell a license unless there were no other licenses for sale. He was truly concerned about those two requirements. He felt Brookings was headed in a direction of not following those two, which axe specifically set out in SB 126. McCarty stated he pulled this quote fxom a couple of cases in South Dakota, so that it makes it clear the City Council is subject to the state laws and only has the powers given to it by the state. If the state specifically sets out, or prescribes, the method for applying an enactment, the council has to follow the specific requirements of that law. If the City doesn't do it,it is exercising authority beyond that which given to it by the code. McCarty doesn't think there is an issue with it going forward, as least he hopes thexe isn't. This cjuote is what he tried to say last time he was in front of tl�e council. The council has to follow SB126, and they have to follow what it requires, othetwise they don't get the benefit of the exception. He stated there needs to be authority for what the council's position is; that is his authority for that position, and thinks that makes it a lot clearer fox everybody why we have to do what we are asking to do here. (OVERHEAD) The Constitution and statutes of this state invest municipal corporations with certain powers; they have no powers other than those so granted and such as are incidental thereto. Where specific powers are so conferred a municipal corporation is vested with discretion as to the method of exercising such powers unless the method of such exercise is prescribed or limited by the Constitution or by legislative enactments. Brooking.r- Lake Telephone Co. v. City of Brookings, 430 N.W. 2d 575.577(S.S. 1988);I�obbins v. City of Rapid City, 71 S.D. 171.17G 23 N.W. 2d >44.147(1946). McCarty stated he recognizes Britzman's work and that this is a work in progress going forward. He doesn't have any additional comments right now,not saying that he won't as a draft comes a long, but that he certainly understands Britzman's situation. McCarty restated his position is easier than Britzman's;which is to look at what one is doing and challenge what they are pxoposing is a much easiex position to have than to actually dtaft a document and to get everything right the first time. McCarty recognizes it isn't an easy thing to do and hopes in the long run that a resolution can be had and an ordinance passed that everybody can be satisfied with. Munsterman thanked McCarry for his work and asked if he has been retained by anyone. McCaxty replied,yes, he has been retained by someone. He has discussed this issue with many,but has not been retained by more than one simply for the purposes of avoicting a conflict of interest. McCarty stated he sees the potential for differences of opinion down the road between the operators/ licensees on the interpretation of SB126. As a result, although he has spoken with several,he doesn't want to be in the position of xepresenting moxe than one. Karl Steege, Skinner's Pub, stated he has spoken to Paul Kinsman at SDDOR. He noticed in the license that is on the shelf,he wasn't sure if the council was fully awaxe that the position of the SDDOR is that the city will have to allow lottery with that license. The SDDOR has taken that position very strongly, and doesn't feel that they will decide otherwise in the futute. Steege noticed from the application process, asking fox correction, that the feeling was that lottery licenses are 8 � maxed out and following the moratorium. Kinsman mentioned lottery would have to go with each additional SB126 license. He just wanted to make this clear and it isn't something that hasn't really been talked about. He stated when these additional licenses get issued, everyone will be allowed lottery under state law and we can't limit it as a municipality. He clarified as Britzman stated earlier, there are several people that are eligible for these new licenses. However,if someone meets these criteria, all a business needs to be is a restaurant and have wait staff. If the Council values the licenses at$18,500, and Steege views the valuation of these licenses as a check and balance in the market place;effectively in the city of Brookings lottery licenses could be sold for$18,500. Steege stated an example of`XYZ Diner' that sells eggs, etc., they could apply fox a liquor license, and it wouldn't matter if they ever sell any liquor or how much they sell, but they will have lottery. Steege stated he just wanted to bring that about; there's a long list of e�sting businesses in Brookings that would qualify under SB126. Steege stated he would be able to apply for liquor and lottery and the city couldn't deny them. Steege said that's one of the concerns that he has is that the City of Brookings could end up with 15 