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SUBJECT: <br />DATE: <br />2018 DOWNTOWN PATIO PROGRAM FEE DISCUSSION <br />SEPTEMBER 5, 2017 <br />PAGE 2 OF 3 <br />For the 2014 patio season, City Council decided to charge a fee of $500 per season for <br />each 12' patio section for each participating business, and $250 per season for each 6' <br />section. The fees were evaluated again for the 2016 season and rates were set at $900 <br />per season for each 12' patio section for each participating business, and $450 per <br />season for each 6' section. <br />DISCUSSION: <br />Through the 2018 City Budget discussion, Staff is recommending $100,000 to go <br />towards constructing 36 feet of additional patios to accommodate a request from the <br />new restaurant Verde. In that discussion, City Council requested the BRaD Committee <br />review the patio rental fees. <br />Rental changes may be made by the City Manager so Staff would like BRaD input on <br />whether to modify the fees, and if so, to what amount. <br />Program Costs <br />The current $900 per 12' section does not cover all the costs of operating, maintaining, <br />and building a replacement reserve. Below is Staff's estimate of the patio program's <br />costs: <br />1) Set up/take down — Public Works (PW) estimates $1,500 in labor costs to set up <br />and another $1,500 to take down the patios. <br />2) Maintenance — PW estimates it will cost $2,000 per year to maintain the wood, <br />repair/replace parts, paint, and other maintenance on the existing patios. <br />3) Administration — Staff estimates it will cost $2,700 per year to administer this <br />program. <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 $30,000. Assuming a 20 -year <br />life and 3% inflation, $2,016 is needed per 12' patio per year to amass enough <br />funds to replace the patio when needed. Yearly total is $38,312. <br />5) Insurance - $500 (staff estimate). <br />6) Storage - $500 (staff estimate). <br />Total estimated costs above to operate the program for the 2018 season are $47,013. <br />This translates to a cost per 12 linear feet of patio of $2474. Much of the increase from <br />2016's analysis is due to the significant increase of the cost to manufacture a 12' patio. <br />The increase is due to material and labor costs increases, but also because there is not <br />a volume discount as replacement will likely happen over multiple years, rather than all <br />in a single season. <br />Demand <br />BRAD COMMITTEE <br />8 <br />