Resolution 1997-32
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RESOLUTION NO. 97-32
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF GILROY UPHOLDING THE DECISION OF THE CITY
ADMINISTRATOR NOT TO RENEW BAR PERMIT FOR
CLUB NEMESYS (ANDRES BECERRA, OWNER), BAR
PERMIT NO. 101222
WHEREAS, pursuant to the Gilroy Municipal Code, Bar
Permit No. 101222 was issued to Andres Becerra for the operation
of Club Nemesys (the "PermitH), located at 7243 Monterey Street,
Gilroy, California, on January 29, 1996; and
WHEREAS, pursuant to Gilroy Municipal Code Section
16.5,
said
Permit
runs
from year- to-year,
and
the
City
Administrator may revoke or refuse to renew such permit, with his
actions subject to review by the City Council; and
WHEREAS,
Gilroy has adopted Resolution No.
97-17
providing for a municipal administrative hearing policy.
Said
resolution provides for an evidentiary hearing in front of the
City Administrator in a question of permit renewal, with appeal to
the City Council confined to the record and oral argument; and
WHEREAS, on March 6, 1997 the City Administrator issued
a "Notice of Intention to Decide on Renewal or Nonrenewal of Bar
Permit No. 101222 and Notice of Opportunity for Administrative
HearingH; and
WHEREAS, representatives of Club Nemesys did file a
,
... .
request in a timely manner for an administrative nearing, and they
requested that the hearing be open to the public, which request
was granted.
In advance of the hearing , representatives of the
club were furnished copies of the exhibits to be entered into
evidence by the Police Department; and
WHEREAS,
the administrative hearing on the renewal or
nonrenewal of the bar permit for Club Nemesys was duly held on
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RESOLUTION NO. 97- 32
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March 26, 1997 in the City Council Chambers.
It lasted from 9:00
a.m.
until approximately 2:30 p.m.,
and was recorded on
videotape.
The club was represented by owner Andres Becerra, as
well as attorneys Richard Terry and Arthur Cantu (Mr. Cantu was
only present for the afternoon session commencing at 1:00 p.m.).
The Police Department was represented by Capt. Gregg Guisiana
without an attorney.
The hearing was held in front of City
Administrator Jay Baksa, who was represented by Acting City
At torney Andrew L. Faber.
The hearing was held pursuant to
Gilroy's Municipal Administrative Hearing Policy, Resolution No.
97-17; and
WHEREAS, on April 21, 1997 the City Administrator
issued his Findings and Decision stating that the decision of the
City Administrator was not to renew the Permit; and
WHEREAS, the permittee has timely filed a request for
an appeal of the City Administrator's decision to the City
Council; and
WHEREAS, on June 16, 1997, the City Council conducted a
duly noticed hearing at a special meeting, at which the City
Council reviewed the entire administrative record of this matter,
including a transcript of the City Administrator's hearing and all
evidence introduced at that hearing, heard oral argument from the
parties, and accepted public input.
NOW, THEREFORE, BE IT RESOLVED TB'AT the City Council
hereby adopts findings and makes a decision ;:ld) this matter as
follows:
1. The City Council hereby adopts the City Administrator's
decision in its entirety.
A copy of that decision is attached
hereto as Exhibit 1 and incorporated herein by this reference.
The City Council adopts the Findings and Decision of the City
Administrator as its own, it specifically finds that substantial
evidence in the record supports each of the findings made by the
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RESOLUTION NO. 97-32
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City Administrator, and that his findings support his decision not
to renew the Permit.
2. Bar Permit No. 101222 is hereby officially nonrenewed.
Since it has already expired as a matter of law, and has only
been deemed valid during the pendency of this appeal, the permit
is now of no further force and effect, and all activities
conducted pursuant to it must immediately cease.
