Annual report / Arizona Department of Liquor Licenses and Control

              Arizona Department of Liquor Licenses and Control

Annual Report July 1, 2003   June 30, 2004

_________________________________________ Mission Statement

To protect the health, safety and welfare of Arizona citizens by licensing the liquor industry and assuring compliance with state liquor laws through enforcement, training and adjudication.

BOARD
Chairman

DIRECTOR ALL0001AHO

LICENSING
LL Licensing Manager ALL0132AHO

DEPUTY DIRECTOR ALL0002AHO ADMINISTRATION
LL Administration Manager ALL183AHO AUDIT Prog. Comp. Aud. III 0189AJN Prog. Comp. Aud. III 0171AAN

Prog. Proj. spct. II 0195AHN

INVESTIGATIONS
Special Investigations Manager ALL0176 AHO Prog. & Proj. Spec. I 0126AAN ( BACKGROUNDS

Cust. Serv. Rep. II 0141AHN

BOARD Admin. Ass't III 0110AAN

INFO. SERV. Info. Tech. Spec. IV 0156AAE

COMPLIANCE Spec. Inv. Supv. 0211AHO Spec. Inv. Sgt. C.I.U. 0208AHN Prog. & Proj. Spec. II 0200AAN Spec. Inv. 143AHN

Spec. Inv. Lt. 0210AHO

Info. Tech. Spec. IV ALL0188AAE (

Cust. Serv. Rep. II 0102AHN

FINAN CE/PE R SONNEL Admin. Serv. Off. I 0108AAE (19) Rita Niner Opt. Disk Input Supv. 0178AAN

Spec. Inv.Sgt. Team 1 0209AHN

Spec. Inv. Sgt. Team 2 0207AHN Spec. Inv. 0154AAN

Spec. Inv. Sgt. Youth/Training 0205AJN

Cust. Serv. Rep. II 0150AHN

Spec. Inv. 0194AAN

Spec. Inv. 0118AAN

Cust. Serv. Rep. II 0120AHN

Admin. Ass't III 0140AAN

Opt. Disk Input Tech. 0124AAN

Spec. Inv. 0175AAN

Spec. Inv. 0148AAN

Spec. Inv. 0159AAN

Spec. Inv. 0152AAN

Cust. Serv. Rep. II 0129AHN

Acct. Tech. III 0167AAN

Spec. Inv. 0151AAN

Spec. Inv.

Spec. Inv. 0206AHN

Spec. Inv. 0179AHN

Cust. Serv. Rep. II 0192AHN

TUCSON Spec. Inv. 0112AAN

FLAGSTAFF Spec. Inv. 0122AAN

TUCSON LL Admin. Ass't III 0186AHN

Spec. Inv. 0123AHN

Spec. Inv.

Cust. Serv. Rep. II 0168AHN

Uncovered

Auditor Surharge

ARS 4-209.K Surcharge

ARS 4-209.L Surcharge

Spec. Inv.

key

July 19, 2004

Number of Full Time Equivalent Positions for the Department with Appropriations 6 5 4 3 2 1 0 199 199 199 199 199 200 200 200 200 200
General Fund FTE's Total FTE's Including Surcharges

2.31 2 2.08 2.18 1.97

2.388

2.448

2.468 2.208

3 2.8 2.6 2.442 2.4 2.2 2 1.8 1.6 1.4 1.2 1

General Fund Appropriations (in millions)

TOTAL COLLECTIONS
7

6

5

4

3

2

1

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Fiscal Year

___________________________________________________________ Administrative

Division

In the Administrative Division, the daily departmental operations include budget preparation, personnel, payroll, insurance and purchasing. Accounting for authorized non-reverting funds is also the responsibility of this Division as well as providing assistance to the State Liquor Board as needed. Information Services is a Section within the Administrative Division. The Department has modernized its operation and all data is now available on computer and through imaging. Countless hours of manpower have been saved with this conversion. The availability of any record at any time, as well as expediting the processes necessary to conduct daily business, is now the responsibility of this Section. All paper submissions are now imaged and available for many to view simultaneously. This section also receives all moneys due and issues licenses. This section has become our hallmark of progress. The Division was responsible for processing the following fees and charges for the Department for fiscal year 2004.
Fee Distribution FY 04 Applications License Fees Out-of-State Agent Change Fines Special Events Club Penalties Copy Fees Non-use Surcharge Audit Surcharge Enforcement Surcharge K Enforcement Surcharge L Miscellaneous TOTAL REVENUES COLLECTED 174,850 3,511,790 64,093 38,000 519,425 44,500 49,100 85,800 1,915 193,400 147,180 341,040 302,655 80 $5,473,828

All funds collected by the Department are transmitted to the state general fund with the following exceptions (See Disbursement of Revenues on the following page.): 1. One-third of all license fees are reserved and returned to the county of origin. The General Fund disbursed to the counties with the exception of Maricopa and Pima. These two counties receive $3,000 per each license they issue in unincorporated areas. The remainder of the licensing fees and all other receipts are retained by the General Fund. Fees from Special Event Licenses are transferred to the Department of Health Services. Fees from club licenses are transferred to the Department of Economic Security, Division of Developmental Disabilities. A surcharge of $30 per license renewal for series 6, 7, and 12 is assessed, with industry support, for funding the Department's restaurant auditors.

