Editor’s note: This story was updated to correct what happened at the meeting.
At the Hill City Common Council meeting July 8, a hearing was held for an off-sale liquor license for The Mangy Moose Saloon.
After the hearing, Mangy Moose owner Tana Nichols withdrew her application, citing frustration with the process.
“My question is: if they were going to deny it, why did they have the hearing?” Nichols said in an interview after the meeting.
Nichols wanted the offsale liquor license to sell Full Throttle Saloon liquor. Nichols only wanted the off-sale license to be for two months, offering to pay a prorated rate for the license.
At the June 24 Hill City Common Council meeting, it was decided that a legal advertisement needed to be run before a hearing could be heard. Now that the legal advertisement had been run, there could be a hearing on the matter.
When it came time for public comment at the July 8 meeting, two members of the audience had an issue with the liquor license being granted.
“I think it sets a bad precedence only offering a liquor license for a partial year,” said Lori Miner, Hill City resident and wife of alderman Bill Miner.
Dale Householder, representing Hill City Senior Center, said his issue with the saloon was in regards to its trash, which he said described as “deplorable.”
The trashcans don’t have a lid on them, he said, and something “needs to change.”
At the July 22 meeting of the council, Householder apologized for what he said regarding the Mangy Moose.
Alderman Jim Peterson read into the record a letter from a constituent in his ward — Judy Walker —who, like Householder, had issues regarding the trash.
In regards to the license itself, there was some confusion on the board if Nichols was allowed to hold it or not.
Aldermen Miner referenced South Dakota Codified Law 35-4-41, which states that a license needs to be held for an entire year rather than a prorated time.
There was a situation in 2013 where Nichols also wanted to obtain an off-sale liquor license for part of the season, which was denied in reference for South Dakota Codified Law 35-4-41.
City attorney Frank Bettmann recommended going with the precedent set in 2013 while Miner referenced a portion of South Dakota Codified Law where license of this sort would not be allowed.
Nichols was upset, saying that she wanted the license for July and August, and if they were to go back and check with the state it would be too late.
“If I can’t have it for this month and next there’s no point,” she said at the meeting. “Just drop it.”
Nichols left the room, and words were said between Nichols and Miner, with Miner rising from his chair. Mayor Kathy Skorzewski instructed Miner to sit back down.
Now, Nichols is upset with the way the meeting went. She said after the meeting she felt the whole process was unfair.
In a letter Nichols provided the Hill City Prevailer News she sent to Skorzewski and the members of the Hill City Common Council, Nichols laid out her issues.
“The unfair proceedings began from the very beginning,” she wrote. “I submitted my request and application nearly two weeks before the next scheduled meeting to allow time for any research needed for the meeting,” she wrote. “Because I had requested this item a few years ago, I specifically asked that it be put on the agenda as an ‘action item’ so as to not waste either the council or my time if it was a moot point. I did that because I was unsure if the ordinances or state laws had been changed, as was discussed after my last request sent years before. Since the majority of the council was in favor of letting it go forward, a hearing was set for two weeks later.”
At that point, Nichols wrote, all signs pointed to moving forward with the request. However, that was not the case.
Nichols said she was clear that this was a promotion with Full Throttle Saloon and, after the June 24 meeting in which no councilmembers voiced an objection, Nichols said she moved forward with the plans to get the liquor.
“I ordered liquor that I can never sell as on-sale only,” she wrote. “The Full Throttle spent thousands of dollars to promote the Mangy Moose and Hill City itself. His signs and promotion ads are now a total waste and he is out thousands of dollars. He will be speaking about these proceedings to his legal council.”
Nichols said after the meeting that she had spent eight years on the Hill City Common Council because she wanted to serve her community.
During her time on the board, Nichols said, “I have never seen a hearing for a liquor license” conducted like that one.
Nichols said after the meeting she felt as if her establishment was singled out by members of the public and the hearing had nothing to do with her establishment. She referenced the comments made by Householder.
As for why the hearing was held, Brett McMacken, city administrator for Hill City, said at the time the council was unaware of the South Dakota Codified Law that prohibited the proration of licenses.
“It was a discussion when it was brought as a request because it was unique because it was for a partial year,” McMacken said. “At that next meeting it was listed as an action item to conduct a public hearing.”
Even though Nichols and the Mangy Moose already hold a liquor license, McMacken said a separate liquor license hearing needed to be held, which is when the public made its objections and Miner brought forth the South Dakota Codified Law relevant to Nichols’s case.
In a legal opinion written by Bettmann, he addressed whether or not the city can prorate a license, if the city can “get around” a state statute such as the one referenced in this case, if the city can accept monthly payments for license fees and if the referenced statute dictates a full fee is required for any license usage for any period of time.
“I’ve reviewed our current (operating agreements) and we are compliant,” Bettmann wrote. “I found no authority for the city to be able to lawfully circumvent a state statute concerning licenses with the possible exception of the following: a. 34-4-21 states that an (operating agreement) cannot exceed five years. Since SDCL 35-4-41 directs that the duration of a license is only one year at a time, then this suggests that the agreement could go longer but then it would be my view that it would be for a period of one year, then four renewals automatically granted by the contract.”
His second and third points also referenced South Dakota Codified Law 35-4-21, where either party can cancel on 90 days notice. This too, he said, suggests the city can go around the one year duration by using the operating agreements. Further, he wrote, SDCL 25-3-21 says the operating agreement can include “any additional compensation or fee as may be mutually agreed upon by both parties.”
In regards to the first point, Bettmann wrote, “I see it as more logical that it is suggesting a full fee is required even if the license isn’t actually un use the full year.
“As to the third question (can we prorate a license?), the discussion immediately above also tells me that a license cannot be prorated,” Bettmann wrote. “As to the final question, I do not see SDCL 35-4-41 as requiring that we must ask for payment of the fee in a lump sum since the language only discusses what the charge must be. Therefore, we could take periodic payments, but I am reminded that we have had issues with that in the past and that is the reason we went to the lump sum fee to be paid in the beginning.”
As for Nichols, she wrote in her letter to the council that she will be advised as to whether or not there are legal grounds to file against the city and “its clown court.”
She said in the meantime she just wants to run her business to the best of her ability without having to listen to every petty complaint that gets said.
“What happened to ‘filing a complaint’ or ‘having the right to know my accuser?’” Nichols wrote to the council. “Do those rules apply to everyone but the Mangy Moose and me?”