or more licenses at whatever price, and how would the City regulate that. He stated it is not a competition aspect, there is a reason there is a moratorium on lottery and there's a reason why there's a limit on licenses. This would open it wide open and maybe at that point we wouldn't have a problem with empty buildings on Main Street, because maybe they'd all be full with liquor and lottery joints. He said that was the comment that he had that maybe the Council would want to consider. Britzman stated the introductory paragraph,Section 1,indicates the governing board of a municipality may issue,but thinks it's optional to issue additional licenses, and as to the number of licenses that would be available, he thinks this could be set by ordinance. He noted that he has not visited with the SDDOR on this point. Bartley stated this is currendy an issue in Sioux Falls and said this will be something to follow up on as Sioux Falls goes through this process. Reed asked in order for a business to have a video lottery license, they only need a malt license. Yes. Troy Hicks,Lantern Lounge/311 Event Center posed a question to Britzman;what happens if a restaurant doesn't meet the 60% criteria,but might be 58%. Hicks also asked if this has been discussed at the state level. No. Britzman commented the statute is clear they have to reach the 60% threshold; otherwise they wouldn't be eligible for renewal. There may be a period where they are not eligible,whether or not they could reapply at some future date, the statute doesn't deal with that. Hicks questioned if they weren't eligible,if they could still get a beer and wine license. Britzman responded,yes, they would be eligible for malt beverage licensing and wine if they have the proper facilities. Hicks' stated his understanding is the state is pushing the Beer and Wine licenses together, and asked if that is correct. Britzman stated he hasn't seen that legislation and has focused on other areas. Hicks stated, as a reference,he knows of several businesses and/or organizations that are one way ox the other challenging this ruling,SB126, to get better clarification. He mentioned the South Dakota Beverage Dealers are requesting a declaratory ruling from the SDDOR on several questions, one being the 58%issue,another being the lottery license. Hicks commented down the road, a lot of these questions we are asking will be answered one way or the other and recommended that the council keep going and hope for the best. Reed asked for one to get to the 60/40%,you'd take the dollaxs of food sold plus the dollars of alcohol sold within the restaurant, nothing else. Britzman said yes,within the restaurant, and the ratio is based on just those two numbers,regardless of what other accounting departments one has within their faciliry. Munsterman stated the remaining question is the maxket value of what the ciry needs to charge for this opexating agreement. He stated we have learned now that we don't have to sell it, that we can continue with the way that we do things here. When it comes to distinguishing what price we set that at,we have to make sure we understand what we can do there,how much that is,before we can step forward? Britzman stated the council needs to take real assertive steps in reaching that conclusion. He recommended keeping two things in mind: 1) We are not getting a lot of input from others throughout the state. He has contacted Yvonne Taylor, SD Municipal League Director and she's 87 going to help coordinate communication. 2) In the meantime,involve people and he and Mr. McCarty could have further discussions about that point. He stated going back to the SDDOR and focusing on that particulaY issue. Munsterman stated he sees a minunum charge of$18,500 verses the last sale,which could be $100,000 or more. He noted there is a big difference and this could be a very important factor to whomevex the council signs on to take ovex that license; that person will need to know what that number is. Bxitzman stated if one Iooks at the overall bi11, that is a real significant point, the most significant one, and yet we still don't have that ironed out. However,he stated it is fair to say that in a couple weeks, at the next council meeting,we should have made some progress in tetms of resolving that. Britzman views that as one of the final issues in the process. Karl Steege said that was part of the point the he made about a month oY so ago to the council, where he thought the big question mark was in valuation. He referenced Garner Hansen,BraVo's and the Shamtock and the city has effectively one "fxee" license left and if the city is talking about promising a SB126 license as a bridge to wherever you are going to go, he doesn't think it's prudent to enter into that until all of these