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HomeMy WebLinkAbout05.a. (Handout) Assesment of Patio DiningASSESSMENT OF PATIO DINING Mentorship Program Project, Rotation #1: July - October 2016 Christina Gee, Senior Administrative Technician (Mentee) Danea Gemmell, Planning & Development Services Manager (Mentor) Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Table of Contents Introduction ...2 Prevalence of Patio Dining ..4 Potential Issues 6 Preventive Measures 7 Collection Approach for Unpaid Fees 12 Conclusion ..14 Appendix: A. Locust Street Case Study: Map and Data B. Definitions of Terms: Types of Outdoor Dining C. Flyer and PowerPoint for City of Walnut Creek D. Suggested Letter to Permittee and Modified Encroachment Permit for City of Walnut Creek E. Sample Collection Letter, Invoice, and Informational Flyer F. PowerPoint Presentation of Mentorship Project on October 19, 2016 1 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Introduction It has come to the attention of staff that a growing trend in restaurants — patio dining — poses a series of potential conflicts for the Central Contra Costa Sanitary District (District), including monies owed in unpaid capacity fees and liabilities incurred by potential claims for odors, loss of business, or property damage due to the dining facilities' proximity to the District's utilities. During the first meeting of our mentorship rotation, Danea presented me with a few options for projects to tackle. This project in particular attracted me because it had the ability to positively impact the District by continuing to improve business processes, potentially collecting delinquent revenue, highlighting the hard work done by staff to ensure compliance, and directing the organization on a track toward identifying and correcting an ongoing and rapidly growing issue. Throughout the mentorship, Danea and I met regularly to touch base and to discuss the issues surrounding patio dining, and with each meeting, this report evolved into a more comprehensive and effective document. To supplement these talks, I also had an opportunity to converse with members of the workgroups within the Planning & Development Services Division to gain a broader perspective of what the division does as a whole. Being able to shadow the Permit Counter was especially informative toward my general knowledge of the District's operations and to see one of the groups that have direct influence over the prevention of unpaid patio dining capacity fees in action. Patio dining capacity fees represent a portion of the District's revenue, which helps fund its costs to collect, clean, and safely recycle or dispose of wastewater. In the District's cost - of -service model, it is important that every customer pays its commensurate share so the District may recover its costs. Under the current methodology, this includes the restaurants with patio dining, which creates an assumed added burden on the system. Given the estimated 780 restaurants in the District's service area, to begin to assess the amount of unpaid patio dining capacity fees is a considerable undertaking, so the best approach was to start with a smaller sample size with an active outdoor dining scene, to indicate how widespread the issue may be. Downtown Walnut Creek is a quickly expanding community in the District's service area, and Locust Street, in particular, has seen rapid turnover in businesses, including a growing amount of outdoor dining. The amount of outdoor dining on Locust Street represents more of the "worst case" scenario, as this selection does not necessarily reflect the entire service area, which may not have as prevalent an outdoor dining presence. In addition to the amount of outdoor dining on Locust Street, the variety of the types of outdoor dining included in the case study are useful for the purposes of this report. From formal parklets, to impromptu tables and chairs placed in the sidewalk, to cordoned -off areas with full table service, "patio dining" can come in many sizes and forms. 2 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell The case study of 31 restaurants on Locust Street found that the majority of the restaurants surveyed (65%) have not paid patio dining capacity fees to the District. Extrapolating these numbers to the rest the District's entire service area indicates a theoretically sizable issue. Using this case study as a launching pad, the aim of this report is to identify and assess the matter as a whole, consider the potential impacts on the District in terms of lost monies and exposed liabilities, suggest preventive measures to impede its growth, and present remedies to continue to address it. 3 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Prevalence of Outdoor Dining Using GeoPortal and its connected Permit Counter records, Google Maps, and other information collected from internet resources, a total of 53 businesses were evaluated as part of the case study on Locust Street in Walnut Creek. Of those 53 businesses surveyed, 31 were restaurants, defined as any business that serves food and drink. The map of the surveyed area and data on the businesses are included for reference (Appendix A). It was found that within the 31 restaurants, the majority (20) have outdoor dining with outstanding patio dining capacity fees owed to the District. This data is represented below in table and pie chart form: Number of restaurants with outdoor dining, patio dining capacity fees unpaid 20 Number of restaurants with outdoor dining, patio dining capacity fees paid Number of restaurants without outdoor dining 5 Total 31 Case Study 31 Restaurants in Downtown Walnut Creek • With outdoor dining, fees paid 19% Without outdoor dining 16% With outdoor dining, fees unpaid 65% 4 ■ Without outdoor dining ■ With outdoor dining, fees unpaid With outdoor dining, fees paid Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Should staff wish to consider expanding on this case study, it would be informative to translate the 20 restaurants with unpaid patio dining capacity fees into a dollar amount of fees owed, to gain a better understanding of the financial impacts. When broken into categories as to where the outdoor seating is located, the data indicates that over half of the restaurants have seating in the public right-of-way (sidewalk or parklet), and the remainder have seating within the restaurant's property line. None of the 31 restaurants surveyed in this case had outdoor dining directly over the District's utilities; however, there is a possibility that this situation may exist elsewhere in the service area. Below are those findings, in table and pie chart form. The terms used to identify the locations are defined and pictured as part of this report (Appendix B). Sidewalk 10 Patio (within the property line of the restaurant) 9 Sidewalk & Patio 2 Sidewalk & Parklet (in the street, over parking spots) TBD (restaurant not open yet) Total 26 Location of Outdoor Seating Sidewalk Patio Sidewalk & Patio ■ Sidewalk & Parklet ■ TBD (not open yet) 1 5 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Potential Issues Unpaid Capacity Fees Capacity fees are established for new users of the District's public sewer system, using an equity "buy -in to their fair share" approach, in which each new user is seen as buying in to all of the District's assets which service their wastewater needs. In Fiscal Year (FY) 2015- 16, the District collected about $8 million in capacity fees. Residential capacity fees are charged as a flat fee, based on Residential Unit Equivalents (RUEs). Commercial capacity fees, like restaurant capacity fees, are calculated based on square footage, on a comparison between the volume and strength of wastewater per 1,000 square feet of the particular business or industry space and an average residence. For most users, a standard factor based on their business type is multiplied by the building area, to determine the burden on the system. Patio dining capacity fees are charged at 29.1 % of the rate of regular restaurant capacity fees (see table below), due to the assumption that patio dining is seasonal and does not have the same magnitude of impact on the system as the indoor dining area. This fee is paid one time. There is no additional direct charge on the restaurant's annual sewer service charge (SSC), which is billed based on flows and assumed loads. Restaurant Capacity Fees: $23,851 per 1,000 ft.2 Patio Dining Capacity Fees: $6,935 per 1,000 ft.2 Under the current methodology, it is assumed that a direct correlation exists between the square footage of a restaurant, the amount of diners who occupy that space, and those diners' impact to the sewer system. The money owed and collected for patio dining go toward the Sewer Construction Fund, which helps with infrastructure costs. It is the restaurant's fair share of the cost of added burden from the patio dining. These fees must be collected in a fair and consistent manner to ensure equity. Liabilities Outdoor dining situated in public right-of-way presents a few issues of liability. This is a potential problem for the District when the dining is located near or over the District's utilities, as it exposes the District to claims for loss of business, property damage, and odors. At its worst case, this constrains access to public sewer mains, some of which are on a frequent cleaning schedule. 