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Home My WebLink About2019 CON Microenterprise Home Kitchen Operations - operate a food facility out of a Private homeCITY OF NATIONAL CITY, CALIFORNIA COUNCIL AGENDA STATEMENT �02-'/ MEETING DATE: June 18, 2019 AGENDA ITEM NO. 38 TEM TITLE: Request for Authorization to Opt Out of Microenterprise Home Kitchen Operations ("MEHKO") Program Participation, which Allows Individuals to Operate a Food Facility out of a Private Home, and Request for Approval of Letter Opposing Pending Legislation (AB-377, Garcia) that Would Eliminate the City's Authority to Opt Out of MEHKO Program Participation. PREPARED BY: Roberto M. Contreras DEPARTMENT: City Attorney PHONE: Ext. 4412 EXPLANATION: Effective January 1, 2019, Assembly Bill No. 626 (Garcia) established MEHK►. as a permitted residential use where individuals can sell meals prepared in their home to consumers for pick-up, delivery, or onsite consumption. Assembly Bill No. 377 (Garcia), in its current form before the State Legislature, proposes various changes to MEHKOs that would, for example, eliminate cities' ability to opt out of the MEHKO program. APPROVED BY: This presentation will explore (1) legislative history surrounding MEHKOs, (2) legal discussion of existing law, (3) AB-377's proposed changes to existing law, as well as (4) identify possible challenges to implementing and regulating MEHKOs within National City. Staff seeks City Council authorization and direction to opt out of MEHKO participation and also seeks approval to sign a letter of opposition to Assembly Bill No. 377 (Garcia) which will be provided at the June 18, 2019 City Council Meeting. FINANCIAL STATEMENT: ACCOUNT NO. N/A ENVIRONMENTAL REVIEW: N/A ORDINANCE: INTRODUCTION: FINAL ADOPTION: APPROVED: APPROVED: Finance MIS STAFF RECOMMENDATION: For reasons to be explained in the presentation, staff recommends that the City Council: (1) opt out of MEHKO program participation, and (2) approve attached letter of opposition to Assembly Bill No. 377 BOARD / COMMISSION RECOMMENDATION: ATTACHMENTS: , sd/th Yi ?i- CALIFORMIA.-0- NATIONAL CITY i, itZlatt ukcoRpoitmse June 18, 2019 VIA EMAIL & U.S. MAIL senator.pan a,senate.ca.gov The Hon. Richard Pan, Chair Senate Health Committee State Capitol, Room 5114 Sacramento, California 95814 RE: AB 377 (Garcia): Microenterprise Home Kitchen Operations - OPPOSE As amended May 20, 2019 Dear Senator Pan: The City of National City respectfully opposes AB 377 (Garcia) regarding Microenterprise Home Kitchens Operations ("MEHKOs"). Our opposition stems from the underlying MEHKO legislation that authorized the sale of meals prepared in private homes to the public. While other jurisdictions may have the means to accommodate such a program, National City does not. By eliminating municipalities' ability to opt out of the MEHKO program, AB 377 converts a troubling proposition into an impossible one. First, AB 377 provides that only the governing body designated as the enforcement agency' may decide whether to establish a MEHKO program. While existing law suggests that cities may opt out of program participation, this bill eliminates any authority for a city to opt out. Consequently, if the County of San Diego permits MEHKOs, then. all 18 cities within. the County's jurisdiction will be automatically forced to participate. Such a preemption scheme militates against the City's strong belief in home rule authority and local control. Second, our city is challenged with fats, oils, and grease ("FOG") that already enter our sewer system. City staff identified seven "hotspot areas" that require Public Works crews to remove FOG from sewer lines once a week every month. These crews also respond to FOG cleanups in other areas of the City every 2 to 3 months. With no MEHKOs in operation, City staff estimated the cost to perform such work in 2018 totaled $208,483. We do not wish these costs to rise given that the City receives no state reimbursement for costs associated with implementing AB 377 or the MEHKO program in general. Finally, other secondary effects of MEHKOs would be more pronounced in National City than in most other cities given our population and geographical boundaries. Approximately 60,000 residents reside within 7.3 square land miles. These statistics render an approximate population density of 8,219 residents per square mile. Such high density would lead to more intense traffic, parking, noise, and waste generation than other cities might encounter because meals would be available via pick-up, delivery, or onsite consumption. 