people know how much that bridge is going to cost. He stated that Kip Pharis, BraVo's, may have a different idea of`I can wait, I can take a 126 Iicense.', but if that license is going to cost$200,000 he might not be willing to do that. Steege stated that was his concern from the beginning;he thinks the three applicants were going down a road with a big question maxk at the end and nobody really knew what the deal was. He wanted to clarify what his position was s�weeks ago, and now,maybe we're thexe. Munsterman said he thinks it's becoming clear to everybody. Brendon Sullivan, Safari Lounge, questioned registering a license for sa1e,does every licensee,if they put their business up for sale, do they have to register that with the city at this time? Britzman stated that as of July 1,if it is for sale, then yes,it does call for that to be registered with the municipality. He stated there is not a procedure set yet,but that procedure is part of the proposed ordinance and that is what is referred to as the `registry'. Britzman said as soon as the ordinance is adopted, the state law requires the city to have that registry. He claxified to Sullivan,if a person such as yourself holding an operating agreement,if you desire to offer your business for sale,you would make contact to city hall and provide a couple pieces of information;this is what the statute calls for and it would be on the registry. He stated if someone is interested in the restauxant license, they would come back to that registry, even though you don't hold a restaurant license. He noted the Safari has a regular license and this doesn't distinguish necessarily the SB126 on the registry. Britzman stated if we are giving credence to people who have sold a business in the past 5 years and the city is required to keep track of those, he would assume other licensees would also be eligible to be on the registry. He felt that comment may be hard to follow,but he stated he was trying to be consistent with the discussion if we are recognizing some of our operating agreements as providing a meaningful value ot price for establishing the price for a restaurant license,he would think those would all be on the Yegistry as well. Britzman stated that this is a point that has not been contemplated before. There would be a place for those with an operating agYeement that want to offer it for sale. Britzman feels that for him, this one is a litde more challenging due to the local option environment that we're in. He stated the council is not used to doing that, or giving any recognition to the value of an operating agreement because they've been issued for$1,500. He stated the city has not been involved in any of the financial dealings between someone wanting to sell their business, as far as the value they attribute to the right to sell alcoholic beverages. Munsterman recommended to Sullivan to keep in touch with City Attorney Britzman and City Clerk, Shari Thornes on this issue of listing his business on the registry. Troy Hicks asked Britzman to clarify on the registry, accoxding to state law based on SB 126, that this will be applicable to all licenses, even the unrestricted. Yes, that is how Britzman understands it; if the operating agreements play a part in establishing the value that applies to a restaurant license,he thinks we have to include all of them. Hicks stated that no one has said `yes'this is coxrect, so right now we are assuming that this registry has to include the unrestricted licenses. Britzman Yesponded,yes;this is based on his discussion with the SDDOR,where they reached the conclusion, that a licensee, such as Hicks, his business would be xelevant,if it had been sold in the past 5 years,in establishing current maxket value. Hicks stated his understanding of SB126 would pertain to only restaurant licensees and doesn't have anything to do with his unrestricted license that he is leasing from the city. Britzman stated it does not have anything pertainuig to his unrestricted license that he is leasing from the city. Hicks stated 8 � he is questioning why he would have to do the registry. Britzman, stated for clarity,we know that if there had been a sale in the five years prior to January 1, 2008, the council would have to consider sales of licensees, such as your business,but after that date,whether those fall on the registry and play a part in setting the price for future restaurant licenses is a point we can resolve in the next two weeks. Hicks commented then that speculation is what concerns him. Bardey stated some of the intent of having a registry is for those who have regular licenses. Other communities that have regular licenses,who have established a value and traded those for value,it upholds the value in that respect a litde differendy than it does