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Home My WebLink About8.2 Attch 1 CCSR 01-17-2012~F D C~~~ ~~~~llv ~y~ ~,,,`IIII~~ U1 \~ ~'1~~ `~' DATE: STAFF REPORT CITY COUNCIL CITY CLERK File #560-90 January 17, 2012 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager ~~ Y` `~ ~ rl~~"kw-~~'~~ _~J SUBJECT: Report on Tobacco Retailers Ordinances Prepared by Martha Afa, Environmental Coordinator and Roger Bradley, Assistant to the City Manager EXECUTIVE SUMMARY: Fiscal Year 2011/2012 City Council initiated work plan goals direct Staff to develop zoning restrictions for new tobacco retailers within the City. FINANCIAL IMPACT: There would be a financial impact associated with the preparation of an ordinance. The Fiscal Year 2011/2012 budget includes sufficient funds to cover the necessary legal review of the ordinance. RECOMMENDATION: Staff is requesting that the City Council: 1) review the Staff report and provide feedback and direction on any preferred option(s) for the development of possible future ordinances affecting Tobacco Retailers and 2) direct Staff, if appropriate, to prepare ordinance proposals with the preferred options. ,. Submitted By Assistant to the City Manager DESCRIPTION: i7 r Reviewed By Assistant City Manager Background A Fiscal Year 2011/2012 City Council initiated work plan goals directs Staff to develop both a zoning restriction for new tobacco retailers within the City (Health and Welfare, Item F) as well as a licensing system for all tobacco retailers (Health and Welfare, Item E). A tobacco retailer is any person or business which sells, offers for sale, exchanges or offers to exchange any form of consideration tobacco, tobacco products and/or tobacco paraphernalia. Page 1 of 9 ITEM NO. 8.2 ATTACHMENT 1 The Zoning Ordinance amendment would establish development standards and regulations for the siting of new tobacco retailers within the City. Among other things, the ordinance would establish a minimum distance that tobacco retailers would need to maintain from areas where children are present. Studies have shown that tobacco use among the youth continues to rise with a particular impact upon high school students. Numerous California cities and counties have adopted ordinances to regulate the siting of new tobacco retailers. The Center for Tobacco Policy and Organization created a matrix of local ordinances (Attachment 1) restricting tobacco retailers within a certain distance of schools. The matrix is dated April 2011 and includes 24 California cities and counties, of which five are cities within Alameda County. In addition to a proposed Zoning Ordinance amendment, Staff was directed to present options for a local tobacco retailer licensing system. The purpose of a local licensing program is to ensure compliance with the business standards and practices of the City and to encourage responsible tobacco retailing while discouraging violations of tobacco-related laws, especially those which prohibit or discourage the sale or distribution of tobacco and nicotine products to minors. In general, any store that would wish to provide tobacco products for sale to the community would have to first obtain a license from the City before so doing. A licensing system is beneficial to the City in at least two ways. First, it provides the City with a strong local enforcement mechanism in penalizing the sale of tobacco products to youth. Violators of such an ordinance could have their licenses revoked for selling tobacco products to underage individuals and/or face significant fines. A second benefit is that a licensing program generally requires a fee to obtain the license, which could be used to cover the cost of enforcement and other tobacco related administrative costs. For many years, the Alameda County Public Health Department has provided the City with grant funding to conduct compliance checks with youth decoys, but in these difficult financial times, such funding may not always be available. ZONING ORDINANCE OPTIONS Current Law • There are currently no local Zoning Ordinance regulations that specifically place restrictions upon tobacco retailers. Under the current regulations within the Zoning Ordinance, tobacco retailers are treated the same as any other retail use. State Law • No applicable laws or standards. Policy Consideration: Minimum Distance from Areas Where Children Are Present To date, five Alameda County cities have adopted ordinances to restrict tobacco retailers from a certain distance of where children are present, which include: 1. Union City -ordinance prohibits the siting of tobacco retailers within 1,000 feet of schools, parks, playgrounds, libraries, recreation centers, religious intuitions or youth- oriented establishments. 2. Albany -ordinance prohibits the siting of tobacco retailers within 500 feet of schools, childcare centers, public libraries, public community centers, parks or playgrounds. 