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HomeMy WebLinkAboutCity Council - 06/03/1997 - Workshop APPROVED MINUTES CITY COUNCIL/STAFF WORKSHOP TUESDAY, JUNE 3, 1997 6:30 PM, HERITAGE ROOM IV 8080 Mitchell Road COUNCILMEMBERS: Mayor Jean Harris, Sherry Butcher-Younghans, Ronald Case, Ross Thorfmnson, Jr. and Nancy Tyra-Lukens CITY COUNCIL STAFF: City Manager Carl J. Jullie, Assistant City Manager Chris Enger, Finance Director John Frane, Assistant Finance Director Don Uran, Liquor Store Managers Mitchell Dean, Bill Lempesis, Jack Schepers, and Council Recorder Jan Nelson I. CALL MEETING TO ORDER Mayor Harris called the meeting to order at 6:35 p.m. All Councilmembers were present. II. STAFF REVIEW OF HISTORICAL BACKGROUND, PRESENT BU TNES ACTIVITY, AND FUTURE PROTECTIONS Enger gave an overview of the liquor enterprise in Eden Prairie and introduced the three Liquor Store Managers. Frane reviewed the chronology of the liquor enterprise. Case asked if the 1982 vote on the Split-Liquor option was required by law in order to get approval from the voters. Frane said the vote in 1982 was held because of the law requiring such a vote once a city has a population over 10,000. Frane reviewed the sales, gross margin and operating income for 1995 operations. Tyra- Lukens asked why we don't generate the same level of operating income as do Edina and Richfield. Frane said our margin does not kick in until we recover the basic costs of operation. Those two cities are adjacent to the area of south Minneapolis that does not have liquor stores, consequently their sales are greater and they recover their basis costs sooner.. Case asked what fixed expenses we have that they don't. Frane said owning versus leasing is a large factor. Enger said the Minnesota Municipal Beverage Association (MMBA) will provide a consultant to do a study for us. He then reviewed the four store issues: ownership vs. lease; location; number; and size. He noted that municipal liquor stores are usually owned, not leased. They are considering ownership status for a store in the Preserve area, as well as new locations in northwest Eden Prairie and southwest Eden Prairie. He said we should be able to compete with private liquor stores, however warehouse stores could be an issue. CITY COUNCIL/STAFF WORKSHOP MINUTES June 3, 1997 Page 2 Tyra-Lukens asked what the gross margin is at private liquor stores. Enger said staff would have to research that. Thorfinnson said he would like to see the per capita figures for other cities and comparisons of how many stores those cities have, how big the stores are, and whether stores are owned or leased. Schepers reviewed what he knew about stores in other nearby cities. Frane said we will get a report from the consultant about whether our gross margins are comparable to industry standards. Case would like to have statistics on our cigarette sales. Harris asked if Staff could prepare that study unless it would be included in the MMBA study. M. PROPOSED MANAGEMENT STUDY OF LIQUOR OPERATIONS Enger said the MMBA study will be free of charge, and he would suggest we go through with it. Their only requirement is that the City Manager, the Liquor Manager or the Mayor read the study. Councilmembers would have the option to be interviewed for the study. He said they would be looking into several of the questions raised tonight. Butcher-Younghans asked if this study is offered to us as a member of the MMBA. Enger said that was correct. Enger noted he would like to have us pursue the Retailer's Award given by the MMBA. Harris thought the consensus of the Council was to go forward with the study. She also thought we need to address the issue of whether we are in this for control or for profit, but we can wait for the study to see what it presents. IV. OTHER BUSINESS IV. ADJOURNMENT Mayor Harris thanked staff for their presentation. She adjourned the meeting at 7:20 p.m.