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Home My WebLink About05.a. Patio Dining Capacity Fees Page 1 of 15 Item 5.a. 1 Central Contra Costa Sanitary District March 20, 2018 TO: FINANCE COMMITTEE FROM: DANEA GEMMELL, PLANNING AND DEVELOPMENT SERVICES DIVISION MANAGER REVIEWED BY: JEAN-MARC PETIT, DIRECTOR OF ENGINEERING AND TECHNICAL SERVICES ROGER S. BAILEY, GENERAL MANAGER SUBJECT: PATIO DINING CAPACITY FEES I n November 2016, the Board received a presentation about the potential for unpaid patio dining capacity fees as part of a mentoring project. Many food service establishments including restaurants and coffee shops have expanded into sidewalks and parking areas, without coming through the permit counter as these improvements have not involved sewer construction. The trend for patio dining continues to increase due to the relatively inexpensive investment into patios and ambience of outside dining that attracts customers. Central San charges capacity fees based on area of improvements. Patio Dining is a use category that has existed for years and is listed on the Schedule of Capacity Fees, Rates and Charges adopted by District Ordinance No. 296 effective July 1, 2017. The current fee is $7,346 per 1,000 square feet of improved area. Staff engaged Black& Veatch Management Consulting, LLC to do a general review of capacity fees in February 2017 and included review of patio dining in the scope. Staff looks forward to reviewing this information with you at the March 20, 2018 Finance Committee meeting. ATTACHMENTS: 1. Patio Dining Capacity Fees Presentation March 20, 2018 Regular FINANCE Committee Meeting Agenda Packet- Page 76 of 95 PATIO DINING CAPACITY FEES .0!01 00.k MARCH 20, 2018 FINANCE COMMITTEE MEETING s � ki Danea Gemmell , PE ' - Planning and Development Services s Division Manager March 20, 201, Fl ANCE C - CAPACITY r� PURPOSE The Capacity Fee Program equalizes the investment in Central San assets among current and new users, thus ensuring that new users pay their fair share of added burden for facilities capacity and services. Capacity Fees are owed for added burden : New connection 10. Change of use Expansion of facility Existing connection that did not pay 'Maroh 20, 018 Regular FINANCE Committee ty�jnn onPnrjq Pprkct_Pana]R of Q5 //�1 PATIO DINING IS AN EXPANSION OF RFSTAURANT Patio dining is any outdoor seating that a restaurant has installed for its customers' use . Patio dining represents an expansion on an existing parcel that requires Central San 's approval and payment of patio dining capacity fees . Am 'Maroh 20, 018 Regular FWCommi¢ee ty�jnn onPnriq PArkct_Pana 70 �r as di��/�""r�' PATIO DINING IS A GROWING TREND October 9, 2015 "No matter what kind of establishment you run, a simple deck or patio can increase revenue by up to 30 percent. Additional research by the Simons Advisory Group proved that a $200, 000 investment increased overall sales by $500, 000 possibly more if your restaurant offers year-round outdoor seating. " https://www.fastcasua l.com/blogs/how-to-attract-guests-with-outdoor-seati ng/ August 1, 2017 'In a study of the Top 100 Bar and Nightclub venues, nearly three _ quarters (73%) sport an outdoorIw r patio, terrace or rooftop ace s — p p an increase from 63% in 2013. " i https://www.trycake.com/blog/3-ways-outdoor-dining-boosts-restaurant-popularity/ MENTORING PROJECT IDENTIFIED POTENTIAL FOR UNPAID PATIO DINING CAPACITY FEES Case Study Central San has an 31 Restaurants in estimated 780 restaurants Downtown Walnut Creek in its entire service area . With outdoor dininCase study of 31fees ' Without aid outdoor restaurants on Locust ' Street in Downtown Walnut Creek. out�aor din ng Majority (65% ) have outdoor ' �n�feF unpaid dining with potential unpaid With o utdoo 'Aifheutdoor fees dining:.fees fees. • �� paid Number of Restaurants with outdoor dining, fees unpaid �� CAPACITY FEES CALCULATION EXAMPLE Capacity Area RUE Current Typical Calculation Fee (per 1,000 S Factor Capacity Fee Restaurant $ 25,263 = 1 x 4.01 x $ 61300 - - • • $ 7,346 = 1 x 1.166 x $ 61300 Patio Dining $ 71346 = 1 x 1.166 x $ 61300 Building