1 The County of San Diego will serve as the "enforcement agency" in San Diego County. Alejandra Sotelo-Solis, Mayor 1243 National City Boulevard, National City, CA 91950-4397 619/336-4283 Fax: 619/336-4239 www.nationalcityca.gov Email: asotelosolis(a nationalcityca.gov Senator Pan June 18, 2019 Page 2 For these reasons, the City of National City respectfully opposes AB 377. Sincerely, Alejandra Sotelo-Solis, Mayor City of National City Cc: Jeff Stone, Vice Chair, Senate Health Committee Melanie Moreno, Staff Director, Senate Health Committee Teri Boughton, Principal Consultant, Senate Health Committee Kimberly Chen, Principal Consultant, Senate Health Committee Reyes Diaz, Principal Consultant, Senate Health Committee Vincent D. Marchand, Principal Consultant, Senate Health Committee Hon. Eduardo Garcia. AD 56 Catherine Hill, League of California Cities, San Diego County Department of Environmental Health RESOLUTION NO. 2019 -106 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY PROHIBITING THE PERMITTING OF MICROENTERPRISE HOME KITCHEN OPERATIONS (MEHKO) WITHIN THE CITY OF NATIONAL CITY. WHEREAS, January 1, 2019, Assembly Bill No. 626 established Microenterprise Home Kitchen Operations ("MEHKOs") as a permitted residential use where individuals can sell meals prepared in their home to consumers for pick-up, delivery, or onsite consumption; and WHEREAS, existing MEHKO law prohibits cities from passing zoning restrictions, or requiring a rezone of the property, or levying any fees on, or imposing any other restrictions, such as an administrative permit, on a MEHKO in any residential dwelling for zoning purposes; and WHEREAS, existing MEHKO law allows operators to apply to the Department of Alcoholic Beverage Control for a license to serve alcoholic beverages at MEHKOs; and WHEREAS, existing MEHKO law purports to preempt National City's ability to require a conditional use permit for the sale of alcoholic beverages at MEHKOs; and WHEREAS, additional fats, oils, and grease ("FOG") are expected to enter the City's sewer system if MEHKOs are authorized to operate in National City; and WHEREAS, National City spent $208,483.20 in 2018 to remove FOG from city sewers; and WHEREAS, National City is home to approximately 60,000 residents who reside within 7.3 square land miles, which renders an approximate 8,219 residents per square mile; and WHEREAS, National City's high population density would subject the City to more intense traffic, parking, noise, and waste generation than other cities would experience under the MEHKO program; and WHEREAS, establishing a MEHKO program would require the City to address the acute traffic, parking, noise, and waste generation that MEHKOs would create by expending additional staff time in nuisance enforcement; and WHEREAS, additional City nuisance enforcement would place further burdens on National City's staff resources and strained budget; and WHEREAS, National City will not receive reimbursement from the State of California for costs incurred in implementing the MEHKO program; and WHEREAS, California Health & Safety Code section 114367 permits cities to prohibit the permitting of MEHKOs within their respective jurisdictions. Resolution 2019 —106 Page Two NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby prohibits the permitting of Microenterprise Home Kitchen Operations (MEHKO) within the City of National City pursuant to Health & Safety Code section 114367. PASSED and ADOPTED this 18th day of June, 2019. Alejandra Sotelo-Solis, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: Angil Morris -Jones City Attorney Microenterprise Home Kitchen Operations (MEHKO) June 18, 2019 Presentation to City Council by City Attorney's Office & County of San Diego Department of Environmental Health Presentation Overview 1. Legal Landscape Before MEHKO Law Existing MEHKO Law (AB-626) Pending MEHKO Amendments (AB-377) ■► Possible Implementation Challenges in National City Legal Landscape Before MEHKO Law Before 2012, home -based food businesses prohibited. January 2013 — Cottage Food Operations ▪ Limited in scope of food sales ▪ Required city business license to operate ■► Allowed pick-up and delivery of food from the home N. Food could be sold to retail food facilities and directly to the consumer at temp events and swap meets ■► Currently there are 3 approved Cottage Food Operations in National City Existing MEHKO Law (AB-626) September 2018 - MEHKO signed into law (Effective January 1, 2019) The new law establishes a "microenterprise home kitchen operation", also referred to as MEHKO, as a new type of retail food facility to be