6 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Preventive Measures To help address the issue of unpaid patio dining capacity fees, it may be prudent to reconsider the current methodology to determine if it is still viable. Then, a clear set of guidelines should be established and consistently enforced. Those guidelines may include the following: • Provisions for grandfathered -in restaurants who paid into the system, but whose fees are now unclear due to lack of records; • Consideration that, sometime prior to 1989, capacity fees were collected under a different methodology (by number of fixtures); therefore, fees may not be due; • Determination of a cutoff date at which the geographic information system (GIS) data is reliable, and possibly not collecting fees for restaurants where it is unclear if the dining was installed prior to that date; • Site specific rules to address multiple scenarios depending on the location and size of the patio dining, including setting a minimum square footage for the size of the patio dining for its fee to be collectable; • Installment payment plan options for restaurants who cannot afford to pay the fees outright; and • Assigned responsibilities for the parties owing the fees. Once those guidelines are established, it would be beneficial for the District to formalize a policy and plan for how to move forward. The District may want to take a proactive approach, both externally and internally, through continued cooperation and increased visibility with municipalities, outreach to restaurants, and the facilitation of collaboration between workgroups within the District. However, given that this is a potentially sensitive issue, it is vital to tread carefully and implement an orchestrated plan. In moving forward with a policy decision, the District may want to consider the amount of collectable fees against the potential political fallout that may occur as a result of the collection efforts. Continued Cooperation and Increased Visibility with Municipalities In the meantime, it is imperative to continue to build relationships with the Cities and request that they retain a policy of sending any businesses installing outdoor dining to the District's Permit Counter. Generally, for new construction or changes of use where tenant improvements are constructed, the District relies on the local building department to route plans to District staff for review. One successful outreach tool the District recently implemented is its periodic Sewer Summits, where staff welcomes planning, public works, building departments, and city engineers to the District's offices. The goals of these summits are to foster customer engagement and awareness of the District's role in the development process. In the 2016 sessions, staff focused on commercial development and capacity fees for the 7 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell municipalities that the District services. The Summit has shown immediate improvements to the District's relationships with other agencies, evidenced by the rise in inspection requests and the fact that agencies are now requiring contractors to obtain the District's signoff on job cards, prior to finalization of building permits. These Summits have increased the District's visibility with the Cities whose resident businesses it services. In the interim between Summits, the same information could be tailored toward a City and presented directly to the departments responsible for referring the restaurants to the District, as seen in the sample flyer and PowerPoint I have drafted for the City of Walnut Creek (Appendix C). In addition, the District could ask that the City display some educational materials that would enlighten the restaurants to the District's existence. One unique challenge that the District faces is that it does not operate within City offices. Most building departments are able to offer one-stop shopping, where their sewer department can review plans concurrently with the building department. Because of this disadvantage, the District depends on the communication of the Cities to their customers to alert them to the District's requirements. Another related challenge is that there are multiple Cities within the District's jurisdiction, each with its own ways of handling business that the District must consider in its approach. Multiagency cooperation is crucial in the combined effort for all utilities to protect each other's' interests. In addition to referring restaurants to the District, the Cities also have the ability to issue encroachment permits and collect fees for any outdoor dining, which could potentially provide a level of protection to the District. Danea and I met with District Counsel, Jen Faught, Esq., to discuss suggesting adding indemnifying language to the City of Walnut Creek's encroachment permit for its parklet pilot program. Danea has continued to work with Ms. Faught on the issue and recently sent the City of Walnut Creek's Engineering Services Manager, Steve Waymire, a suggested modified encroachment permit and accompanying letter to provide to the restaurants (Appendix D). This is part of an ongoing conversation with the City of Walnut Creek. It is staff's hope that other Cities will also be willing to include the District's interests in its permitting process. To this end, the District may want to consider suggesting modifications to the existing encroachment permits in the service area to indemnify itself, become a party to those agreements, or enter into its own agreements with the Cities and/or property owners. It may be advisable to have a property agreement where the District cannot be held responsible for damage to property or loss of business, and possibly to any complaints arising out of odors due to work on the utilities. For parklets that are in the City's right-of-way for general seating and not associated with a specific business, staff has determined that capacity fees are not applicable. 8 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Outreach to Restaurants The District may not wish to rely solely on the Cities to maintain its visibility in the community. It would be advantageous to contact the restaurants directly, via mailers or in- person presentations. Sewer Summits could possibly be modified into a roadshow to the local chambers of commerce, business associations, and any groups that might include restaurant owners. There are instances in which a property owner may legitimately not come to the District's Permit Counter, for example, when installation of patio dining does not trigger a need to visit the City for permitting, and the City would not be able to refer them to the District. This is one case where direct outreach to restaurants becomes necessary for the District to spread awareness about patio dining. The Case of the Coffee Shop During my time spent at the Permit Counter, I learned of a few occasions where an applicant may not have been forthright with staff. This is a challenge that is difficult to navigate as it is out of the District's control, since the District must rely on the applicant for accurate record keeping and fee charging. One particular case staff mentioned with relation to patio dining was that a coffee shop in Lafayette had shown them plans that included a large patio. Staff informed the coffee shop of the associated fees, and they said the patio was a wishlist item for the future and struck it from their plans. That coffee shop is pictured below, as of August 28, 2016: k 9 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell As seen in the SunGard records below for the property, the coffee shop did in fact visit the Permit Counter on April 29, 2016 and eliminate the patio from their plans at that time. There is no record of the coffee shop revisiting the District to pay the patio dining fees after that. This is an example of staff doing everything it is supposed to do and not being able to prevent the incurrence of outstanding fees. However, now that the fees are discovered, it is possible that the detailed records kept by staff will help establish justification for a collection process. iiippIvaticni No. 16-7 . ApplicatIdai!I rBn mon 1t 11: DeicrIpOon: C CHI Sq F6S 0: Data: , ti. $Lairu% CIL Job: 5993 Rirmkt Inform Jon Tie eat ipiefrawrs issued I.'fl' 4111-PPlicAtiorsiPerlett S stns Search ,ff = Com' CINIIITIMILI A IH APPLICAPin PAID FOR 5,C AND CAP SES POR ADDED &MORE FOOTAGE PATO') AREA ELIMINATED ATED FROM PLANS irs 0115 MIFicWOOLAIDGe 4f4/16 E Pim P014 CEO 20Q S! 10 tiltilLOING CE -MGC IN COOKING EQLJPT AT THIS TIME MO OUTDOOR PATIO $,F,ATING ARM AN TO C.00KING OR SEATING MADE BALL RESUBMIT UNDER NEW APIFI !CATION NER VMS NOT ABLE TO GET APPROVAL F ROM CITY OF LAFAYETTE TO AGO THE AODTIONAL PATIO AREA SEATING WHICH- WOULD RIEC:11.11RE RVES CAPACITar FEES TO SE AssEsseD fid. 04020.20116 GES 25 PM N r- 'PS +16OS21 PM tl SANCHEZ r- 4 22J1e mise SEFORE wfi StOti PLAN5 mAKE SURE i HAT TFC T1 - SET PL.ANS HAVE ALL OF THE PATIO AREAS REM[ AND FitAilkte0 As NOT APPIWEI) OY Cir,Cs0 AND Ai SO 'NAT ANT AGES TO THE COOKING ECIUIPIVIEN T REQUIRES A RE SLIME .I. WITH NE w APPICATIO ION' TO CCC5D STCKE15 ARE (r', a 'Y DESK TO PUT ON T I iE PLILAIBING E TS AL ` '.IAKE SURE THAT THE CISHWASFIER FYP E • i HE wool TS 047:107i3116.1-15 20 1214 HDU SIGNED I -I EAL TH SET TS: D°1 V2016 12Phi DI MEZ- e Pr Facilitation of Collaboration between Workgroups within the District ip,....„.00,.. .„, I I The District does not currently have a dedicated code enforcement department who could issue letters and citations and enforce these warnings. However, it does have several workgroups who could potentially work as a team to share information with one another to look out for each other's interests. Making information available across workgroups, integrating internal processes to better leverage resources, and breaking down silos is vital to identifying and collecting outstanding patio dining fees. This potential has already been realized, as there are multiple improvements already being made in the Department of Engineering & Technical Services. 