3. Oakland -ordinance prohibits the siting of tobacco retailers within 1,000 feet of schools, residential zones, libraries, parks, playgrounds, recreational centers or licensed daycare facilities. 4. Berkeley -ordinance prohibits the siting of tobacco retailers within 1,400 feet of schools or public parks. Page 2 of 9 5. San Leandro -ordinance prohibits the siting of tobacco retailers within 1,500 feet of schools, parks, libraries or recreational facilities. Of the statewide policies, the restrictions from schools range from 500 feet to 1,500 feet, with the majority (14 of 24) restricting sales of tobacco within 1,000 feet of schools. In addition to schools, the majority of the policies (18 of 24) also restrict tobacco retailers within a certain distance of other youth-oriented areas. The most popular other location is parks and/or playgrounds, which 18 cities and counties restrict tobacco retailers near in addition to schools. Attachment 2 includes the locations in the City where children congregate (schools, existing parks, future parks, library, daycare centers and City owned and operated recreational facilities). There is a 500 foot and a 1,000 foot buffer around each of these parcels. Decision Point: Determine the appropriate distance to maintain from a tobacco retailer to an area where children are present and the youth-oriented areas that should be included. Consequences: The greater the minimum distance required from a tobacco retailer to areas where children are present and the more types of areas included will result in fewer locations where new tobacco retailers will be able to locate. What is the minimum distance that should be maintained from a tobacco retailer to areas where children are present? ^ 500 feet ^1,000 feet Which areas should be included in the ordinance? ^ Schools ^Libraries ^ Parks ^Playgrounds ^Youth Center ^Arcades ^ Licensed child care facility or preschool ^City owned & operated recreational facilities Policy Consideration: Should Residential Zones be Included in the Ordinance The original City Council initiated Tobacco Retailers work plan goal, which was discussed at the February 24, 2010 Study Session, included establishing a buffer around residential districts in addition to schools and libraries. Of the 24 statewide policies, only one (Oakland) restricts the siting of tobacco retailers within residential zones. Attachment 3 includes all of the existing tobacco retailers in the City. A 1,000 foot buffer from all parcels with a residential land use has been added to this map. Decision Point: Determine if future tobacco retailers should be required to be located a minimum distance from parcels with a residential land use designation. Consequences: If the ordinance requires a minimum distance from a tobacco retailer to parcels with a residential land use designation, then very few new tobacco retailers will be able to locate in the City. As shown in Attachment 3, the majority of parcels designated as commercial are located within 1,000 feet of a residential land use designation. Should the ordinance include residential? ^ Yes ^No Policy Consideration: Limited Density of Tobacco Retailers The Technical Assistance Legal Center (TALC) developed a Model Land Use Ordinance regulating the location and operations of tobacco retailers. The model ordinance includes a Page 3 of 9 requirement that a future tobacco retailer cannot be located within five hundred (500) feet of a site occupied by another tobacco retailer. Studies' have shown that if tobacco retailers concentrate in a particular geographic area, market conditions and competition could lead to a greater impact on community health and safety resulting from tobacco retailers offering special promotions such as sales or discounts. Attachment 4 includes a map of all of the existing tobacco retailers in the City. There is a 500 foot and a 1,000 foot buffer around each existing tobacco retailer. Several of the existing tobacco retailers are located within 500 feet of another tobacco retailer. Of the five Alameda County cities that have adopted a Tobacco Retailers Ordinance, two include a provision that limit the density of tobacco retailers. Union City restricts retailers within 1,000 feet of other retailers and San Leandro restricts retailers within 1,500 feet of other retailers. Of the 24 statewide policies, six ordinances contain a provision to restrict a tobacco retailer from being located within a certain distance of another tobacco retailer. The distance restrictions range from 500 feet to 1,500 feet. Decision Point: Determine if a provision should be included in the ordinance to limit the density of tobacco retailers and if so, what is the preferred distance. Consequences: If the ordinance limits the density of tobacco retailers in the City, then only one tobacco retailer could locate at future commercial centers or at a particular intersection. It isn't uncommon to have gas stations located at multiple corners of an intersection. If this were to occur in Eastern Dublin, then only one of the gas stations would be able to sell tobacco products. Should