2. 3. 4.

5. 6. 7.

A surcharge of $35 on each license is being used exclusively to investigate licensees who have been the subject of multiple complaints to the Department. A surcharge of $20 per license renewal for series 11 and 12 and $35 for all other license types is assessed for a neighborhood association interaction and liquor enforcement management unit. Money received for processing fingerprints is transferred to the Dept. of Public Safety to be paid to the FBI for fingerprint review.
Disbursement of Revenues

General Fund License, fees, permits and penalties Charges for Services Fines Penalties Subtotal disbursements to General Fund Counties and Other Agencies Apache Cochise Coconino Gila Graham Greenlee LaPaz Maricopa Mohave Navajo Pima Pinal Santa Cruz Yavapai Yuma Dept. of Health Services (special event fees) DES/Div. of Developmental Disabilities Subtotal disbursements to counties and other agencies Audit Surcharge Enforcement Surcharge K Enforcement Surcharge L TOTAL DISBURSEMENT Total Collections less Fines & Chrgs

Actual FY 04 3,612,774 1,995 519,425 85,800 $4,219,994 FY 04 4,667 27,202 47,676 15,394 5,665 2,042 9,783 3,000 47,203 14,983 51,000 30,845 17,783 61,547 30,570 44,500 49,100 462,960 147,180 341,040 302,655 $5,473,829 $4,866,609

_______________________________________________________

Licensing Division

Daily activities in the Licensing Division include meeting with applicants and assisting them with understanding the myriad of forms required to complete the licensing process. Responding to questions relative to the licensing process, types of licenses, pertinent fees, information about current licenses and licensees, and miscellaneous questions also are a function of this Division. A review of all documents applicable to the licensing and renewal process requires a great deal of time. Notarization of documents is a small, but important, part of the process. Because of the modernization of the Department, all employees have been trained and are now very computer literate. All files are now maintained in a data base developed for the Department of Liquor. The Licensing staff is charged with accumulating and entering all licensing data in the proper manner so that all data is easily accessed and all information is available to the entire Department as quickly as it is received. This Division also is responsible for the receptionist activities, answering the telephone, greeting people and directing the public to the proper person to obtain information or assistance. Customer Service is of utmost importance. Each employee puts forth their very best to see that visitors or callers are treated politely and expediently.

TYPES OF LICENSES
Sample License # 06031050 Components: 06 03 1050 Series County Sequential Number

Series # 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Type In-State-Producer Out-of-State Producer Domestic Microbrewery Wholesaler Government Bar (All Spirituous Liquor) Beer & Wine Bar (Beer and Wine only) Conveyance (Airplanes, Trains, Boats) Liquor Store (All Spirituous Liquor) Beer & Wine Stores (Beer and Wine only) Hotel & Motel (with Restaurant) Restaurant Domestic Farm Winery Club (Private) Special Event (Temporary License) Wine Festival/Wine Fair Direct Shipment

County Numerical Designator 01 02 03 04 05 Apache Cochise Coconino Gila Graham 06 07 08 09 10 Greenlee Maricopa Mohave Navajo Pima 11 12 13 14 15 Pinal Santa Cruz Yavapai Yuma La Paz

Liquor License Count   July 2004

Series 01 Apache Cochise Coconino County Gila County Graham County Greenlee County Maricopa County Mohave County Navajo County Pima County Pinal County Santa Cruz County Yavapai County Yuma County La Paz County Out of State Suppliers County Ltd Out of State Suppliers County TOTAL 2 1 1

