Tobacco license idea snuffed out

City Council is considering stepping up local enforcement of state law that prohibits the sale of tobacco to minors.

Talk of a tobacco retailer’s license that would levy an annual $150 to $400 fee on approximately 57 liquor, convenience and grocery stores in Gilroy has been snuffed out.

City Council decided Monday to cease consideration of two ordinances that would:

– Require all retailers who sell tobacco products to obtain an annual tobacco retailer’s license;

– Ban smoking in city-owned outdoor public recreation areas (with a $100 fine for violators);

– Make it illegal for tobacco retailers to be located within 1,000 feet of schools, public libraries, parks, playgrounds, youth centers or childcare facilities.

No vote was taken at Monday’s meeting, which was a study session.

The council did, however, agree to look at an ordinance that would establish designated smoking spots in public recreation areas. Further discussion of this topic will likely be agendized sometime in the spring.

While acknowledging the grim statistics surrounding cigarettes and secondhand smoke, Council members Cat Tucker, Bob Dillon, Dion Bracco and Mayor Al Pinheiro said they could not justify spending staff’s time on pursuing a self-policing ordinance that would ban smoking from public recreation areas. They also opposed making businesses that “haven’t done anything wrong” pay to be regulated by the government even more.

“I have no problem going after a business that sells to minors,” said Councilman Dion Bracco. “But to charge stores fees (when they haven’t done anything wrong) to start this program… to impose more fees on a small business – I can’t do it.”

Councilman Bracco said he receives phone calls and emails about the parks all the time. These range from trees that need trimming, to grass that needs cutting, to complaints about cussing, to reports of excessive dog droppings – but “I have never received a phone call about people smoking at our parks,” he said.

The two draft ordinances presented to City Council Monday night are the byproduct of a $45,260 million grant being administered to the City of Gilroy since 2010 from the Santa Clara Public Health Department. The grant’s purpose is to encourage cities to develop regulations that decrease smoking prevalence, prevent youth access to tobacco products and decrease exposure to secondhand smoke.

There is no requirement for the city to approve any of the ordinances; rather, the grant was used by Gilroy to mitigate the extra time staff spent developing the draft ordinances for council’s consideration.

While Councilmen Peter Leroe-Munoz and Peter Arellano (a physician at Kaiser Permanente) supported the ordinances, Bracco, Dillon and Pinheiro viewed the proposed regulations as an example of “the never-ending expansion of government.”

Per current California law, smokers must stand at a distance of 20 feet from all government-owned buildings while lighting up.

Councilman Perry Woodward, who was absent from Monday’s meeting was not available for comment as of press time.

“Essentially what we’re trying to do here is slap another tax on tobacco retailers, but we’re forced to call it a fee because a tax goes to the ballot,” said Dillon, referring to the tobacco retailer’s license.

Modeling license fees from other California jurisdictions that range from $150 to $400 a year, Gilroy’s license fee would have generated revenue to offset the new, ongoing costs of implementing and maintaining the ordinance requirements carried out by the city’s Finance, Code Enforcement and Community Development departments; not to mention enforcement activities by the GPD such as youth decoy sting operations. City Administrator Tom Haglund did not have an estimate for what this cost would have been.

Banning smoking from public recreation areas didn’t fly with some of the council members, either. Several were dubious about the effectiveness of self-policing.

The city already has a similar ordinance about drinking on public property – and it’s not working, according to Bracco. He says people drink and “party” at Miller Park every weekend.

A plethora of community members showed up at Monday’s regular City Council meeting, including the Gilroy Youth Advocates, the South County Collaborative (a leading social service agency), the Gilroy Chamber of Commerce and four business owners representing 7-Eleven, JV Liquor & Deli, Rotten Robbie and Arco.

While city staff recommended the existing 57 businesses in Gilroy be grandfathered into the new ordinance, the threat of a tobacco retailer’s license – which would be non-transferable between owners – has entrepreneurs worried about the future.

Tareq Sulaiman, for example, whose store JV Liquor & Deli is located near Brownell Middle School – is thinking ahead to retirement. With tobacco sales constituting 15 to 20 percent of a convenience store’s overall retail sales, Sulaiman said potential buyers aren’t going to pay top dollar for a business that’s kissing its tobacco license goodbye with the outgoing owner.

“My retirement is my business,” said Sulaiman, a father of three who said he has never received a violation for selling tobacco to a minor in the 23 years he’s been doing business in Gilroy. “I don’t think we should be penalized in this bad economic time with another license fee.”

Tobacco retailers are required to pay a one-time fee of $100 to the State Board of Equalization, and obtain a permit that must be renewed annually (at no cost), according to the Santa Clara County Department of Public Health. Store retailers in Gilroy must also pay a $15 business license fee renewal and a yearly license fee based on their annual gross receipts.

On the flipside, a number of Monday’s ordinance supporters offered counter-arguments, arriving armed with a slew of stats.

“Twenty-five percent of adult residents in Gilroy say they’ve been told they have asthma by a health professional, compared to 14 percent countywide,” said Lynn Magruder, President and Chair of the South County Collaborative. “We already know we have a problem with asthma in Gilroy. (The Collaborative) strongly supports an ordinance that would prevent smoking in parks and trails.”

During his presentation to the city, City Senior Planner Stan Ketchum pointed out that 33 percent of all tobacco sales occur within 1,000 feet of schools. Additionally, in the 90 percent of California jurisdictions that have adopted tobacco retail licenses, the results have generated an average 27 percent reduction in sales to minors, according to Ketchum.

However, Susan Valenta – President and CEO of the Gilroy Chamber of Commerce – reminded Council members that cigarettes getting into the hands of minors isn’t necessarily the fault of businesses. According to Gilroy Police records, Valenta said there were 12 citations in 2009, 17 in 2010 and 14 in 2011 – “but those were for minors in possession,” she pointed out. “Not against the retailers.”

Despite several pleas from community members and an impassioned case for the ordinance made by Councilman Arellano – who threw out the staggering statistic of 443,000 deaths caused annually by smoking – Pinheiro reaffirmed Wednesday that the tobacco retailer’s license is off the table.

If the council were to vote for this, it sets a precedence to regulate “all the other things that are unhealthy to all of us,” said Pinheiro, mentioning French fries and alcohol.

“It’s more taxation in a roundabout way,” he continued. “We can’t be parents to everybody. If you can’t control your own children, why should government be the ones to do it?”

Dale Thielges, a 17-year resident of Gilroy who attended Monday’s meeting as a concerned community member, sees the decision as a missed opportunity to create a positive and healthy image for the city’s youth.

“Our city already imposes other fines based on safety, such as not having your dog on a leash,” she wrote via email. “We don’t really have the resources to impose that either, but it creates a safer community.”

“We’re just asking citizens to act as responsible adults. So any argument about adding on another layer of bureaucracy … to me, the cost of not acting would be too great.” – Councilman Peter Leroe-Munoz
“Peter (Leroe-Munoz), I think the day will come when I’m probably forced to live in your nanny state. But I’ll be dammed if I vote for it. I won’t vote for either one.” – Councilman Bob Dillon
“The stakeholders is the public, and we’re here to represent the public … the more we can do to prevent our youth to help them not to start smoking, the more we ensure a brighter future for all of us.” – Councilman Peter Arellano
“I have no problem going after a business that sells to minors. But to charge stores fees (when they haven’t done anything wrong) to start this program… to impose more fees on a small business – I can’t do it.”
– Councilman Dion Bracco


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