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Assessment of Patio DiningASSESSMENT OF PATIO DINING November 7, 2016 Administration Committee Meeting Presentation of Mentorship Program Project Rotation #1: July —October 2016 Christina Gee, Senior Administrative Technician (Mentee) Danea Gemmell, Planning & Development Services Division Manager (Mentor) PRESENTATION ROADMAP Introduction �r Demonstrate prevalence of patio dining via case study in Walnut Creek Explain challenges and opportunities for the District • Describe preventive measures • Discuss collection approach for unpaid fees • Conclusion 5.a. 1 INTRODUCTION July -October Mentorship Regular mentor/mentee meetings - Interaction with Planning & Development Services staff - One-on-one discussions - Observing the Permit Counter Attending a Collection System Master Plan Board Meeting prep session • Selection of project: Assessment of Patio Dining INTRODUCTION (CONTINUED) Why patio dining? • Potential to identify and help remedy the issue Continuous improvement of business processes Possibility of collecting unpaid fees Patio dining as a growing challenge • Lost monies in associated capacity fees, which contribute to the Sewer Construction Fund and help pay for infrastructure costs Constrained access to utilities • Potential claims for loss of business, property damage, odors 2 CURRENT METHODOLOGY: PATIO DINING Patio dining is any outdoor seating that a restaurant has installed for its customers' use. Patio dining represents a change of use or expansion on an existing parcel that requires the District's approval and receipt of patio dining capacity fees. CURRENT METHODOLOGY: CAPACITY FEES Capacity fees are charged via an equity "buy -in to their fair share" approach, in which each user is seen as buying into the District's assets. Patio dining creates an assumed added burden on the District's wastewater system. Patio dining capacity fees represent part of the restaurant's fair share of the cost for the capital assets needed for the District to collect, clean, and safely recycle or dispose of wastewater. 3 RESTAURANT CAPACITY FEES vs. PATIO DINING CAPACITY FEES Restaurant Capacity Fees: $23,851 per 1,000 sq. ft. Patio Dining Capacity Fees: vs. $6,935 per 1,000 sq. ft. CASE STUDY IN WALNUT CREEK The District has an estimated 780 restaurants in its entire service area. Case study of 31 restaurants on Locust Street in Downtown Walnut Creek (Appendix A) Majority (65%) have outdoor dining with unpaid fees. Case Study 31 Restaurants in Downtown Walnut Creek With outdoor dining. tees paid 19% Withoul outdoor dining 16% With outdoor dining, fees unpaid 65% Number of R • . . ' . outdoor dinin • Number of R .nts with dinin • fees • - id WWI 20 6 4 CHALLENGES Lost Monies —less funding for capital program, complications when fee issues are discovered after the completion of the patio dining Encroachments — patio dining near sewer ,\,14111114, pipe or constrains access • Claims Liabilities — loss of business, property damage, odors claims , ,...4. !4116i'I OPPORTUNITIES Reconsider current methodology and establish program guidelines Grandfathering in restaurants who paid into the system, but whose fees are now unclear due to lack of records; Consider that capacity fees were collected under a different methodology sometime prior to 1989; Determine a cutoff date at which the geographic information system (GIS) data is reliable; Site specific rules based on location and size of the patio dining, including setting a minimum square footage for the size of the patio dining; Installment payment plan options for restaurants who cannot afford to pay the fees outright; and Assigned responsibilities for the parties owing the fees. 5 PREVENTIVE MEASURES Continue to cooperate and increase visibility with local municipalities Gather benchmarking data from other agencies on how they address the issue Meetings with City staff — proposed outreach materials (Appendix 0) • Sewer Summits Modify encroachment permits or other property agreements to indemnify the District (Appendix D) PREVENTIVE MEASURES (CONTINUED) Outreach to restaurants Mailers or in-person presentations Roadshow to local chambers of commerce, business associations downTown THE CHAMBERIWid" PREVENTIVE MEASURES (CONTINUED) • Collaboration between workgroups • Share information • Cross -train between Permit Counter and Environmental Compliance staff • Modify database to be more comprehensive • Audits Perform audits of non-residential parcels and business categories, including multi -uses CASE OF THE COFFEE SHOP Apo' motion No 16-182 APPlIcaton Infonni41011 Appac Nowa Tow* M11).): OWOOki. ConlisclICDi1,J Code CommersIs So. restopc 2135 SNiNe 10, 51iTITPP: - COIEC UN= 5956 Pormet tnformation M* tfr, sopkolso1 F40%.110 Top 4QW1 N APPLICANT PAD FOR SSC AND CAP FEES FOR ADDED SOuA Foorfrux PATIO AREA ELIMAATED FROM PLANS VS 04,291016, COSS AU KWOOLROGE Om& WEB PAY F OR ADOED 209 Si TO &AIDING NO CNANGE COODCNO FDA/PT AT nes tuE NO ouipoola PAT* SEATING AREA Ni! CHANGES TO COOKING OR SEATING /JADE SMALL RESUME uNOER NEW APPLICATION OWNER WAS NOT ABLE TO GET APPROVAL FROU CITY OF LAFAYETTE TO ADO THE ACCT1ONAL PATIO AREA SEATING Wmt0,1 WOULD REOVRE RUES CAPACM FEES TOBE ASSESSED TS C4,29.201,1 Cr5 25 PLI prw4cHEZ - T 04.2B7016 CIS 21 RA PISA/4011Z 412,10 DAISC BEFORE WE SK.14 PLANS MAKE SURE NAT THE HEALTH' SET KAKS HAVE ALL OC TS PATIO AREAS RELIED ANO MARKE0 AS NOT APPRVED BY CCCSO ANC ALSO THAT ANY OiAteGES 70 THE COOKTAD EOUIPmENT REOLPRES A RESUOINTIAL WITH NEW APPICA5)0r4 70 GC,CSO STARS ARE Ow MY DESK TO PUT ON THE PLUNEONG SHEETS ALSO MC( SURE THAT THE DISHWASHER BYPASSES TME TOO GT 55 04,2210160553 PM NSANCHEZ SSD HEAL TH SET 55 0645.2016 12 Ss Pm NSANCHEZ Svfrot.) Ito Vik,f, III Picture taken August 28, 2016 COLLECTION APPROACH (CONTINUED) • Improve collateral sent with collection letter (Appendix E) • Formulate a careful and strategic approach • Ask assistance from City in sending politically sensitive collection letters • Offer installment payments as part of an added provision to the existing Capacity Use Charge Program A s CONCLUSION Case study indicates that, based on the current methodology, a number of restaurants in the entire service area may owe money to the District To begin to address the issue: Review current methodology to see if still viable Discuss policy and plan for how to move forward Collect any fees in a manner that ensures consistent enforcement and political sensitivity Continue to perform outreach and foster better interagency communication and coordination Indemnify self against potential claims Keep improving internal business processes tkaL'5 At FoPGa QUESTIONS? �C. 9