02

03

04

05

06 24

07 7 31 60 16 7 1 464 54 23 185 34 8 44 27 14

08

09 17 43

10 6 56 82 23 12 6 1140 129 26 269 88 28 98 81 23

11 3 5 17 1

12 5 44 99 22 4 2

13

14 3

Total 65 271 386 148 59 29 4838 427 175 1412 338 108 450 280 101 768 195

2 2

1 7 2 1

1 3

71 52 49

3

14 11 9 2 3

3

49 26 15 7

1 1

17 9 670 42 45 235 82 18 80 47 17

20 2

53 3 2

31 5 1 8 2 2

15 2

710 42 40

70 6 2 28 3 4 10 2 1

1562 112 25 383 51 27 135 60 22

1 1 1 1

101 29 10 49 19

4

6 2

2

242 57 16

3 4

2 19 12 6

2

5 2 1

2 2 1

1

50 47 16

768 195 963 32 85 60 1458 975 23 1377 2067 152 2553 14 289

10050

Licensing Division
FY 04 -- 07/01/03 - 06/30/04 9780 10000

9000

8000

7000

6000

5000

4000

3000 1640 2000 689 1000 1444 615 1247

0 Pending Applications Interim Permits Issued Licenses Issued Renewals Issued Licenses Cancelled Special Events

___________________________________________________Investigations

Division

It is the responsibility of the Investigations Division to ensure that all licensees statewide adhere to A.R.S. Title 4 and all rules promulgated by the Department. The primary functions of the Investigations Division are: 1. Provide training and assistance to the local law enforcement communities enhancing their ability to enforce liquor laws; 2. Provide training to middle, high school and college underage students; 3. Investigate all liquor complaints and process all law enforcement reports relating to Title 4 violations; 4. Respond to complaints from neighborhood associations, civic groups and local governing authorities regarding liquor violations; 5. Perform background checks on all applicants for liquor licenses in Arizona; 6. Perform audits to ensure 40 percent food sales for restaurant licensees; 7. Increase contact with licensees through Random License Inspections (RLI's); 8. Cooperate with DPS and local law enforcement agencies on covert, sting and underage buy programs through a team approach; 9. Research and respond to inquiries from manufactures, wholesalers and retailers; 10. Provide law enforcement trained speakers for various industry functions when requested.

Investigations Division FY 04 -- 07/01/03 - 06/30/04
3476

3500

3248 2760

3000
2149

2500

2000

1500
788

1000

598

525

500
64

0
Pending Cases Completed Cases Actionable Completed Cases Underage Actionable Completed Cases Complaints Received Police Reports Received Completed Random Liquor Inspections Background Checks

_____________________________________________________ Compliance

Division

The Compliance Division governs the dispute-resolution process to offer an alternative, when appropriate, to the more costly and time-consuming formal hearing process. The mandate of the Compliance Officer is to arbitrate cases and attempt a fair resolution. Compliance operations are similar to those in a county attorney's office as cases are reviewed to determine what cases merit action by the Department. After a police report is received or a Department report is filed alleging a violation, the Investigations Division decides whether or not a Department action is merited. Actions consist of verbal or written warnings, consent agreements, or referral to full administrative hearing. Consent agreements may be offered for some violations. In these cases the licensee is notified to contact the Department to informally discuss the case with the Compliance Officer. Signing a consent agreement usually obligates the licensee to remedy the situation, pay a fine, and/or agree to a suspension for a specified period of time. In some cases, the consent may require liquor law training, surrendering of the license or providing security plans for their operation. Administrative citations are prepared for the more severe violations and for those licensees who have refused the consent agreement option. When citations are complete, they are forwarded to the Office of Administrative Hearings for a formal hearing process. The Compliance Division is also responsible for approving and monitoring all programs that provide liquor law training.

Compliance Division
FY04 -- 07/01/03 - 06/30/04

600

523

500

400

300

200

69 100 1

51

75 20

0 Completed Cases Cases In Process No Action/Dismissed Cases W arning Letters Issued Licenses Suspended Cases Sent to OAH or Revoked

___________________________________________ Arizona Liquor Board
The State Liquor Board is a separate entity from the Department of Liquor Licenses and Control; however the Board is housed with the Department and is provided one staff member to prepare Board schedules, hearing notices, Board records, Board expenditures, Board hearings, preparation of agendas, issuing Board orders, etc. The State Liquor Board is responsible for hearing and ruling on all liquor license applications that are protested by the public, governing body of a city, town or county, or the Director. The Board may also cause a protest of an application. Additionally, an aggrieved party may appeal certain decisions of the Director to the Board for their review. Members of the State Liquor Board are appointed by the Governor and confirmed by the Arizona State Senate. A.R.S. Sections 38-211 and 4-211 set forth the requirements for appointment and confirmation. There are seven members who are appointed for a three-year term. The terms expire on the appropriate third Monday in January. There are no more than two members from the same county and no more than four members from the same political party. At least six members cannot be directly or indirectly financially involved in a business that is engaged in spirituous liquor. One member shall currently be engaged in the liquor business. The members elect the chairman and vice-chairman annually.
Fiscal Year 2004 No. of Hearings Scheduled No. of Licenses Granted No. of Licenses Denied No. of Appeals Heard 109 32 52 8

Members
James E. Ledbetter Attorney Lorenz D. Otzen, Member Liquor Wholesaler Don Jongewaard Phoenix Fire Fighter Balbir Grewal Retail Licensee William Gary DuPont Neighborhood Association Member D. Alan Everett Consultant Joanne Galindo Health Educator

Term Expires 1/16/06 1/17/05 1/20/06 1/16/06 1/15/07 1/15/07 1/17/05