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SR 10-25-2022 11A City Council Report City Council Meeting: October 25, 2022 Agenda Item: 11.A 1 of 12 To: Mayor and City Council From: Rick Valte, Public Works Director, Public Works Subject: Santa Monica Permanent Parklet Program Recommended Action Staff recommends that the Council review the additional information City staff included in the staff report concerning wastewater fees, outdoor heaters, canopies, and parklet size under the Parklet Program and provide comments. Executive Summary Following a two-year Santa Monica Outdoors Pilot Program (“Pilot Program”) for parklets on public streets, implemented to support local businesses through the COVID- 19 pandemic, on June 28, 2022, the City Council adopted a comprehensive permanent parklet program (“Parklet Program”) to activate public spaces for community enjoyment and economic recovery while also maintaining public safety and recovering maintenance, administration, and improvement costs. In response to Council direction on September 27, 2022, that staff return with additional information concerning certain aspects of the Parklet Program, this report provides additional information about the following four characteristics of the Parklet Program: • Wastewater fees (applicable only if new seats are added for outdoor dining in addition to seats originally approved by City for operation of the eating establishment) 11.A Packet Pg. 1056 2 of 12 • Outdoor heaters (State law prohibits them under canopies and tents and must be placed 5 feet from canopies or tents) • Canopies or tents will require full review and approval by Building and Safety to account for wind load and required foundation. Pursuant to California Fire Code 603.4, propane heaters are prohibited inside of tents, canopies and membrane structures regardless of flame rating. • Parklet size limitations (industry standard of 2 parking space maximum) The Parklet Program requirements, and its fees and charges to recover maintenance, administration, and improvement costs, became effective September 30, 2022, synchronous with the expiration of the pilot program permits and associated license agreements that supported the Pilot Program. Background The Pilot program permits, and associated license agreements, for use of the public right-of-way for outdoor dining expired on September 30, 2022, for approximately 70 parklets located in the City’s Downtown and neighborhood commercial corridors. The comprehensive Parklet Program that City Council adopted on June 28, 2022, includes design requirements for parklets, imposition of fees and charges to defray the City’s costs in administering the program and use of public property, and guidelines for the construction of accessible parklets to comply with the Americans with Disabilities Act (“ADA”). (Attachment A) Under the Parklet Program, eligible businesses operating parklets under the Pilot Program (SMMC Chapter 6.40) who wish to continue operating their parklet, may receive provisional permits and enter into licensing agreements with the City provided that such businesses: (1) Submitted a completed application in compliance of SMMC Chapter 6.42 by September 15, 2022; and 11.A Packet Pg. 1057 3 of 12 (2) Transition to a non-provisional parklet permit no later than February 28, 2023, as set forth in the administrative regulations. If businesses wish to continue providing outdoor dining services in the public right-of- way, they also have the option to participate in the sidewalk dining program that existed prior to the pandemic pursuant to SMMC Section 9.31.200 “Outdoor Dining and Seating”. Discussion The Pilot Program has transitioned parklets from a City-managed pilot located on Main Street starting in 2015, to a lifeline for struggling businesses from 2020 to 2022 during the COVID-19 pandemic, to now becoming a popular feature of Santa Monica’s outdoor lifestyle. The Parklet Program focuses on creating a sustainable policy and fee framework to support local businesses, maintain public safety, and recover City maintenance and improvement costs. The Parklet Program also aims to better align the proliferation of parklets with adopted City policy for enhanced pedestrian experiences in the City’s commercial areas. On September 27, 2022, Council requested additional information about some aspects of the City’s administration of the Parklet Program, as a few businesses raised concerns about the program’s fees, standards, and guidelines for the construction of parklets on the City’s public right-of-way. These concerns include: • Wastewater Fees. The City imposes a one-time fee for net new seats that are added for outdoor dining, that are in addition to seats previously approved by City for operation of an eating establishment. This is a long-established practice (since 1968) and provides for