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HomeMy WebLinkAboutLiquor Control Dept, FY 2014-15 DEPARTMENTAL BUDGET REVIEWS • 4/11/2014 DEPARTMENTAL BUDGET REVIEWS 2014-15 DEPARTMENT OF LIQUOR CONTROL April 11, 2014 Department of Liquor Control (ss) Page 1 The departmental budget review reconvened on April 11, 2014 at 10:31 a.m., and proceeded as follows: Department of Liquor Control Honorable Mason K. Chock, Sr. Honorable Gary L. Hooser Honorable Mel Rapozo Honorable JoAnn A. Yukimura Honorable Jay Furfaro, Council Chair Excused: Honorable Tim Bynum Honorable Ross Kagawa Chair Furfaro: Okay, we are back from recess on our budget period. This is now April 11th, and the order of today we start at 10:30 a.m. I have just had back-to-back sessions with Mr. Rapozo and Mr. Rapozo and Mr. Rapozo. So Mr. Rapozo from Liquor Control is here. Mr. Rapozo: I guess Mr. Chair, if I may make a disclosure that yesterday Mr. Rapozo is not related to me, but today the Mr. Rapozo up there is my older brother. Just for the record. Chair Furfaro: We are glad to have you here, Mr. Rapozo. So I am seeing a few people in the audience, but nobody wanting to give testimony this morning. So on that note I will turn over the Department of Liquor Control review by suspending the rules and let Mr. Rapozo make his presentation and, by the way, I know I have told you this before, but I will tell you again, congratulations on your new leadership role. GERALD T. RAPOZO, Director of Liquor Control: Thank you. Mr. Rapozo: Again, point of personal privilege for the general public watching that the Director of Liquor Control is selected by the Liquor Commission, not by the Council, not by the Mayor, by the Liquor Commission. I just wanted to make sure. Chair Furfaro: Very good point. Okay, sir, you have the floor. Mr. G. Rapozo: Good morning, Council Chair,' Councilmembers. I am Gerald Rapozo with the Department of Liquor Control. Thank you for this opportunity to go over our budget for Fiscal Year 2014-2015. I will just read briefly our budget presentation. I will start with the mission of Liquor Department is to protect the health, safety, and welfare of the residents of the Kaua`i by effectively and fairly enforcing Federal and State Laws and County Liquor Rules as they apply to the manufacture, sale, and distribution of alcoholic beverages. Successes and achievements, we conducted regularly scheduled compliance checks that kept non-compliance rates low. Non-compliance rates on on- and off-premise rates were lowered from 23% in 2012 to 20% in 2013 which is less than the national average which is about 24%. It is not great, but it is okay. We supported Life's Choices Kaua`i on initiatives to reduce underage-drinking by attending district town hall meetings and participating in the Health Fair and distributing information. Some of the improvements include greater transparency of the Department information, developing better data collection systems regarding under aged contact with alcohol, and better access April 11, 2014 Department of Liquor Control (ss) Page 2 to Department information through our website. Challenges, maintaining investigative safety and security in the working environment by scheduling investigators to work in teams when possible, educating the public and teens on danger of high alcohol content products. Research shows that minors are having their first alcoholic beverages at a younger age. Some of the advertising is more geared towards young people. On the other challenges, monitoring and implementing legislative bills regarding alcohol. Legislative bills are posted at the last-minute and we do not have time to respond to some of those bills that come up all of a sudden. Our goals and objectives, reduce the availability of alcoholic beverages to minors from liquor license establishments, conduct semi-annual compliance checks of all premises, on all off-premise and on-premise licensees, to provide on-site training and education for all licensees, server training is very important and we have noticed licensees who got trained employees do not violate the rules, as much as places where they do not have trained employees. Again our goal is to maintain below 20% non-compliance rate on the compliance checks. One of the things that we have been doing this year is going back to the schools and we have been in contact with Mr. Arakaki and scheduling training sessions with the schools on under aged drinking. We will be ordering these drunk busters goggles that the kids use that simulate them being under the influence and they are given simple tasks like picking up a set of keys from the table and showing how difficult it is to do it using those goggles. Another thing we have been doing is getting laptop devices for the investigators so they can allow them to do reports and retrieve information while out in the field, so they do not have to come back to the Office to do their reports . Plus downloading information. Any questions on the budget presentation? Pretty much what increased were the salaries, due to negotiated pay raises, and what we plan to do is reallocate the positions because of succession. Right now our Department we have seven employees including me. In the next year and a half, five of us can all retire, and the two remaining... Chair Furfaro: Say that again? In the next how many years? Mr. G. Rapozo: Year and a half we all will be able to retire. The two remaining investigators currently have less than four years between all of them. Because we are a small Department, it will be difficult to get them to the level to take over when the time comes. Chair Furfaro: So Mr. Rapozo, in the seven there is yourself, is it