The Township of Douro-Dummer discussed the idea of letting their liquor license lapse as a matter of policy.
Parks and Recreation manager, Mike Mood appeared before council on Tuesday evening with a report in hand that suggests the municipality should no longer be in the alcohol service business.
The Township currently holds a liquor license which allows for the sale and distribution of alcoholic beverages at both municipally owned community centres. Mood said that while serving alcohol generates revenue, it could also generate liabilities both legally and financially.
Mood explained that the township currently holds a catering endorsed liquor license under the Liquor Licence Act for the operation of the Community Centres. As part of the renewal process, designated individuals must be listed as a signer on the liquor license. This person is responsible for ensuring that event complies with all relevant regulations and legal obligations under the Liquor Licence Act.
Mood told council that it is getting more difficult to get staff to sign on to this obligation as there has been a growing concern regarding the personal liabilities associated with being a signer on the liquor license, as well as Township liabilities for holding the liquor license. These concerns stem from the potential criminal, financial, and civil liabilities that a signer may incur in the event of non-compliance or violations related to the operation of the establishment.
1. Increased Liability and Legal Risk:
o Alcohol-Related Incidents: The Township assumes legal liability for any alcohol-related incident that occurs on its premises, such as accidents, injuries, or disturbances. This liability could extend to the Township itself, staff, or third-party contractors.
o Increased Legal Costs: The risk of lawsuits, claims, or regulatory violations may result in higher legal and insurance costs. In particular, the Township could face lawsuits for incidents related to over-service of alcohol, underage drinking, or accidents caused by intoxicated individuals.
o Negligence Claims: Should an alcohol-related incident occur, the Township may be deemed negligent if proper protocols (e.g., responsible alcohol service) are not strictly followed. This could result in significant financial and reputational damage.
2. Financial Impact of Insurance, Staffing, Inventory and Supply Costs:
o Insurance: The Township’s current insurance policy may face higher premiums due to the increased risk associated with alcohol-related events. This could strain the Township’s budget, especially if premiums continue to rise.
o Staffing: While holding the liquor license the Township is required to provide the staff to operate the bar. Staffing requirements change event to event depending on projected attendance. This can cause challenges with obtaining sufficient staff who are certified in responsible alcohol service (SMART Serve), which requires ongoing financial investment.
o Inventory: The Township is required to purchase and maintain thousands of dollar’s worth of inventory for events. Low frequency of events presents spoilage and the potential of shrinkage of stock in between events. The storage of inventory relies on large fridges to keep the product cool.
o Supplies: The Township is responsible for adequate bar supplies for each event. This includes glasses, alcohol dispensers, ice and mix.
Mood told council that over the past three years the township has provided this service for seven to 11 different events with a range of annual net profits between $500 and $1,900.
The report Mood presented also gave alternatives to the township retaining it’s license and they are as follows:
1. Third-Party Vendor Partnerships:
o Outsource Liquor License to a third party: Rather than holding the liquor license directly, the Township can allow licensed third-party vendors (e.g., local bars, restaurants, or event companies) to operate under their own liquor licenses at Township facilities. The Township would establish contracts with these vendors to ensure responsible alcohol service and minimize liability.
o Revenue Sharing Model: The Township could negotiate a revenue-sharing arrangement with these third-party vendors, allowing the Township to retain some financial benefit from alcohol sales while transferring the responsibility for licensing, service, and liability to the vendor.
2. Special Occasion Permits for Alcohol Sales:
o Event-Specific Licensing: For events where alcohol sales are required, the Township could consider allowing users the ability to obtain special occasion permits for alcohol sales. This model allows for greater flexibility and limits the duration of the Township’s exposure to liability.
o SOP Management: The Township could manage the selection of SOP’s, ensuring that only reputable, insured, and experienced vendors are chosen for each event. This provides control over alcohol service while avoiding direct responsibility for the license.
3. Sponsorship and Vendor Collaboration:
o Collaborate with Local Breweries or Wineries: The Township could collaborate with local breweries or wineries to host events featuring locally produced alcoholic beverages, while the vendor holds the liquor license. The Township could promote these collaborations as a way to support local businesses while reducing its involvement in alcohol licensing and sales.
o Co-Hosted Events: Rather than selling alcohol directly, the Township could co-host events with local businesses where the business retains the alcohol license, and the Township focuses on organizing and promoting the event itself. The report submitted by Mood was to adopt option two of the alternative choices.
Deputy mayor Harold Nelson asked if patrons seeking a special liquor license could face a rejection if the township does not pocess an umbrella type license and if they should expect a free for all when it comes to bringing liquor on the municipal properties.
Mood responded that the approval of a special license would depend on different criteria depending on the event and applicant. The township not possessing a license is not an obstacle and patrons are limited to the amount of alcohol on hand by what is dictated in the license. He went on to say that inspectors will check the events for infractions.
Ray Johnston brought up the Douro 200 celebrations which are planned for this summer and wanted confirmation that the change in licensing would not affect the celebration.
Mood assured that the township would work with organizations to obtain their licenses.Mayor Heather Watson confirmed that the license would be valid for four years, but asked if it was possible to obtain a license for one year. She wanted to know if staff had any conversations regarding the change with any of the people or organizations that have already booked. Watson pressed for a decision stating that there is no time to defer.
Todd told council that the license is valid for four years, but nobody says you have to use it for the duration.Councillor Tom Watt moved that the township renew the license and that staff come back with a solid plan on how the general public can get their own licenses. In the mean time if patrons can’t or don’t want to obtain a license they can operate under the township license. Staff is to return to council with a report in six to 12 months gauging the success of the change.
The motion passed unanimously
