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Home My WebLink About06.b.1) Presentation on Assessment of Patio Dining6.b.1) ASSESSMENT OF PATIO DINING November 17, 2016 Board 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 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 Next Steps 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. 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, lees paid 19% With outdoor dining. fees unpaid 65% Number of ; : rants with outdoor dinin • fees 'aid ■� ti or.i Or dring dram, leas , arm "VIM o t. eot rti gOr1 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 pipe or constrains access • Claims Liabilities — loss of business, property damage, odors claims 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. PREVENTIVE MEASURES t' 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 C) Sewer Summits Modify encroachment permits or other property greements 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 6 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 Appl4abon No 16-782 p pficst on Worms*. Two* Co Coniractor. $o. Footage: 206 OMR: 4,4;16 Tit= cow Rs: a Atic 6954 Portnit toformilitm wain oituoi Ioe amicitio. Appkatton,Piemit Not. Slum I% nitwit Code Coninsmity fattito k Tegi 4.2.,16 APPLiCANT PAD FOR SSC AND CAP FEES FOR AGOED SQUARE FOOTAGE PATIO ARF.A ELIMINATED FROM PLIAS VS 06,29,2016 00 56AM MOO( ROCA PAY F CR ADDED 209 SF TOGD NO CHANGE IN COOKNG EOUIPT AT 1145 TiE NO OUTDOOR PATIO SEATING AREA WY CHANGES TO COOKING OR SEATING WOE SHALL RESARANT UNCER NEW APPI. ICATION OMER 1,40/6 NOT ABLE TO GET APPROVAL FROM an' OF LAFAYT TTE TO ADO THE ACOTIONAL PATIO AREA SWING MICK VADVtD REQUIRE RUES CAPAOTY FEES TO eiE ASSESSED 1,S OLOSe2016 06 2S P14 rtSANCHEZ Ti$ 0429a016 OS 2, PM PISAW>T-i • 17,214 MSC BEFORE WE Sad PLANS 1AWE SuRE THAT THE HEALTH SEI PLANS HAVE ALL OF THE PATIO AREAS REUQVED ANO MA.RXED AS NOT APPRVED ev�cSO Arde Also THAT Amy CHANGES TO THE COOKING EQUIPMENT REOL.RES A RESuBMITAL WITH NEW APP1CATION TO CC.GSD STKKERS ARE ON ItY DESK TO PUT ON THE PLUMBING SHEETS ALSO MACE SURE THAT THE D6HYik_4(ER BYPASSES TW 103 GT 'PS 01.192010 1:6 TO Pia NSANCHEZ SIGNED HEALTH SET TS 05/16,2014 12 56 PM NSANCHEZ 4,29,16 RUES Sretvog 1 It, 3 at 3 iviintri 1111 Nirti 7 -1111111111111111161-• -4.1111110P- 47:77 .. .�• �-- �. _ • amu!' tift r 4F+.• • . - ' ''°�`�' + terms"" ittuiZ -NZ j IMO Picture taken August 28, 2076 COLLECTION APPROACH 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 8 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 NEXT STEPS • Staff will consider the options and present findings and a recommendation to the Board on a policy decision • Board will be asked to consider this matter at a meeting in the future Review current methodology • Discuss policy decisions moving forward 9 ACKNOWLEDGEMENTS • Mentor — Danea Gemmell • Executive Team, Teji O'Malley, and Larry Bienati, Ph.D. • Planning and Development Services Staff, including Kim Stahl, Tom Godsey, Thomas Brightbill and Permit Counter Staff Tknk'� AEE Fetke QUESTIONS? 10