PASSED AND ADOPTED this -1frt.h day of June
1997 by
the following vote:
AYES: COUNCILMEMBERS: GILROY, MORALES, ROGERS, ROWLISON, VALDEZ and
SPRINGER
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
APPROVED:
-4~
THOMAS SPRINGER,
Mayor Pro Tern
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Rhonda Pellin, Interim City Clerk
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..of ~
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RESOLUTION NO. 97-XL
.f1T ·
\!.L- t tt!
of Of5ilro!1 ·
Telephone (408) 848-0400
Fax (408) 842-2409
7351 Rosanna Street
Gilroy. California
95020-6197
JAY SAKSA
CITY ADMINISTRATOR
April 21, 1997
Arthur Cantu, Esq.
345 Fifth Street, #7
Hollister, CA 95023
Re: Club Nemesys Bar Pennit No, 101222: Notice of Decision
Dear Mr, Cantu:
'\
Enclosed herewith is a copy of the Findings and Decision of City Administrator in the
Matter of Bar Renewal Pennit for Club Nemesys (Andres Becerra, Owner), Bar Pennit No,
101222.
My decision is not to renew the bar permit for 1997, Pursuant to Section VI of the
Administrative Hearing Policy, the Club has 15 days from the date of this letter to file with the
Clerk an appeal to the City Council of my decision, If no such appeal is filed, then the decision
becomes final at the expiration of said 15th day, and the bar must be immediately closed,
,
"
Pursuant to Section III of Resolution 97-17, the entire hearing was videotaped, If you
wish to have the hearing record transcribed, please let us know in writing, We will then have an
estimate made of the cost of the transcription, and will require a deposit from the Club in the
amount of this estimate prior to beginning the transcription, Note that if you do appeal and wish
to direct the Council's attention to any oral testimony from the City Administrator's hearing,a
transcription will be required for the use of the City Council.
. . ,
cc: Andrew L. Faber, Acting City Attorney
g;\-adllum\jay"ocmesysd doc
;EXHIBIT 1
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FINDINGS AND DECISION OF CITY ADMINISTRATOR IN THE MATTER OF
BAR RENEWAL PERMIT FOR CLUB NEMESYS (ANDRES BECERRA, OwNER),
BAR PERMIT NO. 101222
INTRODUCTION
On March 6, 1997, the City Administrator issued a ''Notice of Intention to Decide on
Renewal or Nonrenewal of Bar Permit No. 101222 and the Notice of Opportunity for
Administrative Hearing," which was duly served on the owner of Club Nemesys, Mr. Andres
Becerra. The notice stated in part that the Police Department had recommended against
renewing the annual Bar Permi t No. 10 1222 (the "Permit") issued by the City of Gilroy to Club
Nemesys, 7243 Monterey Street, Gilroy, California on January 29, 1996. The notice further said
that it was the intent of the City Administrator to take action and to decide whether or not to
renew the pemlit pursuant to Gilroy City Code Section 16.5 unless a request for an
administrative hearing was filed by tl;e club, in which case an administrative hearing would be
held on March 26, 1997 in front onhe City Administrator.
Representatives of Club Nemesys did file a request in a timely manner for an
administrative hearing, and they requested that the hearing be open to the public, which request
was granted. In advance of the hearing, representatives of the club were furnished copies of the
exhibits to be entered into evidence by the Police Department.
The administrative hearing on the renewal or nonrenewal of the bar permit for Club
Nemesys was duly held on March 26, 1997 in the City Council Charpbers. It lasted from 9:00
a,m. until approximately 2:30 p.m" and was recorded on videotape. Th~,club was represented by
owner Andres Becerra, as well as attorneys Richard Terry and Arthur Cantu (Mr. Cantu was only
present for the afternoon session commencing at 1:00 p,m.). The Police Department was
represented by Capt. Gregg Guisiana without an attorney. The hearing was held in front of City
Administrator Jay Baksa, who was represented by Acting City Attorney Andrew L. Faber. The
hearing was held pursuant to Gilroy's Municipal Administrative Hearing Policy, Resolution No.
97 -17.
SUlvITvfARY OF THE HEARING
The following is not intended to be a complete summary of the hearing. The official
record is the videotape on file with the City.
1. Prior to the commencement of the taking of evidence, attorney Richard Terry for
the club orally objected to two aspects of the procedure for the hearing, His first objection was
that the hearing violated due process because the City Administrator was not objective and
impartial. The second objection was that due process would be violated if he were not given the
right to cross-examine witnesses against the club.