ours, but the whole intent was even if you have an operating agreement in Brookings, our history has been to transfer an operating agxeement if it has been in the same location and the applicant is of good morale character and meets those criteria. He stated it is always part of a purchase agreement in this community when ' you buy a bar with an operating agreement,the sale is contingent upon the transfex of the operating agreement, otherwise it has no value. Bartley clarified the intent is if you own a bar,it's not a restaurant,it's a bar, the City is still restricted on the number of those licenses. He stated if you own a bar and you want to sell it as a bar,you are not subject to SB126 other than you have to tell us that it is fox sale. He further clarified if someone wants a license under SB126,the City can say this place wants to sell theirs,if you can make a deal,then fine,if you can't then you can come back and apply for a license. He stated it is fairly specific in this bill that you have to go to a registered licensee first, and offer to buy their license. He stated he knows that may not work real well under the City of Brookings system,but it does in other communities. He stated the intent is that it upheld the value of those people who have an operating agreement that's not restricted to be able to still sell their business,get a guaranteed transfer from the city and a purchase agreement arrangement. He stated they would still have some protection of value even in the City of Brookings. He stated one can have some protection,of whatever the perceived value is,if they want to sell that license to anyone else for a bar,because the city can't get any more bar licenses;the City of Brookings is still restricted under state law on that one. He stated the only one this involves is a restaurant license. He stated again the registry helps, so if one has their business for sale, the City tells the buyers they need to get a hold of you first. If they can't make an arms-length transaction with you and make a sale, then they can come back to the city and apply for a restaurant license. Bartley stated it guarantees those that have an operating agreement, and want to get out of it,have the first opportunity to do so;that is essentially what the intent of the bill was. Britzman agreed with Bardey and reminded the council that once the current market price is set, which is to be set in the first 90 days after adoption of the ordinance, that price is set for the next 10 years for our restaurant licenses. The value that any other licensees might attribute after January 1, 2008 to their license,they ma.y offer fot sale fox X amount of dollats,but the council will have established under the statute the current market price, and under state law SB126, that price stays the same for 10 years. Those will not have a bearing, no matter what they offer them for. They will not alter the current market price for 10 years on the restaurant licenses that will be issued 10 years after adoption of the ordinance. 6:00 P.M. CI1'Y COUNCIL MEETING Consent Agenda: A motion was made by Whaley,seconded by Reed to approve the consent agenda as amended,which included: A. Agenda. B. Action to approve City Council Minutes from the Apri129 Meeting. C. Action on Resolution No.37-08, a resolutian awarding bids for 2008-06STI, Chip Seal Project. Resolution No.37-08 Resolution Awarding Bids on Project 2008-06STI Chip Seal Project Whereas,the City of Brookings opened bids for Project 2008-06STI Chip Seal Project on Tuesday,May G,2008 at 1:30 pm at Brookings City�Iall;and Whereas,the City of Brookings has received the following bids for Project 2008-06S'IT Chip Seal Project: TopKote,Inc., Yankton,SD $183,900.00 Now Therefore,Be It Resolved that the low bid of TopKote,Inc., Yankton,SD for the lorv bid of j183,900.00 be accepted D. Action on Resolution No. 38-08, a resolution awarding bids for 2008-05STI,32nd Avenue Street Project. 89 Resolutioh No.38-08 Resolution Awarding Bids on Project 2008-05STI 32"d Avenue Street Project Whexeas,the City of Brookings opened bids for Project 2008-OSSTI 32°d Avenue Street Project on Tuesday,N1ay 6,2008 at 1:30 pm at Brookings City Hall;and Whereas,the Ciry of Brookings has xeceived the following bids fox Project 2007-05STI 32°�Avenue&Prince Drive Stxeet Project: BASE BID (32°a Avenue):Bowe.r Con.rtruc•tion,Brnokingr ,8451,905.60 Alternate Bid(Remove waste material):Bowe,r Con.rtnrction,Brookingr ,� 73,095.36 Now Therefore,Be It Resolved that the low bid of Botve,r Con.rtrrrction,Inc.for the Bare Bid of ,5451,905.60 be accepted and that the Alternate Bid be njected. On the motion, all present voted yes; motion carried, Presentation of the Annual Mayor's Awards for Historic Preservation The Mayor's Awards program began in 