unforeseen capacity upgrades and maintenance of Santa Monica’s and Los Angeles’ sewer infrastructure. Concerns have been expressed that the cost for adding net new seats to a restaurant location are too high. The City’s wastewater capital facility fees were determined to be reasonable per the Water and Wastewater Capital Facility Fee Study that was adopted by City Council on November 24, 2020, under Resolution No. 11308 11.A Packet Pg. 1058 4 of 12 entitled “A Resolution of the City Council of the City of Sana Monica Revising the Wastewater Capital Facility Fee” (“Resolution”). • Outdoor Heaters. State law prohibits the use of propane heaters beneath overhead canopies or umbrellas. Concerns were raised about this prohibition because outdoor heaters were previously allowed under canopies during the pandemic. An interpretation of the California Fire Code language was made in early 2020, allowing propane heaters under tents with certain conditions. In December of 2020, the State Fire Marshal issued an official interpretation, clarifying that the California Fire Code prohibits the use of propane heaters under all tents, canopies and membrane structures. (Attachment B) As a result, Santa Monica modified its regulations to comply with the current Fire Code. • Parklet Size Limitation. Parklets are restricted to 2 parking spaces maximum, which is a common standard across many jurisdictions. Concerns were expressed by businesses who built much larger parklets during the emergency orders. Staff estimates that there are approximately 8 parklets out of nearly 70 that utilize more than 2 parking spaces. This report provides additional detail on the three items listed above. Wastewater Fee Structure Wastewater Capital Facility (One-time) Restaurant - Sit Down (Full Service) $1,358.49 per seat Restaurant - Sit Down (Fast Food) $1,132.08 per seat Note that the wastewater fee is a one-time fee that carries over even if operators change (Water Resources tracks payment of the one-time fee), can be offset with existing seating, and is offset by credit for fees already paid for existing sidewalk dining. Fees are subject to change annually. The City Council has consistently taken a strategic approach to setting future water and wastewater rates that balances a concern for keeping costs affordable to our community while adequately investing in long-term water quality, reliability, and sustainability. As a recognized leader for its environmental and water conservation policies, the City has 11.A Packet Pg. 1059 5 of 12 championed a variety of initiatives designed to provide a sustainable community to its residents and businesses. In 2020, City Council adopted the five-year water and wastewater rate structure and capital facility fee structure aimed to maintain high- quality, reliable water and wastewater collection services, reduce the City’s reliance on imported water supplies, and maintain adequate reserve levels to ensure continuity of water and wastewater system operations. Water and wastewater capital facility fees include “connection fees” and “capacity charges.” California Government Code Section 66013 defines a “capacity charge” as a one-time “charge for public facilities in existence at the time a charge is imposed or charges for new public facilities to be acquired or constructed in the future that are of proportional benefit to the person or property being charged, including supply or capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local agency involving capital expense relating to its use of existing or new public facilities.” (emphasis added.) The imposition of a capacity charge on customers increasing their service requirements on the water and/or wastewater systems ensures that these customers pay their fair share of existing utility asset costs, plus the costs of new facilities needed to serve them. The capacity charge is calculated based on the standards established by the American Water Works Association and considers projected customer growth, value of existing assets, and value of planned assets. As a result, future customers requiring additional capacity or service would enter as equal participants, along with current customers, regarding their financial commitment and obligations to the utilities. The capacity charge was determined to be reasonable per the Water and Wastewater Capital Facility Fee Study that was adopted by City Council in 2020 under the Resolution referenced above. The wastewater capital facility fee proceeds are used to fund capital investments in the wastewater system, which include unforeseen capacity expansion of the wastewater collection system or future design and construction of planned facilities and upgrades to maintain system reliability. The wastewater capital facility fees are applicable for outdoor dining programs based on the following: 11.A