8.1 SR 06-05-2023Request for Action
To
Item Number
Mayor and City Council
8.1
Agenda Section
Meeting Date
Prepared by
General BusinessJune
5, 2023
Tina Allard, City Clerk
Item Description
Reviewed by
Resolution: Premises Permit, Fraternal Order of
Cal Portner, City Administrator
Reviewed by
Eagles at Elk River Golf Club
Jared Shepherd, City Attorney
Action Requested
The Council could consider the following options for the permit request.
1. Adopt, by motion, a resolution approving the premises permit with findings; or
2. Adopt a motion to direct staff to prepare a resolution of denial with findings.
Background/Discussion
Per City Code the intent of allowing gambling in Elk River is that the proceeds of gambling shall directly benefit the
citizens of the community.
The Fraternal Order of Eagles Club #3264 has requested a Premise Permit to sell pull tabs from a second location,
the Elk River Golf Club. City ordinance allows up to three permits per organization. The permit is issued by the
State Gambling Control Board with approval from the city.
The State Gambling Control Board has reporting requirements and they evaluate organizations according to a star
rating system.
Percent Spent on LPE
More than 50%
More than 40%
More than 30%
More than 20%
Less than 20%
Rating
5 Star
4 Star
3 Star
2 Star (1-year automatic probation)
1 Star (1-year automatic probation)
Elk River Eagles' Rating
2020
2021 & 2022
The Board's rating system takes into consideration the total Lawful Purpose Expenditures (LPE). City ordinance
requires an organization to expend 75% of Lawful Purpose Expenditures in the city's trade area. The Club has not
met these requirements for the last three years. The Club is on probation with the state Gambling Control Board
and if they are unable to raise their rating after the probationary term, the Board could suspend their license or
impose a civil penalty.
The Club cited various reasons for being unable to meet state and city requirements as noted in their attached letter.
The Covid 19 pandemic began in 2020. The federal government formally declared the national state of emergency
over on May 11, 2023.
The Elk River Vision P N W I e E U 0 V
A welcoming community rvitb revolutionary and spirzted resourcefulness, exceptional NATURE
service, and community engagement that encourages and inspires prospect. Updated. Januay 2023
Financial Impact
N/A
Mission/Policy/Goal
City Mission
Attachments
■ Resolution
Letter from the Eagles Club
LG 1012 Lawful Purpose Expenditure Reports
N:APublic Bodies\Agenda Packets\06-05-2023\Fugal\x8.1 sr Gainbling Perinit.docx
City of
Elk
*I
River
City of Elk River
City Council
Resolution 23-
A Resolution of the City Council of the City of Elk River Approving a Lawful
Premises Permit
WHEREAS, Elk River City Code § 38, Article V, authorizes legalized gambling,
specifically premise permits within the city. The Fraternal Order of Eagles, Aerie #3264
(Eagles Club) is requesting a second premise permit to operate at the Elk River Golf Club,
20015 Elk Lake Road; and
WHEREAS, per Elk River City Code § 38-166 organizations holding a premises permit to
conduct lawful gambling within the city shall be required to expend 75% of its lawful
purpose expenditures within the city's trade area. The Eagles Club has not met this
requirement for three years (2020, 2021, and 2022); and
WHEREAS, per Minnesota State Law § 349.15 an organization will be evaluated based on
the percentage of annual lawful purpose expenditures when compared to gross profits. An
organization is evaluated to a rating criteria. The Eagles Club has not met this requirement
for three years (2020, 2021, and 2022). The Eagles Club is currently on probation with the
State Gambling Control Board; and
WHEREAS, the Eagles Club have been long-standing community stewards and request
the City Council to consider their history within the community and their unique
circumstances as to why they have been unable to meet state and local requirements.
WHEREAS, the City Council evaluated the testimony and application of the Eagles Club,
and makes the following findings:
1. The Eagles Club is a non-profit organization uniting fraternally in the spirit of
liberty, truth, justice, and equality, to make life more desirable by lessening its ills and
promoting peace, prosperity, gladness and hope.
2. The Eagles Club are long-standing good stewards of the community and have been
around for 58 years, since 1965, helping those in need within the City's trade area.