10 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Copies of Notice of Violations (NOVs) and Warning Notices are now sent from Environmental Compliance to the Permit Counter for review of whether all fees have been paid for those businesses. The Quarterly Report of Environmental Compliance Inspections is also forwarded to Permit Counter staff, who cross-check the report for new businesses. Both groups meet regularly to coordinate their work, and cross -training between the Permit Counter staff and Environmental Compliance inspectors has commenced. There are also plans to link databases and software to make the same information accessible for all compliance matters, so staff from the field and in the offices (Development Inspection, Environmental Compliance, and the Permit Counter) can notify each other of possible violations. The database could be made more comprehensive as well, to show whether patio dining capacity fees have been paid. In this case, the Environmental Compliance Inspectors could theoretically review this information as part of their regular inspections and report any unpaid patio dining to the Planning & Development Services Division to verify the information and start the collection process. By itself, the Permit Counter staff has been keeping thorough records when a restaurant comes to the counter, at which time staff explains the requirements and fees to install patio dining. Whether the restaurant decides to proceed with the patio dining or strike it from their plans, keeping these records protects the District by creating a history if needed to justify a collections process. It is always beneficial to perform regular audits of any ongoing issue. Currently, Planning and Development Services staff is in the midst of a review of non-residential parcels and business categories. This review will span over multiple years. Approximately 200 multi- use parcels are being field reviewed by a dedicated co-op student. For parcels where a change in use has been discovered, resulting in an owed capacity fee, a letter and invoice is being sent to the property owner. The remaining non-residential parcels have been categorized and prioritized, and review of those parcels will begin as part of the next phase. The intent is to perform these reviews on an ongoing basis going forward. Data Sharing with Sister Agencies Patio dining is a growing trend, and it has not only affected the District. This is an issue that is faced by other agencies as well. The District may want to reach out to its sister agencies for advice on how they have approached the subject and to gather benchmarking data to see how the District's situation compares to others'. By fostering better communication and more effective interagency and intraagency coordination, the District can prevent further incidences of unpaid patio dining capacity fees, as well as begin to identify and collect the current unpaid fees. 11 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Collection Approach for Unpaid Fees The first step toward collecting the current unpaid fees is to identify the restaurants owing money to the District. Through an audit of the restaurants and the Permit Counter records, the District can identify the accounts requiring action. The next step would be to contact the responsible party, ideally by coordinating all communication with the City for possible assistance with collection efforts. Then, to collect the unpaid fees, the Rates & Fees workgroup's current practice is to send about three letters, typically to the property owner, after which the delinquent fees are placed and collected on the tax roll. The first letter includes an explanation of why a capacity fee is owed and includes an invoice indicating that payment is due in 45 days. The letter also notifies the recipient that if payment is not received in those 45 days, penalties and interest will be added. Contact information is provided in case the recipient has any questions. If payment is not received within the deadline, a second letter is sent formally declaring the fees delinquent. Recently, staff discovered that the property owner of a restaurant on Locust Street (included in the case study) had not come to the Permit Counter at the time of the tenant change for the required review and approval. At that same time, staff found that it appeared the parking lot in the back of the restaurant was converted into a patio. The City of Walnut Creek, via Administrative Use Permit Y13-114, approved that 2,210 square foot patio dining area for the new restaurant; however, the sanitary sewer connection fees, including patio dining capacity fees, were not paid to the District for this new square footage. Per the current collections process, staff sent the property owner a letter on September 22, 2016, notifying them of the $17,511.87 in outstanding fees, including $11,083.90 in patio dining capacity fees. Below is an aerial view of the property: The area outlined in light blue was once a parking lot and is now a back patio area. 12 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell There is room for improvement in the collateral the District currently sends with the collection letter. The original collection letter sent in September 2016 is included with this report, with recipient information redacted and some minor modifications to create a sample for future consideration. Currently, staff attaches an invoice and sections of the District Code to these collection letters. A more streamlined way of communicating this information may be to combine the District Code references into an informational flyer that establishes additional context for the recipient of the letter. Attached is a proposed sample collection letter, with an invoice and informational flyer attached (Appendix E). The reason for the informational flyer is as follows. Most of the time, staff receives a phone call from the recipient after this first letter. Given that staff can sometimes anticipate what the recipient will say, literature could be included to preempt these questions. The flyer as drafted mitigates these concerns by addressing why the money is being charged, how the District determines who is the responsible party, and showing how widespread the issue is for the District (flyer included in Appendix E). State law says that the Board may place "any delinquent and unpaid charges ... unpaid for a period of 60 days or more on July 1" on the property tax bill for collection. This requires a public hearing. If the situation escalates to this point, the District sends the property owner notice of the public hearing. On a typical timeline for this sort of collection, the initial letter and invoice are sent by March 15, and the letter declaring the payment as delinquent is sent by May 1. Often, whatever action incurred the capacity fee was performed by a previous property owner or tenant. In those cases, recourse against that party is difficult or impossible, so staff is left with having to try and collect from the current property owner. This highlights the need for the District to address this issue sooner than later, because as more time passes, the more difficult it may be to track down the party who originally incurred the fees. One option to mitigate the collections process for the responsible party is to offer installment payments as an added provision to the District's existing Capacity Use Charge Program. If the party can agree to a payment plan, it will be compliant with the District's request for payment. Many businesses have taken advantage of this in the past. 13 Central Contra Costa Sanitary District Assessment of Patio Dining Mentorship Program, Rotation #1: Christina Gee and Danea Gemmell Conclusion This report has identified that patio dining is an issue that is currently relevant to the District. As the case study indicates, under the current methodology, it is possible that a sizable fraction of the restaurants with outdoor dining may not have paid the District the associated patio dining capacity fees. It would be beneficial for the District to begin formulating an approach toward addressing the larger issue in the entire service area. Efforts to remedy this issue may include the following: 1) Reevaluating the current methodology 2) Establishing program guidelines 3) Formalizing a policy and plan to move forward 4) Identifying and beginning to collect any money that is due 5) Performing outreach to prevent additional restaurants from installing patio dining without approval from the District 6) Taking any necessary measures to indemnify the District against potential claims, and 7) Continuing with improvements to the District's business processes to ensure communication between workgroups as well as to the municipalities. This will ensure effective and fair collection of the current outstanding fees, as well as help to prevent the incurrence of future outstanding fees. However, because of the potentially considerable amount of restaurants with unpaid fees, this will need to be a strategic undertaking. The District should have a firm, defensible plan in place before beginning the process of collecting fees, to ensure consistent enforcement and political sensitivity. Considering the possible impacts of lost monies and exposed liabilities, taking some of the steps outlined in this report may help address some of the issues and move the organization forward with a plan for correction and prevention. 