Packet Pg. 1060 6 of 12 • The City’s assessment of capital facility fees to outdoor dining operators that: (1) seek a City permit and license to operate outdoor dining in the public right-of- way; and (2) propose to increase the number of restaurant seats for outdoor dining is consistent with California Government Code section 66013, industry best practice, the City’s Resolution that sets wastewater fees, California case law, and the City’s past practice. • As stated in the Resolution, the last paragraph of Section 1 provides that, “[w]henever a user of the sewer system causes a significant increase of either the flow or strength of sewage discharged to the system, even though there may be no change in land use, an additional Wastewater Capital Facility may be imposed.” Based on studies conducted by and guidelines set by the City of Los Angeles, the wastewater strength from restaurants are typically 3-4 times higher than residential wastewater. The higher wastewater strength from restaurants taxes the wastewater infrastructure significantly more as the higher strength requires more treatment capacity in comparison to residential wastewater (lower strength) for the same volume of wastewater treated. • As the outdoor dining program serves as an extension of the existing restaurant that is a part of a building, the net increase in total number of seats added through the program would result in an increase of wastewater generated per seat added and the resulting wastewater is discharged through the building’s sewer lateral and into the City’s sewer system. The allocation of capacity for the additional wastewater flows from the building represents the amount of capacity allowable to the customer for system engineering and planning purposes, regardless of how much of the capacity is actually used by the customer as the City has no authority over how the business operates and when wastewater flows are generated. • The wastewater capital facility fee paid for by the customer is permanent regardless of if the restaurant seat is indoors or outdoors. If the customer no 11.A Packet Pg. 1061 7 of 12 longer operates the outside portion (e.g., parklet) of the seats, the customer still owns the capacity and could move the seats inside, to the sidewalk, and/or to a private patio as long as it complies with all other codes and regulations (e.g., fire code on capacity). • Wastewater capital facility fees have historically been assessed to restaurants based on their footprint, operations (e.g., full service versus fast food), and/or number of restaurant seats (indoor and outdoor). As the City of Santa Monica is a contracting agency to the City of Los Angeles’ Amalgamated System, it must follow the City of Los Angeles’ methodology and sewerage generation factors in charging wastewater capital facility fees. The City of Los Angeles’ sewerage generation factors and sewerage facility charge (or capital facility fee) were first established in 1968 and 1970, respectively. Under the City’s outdoor dining program, as a condition for using the City’s public right- of-way for outdoor dining (e.g., parklets and sidewalk dining), the City requires that outdoor dining operators comply with standards and licensing requirements that were adopted by the City to maintain public safety and recover maintenance, administration, and improvement costs. Under this program, for those outdoor dining operators that seek to increase the seats, in addition to the seats that the City originally approved for their eating establishments, thereby triggering capacity fees, the City is considering a payment plan that would be included in their license agreements for the payment of capacity fees. To qualify for a payment plan, an outdoor dining operator must: • Pay the City of Los Angeles fees that are charged to the City of Santa Monica for treatment of wastewater (roughly 20% of the total capacity fee for restaurants) prior to the City’s issuance of a license agreement. • Amortize payments of the remaining capacity fee (Santa Monica’s portion) over a 2-year period to be paid in monthly installments. A two-year payment plan would be consistent with SMMC Section 6.42.020(a), which provides that parklet permits are valid for an initial period not to exceed two years and may be renewed for successive two-year periods. 