operated by a resident in a private home. Regulations added to CRFC. ▪ Hot Meals, Green Salads, Frozen Foods I. Legislative History: N. Remove Obstacles to Starting a Commercial Food Business ▪ Access to Business Education and Training on Food Handling Practices ■w Requires an opt -in by a city or the County. N. Since AB 626 went into effect January 1, 2019, only one county in the state has opted in to authorize MEHKO (Riverside County; the local government area where the bill's author is from.) Community Benefits of MEHKO wo Opportunity for home cooks to operate a small business ow Low start up costs Increased access to healthy and affordable food options, particularly in food deserts s Regulation of unsafe private kitchen practices that cause foodborne illness Program Details (County) IIP Requires submittal of SOPs, obtaining a health permit, an initial inspection, and annual inspection. Able to investigate complaints and food borne illness investigations. Few limitations on the types of foods that can be prepared. 1. Customers may dine in, pick up or have food delivered, just like a restaurant. .. Food must be prepared and consumed on the same day. Food preparation is limited to 30 meals per day or 60 individual meals per week. Operations may not have more than one full-time equivalent food employee, not including a family member or household member, and not exceed $50,000 in verifiable gross annual sales. Proper Food Handler Training required. Jo Can use an Intermediary Food Delivery Service (GrubHub, Uber Eats, etc.) Food Safety Concerns (County) ow Contamination of equipment or surfaces: Unlike the requirements of a commercial kitchen, children and pets are not restricted from being in the MEHKO kitchens, increasing risk for food contact surfaces to become contaminated. Utensil sanitizing is not required. Improper temperature control of food: Restaurants are required to use commercial refrigerators that are tested to ensure they can hold large volumes of food at the state required temperature of 41 °F, to reduce the risk of bacteria growth. Homestyle refrigerators that are not built to commercially certified standards may not be capable of holding food at the required temperatures. ink Unsanitary conditions: Home kitchens are not built to safety standards of commercial kitchens, high volume of food preparation will increase risk for vermin and unclean conditions. Food Safety Concerns (County) 1. Less knowledgeable foodhandlers: Home cooks may not have experience cooking larger volumes of food, which requires more advanced preparation methods and food safety knowledge to keep the food in proper temperature ranges and free of contamination. No letter grade: MEHKOs are exempt from local food grading ordinances, which means the public will not see a letter grade displayed in the window like at a restaurant. Zoning ow Residential zones will not be re -zoned and must allow commercial MEHKOs to operate if authorized by a city or county. ■► CRFC Section 114367.4 - A city, county, or city and county shall not prohibit the operation of, require a permit to operate, require a rezone of the property for, or levy any fees on, or impose any other restriction on, a microenterprise home kitchen operation in any residential dwelling for zoning purposes. A microenterprise home kitchen operation shall be a permitted use of residential property in any residential dwelling for zoning purposes if the microenterprise home kitchen operation complies with both of the following criteria: Abstain from posting signage or other outdoor displays advertising the microenterprise home kitchen operation. 1► Be in compliance with applicable local noise ordinances. ■► No Business License requirements written into the law. Land Use Considerations ■► "By -right Use": No discretionary permit review or public notice is required. The law states no additional land use requirements can be applied such as rezone or Administrative Permit. im Limited Code Enforcement abilities: ow No signage allowed I. Noise Ordinance can be enforcec - Nuisance Ordinances can be enforced Potential Community Concerns ■ ► No public notice or public input required +P Traffic ▪ Parking o w Visual Impacts 1. Odors or BBQ smoke Special Events ■► No limit on hours of operation ■► Serving of Alcohol I. Fire Safety - excessive cooking, grease, lack of proper mechanical ventilation, outdoor woodburning ovens and BBQs. o w Proper egress from the home. Board Of Supervisor Options (County) 1. Authorize MEHKOs only in the unincorporated areas and allow each city to determine if they will authorize MEHKOs in their jurisdiction. DEH will be responsible for permitting and regulating MEHKOs in any city that authorizes the program. 