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The City Attorney advised the City Administrator that it was permissible fo~ the City
Administrator to be the hearing officer in this matter.
[Following the hearing, the Acting City Attorney has advised the City Administrator as
follows: "The cases cited by Richard Terry, Gray v, City of Gustine, 224 Cal.App.3d 621 (1990)
and Doyle v, City of Chino, 17 Cal.App.3d 673 (1981), both involved situations where a city
manager had demoted or disciplined a police chief. Pursuant to the Public Safety Officers
Procedural Bill of Rights Act, the police chiefwas entitled to an "administrative appeal." In each
case, it was held by the court that such an appeal in front of the city manager would not comport
with due process because the city manager was already "embroiled" in the controversy and had
already taken action against the police chief. In other words, under those circumstances, the city
manager did not satisfy the requirement for an impartial hearing officer. In the Club Nemesys
situation, however, the City Administrator can be an impartial hearing officer. He has taken no
action on the club, and is not "embroiled" in the controversy. The Police Department has
recommended nonrenewal of the bar permit, but the City Administrator will not act on this until
after the hearing. Accordingly, the c1ul~'s due process rights are preserved."]
With regard to Mr. Terry's second argument concerning the lack of cross-examination,
the City Administrator was advised by the Acting City Attorney that cross-examination was not
required for administrative hearings, Nevertheless, the City Administrator did allow cross-
examination of the police witness by the club, and approximately Y2 hour of cross-examination
occurred. Thus, this issue is moot.
2. The first witness was Police Capt. Gregg Guisiana, Exhibit "A" was admitted
into evidence; this is a black binder containing a memorandum to thCJ, City Administrator from
Chief Sumisaki dated March 5, 1997 summarizing the Police Department's position regarding
the club, as well as supporting documentation. Exhibit "B" was admitted into evidence; this is a
black binder containing records of all police action regarding the club month-by-month during
1996, Capt. Guisiana testified from Exhibit "A" that there were 151 cal1s for service in 1996
directly related to Club Nemesys (not including cal1s to the vicinity). Of these, 31 were simply
routine bar checks where nothing wrong was found, so subtracting them out leaves 120 cal1s,
which is double the number of calls for any other bar in the vicinity.
There were five categories of violations that the Police Department felt were particularly
significant. These included violence, Alcoholic Beverage Control Act violations, Workers
Compensation violations, narcotics violations, and other incidents (including solicitation for
prostitution).
Capt. Guisiana stated that the police felt that the high number of incidents as wel1 as the
fact that employees of the club were directly implicated in a number of them show that a
condition exists where the pennit should not be renewed.
3. Club Nemesys called as a witness Ms. Zina Campos, who has been an employee
of the bar since mid-November, 1996, She disputed the facts as to a few of the incidents reported
by the police. In addition, she stated that there is currently proper record keeping for employees.
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She said that when it appeared that employees were being paid in cash, they were simply cashing
pay checks. She said she has seen no ABC violations, no prostitutiqn, and that they do-not serve
liquor to intoxicated people. She felt that until recently the club wa~ reluctant to make telephone
calls to the police because they felt the calls would be "held against them." She had no personal
knowledge of incidents prior to mid-November, 1996.
4. The next witness for the club was the owner Andres Becerra, who testified
through an interpreter, Mr. Juan Deleon (certified interpreter #30042). He stated that the police
spoke to him in English and he only understood about half of what they said, that he has put
upgrades into the building and would sell it right away because "there are just too many
problems," and that he thinks to the extent there is a crime problem relating to the club, it is
because the area surrounding it is not adequately policed and is a bad area.
5, At the conclusion of the testimony, Capt. Guisiana and Richard Terry gave brief
closing arguments. Capt. Guisiana stated that the bar permit should not be renewed primarily
because of the number of incidents, t)le seriousness of the incidents, and the involvement of
employees of the club. Richard Terry stated that the permit should be renewed because there are
no outstanding ABC issues, the problem is crime itself, not the club, and that the City and the
police should work with this business, not against it.