11.A Packet Pg. 1062 8 of 12 • Should the 2-year payment period pose a hardship on the customer, the customer could submit a hardship waiver and have the option to pay up to a 5- year period based on the hardship demonstrated. The 5-year payment is the maximum pay period as it aligns with the City’s wastewater rate study cycle and infrastructure planning periods that are completed on 5-year cycles. A payment period beyond 5 years would impact wastewater rates. • Should a parklet operator, or City, terminate the license agreement prior to the 2- year license term, no capacity fees will be owed from the date of termination. The payment plan option being offered by the City is similar to the practice by neighboring cities, including Culver City. Culver City’s outdoor dining program requires the City of Los Angeles’ wastewater capital facility fee to be paid up front and offers a payment plan for up to 12 months for the remaining portion of the wastewater fee. The City of Los Angeles’ outdoor dining program requires all wastewater fees (sewerage facility charge) to be paid all up front. Of the 73 applicants who have applied for a parklet permit under the Parklet Program (SMMC Chapter 6.42), only five businesses have informed the City that they will add net new seats as part of their parklet operations. This equates to a total of 94 net new seats. Assuming the net new seats are for full-service ($1,358.49 per seat), this equates to a one-time fee of approximately $128,000 across multiple businesses. It should be noted that the number of net new seats on the application forms are self-reported by applicants and have not yet been verified by City staff. Therefore, it is possible that the number of overall net new seats for eating establishments may increase as Public Works conducts field inspections. Additionally, parklet operators should be aware that increasing occupancy or seating area may trigger additional code regulations or impacts that would require Building and Safety review, such as potentially affecting accessibility requirements (e.g., compliant path dimensions) and requiring increased restroom plumbing fixtures. 11.A Packet Pg. 1063 9 of 12 Use of Outdoor Heaters During the 2020 era of the pandemic when the Pilot Program was quickly implemented, overhead canopies and outdoor heaters were permitted by the City’s Fire Department, which was consistent with many jurisdictions across California. Subsequently, in December 2020 Cal Fire issued an official interpretation of California Fire Code 603.4 to clarify that propane heaters are prohibited inside of tents, canopies and membrane structures regardless of flame rating (CCR Title 19, Division 1 §332.(a) Flame Resistance) (Attachment B). Fire staff and the parklet team began messaging this change in regulation as early as January 2021 and updated the “Do’s and Don’ts” guide in September 2021 to reflect the prohibition on combustible (propane) heaters inside outdoor covered areas. Due to limited staff resources, it has been challenging to enforce this requirement. Current regulations for propane heaters require an annual hazard control permit from the Fire Department. Permit holders are allowed a maximum of one additional tank to be stored without additional State reporting requirements. Consistent with State law, propane heaters are not permitted inside structures and must be placed at least 5 feet away from any tent, canopy or membrane structure. Propane heaters must also maintain a 6 feet clearance, both vertically and horizontally, from any street tree. Canopies • Solid roofs and overhead trellises are discouraged in Parklets due to the added complexity in applicable regulations and potential impacts to City infrastructure. Erecting a roofed structure requires a building permit, which involves securing a licensed structural engineer to provide structural design and foundation details of how structure will be attached to the right-of-way. Prevalent modification or disturbance the right-of-way is not a preferred option for Public Works. • Parklets with overhead canopies/tents must have plans prepared by a licensed professional and require full review and approval by Building and Safety to account for wind load and required foundation. 11.A Packet Pg. 1064 10 of 12 • Umbrellas are permitted and must be between 7 and 10 feet tall and cannot extend past the perimeter of the parklet or obstruct visibility into the parklet. For example, they must not be angled or bent in a way that obstructs visibility into the parklet. Umbrellas cannot cover or obstruct any street tree’s branches or leaves from being exposed to sunlight or rain. No part of a street tree should be compromised by the use of umbrellas or any elements of a parklet. Parklet Size The current parklet program allows a maximum of two parking spaces (approximately 320 square feet) per business. Standardizing parklet size citywide is more cost-efficient and manageable for City staff across many departments, including management of Public Works projects, Department of Transportation capital projects, and considers the operations of neighboring businesses that are not parklet operators. The two-space maximum is a standard across many jurisdictions (but not all), as demonstrated in the below table: Municipality # of Spaces Permitted San Francisco 2 Long Beach 2 Seattle 2 West Hollywood 3 Culver City 3 Los