1986, to acknowledge property owners who save and maintain historical properties within the City of Brookings. During Presexvation Week or Month each year, the Brookings Historic Preservation Conntnission in coopexation with the Mayor's Office,recognizes work which enhances properties at least 50 years of age. Vice-Chair of the Brookings Historic Preservation Commission, Mary Bibby,made the pxesentations to the following five award winnexs: Neighborhood Revitalization—First Bank&Trust Community Development Corp; Overall Commercial Restoration—Wachovia Securities and Scott&Deb Domituack;Overall Residential Restoration—David& Sara Kneip;Restoration of Unique Architectural Features—George's Pizza; and Individual Service to Historic Preservation—Stephen Van Biaren. 1s` Reading- Ordinance No. 18-08. Fixst reading was held on Ordinance No. 18-08,An Ordinance Amending Section 58-36 of the Code of Oxdinances of the City of Brookings, South Dakota and Pertauung to Fleeing from a Police Officer in the City of Bxookings, South Dakota. 2"� Reading: May 27'h 161 Reading—Ordinance No. 19-08. First reacling was held on Ordinance No. 19-08,An Ordinance Amending Section 82-1 of the Code of Ordinances of the City of Brookings,South Dakota and Pertaining to the Definition of Police Officer in the City of Brookings, South Dakota. 2"d Reading.• May 27'h 18`Reading—Ordinance No. 20-08. First reading was held on Ordinance No. 20-08,An Ordinance Establishing Traffic Rules for Vehicle Operation in the Ciry of Brookings, South Dakota. 82-253. Stop required upon approaching stopped emergency vehicle using signals. Z"`'I�eading: May 27'i, 18t Reading—Ordinance No. 21-08 First reading was held on Ordinance No. 21-08,An Ordinance Establishing Tra£fic Rules for Vehicle Operation in the City of Brookings, South Dakota.. 82-254. Yielding right-of-way to emergenry vehicles -Dury of driver of emergency vehicle not to exexcise right-of-way arbitrarily. 2"`�Reading: May 27''' 1a`Reading—Ordinance No. 22-08 First reading was held on Ordinance No. 22-08,An Otdinance Amending Brookings Ordinance Section 82-302 and Pertaining to the Requirement that Speed of a Vehicle be Reasonable under the E�cisting Conditions. 2nd Beading: May 27'h 18`Reading—Ordinance No. 23-08 First reading was held on Ordinance No. 23-08,An Ordinance Revising Ordinance Section 82-563 and Pertaining to Prohibited Obstruction of Vehicle Windows in the City of Brookings, Sonth Dakota. 2"`'Reading.• May 27'� 1st Reading—Ordinance No. 24-08 First reading was held on Ordinance No. 24-08,An Ordinance Establishing Regulations Prohibiting Vehicle Windshield and Front Window Obstructions in the City of Bxookings, South Dakota. 2"�Keading: May 27'� 1g`Reading—Ordinance No 25-08 First reading was held on Ordinance No. 25-08,An Ordinance Establishing Regulations Prohibiting Certain Vehicle Windshield Sun Screening Devices in the Ciry of Brookings, South Dakota. 2"`�Reading: May 27`�' 9n 18`Reading—Ordinance No. 26-08. First reading was held on Ordinance No. 26-08,An Ordinance Establishing Regulations Prohibiting the Operation of Improperly Repaired or Adjusted Vehicles in the City of BYOOkings, South Dakota. 2"`�Reading: May 27'� 18` Reading—Otdinance No. 27-08. Fixst reading was held on Ordinance No. 27-08, an Ordinance Prohibiting Graffiti and Establishing Procedures for Removal of Graffiti in the City of Brookings, South Dakota. 2""Reading: May 27'� Public hearing—House Movin� A public hearing and action was held on a house moving request from John and Ciara Bos to move a one-story, ranch style house from Springfield, SD (Governor's House) to Lot 1,Block 3,Esther Heights Addition, also known as 2006 David Cove. No comments were received. A motion was made by Reed, seconded by Whaley to approve. All present voted yes;motion carried. Ptesentation on Brookings Municipal Lic�,uor Store (BMLS) Financials City Manager Weldon ptovided an update on the pxogress that's been made and some of the issues going on relative to the finances and the sales report of the BMLS. He sta.ted he will be sharing some additional comments relative to some of the changes they have been looking at, specifically some standardized Yeports, and bringing to the council on a regular basis, an update as to how things are going. He stated there is a segregation of the two basic liquor store functions: 1) operating agreement provision in regards to override, and 2) brief financial report on the retail liquor operation report itself. He stated the council will need to total the two bottom lines to get the entire financial picture. Bill Purrington started by clarifying the override portion of the BMLS; split into the operating liquot, operating beer (the liquor licensees of the operating agreements),and the malt beverage,which is convenient