TECHNICAL ADVISORY COMMITTEE
ITEM:		ACTION ITEM
3.	DEVELOP RECOMMENDATION TO THE BOARD ON WATER PERMIT REQUIREMENTS FOR OUTDOOR SEATING
Meeting Date:			November 13, 2014	Budgeted:	N/A
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Stephanie Locke	Cost Estimate:	N/A
General Counsel Review: N/A
Committee Recommendation: N/A
CEQA Compliance: N/A

SUMMARY: Historically, MPWMD has not issued Water Permits for outdoor seating. The reasons for this long-standing practice have generally been (1) the permitting requirements vary city by city and outdoor seating has not been consistently regulated by the jurisdictions; and (2) until recently, outdoor seating has been temporary and/or seasonal in nature. The latter point was stated in a 1990 appeal by Rappa’s Restaurant in Monterey that was heard by the District Board. Rappa’s appealed a staff decision to not allow a Water Credit for outdoor seating. Staff recommended against granting a credit for outdoor seating by stating that the seating “when it was used, was seasonal and temporal – lunching or dining al fresco in Monterey is a limited activity at best.” Hence, at that time it was thought that the impact of outdoor seating on water consumption was minimal at worst.

Over the past two decades there has been an increase in outdoor seating areas at local restaurants, bars, hotels, inns, coffee shops, etc. The potential for increased water use at these sites as the result of increased business capacity is a concern to the District who is managing water supply to meet the needs of residents and businesses, especially as it relates to the State Water Board’s Cease and Desist Order and the Governor’s declared drought emergency. District rules require a water permit for the addition of restaurant seats or for the addition of square-footage to an existing business.

The use of outdoor space to enhance the dining experience, create options, or to increase business raises a number of policy questions such as:

§ Does outdoor seating increase occupancy, or is it simply a matter of seat selection based on weather?

§ If a patron has made the decision to dine out somewhere on the Peninsula, is the choice of seat selection irrelevant – i.e. is the water usage neutral in the whole, or is it additive?

§ Should outdoor seating uses be allowed without a Water Permit requirement?

§ If permitting is desired, should existing outdoor seating be “grandfathered”?

§ No record of existing outdoor dining numbers or when seats were added

§ Water Permit would not have been issued for outdoor seats

§ No Water Credit for outdoor seats?

§ What should be the “baseline” date? March 1985, July 1995, or some other date?

§ Does an outdoor seat have the same Water Use Capacity as an indoor seat?

§ Climate driven or not?

§ Permanent or temporary?

§ Should a permit be required for outdoor square-footage at a coffee shop/deli (Group II food use)?

§ How is an outdoor seating area defined?

§ Seating occurs in areas that may be fenced, on a deck, rooftop, sidewalk, parklet, patio, etc.

§ Should there be an exemption for outdoor seats that can be offset by closing off or removing seating indoors?

§ What is the baseline?

§ Should seating be removed when not actively in use (offset with closure/removal of seats indoors)?

§ How would a requirement for permitting outdoor seating be enforced?

§ Not all jurisdictions regulate outdoor seating

§ Should there be a permitting process to document businesses that are “grandfathered” or that agree to exchange seating?

In the past decade, technology has increased outdoor comfort with overhead and underfoot heaters, and there is greater protection available from the elements. Sturdy umbrellas, canopies and other coverings allow outdoor eating with indoor comfort. A Google search for the term “restaurant patio covers” shows numerous options for outdoor coverings:

Recently, the Cities of Monterey and Pacific Grove have been promoting the addition of outdoor seating as a way to revitalize their business districts and to attract customers. The Water Demand Committee requested that staff begin enforcing the Water Permit requirements for restaurant seat to reflect all seats, including outdoor seating. A recent review of outdoor seating in the MPWMD reveals a significant number of restaurants that have outdoor seating, some with significantly large numbers of tables/chairs. Given the long-standing practice by the District of not enforcing the counting of, or method of filling, allowable seats under District water permits by restaurants, inclusive of outdoor seating, as well as the policy issues related to clarifying that practice, staff is requesting feedback from the Technical Advisory Committee, followed by further discussion and direction from the Water Demand Committee. Both meetings are scheduled for November 13, 2014. The District’s Board of Directors is scheduled to consider this issue and provide direction to staff at its November 17, 2014 meeting.

The issue of whether to enforce District water permit seating requirements to account for outdoor restaurant seating has been discussed in the past by the Water Demand Committee, the Technical Advisory Committee (TAC), and the combined TAC/Policy Advisory Committee (PAC). These committees reviewed this topic in 2001, 2003, 2012, and 2013. The direction from these committees was to permit restaurant seating based on indoor seating capacity and provided no direction as to treatment of outdoor seating due to the inconclusive answers to many of the questions raised above.