the ordinance limit the density of tobacco retailers? ^ Yes ^No If yes, what distance should be maintained between tobacco retailers ^ 500 feet ^ 1, 000 feet ^ 1, 500 feet Policy Consideration: Approval Process for New Tobacco Retailers All new tobacco retailers would be required to obtain a permit prior to commencing operations. There are two options for the City Council to consider: a Zoning Clearance or a Conditional Use Permit. A Zoning Clearance is approved ministerially without discretionary review or a public hearing. If a tobacco retailer meets all of the development standards outlined in the ordinance, then they would submit a Zoning Clearance form that shows compliance with the Zoning Ordinance Chapter regulating the location and operation of tobacco retailers. This is a similar approach taken in the Indoor Recreation Zoning Ordinance Chapter. For indoor recreational uses, if a project meets certain parameters (operates during certain hours, there is adequate parking, etc.) then a Zoning Clearance Application is completed and the Applicant is given the Standard Conditions of Approval that they must abide by. A Planner reviews the 1 Novak, Reardon, Raudenbush, et al. "Retail tobacco outlet density and youth cigarette smoking: A propensity modeling approach." American Journal of Public Health 96(4):670-676 (2006) Page 4 of 9 application and signs off on it. In the case of the Indoor Recreational use, if a project doesn't meet all of the development standards outlined in the Recreational Facilities (Indoor) Zoning Ordinance Chapter, a Minor Use Permit is required, which is a more involved process that requires a Public Hearing. The second option is to require a Conditional Use Permit for all future Tobacco Retailers. A Conditional Use Permit is a discretionary permit which requires a Public Hearing either at a Staff or Planning Commission level. Decision Point: Determine the approval process for new tobacco retailers. Consequences: Reviewing applications for new tobacco retailers via a Conditional Use Permit process would add to the workload of City Staff. Conditional Use Permits typically take 3-6 months to process. What process should be used to review future tobacco retailers in the city? ^ Zoning Clearance ^Conditional Use Permit Policy Consideration: Existing Retailers There are twenty-five tobacco retailers operating within the City of Dublin. Sixteen (16) out of the 24 ((67%) of the existing tobacco retailers are located within 1,000 feet of areas where children congregate. A majority of the policies similar to this proposal that have been adopted in California (22 out of 24) do not subject existing retailers to the location restrictions but apply only to new retailers and 7 out of 24 (29%) are within 500 feet. Decision Point: Determine whether the ordinance should apply to existing tobacco retailers or if the existing tobacco retailers should be grandfathered in. Consequences: If the ordinance applies to existing tobacco retailers, then several of the existing retailers would no longer be able to sell tobacco products. Should the ordinance apply to existing tobacco retailers? ^ Yes ^No TOBACCO RETAILER LICENSE OPTIONS Current Law • There is currently no local Tobacco Retailer Licensing Ordinance in place.. • The City receives grant funding through the Alameda County Sheriff's Office to perform compliance checks each year at Dublin's tobacco retailers to ensure that they are not selling tobacco products to minors. Sfate Law • Tobacco retailers must be licensed by the State Board of Equalization (BOE) for each tobacco retail location. • Each retailer must pay a onetime license fee of $100 for each retail location. The license must be renewed annually at no cost to the retailer. . • The current license program assesses penalties and fines for businesses that sell tobacco products to minors. The fourth to seventh convictions in a 12-month period each Page 5 of 9 result in a 90 day suspension of the license. An eighth conviction in a 24-month period results in the revocation of the retail license. • Individual penalties may be assessed upon conviction for tobacco sales to minors. Violators are subject to either a criminal action for misdemeanor or a civil action punishable by a fine of $200 for the first offense, $500 for a second offense, and $1,000 for a third. Both the business and the employee may be prosecuted under State law. • The State is only able to take action on license related penalties if 13% or more of youths were able to purchase cigarettes during each year's Statewide survey. • State law states that nothing preempts or supersedes any local tobacco control law other than those related to the collection of state taxes, and that local licensing laws may provide for the suspension or revocation of a local license for any violation of a state tobacco control law (California Business and Professions Code section 22971.3). Policv Consideration: Establish a Tobacco Retailer Licensinq System There are many cities