14 91 Library on Main ipolini's Pizza 41 -So Katy s Kreek n!r's Square El Montecli RistarantE 11 ('0 tic • Walnut Creek Downtown Cafe La Scala Lettuce Restaurant & Catering Phoenix Salon & Day Spa • P1 Massimo Ristorante Orangetheory Fitness • The UPS Sto cr). 11 09 Vitality Bowls - mr Walnut Creek, CA Vanes Bistro 2 ior,arnese Havana Mixed Grain Bori:an' Braden, k Roadhouse 0 °c°1 -P1 Ramer" Hiroshi 1 . T Redux Lounc 135 ▪ The Cheese Steak Shop P1 Extreme Flzza sss ocic' II Ji Chevron Wells Fargo Bank Sunol Ridge 1 Restaurant and Bar Crogan's Sport Bar Griii 41.1 San Francisco Creamery Lark Creek Walnut Cr Dragon's Pond Ti Peet 's Coffee OF Restaurants surveyed were on the highlighted side of Locust Street • CorePower Yoga 42D _ Tender Green11 s WalnutCreek 0 $11 Ho ii of Bagels Coffee Shop Big 5 Sporting Goods Destin n Maternity M1 Diablo Blvd - Mt L:i.abia Blvt, Cost Plus World Market 7 ' ,-. P1 • -. Flemings Prime Pure Barre Walnut Creek f.2. ' DI Steakhouse& Wine Bar ,S. 6 Olympia Place o. - Citibank 0 • 0- 11 O Tomatina 75) Mt Diablo Blvd Mt Diablo Blvd Va de Vi Free People th OirirriPic Ruth's Chris Steak House TI 0 harles Schwab • o. Yogurtland Tie Chee-si:c..ake Factory Buckhom Grill ti Main SIN P1 LQI AppI Arithrop roqmpl,c BiNd AT&T 91 Torn's Ipotle Mexican Grill Pariero Bread P1 Ikes Lovrend Sandwicl" The Habit Burger Grill th Verizon IvIeres Wearhouse • AAA Walnut Creek EJ LOFT The Container Patio Dining Capacity Fees Assessment - 31 Restaurants (53 Businesses Total) on/around Locust Street, Walnut Creek Data collected in August 2016 and verified by Permit Counter staff in September 2016 Last APN -Parcel Outdoor Dining? Permit Street Address Tenant Fees Paid? Notes (Permit Counter Report) Address, Owner (Sidewalk/Patio/Parklet) Counter Action &S.- A.- ai. 178191017-1686 Ellwood, Patrick T and Denise A 1680 Katy's Kreek 15 sidewalk seats plus shared parklet (unknown capacity) with 54 Mint II Forno No. No notes re: patio dining. 6 sidewalk seats plus shared May be previous tenant "Downtown Bakery" that came to permit 1686 54 Mint II Forno parklet (unknown capacity) No. with Katy's Kreek. counter in 2014. No notes re: patio dining. 1684 Residual Sugar Wine Bar N/A. N/A. N/A. 1688 Sixteen Eighty -Eight Hair Salon N/A. N/A. N/A. 1668 Walnut Creek Florist N/A. N/A. N/A. 2014 178191009, 178191010, No legacy (pre -SunGard) permits, no applications/permits, no notes on 178191011 - 1666 1666 Cheap Pete's Frame Factory N/A. N/A. N/A. any of the three different 1666 Locust Street parcels. Granzotto, Farry N and Mary 178220035-1690 Bowie, David J 1690 Andy's Sushi No legacy (pre -SunGard) permits, no applications/ permits, but there is TBD -haven't opened yet TBD a note of a second owner, Carolyn Schaffer, on 3/12/16 - the same 2016 second owner as on the 1632 Locust Street parcel. Information is based off Google Maps, GeoPortal/GDI and approximated based on photos and data on the Internet Patio Dining Capacity Fees Assessment - 53 Businesses on/around Locust Street, Walnut Creek Data collected in August 2016 and verified in September 2016 APN -Parcel Address, Owner Street Address Tenant Outdoor Dining? (Sidewalk/Patio/Parklet) Fees Paid? Notes (Permit Counter Report) Last Permit Counter Action 178220032-1632 Bowie, David J 34 seats total on picnic table 1632 Lettuce Restaurant and Catering on parking lot sidewalk and sidewalk seats. 1630 1626 1618 1604 178220019-1610 1610 Locust 1610 Street LLC 178220017-1602 1604 Locust 1602 Property LLC 178220016-1544 Jack & Sylvia Dudum Family LP 1532 and 1544 2 1552 Unclear which parcel this belongs to. 1548 1538 VIP Wigs and Prosthesis Str8 Edge Barbershop M&M Thread Salon Massimo Ristorante Cruise Adventures Unlimited No business listed in parcel. Izakaya Jun Head to Toe Day Spa / Ai Rose Spa Crepes Ooh La La! American Cancer Society Discovery Shop N/A. N/A. N/A. 12 patio seats. N/A. N/A. 8 patio seats. N/A. 8 patio seats. N/A. No. N/A. N/A. N/A. No. N/A. N/A. No. No applications/permits in SunGard, but there is a note of a second • owner, Carolyn Schaffer, on 3/12/16 - the same second owner and date 2016 as on the 1690 Locust Street Parcel (above). N/A. Notes show this parcel was a beauty salon, then some sort of business with a showroom. Deli to restaurant 1199 sq ft, 3.410 RUEs added, but no notes re: patio dining. N/A. N/A. 2014 N/A. These appear to be the same business with two addresses in one parcel. 2013 No. Charged deli rate. No notes re: patio dining. N/A. N/A. 2009 N/A. Patio Dining Capacity Fees Assessment - 53 Businesses on/around Locust Street, Walnut Creek Data collected in August 2016 and verified in September 2016 APN -Parcel Address, Owner Street Address Tenant Outdoor Dining? (Sidewalk/Patio/Parklet) Fees Paid? Notes (Permit Counter Report) Last Permit Counter Action 178220015-1534 Dorking Mary Lou 1524 Tre 178220014-1530 Hotton Donald & Maureen 178220036-1524 Waters Bonnie L Tre 17822037- 1528 Bonanza St. C&H Development Co. 178172006- 1555 Bonanza St. Restaurant Venue Inc. 178172005-1410 Vasconi-Belka Walnut Creek LLC 3 1528 1530 1520 1524 1512 1528 1555 1410 Kaiwa Sushi Vitality Bowls Insignia Hair Salon Lo ka nta Mediterranean Grill & Bar Limon Rotisserie Vanessa's Bistro 2 Broderick Roadhouse Walnut Creek Yacht Club Sauced BBQ and Spirits 8 patio seats. 6 patio seats and 2 sidewalk seats. N/A. TBD - haven't opened yet, but they paid for patio dining. TBD - haven't opened yet, but they paid for patio dining. 8 sidewalk seats. 10 seats on sidewalk and for 8 in a corner on the sidewalk but they do not utilize these. No. TBD -haven't opened yet, but previous tenant (Pyramid Alehouse) had 32 patio seats. No. No. N/A. Yes. Yes. No. No. N/A. Yes. No notes re: patio dining. The parcel was paid in at salon rate, charged deli rate with a net change of .657 RUEs. No notes re: patio dining. N/A. Charged and paid 3074 sq ft at restaurant and 336 at patio dining. Charged and paid 3012 sq ft at restaurant and 258 at patio dining. No notes re: patio dining. Notes from when it became Hubcaps: "TI for (E) Diner. No added square footage." No notes re: patio dining. No notes re: patio dining. No added burden incl. the patio area per Nancy Parker 7/6/16, but no other notes re: patio dining on record for the property. 1995 2013 N/A. • 2016 2015 2007 2016 Patio Dining Capacity Fees Assessment - 53 Businesses on/around Locust Street, Walnut Creek Data collected in August 2016 and verified in September 2016 APN -Parcel Address, Owner Street Address Tenant Outdoor Dining? (Sidewalk/Patio/Parklet) Fees Paid? Notes (Permit Counter Report) Last Permit Counter Action 178230023 - 1380 Jack & Sylvia 1388 Sunol Ridge Restaurant and Bar Dudum Family LP 178230022-1370 Lemoine Gloria D 178230030-1330 Walnut Creek City Of 178230031-1320 1320 and 1322 Locust Street LLC 4 1370 1372 1360 10 seats per their website. Converted parking lot in the No. Collections back of the restaurant to process started. patio / fire pit area. San Francisco Creamery 13 patio seats. Cinco De Mayo Restaurant 8 patio seats. Lark Creek fenced off area. 20 sidewalk seats in a 40 sidewalk seats in a 1352 Tender Greens fenced off area, plus 40 patio seats. 1320 Veggie Grill 10 patio seats. 1322 AlphaTech IT Website Designer N/A. 1322 Whatever Digital Video N/A. Production Service 2210 sq ft of patio area. New restaurant never came for review and they added a new patio dining area, approved by City of WC in March 2016 2014. No. No notes re: patio dining. No. No notes re: patio dining. Note in 2000 that they were enclosing terraces and remodeling front, but no fees were charged. No. Yes. Yes. N/A. N/A. 3011 ft at market rate, 1356 ft at deli rate (assuming that was for patio dining), 695 ft at restaurant takeout 1180 sq ft paid in at deli, remainder of bldg paid in at office, charged 2543 sq ft at restaurant and 376 sq ft at patio 2003 2007 2014 2011 2014 N/A. N/A. N/A. N/A. Patio Dining Capacity Fees Assessment - 53 Businesses on/around Locust Street, Walnut Creek Data collected in August 2016 and verified in September 2016 APN -Parcel Address, Owner Street Address Tenant Outdoor Dining? (Sidewalk/Patio/Parklet) Fees Paid? Notes (Permit Counter Report) Last Permit Counter Action 1840600007- 1550 Olympic Blvd. 1550 Oly Boulevard LLC 184440022-1100 Escuela Shopping Center LLC 5 1550 1192 1140 1100 1159 Citra Grill Forever 21 Panera Bread The Container Store Ike's Lair (actually located on opposite side of street from parcel) Pinkberry (now Pressed Juicery, 1179 actually located on opposite side of street from parcel) 1553 Olympic Blvd. Ruth's Chris Steak House 12 patio seats. N/A. 16 sidewalk seats. N/A. 8 sidewalk seats. 4 sidewalk seats. No. No. No notes of a restaurant being there or of patio dining. N/A. N/A. N/A. 2006 N/A. Retail store to deli, and they paid deli rate. No notes re: patio dining. 2011 N/A. N/A. Deli to deli. No capacity fees owed, no added burden. Formerly Red No. Mango under 1101 Locust St parcel. No notes re: patio dining in Ike's 2013 application or in Red Mango's application. Charged square footage at deli rate, no credits available in multiuse No. because Cheesecake Factory got them all. No notes re: patio dining or 2012 note of tenancy change to Pressed Juicery. N/A. N/A. N/A. Patio Dining Capacity Fees Assessment - 53 Businesses on/around Locust Street, Walnut Creek Data collected in August 2016 and verified in September 2016 Last APN -Parcel Outdoor Dining? Permit Street Address Tenant Fees Paid? Notes (Permit Counter Report) Address, Owner (Sidewalk/Patio/Parklet) Counter Action 184440021-1101 Escuela Shopping Center LLC 6 First entry for Plaza Escuela in this parcel includes 2 garages, restaurants Plaza Escuela Plaza Escuela Multiuse N/A. N/A. 2008 in total of 305,737 sq ft. 1576 18/8 Fine Men's Salons N/A. N/A. N/A. 2015 Project Pie (soon to be Pizza My No. Maybe yes when Pizza 1590 Botelho Dr N/A. No notes re: patio dining or notes of tenancy change to Pizza My Heart. 