stores,grocery stores and some on-sale malt beverage license businesses. Purrington stated the sales are significant;which include the purchases plus the maxk-up. The gross pxofit is $801,425. The total business in 2007 was $4,765,308,gross profit was $438,486, and net profit $398,486. Those sales grew by$364,000 from 2006, and the gross profit grew $32,175. He stated the retail portion of BMLS is split into retail liquor,wine,beer, and the miscellaneous categories of lottery and miscellaneous sales. He stated the net sales o£liquor is about half of the business;liquor sales of$1,491,892,wine sales of$815,257, and beer sales of$725,541. Sales have increased: liquor by$133,907,wine by$122,609,and beer by$70,133. Purrington stated the BMLS broke the$3 million sales mark with$3,188,930 in sales, a gross profit of$645,285,which totaled a 20.24%increase in gross profit. Current expenses for BMLS totaled$192,566,personnel$313,248, capital (any capital items purchased under$5,000 in value are expensed,rather than depreciated,and operate with a 15-year depreciation schedule) is $43,053. Non-operating revenue interest of$8,854,rent (1,000 square feet to Hy-Vee) for$5,200,with total income of$105,292. Brunner questioned other income under operating expenses? Purrington stated this is cash over and short. Purrington commented the 15` Quarter of 2008 has shown some significant increases over 2007: liquor sales of$362,009 ($21,000 increase),wine $192,628 ($19,000 increase),beer$168,460 ($15,000 increase),with the total sales of$762,273 ($62,000 increase). He commented they've had a total gross profit of$166,310 ($19,234 increase), showing a 13%increase. Sales increased just about 9% and showed a$26,265 net income. Purrington clarified on the 2007 Financial, the operating transfer to the general fund totaled $670,000. He stated they were budgeted for$370,000 and an extra$300,000 came from the sale of the old building. The money went in the yeat before last,2006,but was not transferred into the general fund unti12007. Bartley asked if the$300,000 from the sale of the property in 2006 that was added in this transfer, was any of it used any for new store construction. Rita Thompson, Finance Officer, answered no, they used reserves in their account to do the remodel. Purrington looked at five different scenarios fox a $300,000 increase per year for retail, then went to five, six and seven percent increases in sales. His assumption was current expenses and personnel expenses would increase 3%per year. He stated in the 7-8% scenarios, the numbers start to look 91 pretty good. In the fifth year, 2011, the net profit starts to get where think we should be and from there on it will be more than 4-5 times over last year. Purrington believes the gross pxofit of the operating agreements will increase $20-30,000/yeaY. He commented that within 10 years,if these numUers hold true,BMLS will exceed the operating agreements at that point,which means the bottom line number will be well over$1 million. Bardey asked Purrington if his projections took into account any addirional operating agreements for restaurants. No, they used the history of the past,and the recent past and of course that will increase that number. Baxdey stated it would be reasonable to assume that it will increase that number. Bartley asked Purrington i£he could help the council with the operating agreements for SB126 and restaurant licenses to provide the council some numbers as to what they might see from a typical restaurant licenses if issued 1,2,3,4,5 licenses. Yes. Bardey is interested in knowing the average figure income from operating agreements and feels it would be important to know as the council goes forcvard. Purrington stated if they do a reasonable amount of business, they should genexate$Z0,000-40,000 in revenue depending upon what the business is. Some generate quite a bit more than that xight now; these are not restaurants, this new entity we are talking about. Bartley stated he was patticulaxly interested in restaurant operations only. Yes,Purrington stated he could isolate some testaurant numbers, but didn't have them with him. Munsterman asked on the labor personnel costs,between the 5% and 8%, the same percentages are penciled out. He stated if you look at the 5%increase versus the 8%increase in 2012 that is a $600,000 difference in business that is going out the door. He questioned if Purrington was confident he can do that with that same labor percentage. Purrington feels he can, but would obviously have to have a litde bit more part-time help,but would be an insignificant incxease. Purrington stated by the end of 2008,BMLS will have increased business over$750,000 and setded into a pattern of staffing that mixrored closely to what the old store did with