HomeMy WebLinkAboutItem 7.4 Tobacco Retailers Ord~~~~ Off' nU~~~
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DATE:
TO:
FROM:
SUBJECT
STAFF REPORT
CITY COUNCIL
CITY CLERK
File #560-90
April 17, 2012
Honorable Mayor and City Councilmembers
~~
Joni Pattillo, City Manager ° ~'
Report on Tobacco Retailers Ordinance
Prepared by Roger Bradley, Assistant to the City Manager & Martha Aja,
Environmental Coordinator
EXECUTIVE SUMMARY:
A Fiscal Year 2011-2012 City Council initiated work plan goal directs Staff to establish zoning
restrictions for new tobacco retailers within the City. As directed by the City Council, Staff is
presenting this item to re-cap the discussion from the January 17, 2012 City Council meeting.
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. If an ordinance is adopted that does not grandfather in existing tobacco retailers, it is
likely that the City will face legal challenges which have financial implications for the City.
RECOMMENDATION:
Staff recommends that the City Council provide feedback and direction on developing a
Tobacco Retailers Ordinance.
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Submitted By"
Assistant to the City Manager
DESCRIPTION:
BACKGROUND
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Reviewed By
Assistant City Manager
A Fiscal Year 2011-2012 City Council initiated work plan goal directs Staff to establish zoning
restrictions for new tobacco retailers within the City. The ordinance would establish development
standards and regulations for the siting of new tobacco retailers within the City of Dublin. A
tobacco retailer is any person or business which sells, offers for sale, exchanges or offers to
exchange for any form of consideration tobacco, tobacco products and/or tobacco
paraphernalia.
Page 1 of 7 ITEM NO. 7.4
At the January 17, 2012 City Council meeting, the City Council received a presentation from
Staff on possible ordinance provisions and had an initial discussion about this topic. The
purpose of this report is to re-cap that discussion, provide relevant additional information on
probable impacts, and seek direction from the City Council on how to proceed with an ordinance
proposal. The January 17, 2012 Staff Report is included as Attachment 1.
During the deliberations on this item, the City Council directed that Staff bring this item back for
consideration before any additional work was done by Staff and before any meetings were held
with the tobacco retailers.
ZONING RECAP
Minimum Distance to Maintain from Areas Where Children Are Present
Decision Point: The City Council opined that the appropriate distance to maintain from a
tobacco retailer to youth-oriented areas is 1,000 feet. The areas that should be included in the
definition of youth oriented are schools, libraries, parks, playgrounds, youth-centers, arcades,
licensed child care facilities/preschools, and City owned and operated recreational facilities.
Consequences: Of the 25 existing tobacco retailers, seven (7) are located within 500 feet of
areas where children are present and 16 are located within 1,000 feet of areas where children
are present. Please refer to Attachments 2 and 3 for a map of the areas in the City where
children congregate. Attachment 2 has a 500 foot buffer around the areas where children
congregate and Attachment 3 has a 1,000 foot buffer around these areas. No future tobacco
retailers would be allowed to be located within 1,000 feet of these areas. As illustrated in this
map, many of the existing tobacco retailers are located within the buffers surrounding the
tobacco retailers.
Staff Recommendation: Staff would recommend that the minimum distance from youth-
oriented areas be 1,000 feet.
Should Residential Zones be Included in the Ordinance
Decision Point: The City Council opined that tobacco retailers should be required to be located
a minimum distance of 1,000 feet 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 no future tobacco retailers will be able to locate in
the City. As shown in Attachment 4, all but one of the undeveloped/vacant parcels is located
within 1,000 feet of a residential land use designation. This parcel has a land use designation of
Business Park/Industrial, which does not allow retail uses. In addition, 24 out of the existing 25
retailers are located within 1,000 feet of a residential land use. Thus, there would be nowhere
within the City that a new tobacco retailer could locate, and a conditional use process would be
moot as every corner of the City would be prohibited from siting a tobacco retailer.
Staff Recommendation: Staff would recommend that the City Council not require retailers to
be a minimum distance from residential land-use designations.
Limited Density of Tobacco Retailers
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Decision Point: The City Council opined that a provision should be included in the ordinance to
limit the density of tobacco retailers in cases where the retailer is a business that primarily sells
tobacco products (i.e. Smoke Shops). For these types of uses, tobacco retailers should be a
minimum of 1,000 feet from one another. Direction was provided that grocery stores, drug stores
and gas stations are not subject to this requirement.
