LIQUOR FEE BEFORE COUNCIL

Santa Cruz: Owners of some restaurants, stores fight charges to fund police
sting program.

The Santa Cruz City Council today will consider a proposal to charge
hundreds of dollars in new fees to restaurants, pubs and stores that sell
liquor.

The proposed alcohol-sales permit fee would cost businesses anywhere from
$237 to $1,725 a year based on ``risk factors'' that include hours and
volume of sales. The fee would raise about $100,000 a year to continue
funding police enforcement efforts targeting sales to minors. But many
businesses say the new fees are unfair and overly burdensome.

Tara Guglielmo, owner of the Asti Cafe on Pacific Avenue, said the $1,472
fee that would be charged to the downtown pub is ``absolutely ridiculous.''

``I understand the need to support the police department, which I do 100
percent,'' Guglielmo said. ``But being taken advantage of because of my type
of business is just not fair.''

The fee was first proposed in June to continue funding for police sting
operations paid for under a 1995 state grant. The city's application to
renew the grant this year was denied. The fee structure was developed
through discussions with business owners over the last six months.

Police say the fee is warranted because Santa Cruz has twice as many liquor
sales licenses as the state average for cities its size. The rate of
underage drinking exceeds both national and state averages; alcohol offenses
account for 40 percent of misdemeanor arrests; and liquor is a factor in
half of all arrests in the city, police say. Jail bookings for alcohol
arrests cost Santa Cruz $200,000 a year, according to police.

Santa Cruz officials say it is not unusual for the city to charge citizens
for services that directly benefit them or stem from their activities.

The police department's education, monitoring and compliance program for
alcohol sales permits includes site inspections and sting operations. Police
visit restaurants, pubs and stores to advise owners about meeting
requirements of state liquor laws. They also use teenagers as decoy buyers
seeking to purchase liquor from the store or from adult customers.

The proposed fee would pay the salaries of an additional police officer and
records clerk. It affects 215 liquor licensees in Santa Cruz, but would
specifically exclude bed-and-breakfast inns.

Individual fees are based upon a business's risk level as assessed under the
city's alcohol ordinance, which controls the concentration of liquor stores.
It also is based on how late the business sells alcohol -- lower fees for
those closing at 10 p.m., higher fees for those selling up to 2 a.m. The
annual volume of sales also affects fees -- lower fees for those selling
$100,000 worth of liquor, higher fees for those selling more than $300,000
worth.

Operators of several businesses said the fee structure is unfair. Don
Boucher wondered why his Laurel Street 7-Eleven store would have to pay more
than Costco just because it is open 24 hours. He said the proposed fee does
not take into account the private security he hired to help control liquor
problems.

Mark Westburg said the sales-volume system can be skewed against upscale
restaurants, such as his Pearl Alley Bistro.

``You penalize fine restaurants,'' Westburg wrote in a letter to the city,
noting that one bottle of Dom Perignon costs as much as 14 bottles of cheap
vodka.

IF YOU'RE INTERESTED The city council will consider the proposed liquor fee
at its 3:30 p.m. meeting today at City Hall, 809 Center St.

1997 - 1998 Mercury Center.

Checked-by: Don Beck