2. Authorize MEHKOs countywide, which may authorize MEHKOs in ail cities and unincorporated areas throughout the region.* 3. Affirmatively decline to,authorize the permitting of MEHKOs in the unincorporated area. However, cities could still authorize MEHKOs within their jurisdiction, and where a city did so, DEH would be the regulatory authority obliged to apply the CRFC to MEHKO's in that city. * 4. Take no action. This would have the same effect as number three above, affirmatively declining to authorize the permitting of MEHKOs in the unincorporated area. Current Status of AB 626 (County) ■► No action taken by San Diego County Board of Supervisors i ow OPT -OUT Status - Siskiyou, El Dorado, Merced* OPT -IN Status - Riverside Pending MEHKO Amendments (AB-377) Introduced in February, 2019 No Clarifies approving agency to be governing, body of the Local Enforce ent Agency Addi onal food safety requirements Pending MEHKO Amendments (AB-377) u► Should the bill pass as currently drafted, the "governing body of the local enforcement agency" which locally would be the County Board of Supervisors would be the agency to make a decision for the entire region (all 18 cities and the County's unincorporated area) of whether to authorize MEHKOs or not. ■► Given the lack of clarity with existing law, preemption issues may arise if the City prohibits MEHKOs the County later authorizes them. I. The following cities/entities have opposed the legislation: so West Hollywood; Vista; Hermosa Beach; Fountain Valley; Paramount; South Pasadena; Stanton (unless amended); Valley Center Municipal Water District Pending MEHKO Amendments (AB-377) (County) 11, From a food safety perspective, some changes are being proposed in AB 377 that would address some (but not all) of the identified food safety concerns with AB 626. go Food Safety Requirements ow Facilities for sanitizing food equipment and utensils No outdoor food display u , No wood cutting boards E. People not associated with business accessing kitchen N. No intermediary food delivery service Inspection Frequency Pending MEHKO Amendments (AB-377) (County) .► The County of San Diego Board of Supervisors has taken an official "concerns" positon on AB 377 since it would take away a city's ability to individually decide to allow MEHKOs in their jurisdiction. ■' Cities/Agencies have indicated that they wish to retain their authorization. Possible Implementation Challenges in National City AB-626 issues: a. Alcohol (Alcohol Beverage Control "ABC" License Requirements) N. Fats, Oils, & Grease ("FOG") E. Parking Noise ■� Outdoor Stoves / Fire Concern ABC License & MEHKOs E► As of December 19, 2018, ABC treats MEHKOs like any other restaurant for alcohol license purposes NE One licensing requirement in this restaurant context is whether the applicant operates a "bona fide eating place." EP City Attorney has concluded that existing MEHKO law prohibits City from requiring CUP process to obtain ABC licenses. Fats, Oils, & Grease (FOG) ow The Public Works Department has designated seven "FOG" hotspots throughout the City Cost for Hotspots - One week every month; a 2-person Public Works crew hydro jets 3 residential hotspots. ■► Total cost: $7,315.50 monthly or $87,782.40 annually in 2018. w Cost for Non-Hotspot Areas MP Hydro jet every 2 or 3 months. PW crew takes sixty-six (66) days a year to perform the sewer cleaning hydro -jetting in these sewer lines. N. Total cost: $10,058.40 monthly or $120,700.80 annually in 2018. w Total 2018 Cost to Remove FOG from City Sewers = $208,483.20 [National City FSEs and Sewer Hotspots �GOI"tM1 VOhU Sisk WitUf Map 1 4E, ��111� 10 Wr t wig au Map 2 , �,,K; " « .,. raid Map4 � v 1,060 2,000 3,006 4,000 5,666fee M S;, LYce Esn. Legend • FSEs_NoGCD$ • FSE inspected Gravity Main ----r- FOG Hotspot Il':uc, i.:eorye £ a,,h, USDA. DUGS. AeroSRID IGN. an) Ins C; User COmmu Parking, Noise, Outdoor Stoves I. Approximately 60,000 residents reside within 7.3 square land miles. E. 8,219 residents per square mile National City would experience more intense traffic, parking, noise, and waste generation than other cities might encounter in the MEHKC context. imb Meals are available via pick-up, delivery, or onsite consumption. Questions? RESOLUTION NO. 2019 - 106 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY PROHIBITING THE PERMITTING OF MICROENTERPRISE HOME KITCHEN OPERATIONS (MEHKO) WITHIN THE CITY OF NATIONAL CITY. WHEREAS, January 1, 2019, Assembly Bill No. 626 