3. The Eagles Club is recovering from the Covid 19 pandemic of 2020 to 2023, when
many entities were forced to shut down and the Eagles Club suffered the following
effects due to the pandemic:
a. Loss of revenue and a general reduction in the number of requests for
assistance from those in need.
b. A further reduction in requests for assistance due to additional government
benefits being provided such as the Paycheck Protection Program, County
and State aid assistance programs, and Employee Retention Credits.
i
4. The Eagles Club is committed to meeting its requirements for lawful purpose
expenditures under City Code and State Law for 2023 and there is good cause to
grant the second premises permit under the circumstances.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk
River, Minnesota, that the request by the Fraternal Order of Eagles #3264, located at 824
Railroad Drive, for a premises permit at the Elk River Golf Club, 20015 Elk Lake Road is
hereby be approved.
Passed and adopted this 51h day of June 2023.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
i
To: Elk River City Council
From: Fraternal Order of Eagles (FOE), Aerie #3264
Re: Extension of Gambling License
We are submitting a request to provide charitable gambling through paper pull -tabs and
electronic pull -tabs at the Elk River Golf Club.
While we have had a long running gambling license and have provided a lot of support to
various people and organizations within the Elk River area, we acknowledge that we haven't
made the required levels of contributions in the recent past. There are several reasons for this:
• Unlike some organizations who have a dedicated resource for assistance, we depend on
people and organizations in need contacting us and requesting help. Sometimes people
aren't even aware of what we do as an organization. We have since started working on
a pipeline of groups who require our help as well as publicizing our mission as an
organization.
• During the 2020 year, our club was closed for 4 months due to Covid-19. Please note
that this crossed 2 of our fiscal years as we operate on a 6/1— 5/31 fiscal year. This not
only affected our ability to generate revenue, but also affected the number of requests
that we received. We are not sure if the normal requestors even knew we were open.
• Also relating to Covid-19, many organizations received government benefits such as PPP,
County or State Assistance and Employee Retention Credits. This may have reduced
their need for grants, driving down our number of requests.
• Electronic pull -tabs were new to us. We had no idea what to expect in terms of revenue
from them, so when we budgeted, we were conservative as to what would happen. The
revenue was far more than what was expected and far more irregular than paper pull -
tabs, leaving us with a lot of additional, unpredictable revenue. We have since gotten a
better understanding of what we can expect from this source of revenue and are actively
reaching out to the community to make them aware that the Eagles can be a source of
assistance. I believe if you review the past 12 months, our donations have increased
greatly and in a more predictable fashion.
We hope that the City Council will approve our request so that we can extend the benefit that
we can provide to the community. Thanks for your consideration.
se
Eagles Aerie 3264 Elk River
From: Jul 2021 To: Jun 2022, License: 00668
A
0
C
D
E
F
G
MonthNear
Gross profits
Col C,from
Total Gross
Total LPE
Column F
Lawful
% �"..,�,
of Gross profit to.
this month
last month
profit total to
this month
From Last
purpose
date Col, F divided
G1, Line
date Col, A +
F, line 22
Month
to this date
by Col, C [Do not
10C
Col, B
Col, D + Col E
round up % amount]
712021
20,686.94
0.00
20,686.84
5,782.92
0.00
5,782.92
27.95% .
8/2021
18,773.19
20,686.84
39,460.03
2,399.10
5,782.92
8,182.02
20.73%
9/2021.
19,575.68'
39,460.03
59,035.71
7,996.50
8,182 02
16,178.52
27.40%
10/2021
20,592.95
59,035.71
79,628.66
6,919.27
16,178.52
23,097.79
29.01 %
11/2021'
15,867.65
79,628.66
.95,496.31
3,873.12
23,097.79
26,970.91
28.24%
12/2021
14,859.40
95,496.31
110,355.71
7,984.00
26,970.91
34,954.91
31.67%
1/2022
13,423.13''
110,355.71
123,778.84
6,429.93
34,954.91
41,384.84'
33.43%
212022
11,975.90
123,778.84
135,754.74
2,705.31
41,384.84
44,090.15
32.48%
3/2022
20,014.78
135,754.74
155,769.52
9,707.33
44,090.15
53,797.48
34.54%'
4/2022
19,328.99
155,769.52
175,098.51
6,435.02
53,797.48
60,232.50
34.40%
5/2022
11,474.13,
175,098.51
186,572.64
12,775 08
60,232.50
73,007.58
39.13%
6/2022
16,558.17
186,572.64
203,130.81
7,970.04
73,007.58
80,977.62
39.86%
12-MONTH RATING PERIOD
For each 12-month period beginning July 1, a licensed organization will be An organization that fails to expend a minimum of 30% of gross profits on lawful
evaluated by the Gambling Control Board todetermine a rating based on purposes each year (July to June) is automatically on probation effective July 1
the percentage of annual gross profits spent on lawful purpose expenditures. for oneyear. The organization must increase their rating to a mininum of 30% or
It is not a rating of its overall lawful gambling operation. be subject to sanctions by the Board.