RECOMMENDATION: The Committee should discuss the issues related to outdoor seating and make a recommendation to the Board.

BACKGROUND: Summaries of past discussions are shown below.

May 11, 2001 – Staff requests direction from General Manager/General Counsel

Request direction on charging permit fee for restaurant seats as a result of the Barnyard’s water credits. Notes indicate District did not charge for outdoor seating because it was not used year-round or at night when it was cold. Emergence of outdoor heaters prompted the request for direction. Staff recommended enforcing permit requirement for outdoor seating that was in an enclosed area (private area not accessible to general public).

June 6, 2001 – TAC/PAC

Staff noted that outdoor seating had increased. Staff asked for guidance from the Committees on the following items: (1) Should a water permit be required for the addition of outdoor seating? and (2) Should permits be issued only for outside seating in enclosed areas? No formal motion was made. During the discussion it was clear that each jurisdiction had its own method of permitting outdoor restaurant seating. The following comments were made by Committee members: (1) The increase in restaurant seating is driven by smoking regulations (1995 & 1998). If water use increases significantly in a restaurant as a result of outdoor restaurant seating, the District should investigate. (2) This is a case of micro-management of the resource. Unless there is evidence of a real problem, this should not be pursued. (3) Outdoor restaurant seating is similar to installation of water fountains. No water credit should be given for outdoor restaurant seating, only for enclosed seating.

May 14, 2003 – Water Demand Committee

Chair Erickson stated that this item could be brought forward to a future meeting at the request of any Committee member.

October 30, 2012 – Water Demand Committee

The Committee discussed the merits and drawbacks of requiring any restaurant that has installed outdoor seating to obtain a Water Permit for the increased capacity for water use. The Committee requested that District staff review this issue with local chambers of commerce and the District TAC before taking further action.

January 17, 2013 – TAC

Staff gave a presentation that offered suggestions for permitting outdoor restaurant seating. A summary of the presentation is on file at the District office and can be viewed on the MPWMD website. The committee provided the following comments. (a) Outdoor seating will be utilized on a seasonal basis, so a factor of .01 or something else could be assigned for each seat. (b) The amount of water used for outdoor seating may be minimal so adding a new rule may have little effect. (c) Water utilized for outdoor restaurant seating may could, however, affect the community’s ability to remain within regulatory water production limits. (d) The TAC was generally opposed to creation of new regulations regarding outdoor seating because the permitting process for commercial projects is rigorous without considering outdoor seating. (f) If rationing were implemented, it may be a moot point because restaurants would be required to keep water use at a specific level. (g) Enforcement to be accomplished on evenings and weekends would be difficult and expensive. (i) If a factor is established for outdoor seating, the factor should be significantly less than .01 per seat. (j) TAC suggested that if seating is increased by 50% or more, then a water permit would be required.

January 17, 2013 – Water Demand Committee

Summary of staff presentation: MPWMD has not enforced Water Permit requirements for outdoor seating, but could choose to do so. In the past, outdoor seating was minimal due to comfort constraints. Recent technological improvements (outdoor heaters, heated flooring/seating, fire pits, coverings and overhead protection from the elements) have made outdoor seating more comfortable year-round. Meteorologists have suggested that climate change will play an additional role going forward. The rules for outdoor seating differ in each jurisdiction: Carmel requires a Use Permit. The county did not report any permitting requirement. Monterey and Pacific Grove require encroachment permits only if the seats are in the right of way. Projects are reviewed for parking compliance. Seaside does not require permits other than parking review. MPWMD staff indicated that significant increases in the number of meals/customers that can be served corresponds to an increase in water use, but that some of the use may be shifted from indoor to outdoor and water consumption for outdoor seats may be less than indoors. Staff also pointed out that permitting and enforcement of outdoor seating is problematic: It’s difficult to establish a baseline when there is no jurisdictional permitting requirement; Since permits are rarely required, there is a high likelihood that outdoor seating would be dramatically inflated to establish the baseline count; enforcement would be required, including time to investigate and follow up, often on weekends or after normal business hours; and there was a question about equity between Jurisdictions. Staff recommended three options for consideration: That the District enforce the Water Permit requirement for all outdoor seating in excess of 50% (or some other threshold) of the total allowed interior seating or apply a reduced factor for outdoor seating (restaurant seats are 0.02 AF/seat) or maintain the status quo. The Committee also discussed the issue of restaurants adding outdoor seating without benefit of a water permit. There was no consensus as to how to clarify District regulations on the addition of outdoor restaurant seating.

EXHIBITS

None

U:\staff\Board_Committees\TAC\2014\20141113\03\item3.docx x