Originally Published: March 2, 2011 9:55 p.m.
PRESCOTT - An annual fee that local bar and restaurant owners see as "arbitrary" and "unjustified" will get a public airing next month.
Restaurant owners Barry Barbe and Roxanne Nielsen appeared before the Prescott City Council on Tuesday to ask the city to put the annual liquor license fee "on the table" for further discussion.
Speaking on behalf of the local bar-and-restaurant group the Prescott Area Independents, the two restaurateurs questioned the existence of the fee, which they said unfairly targets establishments that serve alcohol.
"Basically, we'd like the council to revisit it," Nielsen said of the liquor license fee. "We would like to find out why it even happened, and why we're being singled out."
Barbe noted that restaurants that serve liquor already pay a $585 liquor-license fee to the state. In addition, he said, restaurants pay an annual fee to the county health department, as well as higher insurance and Workers' Compensation rates. All of those fees come with a service, he said, such as training by the state, or inspections by the health department.
On the other hand, Barbe maintained that restaurants "get nothing" for the annual liquor-license fee they pay to the city.
The restaurant owners also questioned why bars and restaurants were paying the fee, when other businesses in Prescott have no business-license fee.
Councilwoman Lora Lopas said she sees a general business-license fee as a fairer option than the existing liquor-license fee. "I think it's the way to go to help resolve this problem," she said, adding that she sees the current scenario as "ridiculous."
The public comments by Nielsen and Barbe led council members to suggest that the issue should appear on a future agenda for more discussion. The city scheduled the discussion to take place at the April 5 council workshop.
The most recent adjustment of the liquor-license fees occurred about eight years ago, when the city increased the fees by about 50 percent.
At that time, council members maintained that the fees, which had last been adjusted in the early 1990s, were inadequate to cover the cost of administering the liquor licenses, as well as the increased use of city services by liquor establishments.
A city memo from 2003 pointed out that the fees helped to cover costs associated with alcohol in the community. For instance, the memo noted that city police regularly deal with DUI (driving under the influence) cases, as well as alcohol-related domestic violence calls, and traffic accidents involving alcohol.
Along with increasing the annual fees in 2003, the City Council also approved an annual adjustment based on the Consumer Price Index (CPI).
Currently, the annual liquor-license fees include $662 for restaurants and bars; $575 for hotel/motels; $530 for in-state and out-of-state producers, and governments; $354 for clubs, liquor stores, beer and wine bars, and liquor license application fees; $266 for beer and wine stores; $178 for domestic microbreweries; $62 for special events fee; and no fee for wholesalers.
Along with questioning the existence of the fees, Nielsen also brought up the different rates for different uses. "The amounts are very arbitrary; they don't make sense to me," she said.
Under the existing liquor-license fees, the city collects about $70,000 per year. The money goes into the city's general fund, which covers a number of city departments, including the Police Department.
Budget and Finance Director Mark Woodfill said Wednesday that his department is working to compile current statistics on the number of alcohol-related public safety incidents, and will present that information at the April 5 workshop.