% Spent on
Lawful Purpose*
Rating
more than 50% .............. 5 star
*****
more than 40%.............. 4 star
more than 30% .............. 3 star
***
more than 20% ..............
2 star
** One year automatic probation
more than 10% .............. 1 star
* One year automatic probation
EXCEPTION.
An organization that conducts lawful gambling in a location where the primary
businessis bingo (bingo hall) must expend a minimum of 20% of gross profits on
lawful purposes each year (July to June).
25 May 2023 9:16:07 AM Charitable Gambling Made Easy, Inc. Page 1 of 1
Eagles Aerie 3264 Elk River
From: Jul 2022 To: Jun 2023, License: 00668
A
8'
C
D
I�
F'
G
MonthEl(ear
Gross ow.,�.�...w.
profits
r
Cot C,from
Total Gross
.o„o.o,,......o
Total LPE
Column F
....,eeso
Lawful
... .
,,...-. profit
%of Gross rofit to
this month
fast month
profit total to
this month
From Last
purpose
date Col, F divided
G1, Line
date Col, A +
F, line 22
Month
to this date
by Col, C [Do not
10C
Col, B
Col, D + Col E
round up % amount]
712022
8,201.05
0.00:
8,201.05
7,299.55
0.00
7,299.55
89.01%
8/2022
20,974.73
8,201.05
29,175.78
-481.17
7,299.55
6,818.38
23.37%
9/2022`
14,062.65
29,175.78 .
` . 43,238.43
5,046.69
6,818.38
11,865.07
27.44%
1012022
21,264.72
43,238.43
64,503.15
4,523.86
11,865.07
16,388.93
25.41 %
11/2022
22,374.60
64,503.15'
86,877.75
8,462.35
16,388.93
24,851.28
28.60%
12/2022
20,729.20
86,877.75
107,606.95
12,226.86
24,851.28
37,078.14
34.46%
1/2023 :
18,523.23
107,606.95
126,130:18
17,570.11
37,078.14
54,648.25`
43.33%
212023
16,742.85
126,130.18
142,873.03
12,326.32
54,648.25
66,974.57
46.88%
3/2023
28,426.70 `'
142,873.03
171,299.73
24,768.50
66,974.57
91,143.07.
53.56%
4/2023
33,103.53
171,299.73
204,403.26
12,757.63
91,743.07
104,500.70
51.12%
5/2023
6/2023
12-MONTH RATING PERIOD PROBATION.
For each 12-month period beginning July 1, a licensed organization will be An organization that fails to expend a minimum of 30% of gross profits on lawful
evaluated by the Gambling Control Board todetermine a rating based on purposes each year (July to June) is automatically on probation effective July 1
the percentage of annual gross profits spent on lawful purpose expenditures. for oneyear. The organization must increase their rating to a mininum of 30% or
It is not a rating of its overall lawful gambling operation. be subject to sanctions by the Board.
% Spent on
Lawful Purpose* Rating
more than 50% .............. 5 star *****
more than 40% .............. 4 star
more than 30% .............. 3 star ***
more than 20% .............. 2 star ** One year automatic probation
more than 10% .............. 1 star One year automatic probation
EXCEPTION.
An organization that conducts lawful gambling in a location where the primary
businessis bingo (bingo hall) must expend a minimum of 20% of gross profits on
lawful purposes each year (July to June).
25 May 2023 9:15:31 AM Charitable Gambling Made Easy, Inc. Page 1 of 1