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<br /> <br /> <br /> <br />BRAD COMMUNICATION <br />SUBJECT: 2014 DOWNTOWN PATIO PROGR AM DISCUSSION <br /> <br />DATE: SEPTEMBER 9, 2013 PAGE 3 OF 4 <br /> <br />4) Patio depreciation – The patios must be replaced when they have exceeded their <br />useful life and the program should have funding available at the time it is needed. <br />Current replacement cost for one 12 foot patio is $12,000. Assuming a 15-year <br />life and 3% inflation, $1,005 is needed per 12’ patio per year to amass enough <br />funds to replace the patio when needed. Yearly total is $18,094. <br />5) Insurance - $500 (staff estimate). <br />6) Storage - $500 (staff estimate). <br /> <br />Total estimated costs to operate the program for the 2014 season are $26,794. This <br />translates to a cost per 12 linear feet of patio of $1,488. <br /> <br />A fee may be charged to provide revenue to maintain and expand the program. Four <br />scenarios were developed. The fee basis for Scenarios A and B is a square foot rental <br />approach assuming a $15 per sf lease rate for a 96 sf patio (the size of a 12’ patio) for <br />six months. These assumptions translate to a $750 ‘lease rate’ for the season for a 12’ <br />patio. Scenarios C and D generate a ‘lease rate’ that covers the operational costs for <br />the patio program. Attached is a worksheet outlining the costs for each scenario <br />assuming it was in place for the 2013 patio season. A summary of each scenario is <br />below. <br /> <br />Scenario A <br />1) $7.50 per sf rental for season <br />Fee for 12’ Patio = $720 <br /> <br />Scenario B <br />1) $7.50 per sf rental for season <br />2) 50% increased charge for patio linear footage over 24 feet for a business <br />3) Increased charge revenue goes to fund more patios <br />Fee for 12’ Patio = $720 Fee for 12’ Patio beyond 24’ = $1,080 <br /> <br />Scenario C <br />1) City Costs are spread across all patios <br />Fee for 12’ Patio = $1,488.50 <br /> <br />Scenario D <br />1) City Costs are spread across all patios <br />2) 50% increased charge for patio linear footage over 24 feet for a business <br />3) Increased charge revenue goes to fund more patios <br />Fee for 12’ Patio = $1,488.50 Fee for 12’ Patio beyond 24’ = $2,232.75 <br /> <br />Payments from the businesses will be due in two payments. The first payment will be <br />due March 1, and the second will be due June 1. Should payments become 30 days <br />late, city staff will notify the business and if payment is not received within 15 days, the <br />patio will be removed. <br />8