Angeles 2 The two-space maximum is intended to facilitate various modes of transportation and better accommodates the various demands for curb space such as: • Managing and maintaining reliable transit services, as private vehicles frequently block bus stops and impact transit service when proximate curb space is otherwise unavailable; • Deliveries or curbside pick-up and drop-off at designated loading zones for businesses, which often results in illegal and unsafe parking when curb space is unavailable; • Safe path of travel for bicyclists or scooter users, who too often encounter vehicles blocking the bike lane; and 11.A Packet Pg. 1065 11 of 12 • More easily allows for City maintenance and public works projects within the public right-of-way, such as tree trimming, utility improvements, sidewalk repair, compliance with ADA requirements, and other ongoing capital improvement projects. Moreover, a two-parking space limitation eliminates, or greatly reduces, the burden on City staff time necessary to resolve neighbor disputes and complaints concerning the parklet operators’ use of the public-right-of way in front of neighboring businesses, which frequently occurred during the temporary Pilot Program. The permanent parklet program is staffed only by a .5 FTE Public Works inspector, which is insufficient to address the volume of complaints and dispute mediation that is generated by parklets that reside on neighboring storefront spaces, in addition to other customer service requests such as maintenance, site cleaning, noise, and parklet application management. If a parklet operator’s frontage space is not directly in front of the parking space, or if more than half of such a space is in front of a neighboring tenant or property owner space, the parklet operator is required to obtain written consent from the neighboring tenant, or property owner, for approval of their parklet application. If the neighboring ground floor space is vacant, the parklet operator is required to obtain written consent from the property owner or, owner’s agent, to operate their parklet on the public-right-of- way in front of a neighboring tenant. This is similar to a process used by the City of San Francisco in administering their parklet program for neighbor consent. If a new neighboring tenant, or property owner, moves in after a parklet has been approved, the new neighboring tenant or property owner will have an opportunity to deny the use of the public-right-way space during the renewal period, which will occur every two years pursuant to SMMC Section 6.42.020(a). Currently, approximately 8 parklets out of a total 70 parklets exceed the two-space maximum. 11.A Packet Pg. 1066 12 of 12 Financial Impacts and Budget Actions There is no immediate financial impact or budget action necessary as a result of the recommended action. Prepared By: Peter James, Chief Operations Officer Approved Forwarded to Council Attachments: A. Adopting SMMC Chapter 6.42 Establishing a Permanent Parklet Program (Web Link) B. CAL FIRE Official Interpretation -December 2020 11.A Packet Pg. 1067 Page 1 of 3 CAL FIRE - Office of the State Fire Marshal Information Bulletin 20-007 Issued: December 15, 2020 Use of Heaters in Temporary Tents & Awnings The use of tents and membrane structures have become prevalent within the State Blueprint for a Safer Economy for outdoor dining, beverage service, and events when such businesses are required to operate outdoors. CAL FIRE - Office of the State Fire Marshal (OSFM) encourages expedited approval of designated facilities and operations but reminds everyone that the California Code of Regulations Title 19 and Title 24 continue to remain in effect. Given the critical nature of the COVID-19 pandemic outbreak, OSFM is providing expedited certification of tents, permitting tent and/or fabric manufacturers to field label tents after contacting the Office of the State Fire Marshal, and permitting tents to be field treated by a State Fire Marshal certified flame-retardant General Applicator. The OSFM provides statewide fire prevention regulations for the use of tents, awnings, or other fabric enclosures. Below are some important elements of the statues and regulations. Approval of Temporary Tents, and Membrane Structures: Based on the size of tent, a permit from the local fire department, or OSFM on state property, may likely be required. In addition to these regulations, all state and local public health directives shall also be followed. Tent and Membrane Structure Materials California regulations require that all tents manufactured, sold, rented, or used be made from nonflammable material or material treated with a flame-retardant chemical approved by OSFM. Title 19 CCR §1171 Each section of the top and sidewalls of large tents (ten or more occupants) shall have the State Fire Marshal seal of