FINDINGS OF FACT
The City Administrator, having heard the oral testimony and argument, and having
received into evidence documentary Exhibits "Al) and "B," now makes the following findings,
all of which are supported by substantial evidence in the record: ,;
,
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1. The Police Department evidence of problems at the club was essentially
unrebutted. The Police Department memorandum of March 5, 1997 is attached hereto and
incorporated herein by reference as Exhibit 1 to these Findings, and the City Administrator
hereby finds that the incidents did occur as described in Exhibit 1.
Mr. Becerra and/or Ms. Campos did put a different interpretation on two of the incidents
involving Alcoholic Beverage Control Act violations. The first was an incident of October 22,
] 996, when a bottle of alcohol purchased at retail was found in the manager's office. It is a
violation of the ABC laws for a bar to purchase alcohol at retail for resale, but Mr. Becerra stated
that the bottle was present for his personal consumption. [After the hearing, the City Attorney's
office checked with the ABC, which said that they interpret the law to be violated if any alcohol
purchased at retail is found on the premises. Neverthe]ess, the City Administrator does not base
his decision on this incident], In the second incident, on December ]2, ]996, a police officer
upon entering the bar observed a patron fall off the bar stool. After investigation, the officer
concluded that the patron was drunk; the bartender admitted serving him a beer (it is a violation
of the ABC act to serve alcohol to an intoxicated patron). Ms. Campos testified that they did not
serve him beer, but were tryIng to sober him up.
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With these exceptions, there was no evidence directly rebutting any of the)ncidents
contained in Exhibit 1, and the City Administrator hereby finds that all of those incidents
occurred as described.
2. During 1996 there were 151 calls for service directly related to Club Nemesys, of
which 31 were routine bar checks with nothing to report. The remaining 120 incidents were
twice the number of incidents of any other bar, including those on the same block as club
Nemesys. Many of these incidents were of a serious nature involving violation of State law. In
addition, there were many more incidents involving violence at Club Nemesys than in other bars
in Gilroy.
3. Many of the incidents appear to involve a lack of management and supervision by
the owner of the club. Particularly dishlrbing were incidents where employees either participated
in illegal activity, or were aware of such activity and did not. prevent it. These include the
following:
"
(a) Violent incidents. Employees were directly involved in several violent
incidents (for example, the incidents of April 28, 1996, June 2,1996 and September 8,1996). In
the incident of October 18, 1996, the manager of the bar (a convicted felon) was found in
possession of a firearm. Also on that date a patron was stabbed inside the bar, and the bar owner
and employees were found cleaning up after it in an apparent effort to hide the evidence.
(b) ABC violations. On May 25, 1996, a minor was found in possession of a
false ID, and the manager told the officer that his ID had been checked. In the October 18, 1996
stabbing incident, there was a failure to report. In the October 10, 1996 incident there was no
employee present in the bar. "
(c) Workers Compensation violations. The failure to maintain proper
employee records and Workers Compensation insurance all involve management inaction.
(d) Narcotics violations. Employees were involved in the September 10,1996
incident where the bartender was arrested for possession for sale of methamphetamine, the
September 19, 1996 action in which security guards notified individuals in the restrooms of the
approach of uniformed officers, and the September 20, 1996 incident in which an undercover
agent bought narcotics from the manager of the bar.
(e) Other incidents. On September 22, 1996 and September 23, 1996,
undercover agents were solicited by prostitutes. An employee made the introductions.
4. There was testimony from the club's witnesses of efforts made to improve the
situation at the club. Zina Campos testified to greater care being taken with security, ABC
violations and proper employee records. In addition, both she and Mr. Becerra testified to now
having a better attitude toward cooperating with the police.