Consequences: If the ordinance limits the density of tobacco retailers in the City that primarily
sell tobacco products, then there would be fewer such uses in the City. There are currently
three "smoke shops" in Dublin that primarily sell tobacco products. Two of these businesses are
located within 1,000 feet of one another.
Staff Recommendation: Staff would recommend that smoke shops be prohibited from siting
within 1,000 feet of each other.
Approval Process for New Tobacco Retailers
Decision Point: The City Council opined that a provision be included in the proposed ordinance
to require that the approval process be through the Zoning Clearance process.
Consequences: The Zoning Clearance process takes much less time than a Conditional Use
Permit. If an ordinance is adopted that requires a minimum distance of 1,000 feet from areas
where children are present and 1,000 feet from residential, then the review process (either
Zoning Clearance or Conditional Use Permit) is a moot point since there will be no areas in the
City where a future tobacco retailer could be located.
Staff Recommendation: Staff would recommend that a zoning clearance be used for the siting
of new tobacco retailers.
Existing Retailers - "Grandfathering"
Decision Point: The City Council opined that a proposed ordinance should apply to all existing
tobacco retailers within the City. Furthermore, any existing retailers that are in violation of the
Ordinance shall be phased out within 1, 2, 3, or more years, depending on the legality of the
timeframe.
The City Attorney's office has preliminarily researched the issue of "grandfathering," and
whether the City has the authority to restrict tobacco sales at existing sites. If the City wants to
phase out existing tobacco retailers, it must establish an "amortization" process whereby
retailers are given a period of time to operate such that they can recoup their investment in the
business. In particular, the City is not required to allow existing uses to continue indefinitely.
However, to the extent that the City would like to eliminate sales at existing sites, it will be
necessary for the City to provide the "amortization" period as mentioned for existing uses.
California case law clearly holds that while cities may validly provide for the eventual termination
of nonconforming property uses without compensation, they must provide a "reasonable
amortization period commensurate with the investment involved." The specific length of the
amortization period is not established by law. Rather, the appropriate amortization period must
be reasonable and commensurate with the investment involved, so the appropriate period
should be determined on a case by case basis with respect to particular properties. Potential
factors to be considered in establishing an amortization period might include, but are not limited
to the amount of money invested in a leasehold or improvements, the length of time remaining
on a lease, or additional evidence of undue financial hardship. It is expected that preparation for
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and the actual conduct of amortization hearings would require a fair amount of additional legal
and administrative work.
Consequences: If the ordinance applies to existing tobacco retailers and if a 1,000 foot buffer is
required from residential land uses, then all of the existing tobacco retailers (25) would be in
violation of the ordinance and would be required to phase out the sale of tobacco products. Of
the existing 25 tobacco retailers in the City, three businesses sell only tobacco products and
related paraphernalia and/or liquor and therefore adoption of an ordinance that applies to
existing tobacco retailers will most likely result in the closing of these businesses. For those
businesses where tobacco sales are ancillary to the businesses primary focus, these business
would, of course, be able to continue to operate, but would perhaps lose a revenue source. Staff
believes that legal challenges are likely, resulting in significant staff time and financial resources.
Staff Recommendation: Staff would recommend that existing retailers be grandfathered within
the ordinance.
Option/Impact Matrix
Options Existing Tobacco Retailers Future Tobacco Retailers
500 feet from children Seven tobacco retailers are Future tobacco retailers would
located within 500 feet of not be permitted to locate in
children and would have to areas within 500 feet of areas
phase out the sale of tobacco where children are present.
products if the ordinance does
not grandfather in existing
tobacco retailers.
Refer to Attachment 2
1,000 feet from children Sixteen (16) tobacco retailers Future tobacco retailers would
are located within 1,000 feet of not be permitted to locate in
children and would have to areas within 1,000 feet of areas
phase out the sale of tobacco where children are present.
products if the ordinance does
not grandfather in existing
Tobacco Retailers.
Refer to Attachment 3
Apply Ordinance to Twenty-four (24) of the twenty- All undeveloped/vacant parcels
Residential Land Use five (25) tobacco retailers are that are designated as
located within 1,000 feet of a commercial are located within
residential land use designation. 1,000 feet of a residential land
These businesses would have use designation. Including a
to phase out the sale of tobacco 1,000 foot minimum distance
products if the ordinance does from residential land uses would
not grandfather in existing result in no new businesses
tobacco retailers. being able to sell tobacco
Refer to Attachment 4 products in the City.
Refer to Attachment 4
Apply Ordinance to existing All twenty-five (25) of the Not Applicable
Tobacco Retailers existing tobacco retailers would
be in violation of the ordinance
and would have to phase out
the sale of tobacco products.
