02-28-2023 WS City Council Agenda WORK SESSION
RICHFIELD MUNICIPAL CENTER, BARTHOLOMEW ROOM
FEBRUARY 28, 2023
5:30 PM
Call to order
1.Brief recap presentation and staff policy recommendations related to prohibiting flavored tobacco products,
capping the number of tobacco licenses issued by the City and the impact of removing all tobacco products from
municipal liquor stores. An update on the adult cannabis bill in the Legislature will also be provided.
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at
least 96 hours in advance to the Acting City Clerk at 612-861-97 12.
AGENDA SECTION:Work Session Items
AGENDA ITEM #1.
STAFF RE P ORT NO. 05
WORK SESSION
2/28/2023
RE P O RT P RE PA RE D B Y: J ennifer A nderson, S upport S ervices Manager
D E PA RTME NT D IRE C TO R
RE V IE W: J ay Henthorne, D irector of P ublic S afety/C hief of P olice
2/21/2023
O THE R D E PA RTM E NT RE V IE W: S ack Thongvanh, A ssistant C ity Manager C hris F ierst, L iquor Operations
Manager
C ITY MA NA G E R RE V IE W: K atie Rodriguez, C ity Manager
2/23/2023
I T E M F O R WO RK S E S S IO N:
Brief recap presentation and staff policy recommendations related to prohibiting flavored tobacco
products, capping the number of tobacco licenses issued by the City and the impact of removing all
tobacco products from municipal liquor stores. An update on the adult cannabis bill in the Legislature
will also be provided.
E X E C UT IV E S UM M ARY:
The Richfield Advisory Board of Health (A B H) is responsible for making recommendations to the City
Council related to community health services and has a long history of advocating for sound health policies to
protect the residents of Richfield.
The City Council originally heard this full presentation on March 22, 2022 during an online work session.
Council supported the elimination of flavored tobacco products and capping retail tobacco licenses. The
strategy for capping licenses wasn't determined at that time. There was additional discussion of ending all
tobacco sales in Richfield liquor stores. Staff was asked to research this issue before a decision would be
made.
Staff will briefly summarize policy recommendations that prohibit the sale of flavored tobacco products as well
as cap the number of tobacco licenses. Staff is recommending a license capping approach that would
allow renewals for businesses that maintain ownership as long as the original owners are still in
place at the time of renewal. T he City would not accept any more applications for new licenses, and
only renew those businesses with the same owner in place. As stores close or change ownership,
the City wouldn’t issue additional licenses. Had the capped approach been in place in 2021/2022,
the total number of licenses would have dropped since 4 tobacco only stores closed or moved. If the
municipal liquor stores stop selling tobacco, total licenses will drop to 21, beginning the gradual
reduction in total licenses.
Staff will also review the impact of eliminating all tobacco products from municipal liquor stores. Currently,
Richfield Municipal Liquor offers twenty-eight varieties of cigarettes for sale at our four locations. Of
these twenty-eight varieties, eleven are flavored cigarettes. Annually cigarette sales contribute
1.46% to 1.79% of total Liquor Operations sales. Cigarettes are a convenience item the stores offer
customers to help save a stop.
D IRE C T I O N NE E D E D:
The proposed ordinance that was presented last year restricts all flavored products and eliminates all
retail tobacco licenses with a specific sunset date. Staff seeks approval to develop a proposed
ordinance that caps tobacco licenses but does not include a specific sunset date. The proposed
ordinance would be presented for a first reading at a future Council meeting.
Staff also seek direction on eliminating all tobacco products from municipal liquor stores. If council
does choose this option staff recommends a phased approach of thre e months to draw down
inve ntory and prov ide enough notice to ve ndors and custome rs.
B AC K G RO UND INF O RM AT I O N:
A.H IS TOR IC AL C ON T E X T
I n 2019, the Advisory Board of Health (A B H) began researching tobacco policies related to prohibiting
flavored tobacco products, as well as capping the number of tobacco licenses the city issues. This work
was then sidelined due to Covid. I n late 2021/early 2022, presentations on these topics were provided to
the A B H by Bloomington Public Health and the Association for Non-Smokers MN (A NS R). The A B H
has since worked with A NS R and the Public Health Law Center at Mitchell Hamline School of Law to
develop draft policy language.