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DECISION
Having heard the oral evidence and argument and having reviewed the documentary
evidence, it is the City Administrator's decision that the above-referenced bar permit not be
renewed for 1997. Both the number of incidents (particularly the number of violent incidents)
and the seriousness of the incidents are way out of proportion to other bars in the City of Gilroy,
including bars in the same neighborhood. Perhaps most troubling are the incidents in which
employees of the club appear to have had an active involvement, thus showing a conscious
disregard of the law. Mr. Becerra is responsible for the actions of his employees and must be
held accountable for them. The consistent pattern of repeated violations, constitute violations of
Section 16.5(a)(2) of the Gilroy Municipal Code and Section 16.5(a)( 4) of the Municipal Code in
that there have been repeated violations of State and local law, in that they constihlte a repeated
patterns of "disorderly conduct constituting a breach of the peace or which is detrimental to the
public welfare."
"
Accordingly, the decision of the City Administrator is not to renew the bar permit.
Pursuant to Section VI of the Administrative Hearing Policy (Resolution No. 97-17), the
owner of the club has 15 days from the date of mailing of this decision within which to appeal
the decision to the City Council. If no appeal is filed with the City Clerk within that period of
time, then this decision shall become final on the expiration of the 15th day following the date of
such mailing, and the club shall immediately be closed. If a timely appeal is filed, then this
decision shall not become final until action is taken by the City Cou
DATED:
Lf /~ I
,1997
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GILROY POLICE DEPART1\'lENT
IV[E 1\'10 RAND Ul\'[
To:
Jay Baksa, City Administrator
From:
Chief Sumisaki
Subject:
Club Nemesis
Date:
March 5, 1997
Sl]1Vfi\'(A R Y
"
After a review of the police activity at the Club Nemesis, 7243 Monterey Road, it is my
recommendation that the City not renew their bar permit for 1997, This recommendation is based
upon a pattern of violations over the past year, The incidents at the location have been
categorized into four main groups; acts of violence, violations of the Alcohol Beverage Control
Act, workman's compensation violations and narcotic violations. There were 151 calls for service '
directly related to the Club Nemesis. Included in that number are 31 bar checks during which the
officers took no action.
VlOLENCE
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There were 46 disturbance incidence reported at the location during the year. Eighteen of them
were verbal, twenty five of them were violent and three were strong ann robberies. These
incidents all occurred inside or immediately outside the bar. Listed below are a sample of
incidents.
04-28-96
Sequence #4378
Patron reports that a waitress threw beer on him. No report
requested.
05-21-96
Sequence #7225
Report of four subjects fighting inside the bar. No report
requested. .
05-28-96
Sequence #8192
Report of two subjects fighting inside the bar. No report
requested.
06-02-96
Sequence #8929 '
Security guards sprayed patron with mace for no apparent
reason. No report requested.
~Pf\
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e
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Club Nemesis
~ch 5. 1997
. Page 2
06-16-96 Sequence #805
09-0S.f) q L Sequence #2215
10-18-96 96-7003
10-18-96 96-6975
Security officer pushed and maced patron for no apparent
reason. No report requested.
Employee claims that two other employees assaulted her.
No report requested.
rv'fanager of bar found in possession of a firearm.
Patron stabbed inside bar. No -report made to police. Bar
owrrer and employees found cleaning up eviqence of the
stabbing.
10-19-96
96-703 1
Patron inside bar cho~g other patrons.
Drunk patron is throwing beer bottles at other patrons, No
repon requested.
10-27-96
Sequence #8612
ALCOHOL BEVERAGE CONTROL ACT VIOLA nONS
There were nineteen incidents which involved violations of the ABC laws. tl~ven of these
involved minors either inside the bar or attempting to get into the bar. Other serious violations of
ABC laws by the bar include failure to report a stabbing, having retail purchased alcohol on the
premise and leaving the bar unattended. Listed below are a sample of the incidents.
01-13-96 96-0322 Minor in bar found during bar check.
05-25-96 96-3629 During a bar check, a minor found inside the bar with false ro.
07-28-96 96-5079 Drunk found passed out inside bar
10-10-96 96-6784 Undercover agents inside bar, Two other patrons inside bar, tfQ
employees of the bar present.