registration label. Small tents (nine or less occupants) may have a registration label meeting the provisions of CPAI-84; otherwise the State Fire Marshal seal of registration label is required. Title 19 CCR §335 Fuel-Fired Heating Appliances Any heaters with open flame, open flame elements, or exposed heating elements are prohibited from being used inside a tent structure. Title 19 CCR §317. Per manufacture recommendations, these types of appliances should only be used in open outdoor space areas with plenty of air flow. 11.A.b Packet Pg. 1068 Attachment: CAL FIRE Official Interpretation -December 2020 (5401 : Outdoor Dining Program Updates) Page 2 of 3 Information Bulletin 20-007 (Continued) Examples of fuel fired appliances include: Liquefied petroleum gas shall not be stored or used in connection with any tent unless the storage containers, equipment, fittings, appliances, placement, use, and operation comply with Title 19 CCR §325. Forced air heaters may be used to heat tents and membrane structures as these units are positioned on the outside of a tent with heat pumped in through a duct under the sidewall of the tent. Examples are provided below: Electric heating appliances Portable electric heating appliances shall be listed for its specific use and labeled by an approved testing laboratory. All appliances shall be used per the appliance’s listing for its approved location and use type. Portable electric heating appliances must also be equipped with a tip-switch cutoff and have concealed heating elements. Heating appliances shall be used in accordance with Title 19 CCR §3.17 and California Electric Code (CEC) Chapter 424. Code References for Location and Use of Tents, Canopies, and Membrane Structures: The State Fire Marshal shall prepare and adopt rules and regulations establishing minimum requirements for the prevention of fire and panic in connection with the use of tents, awnings, or other fabric enclosures. Health and Safety Code Section 13116 11.A.b Packet Pg. 1069 Attachment: CAL FIRE Official Interpretation -December 2020 (5401 : Outdoor Dining Program Updates) Page 3 of 3 Information Bulletin 20-007 (Continued) Outdoor spaces created on public property must have a permit issued for Temporary Membrane Structures and Tents. The fire code official shall issue a permit and inspect tents, canopies and membrane structures covering an aggregate area of 400 square feet or more. 2019 CFC §105.6.47 A building permit from the Building Department is required for membrane structures for use exceeding 180 days. 2019 CFC §105.3.1 NFPA 701 may be applied when recognized by the authority having jurisdiction. Title 19 CCR §1.09 Tents, canopies, and membrane structures shall not be installed within 20 feet of buildings unless approved by the fire code official. 2019 CFC §3103.8.2 Tents, canopies, and membrane structures shall be installed a minimum of 20 feet from parked vehicles or internal combustion engines. Title 19 CCR §312 There shall be a clearance of not less than 3 feet between the fabric sides of a tent, canopy or membrane structure and all contents located inside the tent, canopy, or membrane structure. 2019 CFC §3107.8 Extension cords serving a tent, canopy or membrane structure must be protected by a Ground Fault Circuit Interrupter (GFCI) and must be protected from damage. CEC Table 400.4 Tents and their appurtenances shall be adequately roped, braced, and anchored to withstand the elements of weather and prevent against collapsing. Documentation of structural stability shall be furnished to the fire code official. 2019 CFC §3103.9 Means of egress shall always be maintained. Title 19 CCR §3.11 Flammable vegetation, materials and combustible waste is not permitted within 50 feet of the tent or membrane structure. Title 19 CCR §326 Smoking shall not be permitted in tents. Approved “No Smoking” signs shall be conspicuously posted. Title 19 CCR §316 Portable fire extinguishers shall be provided. Title 19 CCR §319 Generators and other internal combustion power sources shall be separated from tents, canopies, or membrane structures by a minimum of 20 feet and shall be isolated from contact with the public by fencing, enclosure, or other approved means. All generators must be bonded and grounded. 2019 CFC §3107.16 Liquids having a flash point below 200°F shall not be stored in any tent nor less than 50 feet from any tent. Title 19 CCR §324 For more information please visit our website http://osfm.fire.ca.gov For assistance in obtaining an approved OSFM Certificate of Registration for tents and flame retardant material assistance, please contact Deputy Patricia Setter, OSFM Flame Retardant Program Coordinator at (916) 597-5703 or email: patricia.setter@fire.ca.gov. 11.A.b Packet Pg. 1070 Attachment: CAL FIRE Official Interpretation -December 2020 (5401 : Outdoor Dining Program Updates)