Three of the businesses only
sell Tobacco/Alcohol products
and would most likely go out of
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business.
Refer to Attachment 5 & 6
Limit Density of "Smoke There are currently three Any future "smoke shops" that
Shops" tobacco retailers in the City that primarily sells tobacco products
primarily sell tobacco products. would not be permitted to locate
Two of these retailers are within within 1,000 feet of an existing
1,000 feet of one another. tobacco retailer.
Attachment 7 shows all of the various restrictions. As illustrated in Attachment 5, there are no
future areas in the City where tobacco retailers could be sited and all of the existing tobacco
retailers (25) would be required to phase out the sale of tobacco products in the specified
amount of time, if the ordinance requires that all tobacco retailers be located 1,000 feet from
residential land uses.
If the City Council were to adopt an ordinance that phases out the sale of tobacco products and
retailers, it is likely that lawsuits would be filed challenging the legality of the ordinance, which
would have financial implications for the City. Therefore, Staff recommends that the Tobacco
Retailers ordinance include a minimum distance of 1,000 feet from future tobacco retailers to
areas where children are present, but that it does not require a minimum distance from
residential districts. Staff also recommends that existing businesses be grandfathered in and
allowed to continue to sell tobacco products. Staff has already received significant interest and
concern from local and regional retailers, as well as national organizations, that support tobacco
retailing.
TOBACCO RETAILER LICENSING RECAP
In addition to the Conditional Use Permit, the City Council also discussed the establishment of a
licensing provision for the sale of tobacco products. 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.
Establish a Tobacco Retailer Licensing System
Decision Point: The City Council opined that there should be 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.
Staff Recommendation: Staff would recommend establishing a Tobacco Retailer Licensing
system.
Establish a Fee to Obtain a Tobacco Retailer License
Decision Point: The City Council opined that there should be a licensing fee should be
established at full cost recovery.
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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
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.
Staff Recommendation: Staff would recommend that a fee be established at full cost recovery.
Revocation vs. Suspension for Violations
Decision Point: The City Council opined that licenses should be revoked or suspended for a
violation of the ordinance; e.g., selling tobacco products to minors.
Consequences: Businesses will lose revenues from being unable to operate as a tobacco
retailer. Reapplication fee would be required to obtain a license after revocation.
Staff Recommendation: Staff would recommend that licenses be revoked for violations.
Determine Appropriate Revocation Period for Violations
Decision Point: The City Council opined that the appropriate revocation/suspension period for
violating ordinance provisions is:
• 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.
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 Recommendation: Staff would recommend that revocations/suspensions be include as
outlined.
Fine In Lieu of Revocation/Suspension
Decision Point: The City Council opined that a fine in lieu of a revocation/suspension is
appropriate under the following conditions:
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).
Consequences: This option would 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
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time as well as go through the reapplication process with its cost and time commitments.
Allowing a fine in lieu of revocation would relieve the administrative workload for Staff in
reviewing and approving reapplications for those businesses that would have had otherwise had
their licenses revoked.
Staff Recommendation: Staff would recommend that this item be included as outlined.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The Public Meeting Notice was mailed to all existing Tobacco Retailers within the City in
addition to other interested parties.
ATTACHMENTS: 1. January 17, 2012 Staff Report without Attachments
2. Map of locations in the City where children congregate with a 500
foot buffer
3. Map of locations in the City where children congregate with a 1,000
foot buffer
4. Map of existing tobacco retailers in the city with a 1,000 foot buffer
around residential land uses
5. Map of the existing tobacco retailers in the city with a 500 foot
around the retailers
6. Map of the existing tobacco retailers in the city with a 1,000 foot
around the retailers
7. Map that shows all of the restrictions
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~~~~ Off' nU~~~
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DATE:
TO:
FROM:
SUBJECT
STAFF REPORT
CITY COUNCIL
CITY CLERK
File #560-90
January 17, 2012
Honorable Mayor and City Councilmembers
Joni Pattillo, City Manager ~ ~ ~ ~ ~'~~_ ~~
Report on Tobacco Retailers Ordinances
Prepared by Martha Aja, 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.
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Submitted By"
Assistant to the City Manager
DESCRIPTION:
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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
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
Policv 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
Policv 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.
State 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
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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 Licensing 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?
Policv 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 be required to obtain a license after revocation. Deter
noncompliance with the ordinance.
In the case of a violation, should a license be? ^ Revoked ^Suspended
Policv 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.
• 2nd 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.
• 2r'd 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 would 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
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