26 pages of liquor rule changes OK’d

Unlike past votes, there was no public opposition

GLENN MUKAI – Improvements underway

WAILUKU — The Maui County Liquor Control Commission approved another round of rule changes Wednesday — this time received favorably — that assist nonprofits holding special events and restaurant owners with liquor licenses.

Rule changes initiated with little public notice in early 2017 generated a storm of complaints from hundreds of residents, community groups, law enforcement and nonprofit officials. Issues initially arose in early 2017, when the department approved major rule changes, such as allowing 24-hour retail sales of alcohol and home deliveries, and began imposing and enforcing more stringent requirements for nonprofits attempting to obtain single-event licenses for fundraisers.

At the time, the major changes were characterized as “mostly housekeeping” by the commission and department.

“This time it is housekeeping,” Commission Chairman Robert “Bob” Tanaka said during Wednesday’s meeting.

The commissioners said during the meeting that the changes were needed to comply with measures passed by the last state Legislature.

While the changes promise to help licensees, nonprofit officials still have reservations and referred to last week’s County Council meeting focusing on an audit that was critical of the department and the commission. The audit’s 54 recommendations included having the mayor and council conduct an annual review of the commission, holding Sunshine Law training for liquor commissioners and updating the department’s operations manual.

Debbie Cabebe, immediate past president of the Maui Nonprofit Directors Association and chief executive officer of Maui Economic Opportunity, said Wednesday that she thinks the overall changes are positive but that the “underlying problem still exists.” She said the audit helped reveal many issues, such as the department’s operations manual, which has not been updated since 2000.

“Any policy is open to interpretation,” she said. “You can have two people doing the same job, but their understandings are different. If you don’t have a compass to guide them, you’re going to continue to have problems.”

The new rules aim to lessen paperwork for nonprofits seeking Class 10 special licenses and allow the commission to “waive any hearings, fees, notarization of documents, submission of floor plans and other requirements.” The license also allows fundraising events to auction liquor in sealed or covered glass, ceramic or metal containers, or services that provide liquor.

No criminal background check would be required of nonprofit officials — as had been called for by the liquor department — though nonprofit applicants would have to provide a current list of officers and directors. Proof of liquor liability insurance also would be required unless waived by the commission.

Other approved changes will allow restaurant owners to apply for liquor licenses before they open. Previously, restaurants had to apply for a general dispenser license and show that at least 30 percent of their gross revenue came from food sales during the first year.

Applicants can receive Class 2 restaurant licenses if they produce an affidavit stating that at least 30 percent of the establishment’s revenue will come from food sales. They also would have to submit monthly reports on food and liquor revenues throughout the first year.

Restaurant licenses can be transferred to another applicant taking over the same location, as well, but the new owner must agree to bring in at least 30 percent of gross revenue from food sales and submit monthly reports on food and liquor revenues.

Wednesday’s meeting was the first since the release of the council audit. All nine commissioners were in attendance for the second time this year; the audit referenced poor attendance by commissioners.

Unlike previous meetings on controversial rule changes that filled the room, only one person testified on the 26 pages of rule changes during Wednesday’s meeting.

“They’re great (rules). This is progress,” commissioner Jonathan Todd said. “This is what everybody has been complaining about on Maui, and now we finally have the state responding and Maui following.”

Liquor Director Glenn Mukai credited the changes to local nonprofits and industry professionals, including Cabebe and Lisa Paulson, executive director of the Maui Hotel and Lodging Association. He said the two women “stepped up” by going to the state level and “got what they wanted.”

Cabebe said the changes began with Kihei resident Madge Schaefer, who originally sued the county over the 24-hour liquor sales issue and later advocated for nonprofits seeking special licenses. Cabebe then worked with Paulson and the Liquor Control Department’s small business advisory committee to draw up the state laws.

Cabebe noted that some licensees continue to have challenges working with the department but is hopeful things will get better in light of the audit and rule changes. She said the association plans to hold a membership meeting today to discuss various issues.

“I think we’re going to continue to have challenges, but I think it’s a step in the right direction,” she said of the new rules.

About the department’s operations manual, Mukai assured commissioners that changes were being made. He said two departmental changes and three amendments to the operations, policies and procedures are being reviewed by the Hawaii Government Employees Association union for final approval.

Mukai, who has been director since June 2016, blamed delays on updating the manual to changes in state liquor laws, rules of the commission and county policies.

“We have to sift through everything and make sure it’s correct and doesn’t come into conflict with anything,” including union contracts, he told commissioners.

Mukai told the commission that the department is going through a reorganization process, which he requested through the Department of Personnel Services over a year ago. He said the Liquor Control Department was behind more than a dozen county departments but has recently taken priority over the others.

The usefulness of the department’s website also came under fire in the audit with limited applications accessible. Mukai said the department is working to house more applications and other materials for licensees on the website and overhauling its email system to be able to send out news and information quickly.

He said he is working on acquiring computer tablets for liquor investigators so they can review floor plans and other documents while out in the field.

Application materials and checklists for nonprofit special events online will need to be updated with the new rule changes. He did not give a timeline for when they would be available on the department’s website but said it would be “as soon as possible.”

* Chris Sugidono can be reached at csugidono@mauinews.com.

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