throughout California and within the Bay Area that have adopted local tobacco retailer ordinances (Attachment 5). Within Alameda County, four jurisdictions have adopted such an ordinance (Albany, Berkeley, Oakland, and Union City). For the City of Dublin, the adoption of a retailer ordinance would move the City from a grade of "C" to an "A" grade as rated by the American Lung Association (Attachment 6). The grade of "C" does not appear to reflect that the City already has a sampling prohibition in place, which would yield one additional point moving the City to a grade of "B." Staff will work with the American Lung Association to see if an additional point is merited. A retailer licensing ordinance would provide greater local control over the illegal sale of tobacco products and would provide a sustainable funding mechanism for program enforcement and administrative oversight. Decision Point: Determine whether the City should consider a retailer licensing system for all existing as well as any future tobacco retailers. Consequences: Provide greater enforcement and local control of tobacco related infractions. An additional burden would be placed upon local businesses to apply for the license. Also, additional staff time will be required to review, approve, and manage the licensing program as well as to conduct hearings for possible license revocations; however, a licensing fee could be established to offset the additional costs to the City. Should Staff prepare a retailer licensing ordinance proposal? ~ Yes ^No Policv Consideration: Establish a Fee to Obtain a Tobacco Retailer License As stated above, the costs of a licensing system can be recovered by the establishment of an appropriate fee. All four of the cities within Alameda County that have adopted a Tobacco Retailer License have also adopted a fee. Among these jurisdictions, fees range from a low of $250 for Albany to $1,500 for Oakland. If the City Council were to choose this option, Staff would work with Police and Finance to determine a recommended annual cost for the license fee, which would be set at a rate that at least recovers some if not all of the program's costs. In particular, the City can only set a fee at a rate that recovers the City's costs for program management. Decision Point: Determine whether a licensing fee should be established. Consequences: A license fee would provide funding to cover the cost of program management and enforcement. A fee would be an additional cost burden for the retailers. In particular, many Page 6 of 9 retailers and consumers believe there are already significant costs and fees placed by government on the sale of tobacco products. If a funding fee is not included, compliance checks. ensuring that tobacco products are not being sold to minors, may need to be suspended should grant funding be unavailable during any given year. Should the retailer license require a fee? ^ Yes ^No Should the fee be at full cost recovery? ^ Yes ^No If not, what is an appropriate percentage? Policy Consideration: Revocation vs. Suspension for Violations Significant penalties deter infractions with the severity of consequences correlating positively with compliance; i.e., the more severe the consequence, the more likely one is to comply. However, longer periods of revocation will result in lost revenue for the- business. The model ordinance prepared by the Technical Assistance Legal Center (TALC) recommends that revocations be used instead of suspensions as they have the benefits as outlined below: 1. The burden is put on the retailer to seek to sell tobacco again. Retailers who have little interest in selling may simply choose to stop and not reapply. With suspension, a retailer "automatically" re-acquires the privilege of selling tobacco. 2. Because the retailer must reapply for a license, a new licensing fee must be paid and the retailer is re-educated regarding the requirements of the license by reading and completing the application. 3. Technical, but legally significant, difficulties arise if a license is allowed to "expire" before a final administrative decision regarding a suspension is made (e.g., a court may question how a license can be suspended if that license no longer exists). 4. Enforcement is more clear-cut: a retailer either has a license or the retailer does not. With suspension, a retailer could also have a suspended license which raises the question of how to treat additional violations during a suspension period. Staff would be concerned that the revocation process would provide a more manageable enforcement mechanism. Decision Point: Determine whether licenses should be revoked or suspended for a violation. Consequences: Businesses will lose revenues from being unable to operate as a tobacco retailer. Reapplication fee would he required to obtain a license after revocation. Deter noncompliance with the ordinance. In the case of a violation, should a license be? ^ Revoked ^Suspended Policy Consideration: Determine Appropriate Revocation Period