10-18-96 96-6975 Victim stabbed inside the bar. no call made to notify police
.~
10-}t-96 96-7084 Nllnor found inside bar
10-22-96 96-7084 Contaminated alcohol found inside the bar
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dub Nemesis
M~ch 5, 1997
Page 3
10-22-96
96-7084
Retail alcohol found inside the bar
10-29-96
Seq #8832
12-16-96
96-8282
Very drunk female cut the cord to the telephone
During a bar check, officer observed a drunk fall off the bar stool.
Bartender says that he had served him only one beer.
WORKNfAN'S COrvfPENSA nON VTOLA TTONS
"
There were three separate times when employee's were found to be working in violation of the
states workman's compensation laws, In two of the cases, there were multiple violations.
03-08-96
Seq# 7851
09-10-96
96-6128
10-22-96
96-7084
NARCOTIC VTOLATIONS
Gilroy Police Department assisted the state EETF (Equal
Employment Task Force) in doing bar checks in the city. During
these checks the Nemeses Club was found to have several
employees without proper work records nor workman's
compensation insurance
During an arrest of the bartender for sales of ~~cotics, it was
determined thaI she was working without proper work records nor
workman's compensation insurance
During a check of the bar EETF found several employees inside the
bar wiIhout proper work records nor workman's compensation'
msurance
There were twenty one narcotic related incidents during the past year at the Club Nemesis. The
examples listed below are all incidents which were discovered by officers during undercover
operations or while doing bar checks.
05-10-96
96-3242
08-24-96
96-5728
During a bar check officers found a person in possession of 15,9
grams of cocaine
Durjng a bar check two people were arrested fur narcotic activity
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Club Nemesis
March 5~ 1997
Page 4
09-10-96
96-6128
09-19-96
96-63 19
09-20-96 96-6327
09-20-96 96-6346
09-21-96 96-6357
09-21-96 96-6385
09-22-96 96-6408
11-08-96 86-7525
OTIIER INCIDENTS
Patrol officer observed suspicious activity which resulted in the
arrest of the bartender for po~s~ssiQn (or sales of
methamphetamines \_
During an undercover operation, the agents observed the security
guards notify individuals in the restrooms of the approach of
uniformed officers.
Undercover agent inside the bar bought narcotics from an employee
Undercover'agent inside the bar bought narcotics from a patron
Undercover agent inside the bar bought narcotics from a patron
Undercover agent inside the bar bought narcotics from a patron
Undercover agent inside the bar bought narcotics from a patron
During a bar check., officers found patron, in possession of narcotics
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There were 36 other incidents which ranged from calls for medical help to thefts to urinating in
public. About half of these incidents resulted in an arrest being made including the two listed
below.
09-22-96
96-6391
09-23-96
96-6410
Under cover agents inside the bar are solicited by prostitutes
Under cover agents inside the bar are solicited by prostitutes
As a comparison, the two other bars in the same block of Monterey St had considerably less calls
for service, The Aloha Club had 56 calls and the Mexico Cafe only 29 calls during this past year,
There is a clear pattern of violations at the Club Nemesis. The oWner appears to be uninterested
in correcting this problem. The most blatant example of this is the failure on his part to maintain
proper work records and worker's compensation insurance for his employees. He was cited and
put on notice about this problem ih March. Seven months later, there were still violations found
at the location. This is an area totally within the control of the bar owner. Another good
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Club l'femises
March 5, 1997
Page 5
example of this is the purchasing of alcohol illegally for use in the bar, This is another violation
which was totally within the control of the owner. Add to this the numerous narcotic and ABC
violations and it is apparent the this location is a major problem to the City which should not be
allow to continue operating.
Copies of the reports and dispatch records for the listed incidents have been placed behind the tab
labeled with the category headings. In addition to this, all the reports and dispatch records for the
year have been divided by month and included at the end of this report.
RECOMIVffiNDA nON
Based upon this patter of violations and t~e excessive calls for service at the Club Nemesis, I
recommend that the bar permit for that location not be renewed for 1997.
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I, RHONDA PELLIN, Interim City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No, 97-32 is an original resolution, duly adopted by the Council of the City
of Gilroy at a special meeting of said Council held on the 16th day of June, 1997, at which
meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 16th day of June, 1997,
~~I
Interim City Clerk of the City of Gilroy
(Seal)