B.P OL IC IE S (resolutions, ordinances, regulations, statutes, etc):
The City of Richfield has a tobacco policy that regulates the sale, possession, and use of tobacco and
related devices and products and is intended to protect young people against the serious effects
associated with tobacco use.
C.C R IT IC AL T IMIN G IS S U E S:
None
D.F IN AN C IAL IMPAC T:
Currently, tobacco licenses are issued and renewed annually by the Support Services Division. The
2023 fee for a retail tobacco license is $541. W ith 25 establishments currently operating, retail tobacco
licenses generated $13,525 in revenue for 2023.
Banning sales of flavored tobacco and eliminating all tobacco products in municipal liquor stores will have
a financial impact on revenues and profits, potentially reducing funds available to Park and Recreation
capital investment. The 2023 Budget includes a $500,000 transfer from the Liquor Operations Fund to
support Park and Recreation capital projects. I n 2022 the profit on sales of flavored tobacco was
$12,151 and the profit on non-flavored tobacco products was $40,847. Detailed sales and profit
information from 2020 is attached.
E.L E GAL C ON S ID E R AT ION:
I t is advised the City Attorney should review the proposed ordinance prior to any formal action.
ALTE R N AT IV E(S):
Council could choose not to ban flavored tobacco. Council could choose not to cap tobacco licenses. Council
could choose not to eliminate all tobacco products from municipal liquor stores.
P R IN C IPAL PAR TIE S E X P E C TE D AT ME E TIN G:
AT TAC H ME N T S:
D escription Type
C igarette S ales D ata C over Memo
2020 Cigarette Sales Profit Qty. Sold (Units/Packs)Sales Total Total Cost Profit Margin
Flavored Tobacco Sales 25.40%10,495.99$ 4,226 46,507.24$ 36,011.25$ 22.60%
Non-Flavored Tobacco Sales 74.60%30,825.63$ 13,337 148,011.63$ 117,186.00$ 20.02%
Total Sales 100.00%41,321.62$ 17,563 194,518.87$ 153,197.25$ 21.20%
Note: Cigarette Sales contribute 1.46% of total sales for the year end 2020.
2021 Cigarette Sales Profit Qty. Sold (Units/Packs)Sales Total Total Cost Profit Margin
Flavored Tobacco Sales 24.30%9,166.15$ 4,937 56,995.13$ 47,828.98$ 19.16%
Non-Flavored Tobacco Sales 75.70%28,590.12$ 15,460 175,473.90$ 146,883.78$ 19.50%
Total Sales 100.00%37,756.27$ 20,397 232,469.03$ 194,712.76$ 19.50%
Note: Cigarette Sales contribute 1.66% of total sales for the year end 2021.
2022 Cigarette Sales Profit Qty. Sold (Units/Packs)Sales Total Total Cost Profit Margin
Flavored Tobacco Sales 22.90%12,151.05$ 4,901 62,603.49$ 50,452.44$ 19.00%
Non-Flavored Tobacco Sales 77.10%40,847.30$ 14,594 185,657.06$ 144,809.76$ 22.00%
Total Sales 100.00%52,998.35$ 19,495 248,260.55$ 195,262.20$ 21.35%
Note: Cigarette Sales contribute 1.79% of total sales for the year end 2022.
2023 Sales to 02/21/2023 Profit Qty. Sold (Units/Packs)Sales Total Total Cost Profit Margin
Flavored Tobacco Sales 22.50%1,246.05$ 567 7,365.33$ 6,119.28$ 16.90%
Non-Flavored Tobacco Sales 77.50%4,285.58$ 1,626 21,121.74$ 16,836.16$ 20.03%
Total Sales 100.00%5,531.62$ 2,193 28,487.07$ 22,955.45$ 19.42%
Note: Cigarette Sales contribute 1.58% of total sales for the year so far.
Current Inventory as of (02/22/2023)Units/Packs Cost
Cedar 566 5,715.85$
Lyndale 261 2,654.52$
Penn 165 1,741.31$
Wine and Spirits 205 2,133.31$
4-Store Totals 1,197 12,245.00$