2014 Heart) My Heart opens. 1500 Yogaworks N/A. N/A. N/A. N/A. Significant patio seats they 1181 Cheesecake Factory Yes. Charged for 1953 sq ft of patio seating. 2008 have paid for. 1158 Chipotle Mexican Grill (located on opposite side of street) 1171 Buckhorn Grill 1152 Starbucks (located on opposite side of street) 10 sidewalk seats. No. 28 sidewalk seats in fenced off area. 8 sidewalk seats. No. No notes re: patio dining. No notes re: patio dining. Reduced size from 3217 sq ft to 1120, fees paid previously. Listed at 1140 but that address now belongs to Panera Bread, which probably took over the remainder of the space, but Panera is listed under 1100 Locust St parcel. No notes re: patio dining. 2003 2002 2002 1141 Verizon Wireless N/A. N/A. N/A. N/A. 1153 Mephisto N/A. N/A. N/A. N/A. 1101 Men's Wearhouse N/A. N/A. N/A. N/A. 1179 Ti I ly's N/A. N/A. N/A. N/A. Definitions of Terms: Types of Outdoor Dining The following are definitions of the terms used in differentiating some of the types of outdoor dining in the District's service area, including pictures taken on Locust Street in Downtown Walnut Creek. Sidewalk — in the public right-of-way. 1 2 Patio — within the property line of the restaurant 3 Sidewalk & Patio — a combination of sidewalk and patio dining Parklet — an extension of a sidewalk into a street where there were once parking spaces. Sidewalk & Parklet — a combination of sidewalk dining and a parklet. 4 The Challenges of Patio Dining What are the issues? Central Contra Costa Sanitary District staff has identified that a number of restaurants in our service area have not received the proper approvals from our Permit Counter and paid the associated fees for their patio dining. This results in the following challenges for the District: Lost Monies: Patio dining capacity fees are charged to any restaurant that is adding outdoor dining space. These fees represent the fair share of the restaurant for the added burden to our system, and they are an integral part of the District's fees we collect to fund our costs to collect, clean, and safely recycle or dispose of wastewater. Liabilities: Outdoor dining situated in a public right-of-way is a potential problem when it is located near or over the District's utilities, as it exposes the District to claims for loss of business, property damage, or odors. At its worst case, this constrains our access to public sewer mains, some of which are on a regular cleaning schedule. What are patio dining capacity fees? Patio dining capacity fees are established for new users of the District's public sewer system. These fees are assessed by means of an equity "buy -in" approach for the user's fair share of the cost of the District's assets. In this case, the patio area is a new "user," because it represents an added burden on the system. For commercial use, capacity fees in general are calculated by square footage, on a comparison between the volume and strength of wastewater from 1,000 square feet of the particular business or industry space, and an average residence. For most users, a standard factor based on their business type is multiplied by the building area, to determine the burden on the system. Patio dining capacity fees are offered at 29.1% of the cost of regular restaurant capacity fees. This fee is paid one time, and it is a separate fee from the restaurant's annual sewer service charge (SSC), which is based on flow and assumed loads and billed via the property tax roll. Some examples of "patio dining" include the following: Outdoor seating on the sidewalk Outdoor seating on a patio within the restaurant's property line Combined sidewalk and patio seating The District's Treatment Plant in Martinez Parklet in the street, over parking spaces Have all patio dining fees been paid to the District? Unfortunately, no. It has come to the District's attention that restaurants may not be visiting our Permit Counter for the necessary approvals and payments to construct patio dining. CASE STUDY 31 Restaurants in Walnut Creek Outdoor dining, patio dining capacity fees UNPAID Outdoor dining, patio dining capacity fees Mk PAID ill Without outdoor dining To begin to assess this issue, staff performed a case study of 31 restaurants in Downtown Walnut Creek. As pictured above, it was found that the majority of the restaurants (65%) have not paid the patio dining capacity fees due to the District. Extrapolating this to the rest of the District's service area, this is indicative of a theoretically sizable issue for the District. How will the District collect the outstanding fees? The District's practice is to send a collection letter to the responsible party. If payment is not received in 45 days, penalties and interest will be added. If payment is not received, the Board may elect to place the delinquent charges on the property tax roll for eventual collection. In an effort to make this as easy as possible for the restaurant, the District is offering installment payment plan options as a part of our Capacity Use Charge Program. What can be done to remedy this? The District is working to identify the restaurants who owe fees and will send the collection letters. However, a key part of our plan to collect the unpaid fees and prevent further incidence of unpaid fees depends on multiagency cooperation and communication. Generally, for new construction or changes of use where tenant improvements are constructed, the District relies on the local building department to route plans to District staff for review. We ask that City staff continue to refer any restaurants looking to install outdoor dining to the District's Permit Counter. As we tackle this issue in our service area, we ask for the City's support. Whom to contact with questions: Central Contra Costa Sanitary District 5019 Imhoff Place Martinez, CA 94553 Planning St Development Services Division Manager, Danea Gemmell (925) 229-7118 Or, for general questions, the District's Permit Counter Staff Phone: (925) 229-7371 2231-9/16 THE CHALLENGES OF PATIO DINING & THE ROLE OF THE CITY Central Contra Costa Sanitary District Fall 2016 PRESENTATION ROADMAP • Define patio dining and its related capacity fees Demonstrate situation of unpaid capacity fees via case study in Walnut Creek Explain issues and challenges for the District Describe remedies and preventive measures • Discuss the role of the City 1 WHAT IS "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. VARIETIES OF PATIO DINING • Sidewalk: in the public right-of-way iii 2 VARIETIES OF PATIO DINING (CONTINUED) Patio: within the restaurant's property line VARIETIES OF PATIO DINING (CONTINUED) Combined sidewalk and patio ,ftlet 3 VARIETIES OF PATIO DINING (CONTINUED) • Parklet: in the street, over parking spaces iii PURPOSE OF CAPACITY FEis • A capacity fee is a one-time fee for new users of the District's public sewer system, to cover the cost of the added burden on the system. • The new user is buying -in to the capital assets. • Capacity fees help fund infrastructure costs. • Patio dining capacity fees represent part of the restaurant's fair share of the costs for the District to collect, clean, and safely recycle or dispose of wastewater. 4 RESTAURANT CAPACITY FEES VS. PATIO DINING CAPACITY FEES Restaurant Capacity Fees: $23,851 per 1,000 sq. ft. vs. Patio Dining Capacity Fees: $6,935 per 1,000 sq. ft. CASE STUDY ON LOCUST STREET • The District has an estimated 780 restaurants in our service area. • Case study of 31 restaurants on Locust Street in Downtown Walnut Creek found that the majority (65%) of the restaurants have outdoor dining with unpaid fees. Case Study 31 Restaurants in Downtown Walnut Creek Number of Restaurants without outdoor dinin • Number of Restaurants with outdoor dinin •, fees • aid 20 6 "IC 5 CASE STUDY IN WALNUT CREEK (CONTINUED The majority of the patio dining is located in the public right-of-way (sidewalk or parklet). These would have required an encroachment „IL permit from the City. Location of Outdoor Seating Sidewalk & Patio Sidewalk & Parklet TBD not o • en et 2 2 3 Sidewalk ■ Patio • Sidewalk & Patio • Sidewalk & Parklet • TBD (not open yet) ISSUE: OST MONIES • Without the patio dining capacity fees, the District has less money with which to fund its capital program. • When fee issues are discovered after the completion of the patio dining: It is more difficult for the District to locate the responsible party, and The new owner could be held responsible for payments of past owners' changes. 