for Violations In addition to the revocation discussion, TALC's model ordinance recommends the following penalties be assessed as a consequence of an ordinance violation; e.g., a retailer has been caught selling tobacco products to a minor. TALC Ordinance Recommendation: • 1St violation within a 60 month period: License revoked/suspended for 10 days. • 2"d violation within a 60 month period: License revoked/suspended for 30 days. Page 7 of 9 3rd violation within a 60 month period: License revoked/suspended for 60 days. 4 or more violations within a 60 month period: License revoked/suspended for 5 years. In reviewing the TALC recommendation, Staff believes there may be some inconsistencies in the amount of time that licenses could be revoked/suspended. In particular, the timeframe is less punitive on the front end and severely punitive on the backend; i.e., going from 10, 30, 60 days to five years is a big shift. Also, the recommendation seems to imply that there could be more than 4 violations within a 60 month period, but if the fourth violation results in a 60 month revocation/suspension, then more than 4 violations are not possible. As an alternative, Staff is proposing the following example for the City Council's consideration: Staff Alternative: • 1St violation within a 60 month period: License revoked/suspended for 30 days. • 2nd violation within a 60 month period: License revoked/suspended for 90 days. • 3rd violation within a 60 month period: License revoked/suspended for 180 days. • 4 or more violations within 60 month period: License revoked/suspended for 1 year. Decision Point: Determine appropriate revocation/suspension period. Consequences: The more significant the penalties, the more likely a business will be in compliance with ordinance provisions. Additionally; the longer the revocation/suspension period; the more revenues that a business will lose, and the more sales tax the City may forfeit. Management of compliance and reapplication will have a staff impact, which could be offset by licensing fees. Staff should prepare violation penalties in accordance with: ^ Staff Proposal ^ Model Ordinance ^ Other Option: Policy Consideration: Fine In Lieu of Revocation/Suspension Many cities have provided an option for violators to pay a fine in lieu of having their license revoked for a first or second violation. This allows for a penalty to be assessed for violations that have occurred, while giving the retailer an option to keep his/her license. There are times where it may occur that rogue employees go against store policy and will sell tobacco products to minors. In such cases, store management is still culpable for the violation, but taking the license away may be a more serve punishment then required. As such, it may be desired to allow a fine to be paid in lieu of revocation/suspension. Generally, this is only allowed fora 1St or 2nd violation within a 60 month period, as going beyond this would indicate that management is not taking sufficient action to curtail violations of the ordinance. Staff would recommend the flowing fines as part of a proposed ordinance: 1. 1St violation within a 60 month period: an administrative penalty of at least one thousand dollars ($1,000). 2. After a second violation of this chapter at a location within any sixty-month (60) period: i. an agreement to stop acting as a Tobacco Retailer for at least seven (7) days; and ii. an administrative penalty of at least five thousand dollars ($5,000). Decision Point: Determine whether a fine in lieu of a revocation/suspension is appropriate. Page 8 of 9 Consequences: This option wocild allow a fine to be paid, which would provide additional revenue to the City. This would also provide an option for the business to determine how a penalty is applied; i. e., do they prefer to pay a fine or lose tobacco sales revenue for a period of time as well as go through the reapplication process with its cost and time commitments. May relieve the administrative workload for Staff in review and approval of reapplications for those businesses that have had their licenses revoked. Should an ordinance proposal include a fine in lieu of revocation/suspension? ^ Yes ^No Is the Staff proposal adequate? ^ Yes ^No NOTICING REQUIREMENTS/PUBLIC OUTREACH: A Public Meeting Notice was published in the Valley Times and posted at several locations throughout the City. Additionally, the Public Meeting Notice was mailed to all existing Tobacco Retailers within the City. ATTACHMENTS: 1. Center for Tobacco Policy and Organization Matrix 2. Map of locations in the City where children congregate with a 500 foot and 1000 foot buffer. 3. Map of existing tobacco retailers in the city with a 1,000 foot buffer around residential land uses. 4. Map of the existing tobacco retailers in the city with a 500 foot & 1,000 foot buffer around the retailers. 5. Table of Strong Local Strong Local Tobacco Retailer Licensing Ordinances. 6. Table of Tobacco Control 2010 -California Local Grades. Page 9 of 9