Area (Square Feet) is the Unit of Measure for Non- Residential Capacity Fees. Residential Unit Equivalent (RUE) Factor is based on specific flow and strength for each User Group. • . . : • 'ser Group Resta u ra nts 4.01 548 700 360 Deli/Bar/Coffee Shop 1.166 259 150 165 Patio Dining 1.166 165 700 360 "Biological Oxygen Demand(BOD) al Sus ended Solids TSS SERVICE AREA SURVEY OF 48 RESTAURANTS WITH PATIO DINING Restaurant raMM"M % of Patio Patio M9 square feet square to Location feet -a 3,655 370 10% $ 2,784 4,128 461 11% $ 3,386 1,787 147 8% $ 1,080 San Ramon Restaurant 7,818 1,322 17% $ 9,711 Concord Restaurant 40% c 35% L 30% a� 25% • - • o • • • N 20% a15% • • 10% a • � • • •• • • • • • 5% • • 0% - 0 400 600 800 1000 1200 1400 Patio Size (square feet) AGENCIES ARE MIXED ON CHARGING FOR PATIO DINING CAPACITY FEES CAPFEECHARGE East Bay Municipal EBMUD does not charge for patio dining area specifically as their No MW Utilities District capacity fees are based on consumption water consumption data and business type. Dublin San Ramon DSRSD charges 50% of regular charge per square footage for the patio Yes Servicesdining when it is dedicated to the business (this rule applies to businesses like Starbucks as well if they have a dedicated outside sitting area). Dedicated represents planned seating submitted in the tenant improvement plan. Delta . • DDSD does not charge a fee for the patio dining area, only for the No Sanitationsquare footage inside the building. DD UnionUSD does not charge for patio dining- only charges per square foot No Dinside the building. City of The City charges for the patio dining, if it is dedicated to the restaurant, Yes based on square footage. lronhouse Sanitation ISD charges dedicated patio dining area and it is charged additionally Yes Dbased on the numbers of seats. Ross Valley RVSD does not charge for patio dining area. The patio seating does not No Sanitatioreally matter since the charge depends only on the number of fixtures in the premise. NA-qrrh 9n gni A Pam dnr P1K1AK1C'.P Cr%m iffini= Mppfinn AQ anrin PnrL-,=t- Pnnp AA r)f Q!� .44�--= l Jack's Restaurant & Bar In & Out Burger Prima Panera � Katy's Kreek Kentucky Fried Chicken Cheesecake Factory Baja Fresh Urban Plates Dos Coyotes Starbucks Tender Greens Pressed Juicery Gott's Roadside Subway Vitality Bowl CRITERIA TO EVALUATE PATIO DINING FEES IF I W, Wq Fine D ake Out Fast Casual/ Deli/Coffee Quick Service Sho Ad Wh A&k AMd 1& —A&mW • Tables Increase Customers Tables provide Convenience for Customers • Increase Number of Servers No Servers in patio • Additional food output No Additional food output/Takeout food • China Plates/Silverware Paper Plates/Plasticware • Alcohol Served in patio No Alcohol in patio • ed'c e-i t'o ` RECOMMENDATION Maintain existing capacity fee schedule : Restaurants Deli/Coffee Shops Patio Dining Revise criteria/procedures for assigning capacity fees for patio dining only for restaurants and fast casual dining . Patios for Deli/Coffee Shops exempted from capacity fees . 'Maroh 20, 018 Regular FW Committee fyl�mnn onPnriq Parkct_Pana R]of Q5 //�1 REVISITING MENTORING PROJECT WITH NEW PATIO DININGCRITFRIA Case Study-Revised Criteria Case study of 31 31 Restaurants in restaurants on Locust Downtown Walnut Creek Street in Downtown Walnut Creek. Originally (65%) had • outdoor dining with potential unpaid fees. Revised (42%) with Wiingcath acitooryfing, patio "' dining capacity fees unpaid outdoor dining owe ■With outdoor dining, patio dining capacity fees paid unpaid capacity fees ■With outdoor dining, patio dining capacity fees exempt Number of Restaurants wittroutdoor dining, fees unpaid 13 Number of Restaurants with outdoor dining, fees exempt 6 NEXI Present findings and recommendation for Board approval on patio dining policy. Prepare Brochure outlining Patio Dining Capacity Fee Criteria : Distribute to partner agencies Include on all non-residential applications Use new criteria in patio dining audit for . fiscal year 2018- 19 . 'March 20, 2018 Regular FINANCE Committee fylpptmnn onPnrjq Parkct_Pana RQ of Q5 QUESTIONS ? March 20, 2018 Regu ommittee -