four inspectors? One Deputy and one clerical? Mr. G. Rapozo: Yes, we have...we are set up for four field investigators. We have one supervising investigator, myself, then we have a Commission Secretary and a Senior Clerk. Chair Furfaro: Okay. In the past year have we found ourselves citing any licensees with significant and I mean "significant" even the threat of suspending their license? Mr. G. Rapozo: The beginning part of this year we did the compliance checks and we had...I think a total of 11 violations. So few of them were adjudicated last week and probably the next two meetings we have violation hearings coming up. Chair Furfaro: Were they retail outlets or bars or restaurants? April 11, 2014 Department of Liquor Control (ss) Page 3 Mr. G. Rapozo: So far this year we did one retail store operation and three for the restaurants and bars. Chair Furfaro: Questions, JoAnn you have the floor. Ms. Yukimura: Yes. Thank you, Gerald for your report. You said earlier this year you did these compliance checks? Mr. G. Rapozo: Yes. Ms. Yukimura: And you had 11 violations? Mr. G. Rapozo: I am not sure the exact... Ms. Yukimura: That would be year 2014 record, right? Mr. G. Rapozo: Yes, it is not in here. Ms. Yukimura: Is this on or off-premise? Mr. G. Rapozo: One was for retail stores off-premise and three so far for on-premise, restaurants, and bars. Ms. Yukimura: I was going to ask you the difference between on and off-premise. Retail is considered off the premise, where open liquor is being sold? Mr. G. Rapozo: You purchase the liquor from the store and consume the liquor off-premises and on-premise you consume on-premises. Ms. Yukimura: Thanks. If you go by your 2013 checks for off- premises...actually in both cases 2011, 2012 or 2013 is either remaining the same or going up...but for our on-premises, you went down from 16 to 4. Do you check the same number of premises every... Mr. G. Rapozo: What happens is that we submit our list of licensees to the University of Hawai`i Office of Public Health Studies and submit the licensees and their computer selects who we visit. Ms. Yukimura: I see. Mr. G. Rapozo: Usually because Kaua`i is so small, usually during the compliance check term, usually all of the licensees get checked. Ms. Yukimura: Okay. But like in 2012...on your on-premises list, in 2012 you had 74 licensed premises inspected and then you had 29 in 2013. That is a really big difference. Mr. G. Rapozo: What happened is that it depends on the contract. So I think that year they concentrated more on the off-premise sites and did not check as much. April 11, 2014 Department of Liquor Control (ss) Page 4 Ms. Yukimura: I see. I am just wanting to make sure that we are comparing apples-to-apples, when we look at whether we are being successful or not? I do recall and I hope it is not on my desk. There was an article there the NACo magazine, the National Association of Counties, talking about a very effective compliance check process and I thought I sent it to you folks. Maybe it was prior to you taking the head position. I can try to check my record because otherwise it is in my office in a to-do pile. They described a system that really cut down. Mr. G. Rapozo: Nationally there is a whole bunch of different ways of doing compliance checks. Like in Hawai`i, they cannot lie. So the minors have to tell you the truth and if they are asked how old they are, they have to be honest and cannot use fake IDs. Some of the programs on the mainland they can lie and use fake IDs. That is why in Hawai`i we want to stay away from that. Ms. Yukimura: Yes. Then your thing with the goggles, does it not make the kids think it would be fun to be drunk? Mr. G. Rapozo: With the studies no, they think it is no big deal and they are acting normally. They think they can do anything. They think they can walk the straight line or pick their keys up from the table and they realize it is not that easy. Ms. Yukimura: Well that is good if it really makes them more aware. Because kids can be pretty unaware. The law allows the Liquor Commission to use a certain percentage of its penalties for underage drinking. So that amount was set aside this past year, yes? Mr. G. Rapozo: Yes. Ms. Yukimura: And it went where? Mr. G. Rapozo: That money was not touched really. Ms. Yukimura: It was not? Mr. G. Rapozo: The State Law allows that 10% of the fine money collected for the year can be used for enforcement or public educational purposes or enforcement. Ms. Yukimura: Right. So how much is that money approximately every year? Mr. G. Rapozo: Roughly that 10% would be $3,000. Ms. Yukimura: You keep it in a separate account? Mr. G. Rapozo: Yes, it is in a separate account. Ms. Yukimura: Do you have a program for utilizing or you wait for proposals? April 11, 2014 Department of Liquor Control (ss) Page 5 Mr. G. Rapozo: What has been done in past, the money in the fine account, besides the 10% that can be used for public education and enforcement, that money can only be used for the education of the licensees', staff, and Commissioners. Ms. Yukimura: The 10%? Mr. G. Rapozo: Yes the overall. The penalty fines. So that is totally separate from the liquor fees and fines and that money can only be used for training of the employees, the Department employees, Commissioners, or the licensees themselves. Up until now we have not touched that fund. Ms. Yukimura: The $3,000 that you set aside of the penalties, right? In general the penalties can be used only for education of your licensees? Mr. G. Rapozo: Correct. Ms. Yukimura: But the $3,000 that you set aside can be used for? Mr. G. Rapozo: For enforcement programs or public educational...and that is where some of the money