staffing levels. Purrington doesn't see a need for many additional people, except for maybe during the holidays when xestocking is such a huge issue. Munsterman noticed they were keeping the gross proft at 20%, and asked if there was a reason they are not going over 20%. Purrington commented that he and Weldon are curxendy discussing this and they have some plans in that area, but that's been about the percentage, and used it for the sake of projections. Puxrington stated that obviously anything more than that would increase the third line/gross pYOfit line. Reed wasn't sure when the vote was made to move the stoxe,but on Octobex 11, 2007 presentation, he noticed the store was on track for projected sales of$3.2 million. What he is wondering about is that the bottom line isn't what was oYiginally planned on, as they wexe hoping,not counting depreciation, to clear$218,000. Reed asked in the current expenses of$192,000 if that includes the lease. Yes. Reed asked in the current expenses af$125,000,where are the extra expenses coming from? Purrington tesponded that he likes to compate these numbers to Z005, the last year in the old stoYe; the biggest expense was the lease of$75,000. There are also increased energy costs of$6,230, for considerably more space,and a credit card discount/pxocessing fee of$16,083 which is a direct function of the amount of business done. The more business that is done, the moxe paid in processing fees. Purxington stated this has gone up considerably,but business has gone up considerably. He stated there are a few other expenses that amount to $800 or$1,000,but those three are the big ones. Reed asked if the majox expense, the lease, more expensive than originally thought. The Incxease in current expenses was $114,000 and that makes up $97,000. Reed asked what the lease expense was. $75,000. Reed questioned the $45,000 lease price that was stated originally. Purrington stated part of that was the common area maintenance charges which is roughly$2,500/month. Purrington stated they received a rebate of$5,000 in 2007. He stated Mills Pxoperty Management has taken over the building, and they now receive a bettez accounting of the expenses, and axe very pleased with theix management and the$5,000 rebate. Weldon commented the Liquor Store will be pxoviding different standardized reports, similar to the reports seen in the packet fox Year-End 2007 and First Quarter 2008. He hopes the council fmds 9 � them easy to follow, and if more detail itemized informarion is needed, that information will be available to them. Weldon stated it is instructive and helpful that we look at the operating revenue as separate from the retail. They are two sepaxate and distinct functions of liquor stores,and especially in our situation it is helpful to see where we are incurring the costs and how that breaks out. Secondly, these reports will be provided on a monthly basis as well as quaxterly reports to the council and the public,which will be started right away. He stated they are concentrating on a couple signs of the financial health of the Liquor Store. They will be looking at customer count,gross sales,increase percentage of gross sales,gross profit,gross profit margins, net profit, net profit margins, and finally the transfers to the general fund, as part of the bottom line. Staff will be following the Griffin Report,which the council commissioned as a precursor to moving the liquor store some time ago,and there was some very helpful instructions about we can modify the report in the store. Following that,we will be striving for 20-25%gross profit margins and net profit margins of 8-10%. Weldon stated in this report BMLS is at 3.3% for the year and has a ways to go. One of the reasons, as Bill mentioned,was a significant amount of capital improvements from the store that was a carryover from 2006 into 2007. This won't be in the future, so there will be a truer picture to that in 2008 of what that looks like. Weldon stated one thing they axe going to focus on is the net profit margin. He stated one of the things already done is restructuring management,which has realized a$10,000 savings in personnel costs,and will be looking to do more judicial use of structuring part-time clexks and part-time employees in the futuxe. He said the Griffin Report suggested going through attrition by one full- time employee. They have recendy received the resignation of one full-time clerk, and will not be filling that position immediately. So, he made note BMI.S will be down one full-time clerk at this time. Weldon clarified that he will pxobably budget for that position in the 2009 Budget just as a safety valve if they discover it that doesn't work, especially if gross sales continue to take off. They will be giving this a try first