6 ISSUE: ENCROACHMENTS Approximately 1,500 miles of sewer pipe throughout the entire service area. Some pipes may be close to where a restaurant has installed or plans to install patio dining. In its worst case, the patio dining may constrain access to public sewer mains, some of which are on a frequent cleaning schedule. ISSUE: CLAIMS LIABILITIES • The District could potentially be held accountable for loss of business, property damage, or odors claims when there is no property agreement in place and the patio dining area is affected when we access our utilities. REMEDIES Identify businesses with outstanding fees and send collection letters Offer installment payments as part of Capacity Use Charge Program For parcels with high capacity fees Down payment Pay balance over 15 years DISTRICT'S PREVENTIVE MEASURES - Establish program guidelines Continue to cooperate and increase our visibility with local municipalities, including building departments, public works, and city engineers Perform outreach to restaurants Continue to refine internal processes for compliance identification 8 ROLE OF THE CITY Continued coordination of new business sign -offs Modify encroachment permits to indemnify District (thank you!) When restaurants are issued encroachment permits for any outdoor dining, please refer them to our Permit Counter for sanitary sewer sign -off and receipt of fees. For parklets with no ties to specific business and for general use, no action is needed. Pis Jim MI pi Will IN NM Mud I, Th. sppreliall ii kw local jurisdklion buildtrig p+ndt subaditA ett44, A CCCSD pent* 4 requle#cf b.d.. sue Of .11 OXIIirror mrkist reo.rit, CENTIRA SAM" for Yu Rd/ 7 4t& FOR YOUR CONTINUED COOPERATION. 9 Dear Permittee, Congratulations on receiving a Temporary Encroachment Permit from the City of Walnut Creek. The City has attached this letter to your permit at our request, so that we can inform you of our District requirements. The City has also sent a copy of your Permit to our offices. The expansion of your restaurant adds burden to our wastewater infrastructure and thus triggers a payment of a capacity fee under Chapter 6.12 of the District's Code and District Ordinance 291 (See attached table) . The fee is calculated by multiplying the "Banquet facilities / patio seating" factor of 1.166 (which as you can see is 29% of the restaurant factor) by the current capacity fee of $5948, for a connection fee of $6935 per 1,000 square feet of patio area. Please contact us so that we can help determine your capacity fee responsibility. The fee is due before you open your new area. In addition, depending on the character and location of your expansion, and whether it interferes with access to our underground wastewater lines, we may require you to enter into an agreement with our District to memorialize your obligation to be responsible for extra costs that the District incurs or damages caused because of the presence of your expansion. 2705175.1 TEMPORARY ENCROACHMENT PERMIT AGREEMENT G T Y O F WALNUT FOR PARKLET FACILITIES CREEK PERMIT NO. This Agreement is entered into as of , 20 between ("Permittee") and the City of Walnut Creek, a California municipal corporation "City"). RECITALS This Agreement is based upon the following facts: A. Permittee is the operator of a certain business located in the City commonly known as _[Name of Restaurant] [Street Address] located at (the "Property"). The Property is located in the Pedestrian Retail Zoning District. B. The proposed decking, railing, ramps, fencing, portable tables, chairs, umbrellas, and appurtenances along with the area to be utilized for their placement, constitutes an encroachment onto the City's right-of-way known as [Street Name] (collectively the "Encroachment"). The Encroachment will serve the business and the public at the Property immediately adjacent to the Encroachment. C. In accordance with Chapter 1 of Title 7 of the Walnut Creek Municipal Code, City has determined that the Encroachment, at this time and as conditioned by this Agreement, does no ardize the public health, safety, or welfare. AGREEMENT 1. Temporary ncroachment Permit; Term. City hereby grants to Permittee a Temporary Encroachment Permit (the "Permit") to encroach into the City's right-of-way on [Street Name], by installing and maintaining improvements for the use and benefit of the business and the public at the Property. In consideration of City's issuance of the Permit, Permittee covenants and agrees to abide by the terms and conditions set forth in this Agreement. This permit is valid on an annual renewal basis for up to five (5) calendar years, commencing on the effective date in the first paragraph. Renewal is based on satisfactory Rev. January 2014 City of Walnut Creek Temporary Encroachment Permit Agreement Page 2 for Parklet Facilities compliance with the terms and conditions set forth in the Agreement. It expires on 20 2. Permittee's responsibilities. Permittee agrees that: 2.1 Acceptance of terms and conditions. Any work done pursuant to the Permit shall constitute acceptance of the terms and conditions contained in this Agreement. 2.2 Public use. The improvements are considered Public and shall be made accessible and open to all members of the public 2.3 Installation and maintenance. The Encroachment shall be installed and maintained in a safe and sanitary condition at the sole cost, risk, and responsibility of Permittee and its successors in interest. 2.4 Limit to Encroachment area. The Encroachment is only for that portion of the right-of- way directly in front of the Property and as depicted on Exhibit . (The Exhibit should show utilities) No addition, alteration, improvement, or expansion shall be made to the Encroachment that would cause further physical encroachment into City's right-of-way. 2.5 No permanent structures; No displays. No permanent structures, nor the display of advertising or sale of products and services, are permitted within the Encroachment area. 2.6 Pedestrian passage. Permittee shall retain a minimum 5' 6" unobstructed pedestrian path within the public right-of-way at all times and a minimum 8' 0" unobstructed pedestrian path within the public right-of-way adjacent to all fenced dining areas. 2.7 Distance from street. Tables, benches and chairs and related appurtenances shall be maintained at least 2.5 feet away from the edge of the street/parklet interface at all times. 2.8 Umbrellas. Except for the support pole, all portions of an approved umbrella and its supporting structure shall be a minimum of seven feet above the parklet and access walkway at all times. Any umbrella canvas shall be a solid, muted color. Worn and faded umbrellas shall be promptly replaced to maintain an attractive pedestrian environment. No writing, symbols, advertising, or other form of signs are permitted on umbrellas. 2.9 Trash and recyclables removal. Permittee is responsible for the timely removal of all trash and recyclables located or created within or resulting from the Encroachment. Permittee shall provide convenient, separate trash and recyclable receptacles and ensure that they are emptied not less than daily. Also, designated business personnel shall clear tables and remove debris promptly after each seating. Existing City trash and recycle cans may not be used. Rev. May 2016 City of Walnut Creek Temporary Encroachment Permit Agreement Page 3 for Parklet Facilities 2.10 Daily removal of tables and chairs. Tables, chairs, umbrellas and other portable appurtenances must be promptly removed from the Encroachment area at the end of each business day. 2.11 Alcoholic beverages. No alcoholic beverage may be served or consumed within the Encroachment area. Permittee is responsible for strict enforcement of this condition. 2.12 Fencing and railing. Approved fencing and railing shall be installed and maintained in a manner that prevents access to adjacent parking and roadway. The method of fence/railing installation shall be approved by staff prior to its initial installation. Fence and railing shall not obstruct vehicular vision or passage. Fence and railing supports shall be designed and/or covered in such a manner that they do not create tripping hazards 2.13 Entry width. Entry to the outdoor eating area shall be a minimum 36 inches for handicapped accessibility. 2.14 Pedestrian passage around fencing and railing. There shall be no potted plants or other elements installed outside of the fence and railing that reduces or impedes pedestrian access around the outside perimeter of the fence. 2.15 Sidewalk maintenance. Permittee must routinely clean the sidewalk and, if necessary or as otherwise directed by the City Engineer, replace soiled or damaged pavers. 2.16 Correction or removal of nuisance. Any fencing, railing, mounting, furniture, or conditions of use associated with the Encroachment that, in the opinion of the City Engineer (or his/her designee), is unsafe, not secure, damaged, or disfigured shall be deemed a nuisance and shall promptly be corrected or removed by Permittee within five days after written notice to remove the Encroachment is mailed by the City Engineer. 3. Revocation; Removal. This Permit may be revoked upon written notice from City to Permittee. Permittee has the right to an Appeal of the revocation within 10 business days of the written notice. Permittee's appeal shall be submitted to the City Engineer. If the Appeal is denied by the City Engineer, Permittee shall remove, relocate, or restore the Encroachment area, as directed by the City Engineer, within 30 days following written notice from City. In the case of an emergency, as determined by the City Engineer, the City may require that the Encroachment be removed immediately, or within less than 30 days. Permittee shall not have the right to appeal any revocation based upon the City Engineer's determination of an emergency. If the Permittee fails to remove, relocate, restore, or otherwise comply with the direction of the City Engineer regarding the Encroachment, City may cause the work to be done, and the costs of the work may be a lien against the Property. Permittee shall have the right to remove the Encroachment at any time. Permittee will be required to obtain additional permit(s) related to the Encroachment removal. Permittee is responsible for costs of removal and for repairs that may be required to the right-of-way, as determined solely by the City. Rev. May 2016 City of Walnut Creek Temporary Encroachment Permit Agreement Page 4 for Parklet Facilities 4. City's existing rights and obligations. Whatever rights and obligations City possesses with respect to the right-of-way shall remain and continue in full force and effect and are not affected by City's grant of permission to install and maintain the Encroachment as contemplated by this Agreement. In certain instances such as a street or sidewalk repaving, the City may require Permittee to remove Encroachment. The City will strive to notify Permittee as early as possible that the Encroachment will need to be removed. Circumstances permitting, Permittee may be able to re -install Encroachment after the streetscape improvement has been completed. Permittee is responsible for the costs of removing and re -installing the Encroachment. 