that we will be giving to Life's Choices for their functions, public education will come from. Ms. Yukimura: Thank you. Chair Furfaro: I want to hear that again. That is the money you use when you partner with Life's Choices? Mr. G. Rapozo: That is the plan. Chair Furfaro: Okay. Vice Chair Chock. Mr. Chock: Gerald, thank you for your presentation. So pretty interesting, you are going to have a turnover real soon in your Office, at least the opportunity for that to occur. I am sure there is a succession plan that you have in place. Mr. G. Rapozo: It is very hard because of the size of the Department. That is a problem. Our secretary, if she plans to retire shortly, I would not want to be the person filling her shoes, because she pretty much does everything. I am working...I have to talk to HR, because how can you get somebody to at least learn? Because that position, besides being the Commission Secretary, she is the Fiscal Officer and she does everything. So the person who comes into that position it is going to take a while to get comfortable. Mr. Chock: Just from the standpoint of the budget, I am thinking about what kind...trying to foresee what kind of impacts that might have? Do we foresee an increase in need in order to build that foundation of the next people come on board or maybe it is a restructuring of it that might alleviate some of the budgetary needs? I just wanted to hear more about your foresight on that? Mr. G. Rapozo: It could. That is the thing, when the time does come, like I can always call my old Director and pretty much it is the succession will be a April 11, 2014 Department of Liquor Control (ss) Page 6 phone call away, because learning the position...I was fortunate that years before my supervisor, Dexter Shimatsu retired, he had me doing things, licensing and all of those kind of things that were not in my job description, but he had me doing certain things so when he retired it was a comfortable transition. Same thing when Eric Honma retired he had me doing some of the things. So for me I was fortunate. The next people will not be as fortunate. Mr. Chock: So I know there are some programs and we talked about them yesterday with KWIB and for instance there is this grant that OED will be applying for. Do you do any partnerships with some of the KWIB programs as well? Mr. G. Rapozo: What program is that? Mr. Chock: It is the Workforce Investment Board. Kaua`i Workforce Investment Board. They have some youth segment programs that I know worked not only in partnership with Life's Choices, but in terms of building life skills that people need, in their employment or on the track to higher education and so forth. So I was just wondering and there seems like there might be more partnership or outreach in terms of the messages that you folks advocate for are so important. This is a generational epidemic when we talk about alcoholism and the culture that we have here on this island. I mean I am subject to it in my family as my kids and those before me also. Mr. G. Rapozo: Definitely. The education, that is why going back to the schools. We were all brought up. We were the beer runners for our parents and grandparents. Go get a beer, go get a beer. That was something that was the culture. Up until a few years ago I was still doing that and finally realizing, hey wait a minute, that is illegal and that is where education, back in middle school and high schools might be too late, but that is there we want to start. Chair Furfaro: Go ahead, JoAnn. Ms. Yukimura: Gerald, where is that line item for the percentage of your penalties? Mr. G. Rapozo: It is not on the budget. Ms. Yukimura: So what you are getting is about $3,000 a year? Mr. G. Rapozo: Roughly. Ms. Yukimura: Because it does depend on how much you take in or actually it is how much you rule in terms of penalties owed, right? Mr. G. Rapozo: Yes. Ms. Yukimura: Your Commission? Mr. G. Rapozo: Correct. Ms. Yukimura: But it is roughly $3,000 per year? April 11, 2014 Department of Liquor Control (ss) Page 7 Mr. G. Rapozo: Last few years we have been collecting roughly $30,000 in fines. Ms. Yukimura: Okay. Chair Furfaro: Excuse me, may I follow-up, Gerald you do budget a line item that says what you anticipate fines to be, right? Mr. G. Rapozo: No. Chair Furfaro: You do not? Is that right, Ernie Barreira? ERNEST W. BARREIRA, Budget & Purchasing Director: I am searching Chair. Chair Furfaro: Because even though the portion that actually goes back into retraining and so forth, I would think we would forecast a line with what we anticipate fines to be. Ms. Yukimura: Then you would forecast the expenditures of that line item, too. Gerald could you give us a five-year record of the fines that you have imposed or the Commission has imposed? And the expenditures from those fines? Whether it is training of the licensees or anti-underage-drinking moneys, public education? You have only been on board for three months, two months. Mr. G. Rapozo: Since August. Ms. Yukimura: Okay. Six months. So I recognize that you may not know it off the top of your head. If you could, that would be helpful. Chair Furfaro: So if you could, Ernie, we want to make sure that we go back five years and see what the fine trend has been and maybe we should show that? I am sorry, JoAnn you still have the floor. Ms. Yukimura: That is all I have. Thank you. Chair Furfaro: Other members? Questions? Looks like you had a pretty big success your first time up. Our next session is not scheduled until 11:30 a.m. I want to prep for that and can recess until the County Attorney comes back in. Thank you Gerald and congratulations There being no objections, the Committee recessed at 10:52 a.m.