The decision to deny two Iowa City bars’ liquor-license renewals ultimately falls with the state, not the Iowa City City Council.

In the past, the Iowa Alcoholic Beverages Division has rarely stripped bars from being able to serve liquor in Iowa City area. But officials say the City Council’s recent recommendation to deny renewing two downtown bars’ liquor-licenses will influence the state’s decision later this year.

Et Cetera, 118 S. Dubuque St., and 3rd Base Sports Bar, 111 E. College St., filed appeals last month with the alcohol agency after the City Council denied their liquor-license renewals on July 28.

On Oct. 23, the bars will fight to keep the core of their businesses — their liquor licenses — in front of an administrative law judge from the Iowa Department of Inspections and Appeals, who will hand down a decision within 40 days.

“Some cases they win, they lose,” said Lynn Walding, the administrator of the alcohol agency. “Each case is judged by its own individual merit in the proper setting.”

A judge will be looking to see if these bars possess a “good moral character,” which is written into state law. The criteria making up this phrase includes status as an Iowa resident, no convictions of felonies in the past five years, and having a “good reputation,” among others.

Based on Iowa City’s newest guidelines, which require denial for any bars with a ratio of more than one PAULA per police visit, Jim Clayton, who serves on the Alcohol Beverages Commission, said Et Cetera and 3rd Base have shown the inability to control underage clients in their establishments.

That, he said, challenges the concept of good moral character.

The definition of good moral character is “very open to interpretation,” said Iowa City Mayor Regenia Bailey.

For example, Clayton said, if a bar owner threw the business’ garbage in an alley rather than in a designated Dumpster, that person’s good moral character could also be questioned.

“It’s not rocket science here,” he said.

But state officials have one factor specifically in mind — that they will not tolerate underage drinking.

“One thing we know [good moral character] means: You will follow all local laws and ordinances,” Clayton said.

If either the bar owners or city officials are unhappy with the proposed decision handed down by the Department of Inspections and Appeals, they can appeal it to Walding, who would reconsider the matter and make his own motion based on the evidence. Walding’s word constitutes the agency’s final decision.

Alcohol agency officials said it isn’t often that they revoke licenses. The last Iowa City business to lose its license from the state was Suburban Amoco, 1905 Keokuk St., in 2008.

Either party can appeal Walding’s decision to the courts, he said.

The case would be heard by a district court. That court’s decision could then be appealed to the state’s appellate courts.

Walding said he couldn’t comment on the appeals.

But Clayton, who also owns downtown business the Soap Opera, 119 E. College St., said the city’s denial has some weight in the state’s eyes.

Because Iowa’s state law-enforcement officers don’t typically deal with alcohol violations, complaints made by city officials are important, he said.

“We’re dependent on local and county enforcement,” Clayton said.

Though the matter is now out of the city councilors’ hands, some said they hope their denial will be seriously considered when the state examines the appeals in October.

“I don’t know what they are going to do with this particular round of bars,” said Councilor Connie Champion. “At least we’re sending the message that we mean business.”