Mayor says budget staffers who said chain restaurants would pay less than other eateries were mistaken.
Many details of the new fee proposal are unsettled, but some City Council members were surprised this week when city budget staffers said individual restaurants would likely pay higher fees than chain restaurants. Rybak said Wednesday that they were mistaken and that the amount of the fees would depend on state food risk guidelines.
City fees are already a touchy issue for local businesses, who are simultaneously fending off a proposed 3 percent across-the-board increase to Minneapolis licensing fees. The City Council's regulatory committee took up that issue last week, and the committee's chair, Council Member Elizabeth Glidden, said on Wednesday members will likely vote for no increase at their next meeting.
The health risk impact fee is a new concept, however. It could raise between $728,000 and $907,000 a year to pay for the new health inspectors, based on draft proposals obtained through a public records request. Those proposals show it could cost between $350 and $450 a year for "high-risk" food establishments, which includes full-service restaurants.
Rybak's spokesman, John Stiles, said this is needed partly because Minneapolis has fewer inspectors per establishment -- one for every 377 facilities -- than other cities in the metro and comparable cities nationwide. In St. Paul the ratio is one inspector per 294 businesses. The number of health-licensed facilities in Minneapolis has grown by 24 percent in the past decade, Stiles said.
The draft proposals show that full-service restaurants would pay the largest chunk of the fee, though coffee shops, pizzerias, food trucks, swimming pools, hotels and tattoo parlors would also contribute. On Monday, city budget employees told the council's budget committee that the corporate structure of the business would affect their fee.
"For instance, a locally owned, one-outlet restaurant might have to pay a higher risk-based fee than a chain restaurant that already has several outlets within the city," senior financial analyst Andrew Lenz said. The city's budget director, LaTonia Green, later added that if the fee for a "high-risk" entity is $400, it might be $100 for "the chain organization or one that does not have as much risk."
In a city that spends a lot of time promoting healthy eating and small-business growth, the potential favoritism toward chains didn't sit well with some on the panel.
"We all just immediately reacted with great concern at the concept of a discount for fast-food chain restaurants in Minneapolis, while other restaurants [run by] entrepreneurial-first-time restaurant owners are defined as high-risk," Council Member Gary Schiff said.
The budget staff was "mistaken," Rybak said. "Which is understandable, considering they are one week after delivering a multi-thousand-point, $1.4 billion budget to have gotten one nuance wrong."
Instead, he said, the new fee would be set based on state guidelines defining low-, medium- and high-risk food service establishments, which often determine how much time they require to inspect.
"The general idea is to say that the restaurants that take the most time would pay the most money," Rybak said. Stiles said inspectors now review nearly five times more restaurant plans per year than they did 10 years ago.
As for the amount of the fee, Rybak said, "I think we're going to have months to figure that out and have good healthy discussion and engage our businesses with it."
Joyce Wisdom, executive director of the Lake Street Council, a merchants' group, wrote to two council members Wednesday seeking for more details about the fee. "But they should know that we will be concerned about additional fees to small businesses that are already overburdened by excessive paperwork and fees required by the city of Minneapolis," she said.
Glidden said Wednesday morning -- before Rybak disputed the staff description -- that she wants a more detailed presentation on the proposal before casting an opinion. But she sees the need to do something. "I do think we need to find a way that we're able to fund within the budget some additional health inspectors," Glidden said.
Eric Roper 612-673-1732 Twitter: @StribRoper