Memorandum

City of Lawrence

City Clerk’s Office

TO:	David L. Corliss, City Manager Toni Wheeler, Director of Legal Services
FROM:	Jonathan Douglass, Assistant to the City Manager/City Clerk
CC:	Diane Stoddard, Assistant City Manager Cynthia Wagner, Assistant City Manager
DATE:	September 16, 2010
RE:	Proposed sidewalk dining and hospitality license changes

The City Clerk’s Office administers sidewalk dining licenses pursuant to Chapter 6 Section 12 of the City Code. Staff would like to suggest a number of changes for City Commission consideration to streamline the application process.

Adjacent Property Owner and Tenant Permission

The current code requires applicants for new and renewal sidewalk dining and hospitality licenses to obtain statements from adjoining property owners and tenants expressing a lack of objection to the proposed sidewalk hospitality use. If the applicant is unable to obtain such statements a public hearing must be held to determine whether to grant the license. As the City Clerk’s Office has processed renewal applications, this particular requirement has caused frustration to numerous applicants who have not found objection from neighboring property owners and tenants, but simply non-response. Adjoining property owners are sometimes non-local and difficult to contact and get a response. As a result, some sidewalk dining renewals have been difficult to process. Staff is saving up a number of such renewals to hold one public hearing for all of them in order to judiciously use the City Commission’s time. In the meantime the sidewalk dining and hospitality areas are allowed to continue operating.

Staff suggests requiring the statements from adjoining property owners and tenants for the initial sidewalk dining and hospitality license, but eliminating the requirement for renewal licenses. This would greatly streamline the renewal process for the applicants and staff, and the City Commission would retain the right to revoke any license pursuant to Section 6-1202.10 if at any time the Commission finds that action appropriate. Suggested language to accomplish this change follows.

6-1202.1            The proposed sidewalk hospitality use shall be pursuant to the written permission of the record and equitable property owner for the applicant hospitality establishment. Further, the applicant for any new or renewal license shall submit a written statement from each adjoining property owner, and any tenant of each adjoining property expressing a lack of objection to the proposed sidewalk hospitality use. In the event that an adjoining property owner or the tenant of an adjoining property fails or refuses to sign such a written statement, or upon the request of the City Commission, a public hearing will be held by the City Commission to determine whether to grant the license. At such hearing, the City Commission will hear such testimony and receive such evidence as is necessary for it to determine whether it is within the public’s interest to approve such use and shall make findings of fact sufficient to support its decision. The applicant and all adjoining property owners shall be provided written notice of the date and time of such hearing at least ten days prior to its occurrence. Notice shall be provided by first class mail or delivered in another manner that is reasonably calculated to cause such notice to come to the attention of its intended recipient. In the case of mailed notice, the notice shall be deemed to be effective at the time that it is mailed.

Possession and Consumption of Alcohol on the Public Right-of-Way

The City Commission recently adopted Ordinance No. 8515, which, among other things, authorizes the possession and consumption of alcohol on the public right-of-way pursuant to a sidewalk dining and hospitality license. Therefore, a small clean up item in the sidewalk dining ordinance is warranted, to remove the requirement for the applicant to pay the costs of an ordinance granting exemption to the prohibition of alcohol on public property, since such ordinances are no longer necessary. Suggested language follows. 

6-1202.4            The City Commission may grant permission for the licensee to serve, and patrons of the licensee to possess and consume alcoholic liquor and/or cereal malt beverages on the sidewalk, pursuant to Chapter 4 of the City Code. The licensee shall pay for the publication costs of an ordinance granting exemption for the possession and consumption of alcoholic liquor on City right-of-way. The licensee shall comply with all state and City laws pertaining to the sale of alcoholic liquor and cereal malt beverages. If food is served by a licensee anywhere on its premises, then, as a condition of licensure, food service must also be available in the sidewalk hospitality area during the same times and at the same prices as food is available inside the establishment.

Sales and Liquor Tax Forms

The current city code requires the applicant for a new or renewal license to submit copies of their completed and filed State of Kansas sales and liquor tax forms for the prior twelve consecutive months. This is a redundant requirement because applicants that hold drinking establishment licenses already have to submit that information, and the information is meaningless or not available for applicants that are not drinking establishments. Staff recommends the following change to the code, which eliminates the requirement to submit completed sales and liquor tax forms upon application for a sidewalk dining and hospitality license, but retains the city’s ability to request that information when appropriate. 

6-1202.5            The licensee shall make available to the City copies of completed and filed State of Kansas sales and liquor tax forms of the food service establishment. The forms for the prior twelve (12) consecutive months shall be provided to the City Clerk at the time of initial application and one month prior to license renewal. Upon the request of the City Clerk, the licensee shall make available copies of the completed and filed State of Kansas sales and liquor tax forms of the food service establishment for the prior twelve (12) consecutive months at any time for use by the City Commission in consideration of the revocation or suspension of the license.

Insurance Requirements

Current city code requires the licensee to carry an insurance policy insuring the licensee, and the City of Lawrence as an additionally named insured, in an amount not less than $500,000 single incident. Staff recommends changing the language to simply require proof of insurance and notification of any changes to the coverage, rather than having the city as a named insured. This change accomplishes better protection for the city for two reasons. First, the city currently does not know if insurance lapses or is changed after the proof of insurance is initially submitted. Second, naming the city as an additionally insured may suggest that the city accepts some liability for activities in the sidewalk dining and hospitality area. Consultation with Legal and Risk Management staff resulted in the following suggested language.

6-1202.11          (A) Insurance. The licensee shall carry an insurance policy issued by a company licensed to issue insurance in the State of Kansas, insuring the licensee, and the City of Lawrence as an additionally named insured, in an amount not less than $500,000 per single incident, for any liability associated with the failure of the licensee, its employees, agents, servants, invitees, and patrons to exercise due care and diligence in the use of the sidewalk. The licensee shall provide the City with a certificate of insurance on a standard ACORD form, or a substantially similar form approved by the City Clerk or his or her designee, establishing the licensee maintains currently active insurance.  The certificate of insurance shall require the insurance carrier to notify the City at least thirty (30) days prior to any change in terms and conditions of the policy, including cancellation for any reason, and prior to expiration of the policy term.

Staff believes that the changes suggested in this memo will improve the regulation of sidewalk dining and hospitality areas, as well as streamline the application and renewal process to offer better customer service to license applicants.