5. Utilities. Encroachment may be located above and/or adjacent to utilities. Permittee may not misuse or interfere with any existing utilities. There may be instances when utility owners are required to access, maintain, repair or replace their utilities, which will require removal of Permittee's Encroachment. City and utility owners will attempt to provide advance notice to Permittee, however in the event of emergencies, there will be little or no notice to the Permittee. Under no circumstances will the City, utility owner, their representative or contractors be responsible for any costs related to removal and replacement of Encroachment, including costs for loss or disruption of business. In addition, the City, utility owner, their representative or contractors will not be responsible for any Permittee costs related to their access, maintenance, repair or replacement of the utility, except for costs that would have been incurred absent the Encroachment. The validity of this Permit is explicitly conditioned on obtaining any required approvals from the Central Contra Costa Sanitary District. 6. Permittee's Insurance. Permittee shall procure and maintain, at its sole cost for the duration of this Agreement, a general liability insurance policy that protects City from any claims that may arise in connection with the Encroachment in a form and with an insurer acceptable to City's Risk Manager. The policy shall: (i) name City and its elected officials, officers, employees, agents, and representatives, and the Walnut Creek Downtown Business Association as additional insureds; (ii) contain no special limitations on the scope of protection afforded to such additional insureds; (iii) contain policy limits of no less than $1,000,000 combined single limit per occurrence for bodily injury, personal injury, and property damage; and (iv) provide that the policy shall not be cancelled or materially altered without thirty days advance written notice addressed to: Risk Manager, City of Walnut Creek, 1666 N. Main Street, Walnut Creek, CA 94596. Permittee's insurance coverage shall be primary insurance with respect to the City and its elected officials, officers, employees, agents, and representatives, and any insurance or self-insurance maintained by the City or any other additional insureds hereunder shall be excess insurance and shall not contribute with Permittee's insurance. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this location or the general aggregate limit shall be twice the required occurrence limit. An endorsement evidencing such coverage shall be filed with City's Risk Manager before any use of the Encroachment area by Permittee. The endorsement must reference the insurance policy number indicated on the certificate of insurance and must be signed by an individual authorized to bind coverage on the insured's behalf. Rev. May 2016 City of Walnut Creek Temporary Encroachment Permit Agreement Page 5 for Parklet Facilities 6. Indemnification. Permittee shall, to the fullest extent permitted by law, indemnify, defend (with independent counsel approved by the City), and hold harmless the City and the Walnut Creek Downtown Business Association from and against any claims arising out of Permittee's performance or failure to comply with obligations under this Agreement, except to the extent caused by the active negligence or willful misconduct of the City. In this section, "City" means the City, its officials, officers, agents, employees and volunteers; "Permittee" means the business owner, its employees, agents and subcontractors; "Claims" includes claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including any and all related costs and expenses in connection therein) and any allegations of these; and "Arising out of" includes "pertaining to" and "relating to". The provisions of this section survive the termination of this Agreement. 7. Agreement runs with the land. Agreement runs with the land and is binding on successors in interest. 8. Signatures. By executing this Agreement, Permittee represents to City that it has the power and authority to accept and perform the terms of the Agreement. The parties have signed this Agreement as of the date first written above. CITY OF WALNUT CREEK City Engineer 2705167.1 PERMITTEE Business Name Permittee's name (printed) Permittee's signature Rev. May 2016 Central Contra Costa Sanitary District Protecting public health and the environment Date Property Owner Property Owner Address Line 1 Property Owner Address Line 2 5019 Imhoff Place, Martinez, CA 94553-4392 NOTICE OF REVIEW AND CONNECTION FEES DUE RESTAURANT NAME, RESTAURANT ADDRESS, CITY, CALIFORNIA AP N ###-###-###-# JOB ### Dear Property Owner: FAX: (925) 228-4624 ROGER S BAILEY General Manager KENTON L. ALM Counsel for the District (510) 808-2000 ELAINE R. BOEHME Secretary of the District During a periodic review of commercial users, staff discovered that a new restaurant is in operation at the above address. Central Contra Costa Sanitary District (CCCSD) review and approval is required at the time of tenant change. During the same review, it was discovered that a new patio dining area has been created for the restaurant. Walnut Creek Administrative Use Permit Y13-114 approved a new 2,210 square foot patio dining area for the new restaurant. Sanitary sewer connection fees, including capacity fees, are due for this new square footage. In order to resolve the above issues, CCCSD requires that the fees be paid. Enclosed is an invoice in the amount of $17,511.87 for the outstanding sanitary sewer connection fees. Payment shall be made to CCCSD no later than 45 days from the date of this letter, or by April 30, 2016. If the fees remain unpaid after April 30, they will become delinquent, and additional charges will be assessed. The District will assess a 10% delinquent fee and a penalty of 1 %/z% per month from the date of delinquency. Complete project plans for the new restaurant and patio dining area shall also be submitted to CCCSD for review no later than 45 days from the date of this letter. Review is required in order to determine pretreatment requirements and compliance. CCCSD Code that relates to this matter includes Section 6.12.030 D: Time for Payment and Penalties for Delinquent Payment; Section 6.12.030 E: Persons Responsible for Payment of Capacity Fees; Section 6.12.040: Residential Capacity Fees; and Section 1.08.080: Penalties for Delinquent Payments. Property Owner Page 2 Date Enclosed is a flyer which provides additional information on these charges. If you have any questions or if you have any documentation regarding this matter, please contact me at (925) 229-7###. Sincerely, Name Title (Rates & Fees Staff) Enc: Invoice Informational Flyer Central Contra Costa Sanitary District Customer CCCSD Acct. # Description Invoice Date Application #16-365 tenant improvement for new patio dining space (2,210 square feet) Commerical Application Fee Source Control Review Fee Sewer Service Charge - Current FY 2015-16 Capacity Fee - Commericial, Zone 1 (1,583 square feet at 1.166 RUE/1,000 sf) Revised square feet provided by Mark Flaherty on 3/23/16 APN Job Payment Details Charge 3/16/2016 Revised outdoor patio dining space $320.00 $877.00 $845.99 $11,083.90 TOTAL DUE Payment shall be made within 45 days of the date on this Invoice. Fees become delinquent if not paid by April 30, 2016. Additional charges will be assessed. PLEASE REMIT TO: CENTRAL CONTRA COSTA SANITARY DISTRICT ATTN: Earlene Millier 5019 Imhoff Place Martinez, CA 94553 (925) 229-7359 II TOTAL $320.00 $877.00 $845.99 $11,083.90 $13,126.89 Please return copy of invoice with remittance. Patio Dining Capacity Fees you have been contacted by the District because, according to our records, your restaurant owes patio dining capacity fees for outdoor dining. This newsletter explains the fees, how they apply to you, and how we are keeping costs down. What are patio dining capacity fees? Patio dining capacity fees represent a portion of the Central Contra Costa Sanitary District's revenue, which helps fund our costs to collect, clean, and safely recycle or dispose of wastewater. This is a one-time fee established for new users of the District's public sewer system. These fees are assessed by means of an equity "buy -in" approach for the user's fair share of the cost of the District's assets. In this case, the patio area is a new "user," because it represents an added burden on the system. How are capacity fees calculated? For commercial use, capacity fees are calculated by square footage, on a comparison between the volume and strength of wastewater from 1,000 square feet of the particular business or industry space, and an average residence. For most users, a