KLC attorney and Prestonsburg mayor attend Inez City meeting

BY ROGER SMITH
MOUNTAIN CITIZEN

INEZ — Kentucky League of Cities attorney Megan Griffith and Prestonsburg Mayor Les Stapleton attended the Inez City Commission meeting Thursday to help the Commission prepare for the transition to alcohol sales.

“It’s important for you all to understand today that you all are going to have alcohol sales in your community regardless of if you do anything or not,” Griffith began. “You may want to pass an ordinance and get your rules and regulations in place because 60 days after the election results are certified, which was [Nov. 13], people can sell alcohol here regardless of if you make them pay a fee, set the hours, or what have you. You want to get ahead of it so that they have the structure in place.

“Without an ordinance, you will not collect any fees; all the fees will go to the state. And you will not have any authority to set Sunday sales or hours. That’s the main kind of policy decisions you all are deciding.”

Commissioner Jennifer Wells asked about the difference in the license fee and alcohol sales tax.

“Those are two separate issues,” said Griffith. “The state law sets out license fees, so if someone has a restaurant and wants to sell alcohol, there’s a certain fee that they would have to pay. It’s usually $500 to $1,000. That’s separate from — they call it a tax, but it’s really an alcohol regulatory fee. And that’s for populations of 20,000 or less, and it’s up to 5%. The mayor and I have been talking about this issue, and it’s a very complicated issue. I’ll explain why it’s complicated: That fee is supposed to offset police administration and regulation of alcohol. So, the thought is you now have this in your community, so it’s going to take police resources to police it… That isn’t to say you can’t spend the money on other things related to alcohol, like alcohol education, but it’s not going to be able to pay your electric bill. So, the fees and the tax are separate issues, and you all have the authority to decide if you want to impose that tax.”

Wells asked how the city would know how much alcohol a restaurant sells.

“It is on the gross receipts, the gross sales of alcohol. It would be up to them to do a return and say this is how much we sold and this is how much we owe. They would fill it out and then remit the tax to you all,” explained Griffith.

Mayor Daniels stated, “The city cannot set the percentage of alcohol versus food sales.”

Griffith elaborated, “The state has set the rules and they have told the city what you can and can’t do. Basically, what you can do is say we want Sunday sales or not and set the hours, and you can collect a fee for the licenses and the alcohol regulatory fee. That’s about the limit of your authority. Everything else is already set out in state law.

“So if a restaurant sells 50% of its gross sales in food, they are eligible to apply for an NQ2 [Non-quota Type 2 retail drink license]. You all don’t have the authority to change those percentages because it’s already set in state law.”

Daniels asked if the percentage was 51/49, to which Griffith said, “It’s 50%. That’s just for restaurants. That isn’t for, say, if you have a different type of business, like a bar. It’s just that it is a different type of license. Just because a restaurant doesn’t sell 50% or more of food doesn’t preclude them from selling alcohol. It’s just a different type of license.”

Griffith added that seating limits apply to moist areas, “but where you all went fully wet, those limits don’t apply to you.”

Daniels asked Mayor Stapleton if he had sports bars in his city.

“We do. As a matter of fact, just about all of our restaurants have a TV of some sort. It may not be a sports bar, it may be a local channel, or it may be something else,” Stapleton said. “You go to Stonecrest Golf Course, we have a restaurant, and they have a bar. When big games are on – you know, UK is a big game, the Super Bowl – everybody’s having those parties and it’s a big seller for them, big revenue.”

Commissioner Nita Collier asked about limits on the number of gas stations selling alcohol.

“The only limits are on quota retail packages and those are your traditional liquor stores, not your gas stations selling packages of beer,” said Griffith. “It’s distilled spirits and wine by the package. Those are limited to a population requirement. In the city there would be two available licenses for retail package sales, but all other licenses are not restricted by population.”

Wells asked about alcohol sales at the historic courthouse.

Griffith said the organization that runs the historic courthouse would apply for a specific type of license for qualified historic places.

Stapleton stated that Prestonsburg usually works through a local restaurant: “We allow them to come in and utilize their catering license.”

Griffith said, “That’s a great point. Just because it’s qualified historic doesn’t mean they have to have their own license. You can use a caterer or get a special temporary license. It’s a different kind of license. Basically it allows you to have a one-time thing, not a licensed premises ongoing.”

Wells then asked if there was any kind of restriction regarding churches and the sale of alcohol.

“No,” Griffith said.

Wells’ next question was about alcohol sales and consumption at festivals.

“It depends on who is applying for the license,” answered Griffith. “You can have a nonprofit apply for the license or the city can apply for the license. I don’t recommend that. I would have some outside entity apply for that special temporary license. You can use city property, but it’s just saying that it’s a temporary one-time event.”

Commissioner Roy Penix asked about having open containers at festivals.

“That’s a tricky question,” Griffith stated. “If you have a courthouse square and you’re going to have your festival there, whoever applies for the special temporary license can designate the area where the event is happening. Then a person would be able to walk around in that festival area with alcohol. They can’t walk down Main Street to like the closest bar.”

Wells asked Griffith about the legality of souvenir alcoholic beverage packages at festivals.

“You can have that,” stated Griffith. “That leans more toward what is called an entertainment destination center. Some cities have kind of permanent areas where they allow people to walk in and out. I don’t think you all have the kind of population or businesses to do that, but you would do those special temporary licenses.”

Griffith advised the commission that the KLC would help the city prepare its ordinance and ensure it contains everything the city needs. She and Stapleton also told the commission to contact them anytime, and they would answer their questions.

The next Inez meeting is set for Dec. 14 at 6 p.m.