as per the recommendation of the report and see what happens. Weldon stated they will also be following the Griffin Report recommendations on markups. Bill has already been doing that and will be spending about$20,000 between now and the end of the year for advertising;being more aggressive on advertising and marketing. Weldon stated they are going to give those issues a try and axe confident this will be profitable for the community. Reed and Bartley commented the reports are great and in an easy-to-read format. AD HOC Committee Regarding Liquor Issues. Bardey commented there are a lot of things coming up in regards to liquor and some of the information needed for SB126 and those licenses. He would like to suggest to the council, the Ciry Charter allows at the direction/approval of the council for the City Manager to appoint an Ad Hoc Committee to woxk on an issue,and he feels this is one of those issues that this is important,all these liquor issues, that have to get done by July 1. He feels it may be a litde easier, especially if Britzman is going to work with the SD Municipal League (SDML), to have an Ad Hoc Committee,as the entire council can't all meet with SDML. He suggested some type of Ad Hoc Committee of the Council that would be appointed by the City Manager. He suggested that this be done this evening, to direct the City Manager to set up an Ad Hoc Committee to address the liquor issues and report back to the council, and take testimony from the public, SDML, SDDOR,Bill Purrington,etc. Weldon commented this has been talked about,and it might help the city streamline the process a little bit more. He stated what the council has is a series of liquor-related bills that the legislature has approved,which the city will need all local ordinances for. He thinks the council can pigeon hole those together in the same sort of productive process. ACTION: Motion was made by Bartley, seconded by Brunner, to direct the City Manager to form an Ad Hoc Committee referring all the liquor issues to that committee to report back to the council before July 1. Reed asked if this Ad Hoc Committee was specific to the other liquor issues or SB126. Bardey clarified it would include SB126 as well as the others. He stated there needs to be some information gathered still from the SDDOR,which Britzman is going to work on,and there also needs to be some infortnation garnered from some of the other communities that are going down the same path. He stated if you are going to have meetings with those people,he feels sometimes it is beneficial to not only send Britzman,but a council member or someone on the Ad Hoc Committee 93 to those meetings;you get a better feedback. Also, he also feels it wiil allow the public to come to these subcoinmittee meetings;publish meeting notices. He wants the public to come, make testimony, make the request, have input on tl�e process, rather than just coming to the council. He doesn't think there are enough council meetings between now and July 1"to do this effectively, and believes a subcomuiittee could probably peYform that function foY the council. Reed commented now understands why SB 126 would be a part of the Ad Hoc Committee. Bartley stated all of those issues need to be resolved by July 1"if possible. Munsterman stated if any of the Council was interested in serving on this committee, to submit their name to City Manager Weldon. Bardey suggested leaving the makeup of the committee to the City Manager,and he can determine if he wants other people, not just council members, to serve on the Ad Hoc Committee. On the motion, all ptesent voted yes;motion catried. Executive Session. A motion was made by Reed, seconded by Whaley to enter into executive session at 6:52 p.m. for marketing and pxicing strategies with the City Council,City Managex, City Attoxney, Deputy City Clerk and Steve Meyer,Btookings Municipal Utilities present. All present voted yes;motion carried. A motion was made by Reed, seconded by Whaley, to exit executive session at 7:49 p.m. All present voted yes;motion caxried. No action was taken. Executive Session. A motion was made by Bardey, seconded by Whaley, to enter into executive session at 7:51 p.m. to consult with 1ega1 counsel concerning contractual issues with the City Council, Ciry Manager, Ciry Attorney, and Deputy City Clerk present. All pxesent voted yes;motion carried. A motion was made by Bardey, seconded by Reed, to e�t executive session at 8:29 p.m. All present voted yes;motion carried. Ad,�ourn. A motion was rnade by Brunner, seconded by Whaley, to adjourn. All present voted yes; motion carried. Meeting adjourned at 8:31 p.m. CITY OF BROOKINGS � C.TY pFg � o-a,,•"INCpRp:�'o cott D. Munsterman,Mayor �O��1"'�'��!�i �,0 Z T ��1�:' C t �•F v`C1. t �� Shari Thornes,City Clerk ,