standard factor based on their business type is multiplied by the building area, to determine the burden on the system. Patio dining capacity fees are 29.1% of the cost of regular restaurant capacity fees. This fee is paid one time, and it is a separate fee from your annual sewer service charge (SSC), which is based on flow and assumed loads and billed via your property tax roll. Some examples of "patio dining" include the following: Outdoor seating on the sidewalk The District's Treatment Plant in Martinez Who is responsible for paying the fees? District Code Section 6.12 discusses the persons responsible for the payment of these fees: 1) the parcel owner at the time the added burden occurs, 2) the tenant or business owner (for nonresidential use), 3) the wastewater service permit applicant, 4) the parcel owner at the time of discovery of unpaid or delinquent capacity fee are jointly and severally responsible. The parcel owner is responsible for notifying a prospective purchaser of the existence of unpaid or delinquent capacity fees, and the prospective purchaser is responsible for directly verifying with the District that capacity fees have been paid, since existence of unpaid or delinquent fees may not be apparent from the title report. Outdoor seating on a patio within the restaurant's property line Combined sidewalk and patio seating Parklet in the street, over parking spaces Why are patio dining capacity fees important? The money collected from the fees is important to the continued funding of the District's assets. There is a direct correlation between the square footage of a restaurant, the amount of diners who occupy that space, and those diners' impact to the sewer system. The money owed and collected for patio dining an integral part of the District's fees and must be collected in a fair and consistent manner to ensure equity among all users. Is your restaurant a unique case? Unfortunately, no. It has come to the District's attention that restaurants may not be visiting our Permit Counter for the necessary approvals and payments to construct patio dining. It is important that, when you do any new construction or changes of use where tenant improvements are constructed, you gain approval from us - your sanitary sewer district - in addition to your City. To begin to assess patio dining in our service area, staff performed a case study of 31 restaurants in Downtown Walnut Creek. As you can see in the following pie chart, this case study found that the majority of the restaurants (65%) have not paid the patio dining capacity fees due to the District. CASE STUDY 31 Restaurants in Walnut Creek Outdoor dining, patio dining capacity fees UNPAID Outdoor dining, patio dining capacity fees L PAID Without outdoor dining Extrapolating this to the rest of the District's service area, this is indicative of a theoretically sizable issue for the District, which we hope we can begin to remedy with your help in paying the fees due to us. What are we doing to prevent the incidence of further unpaid fees? We strive to continually improve our business practices to serve you and our other customers in our service area. We are enhancing our multiagency cooperation and communication to ensure that restaurants like yourselves are referred to us when you gain approvals from your City, so you can be aware of your responsibilities as you grow your business by installing patio dining. What can we do to help you? We understand it may be jarring to receive this news. We are happy to speak with you about these fees and work with you to consider options for payment of the fees, including an installment payment plan as part of our Capacity Use Charge Program. Thank you for your attention to this matter. Whom can you contact with any questions? Central Contra Costa Sanitary District Permit Counter Staff 5019 Imhoff Place Martinez, CA 94553 Phone: (925) 229-7371 2230-9/16 ASSESSMENT OF PATIO DINING October 19, 2016 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 • Demonstrate prevalence of patio dining via case study in Walnut Creek • Explain issues, challenges, and opportunities for the District • Describe preventive measures R Discuss collection approach for unpaid fees • Conclusion T� • Conclusion 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 DEFINING "PATIO DINING" Patio dining is any outdoor seating that a restaurant has installed for its customers' use. It represents a change of use or expansion on an existing parcel that requires the District's approval and receipt of patio dining capacity fees. n_ VARIETIES OF PATIO DINING Sidewalk: in the public right-of-way 401_ 3 VARIETIES OF PATIO DINING (CONTINUED) Patio: within the restaurant's property line VARIETIES OF PATIO DINING (CONTINUED) Combined sidewalk and patio ,,fget VARIETIES OF PATIO DINING (CONTINUED) Parklet: in the street, over parking spaces iii DEFINING "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. • Under the current methodology, patio dining creates an assumed added burden on the District's wastewater system. iiiill4,4\ • 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. 5 RESTAURANT CAPACITY FEES VS. PATIO DINING CAPACITY FEES Restaurant Capacity Fees: $23,851 per 1,000 sq. ft. vs. Patio Dining Capacity Fees: $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, fees paid 19% With outdoor dining, fees unpaid 65% Without outdoor dining 16% . Without outdoor dining ■ `ddith outdoor dining, tees unpaid with outdoor dining, fe paid Number of Restaurants without outdoor dinin • Number of Restaurants with outdoor dinin •, fees • aid 20 6 6 Sidewalk & Parklet Sidewalk & Patio CASE STUDY IN WALNUT CREEK (CONTINUED) The majority of the patio dining is located in the public right-of-way (sidewalk or parklet). This would have required an encroachment permit from the City. Future work to continue the study: Benchmarking against other agencies Translating this data to a dollar amount in fees owed Location of Outdoor Seating ittraMOM =El 9 2 2 3 TBD not o • en et Sidewalk Patio • Sidewalk & Patio • Sidewalk & Parklet ■ TBD (not open yet) ISSUE: OST MONIES O Without the patio dining capacity fees, the District has less money with which to fund its capital program. • When fee issues are discovered after the completion of the patio dining: It is more difficult for the District to locate the responsible party, and The new owner could be held responsible for payments of past owners' changes. J''f,-. (4' ISSUE: ENCROACHMENTS Approximately 1,500 miles of sewer pipe in the entire service area. Some pipes may be close to where a restaurant has installed or plans to install patio dining. In its worst case, the patio dining may constrain access to public sewer mains, some of which are on a frequent cleaning schedule. ISSUE: CLAIMS LIABILITIES • The District could potentially be held accountable for loss of business, property damage, or odors claims when there is no property agreement in place and the patio dining area is affected when we access our utilities. 8 OPPORTUNITIES 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. • PREVENTIVE MEASURES • Continue to cooperate and increase visibility with local municipalities Meetings with City staff - Outreach materials for City of Walnut Creek (Appendix C) Iiiiii,,, • Sewer Summits Modify encroachment permits or other property agreements to indemnify the District (Appendix D) 9 PREVENTIVE MEASURES (CONTINUED) Outreach to restaurants Mailers or in-person presentations Roadshow to local chambers of commerce, business associations 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 10 CASE OF THE COFFEE SHOP Application No. 16.782 Application Information AraplicitiofidPorf.11 Ntitei Yanrnt I»ucrlptlan- corm -actor Sq. Foals_ 205 Dale:4,22,115 Typo; COMF SlEru. CL. Jai: SON Permit information Th rr'$ ia .0 pgrnd5, 6 IOi tl' ncirbe 18 Snow * v enlaces Search O de I, Coda Comment. 4+79+10. ON APPLICANT PAID FOR SSC AND CAPPEES FOR ADDED SQUARE FOOTAGE PATIO AREA ELIMINATED 'FROM MANS 17.5 04,29.112010 09 55 A.141 KWOOLRIDGE • 18 RUES PAY FOR ADOE0 5r 10 OLIILDIHG NQ CHANGE 1N 0001880 EQUFPT AT THIS TIME NO OUTDOOR PATIO ATIING AREA ANY CHANGES TO COOKING OR SEATING MADE SHALL RESUBMIT UNDER NEW APR ICAliONOWNER 8888 NOT A0LE TO GET APPROVAL FROMCrn OF L.4FAyE1TE TO ADD THE ADOTIQNAL PATIO AREA SEATING WHICH WOULO 88QLrIRE FLUE CAPACITY FEES TO SE ASSESSED 01 040211.70116. 05 25 PIM NSANCHEZ .- TS 04,11,7018 05 21 PM CHEZ - • 15 DISC SFORE SPCA 8+15 MAKE, 511155 lIIAT atlk 181.81 rH SET PLANS WW1 ALL OF THE PATIO AREAS REMOVED AND MARKED AS! T.APPIritE0OY AND ALSO THAT x+11' CHANGES TO THE COCKING EQUIPMENT REQUIRES A RESLIRMITIAL WITH NEW APP1CATIO# TO CC010 STICKERS ARE ON MY DESK TO PUT ON THE 1151MB180 SHEE'TSALSO MANE SURE 11881 THE DISHWASHER BYPASSES TFIE 100 GT 175 047E12010 70 P1k11SAE4CHEZ SIGNED HEALTH SET TS 6511820015 125$PM85 HEZ- $foonn8 1 to 1 of 3 8Mr1 Preoraus II Neil Picture taken August 28, 2016 11 COLLECTION APPROACH • Currently, on a typical timeline: Initial collection letter sent by March 15 Letter declaring payment as delinquent sent by May 1 Board may place unpaid charges on property tax roll on July 1 via public hearing COLLECTION APPROACH (CONTINUED) • Improve collateral to mitigate the message (Appendix E) • Formulate an approach that is careful and strategic Ask assistance from City in sending politically sensitive collection letters • Offer installment payments as part of the existing Capacity Use Charge Program For users with high capacity fees • Down payment and pay balance over 15 years 12 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 QUESTIONS? 13