established Microenterprise Home Kitchen Operations ("MEHKOs") as a permitted residential use where individuals can sell meals prepared in their home to consumers for pick-up, delivery, or onsite consumption; and WHEREAS, existing MEHKO law prohibits cities from passing zoning restrictions, or requiring a rezone of the property, or levying any fees on, or imposing any other restrictions, such as an administrative permit, on a MEHKO in any residential dwelling for zoning purposes; and WHEREAS, existing MEHKO law allows operators to apply to the Department of Alcoholic Beverage Control for a license to serve alcoholic beverages at MEHKOs; and WHEREAS, existing MEHKO law purports to preempt National City's ability to require a conditional use permit for the sale of alcoholic beverages at MEHKOs; and WHEREAS, additional fats, oils, and grease ("FOG") are expected to enter the City's sewer system if MEHKOs are authorized to operate in National City; and WHEREAS, National City spent $208,483.20 in 2018 to remove FOG from city sewers; and WHEREAS, National City is home to approximately 60,000 residents who reside within 7.3 square land miles, which renders an approximate 8,219 residents per square mile; and WHEREAS, National City's high population density would subject the City to more intense traffic, parking, noise, and waste generation than other cities would experience under the MEHKO program; and WHEREAS, establishing a MEHKO program would require the City to address the acute traffic, parking, noise, and waste generation that MEHKOs would create by expending additional staff time in nuisance enforcement; and WHEREAS, additional City nuisance enforcement would place further burdens on National City's staff resources and strained budget; and WHEREAS, National City will not receive reimbursement from the State of California for costs incurred in implementing the MEHKO program; and WHEREAS, California Health & Safety Code section 114367 permits cities to prohibit the permitting of MEHKOs within their respective jurisdictions. Resolution 2019 — 106 Page Two NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby prohibits the permitting of Microenterprise Home Kitchen Operations (MEHKO) within the City of National City pursuant to Health & Safety Code section 114367. PASSED and ADOPTED this 18th day of June, 2019, Alejandra Sotelo=Solis, Mayor ATTEST: Michael R. Da :P, City Clerk APPROVED AS TO FORM: ngil ris-Jones City ' orney Passed and adopted by the Council of the City of National City, California, on June 18, 2019 by the following vote, to -wit: Ayes: Councilmembers Cano, Morrison, Quintero, Rios. Nays: Sotelo-Solis. Absent: None. Abstain: None. AUTHENTICATED BY: ALEJANDRA SOTELO-SOLIS Mayor of the City of National City, California MICHAEL R. DALLA City Clerk of the City of National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2019-106 of the City of National City, California, passed and adopted by the Council of said City on June 18, 2019. City Clerk of the City of National City, California By: CALIFORNIA June 18, 2019 VIA EMAIL & U.S. MAIL senator.pan@senate.ca.gov The Hon. Richard Pan, Chair Senate Health Committee State Capitol, Room 5114 Sacramento, California 95814 RE: AB 377 (Garcia): Microenterprise Home Kitchen Operations - OPPOSE As amended May 20, 2019 Dear Senator Pan: The City of National City respectfully opposes AB 377 (Garcia) regarding Microenterprise Home Kitchens Operations ("MEHKOs"). Our opposition stems from the underlying MEHKO legislation that authorized the sale of meals prepared in private homes to the public. While other jurisdictions may have the means to accommodate such a program, National City does not. By eliminating municipalities' ability to opt out of the MEHKO program, AB 377 converts a troubling proposition into an impossible one. First, AB 377 provides that only the governing body designated as the enforcement agency' may decide whether to establish a MEHKO program. While existing law suggests that cities may opt out of program participation, this bill eliminates any authority for a city to opt out. Consequently, if the County of San Diego permits MEHKOs, then. all 18 cities within. the County's jurisdiction will be automatically forced to participate. Such a preemption scheme militates against the City's strong belief in home rule authority and local control. Second, our city is challenged with fats, oils, and grease ("FOG") that already enter our sewer system. City staff identified seven "hotspot areas" that require Public Works crews to remove FOG from sewer lines once a week every month. These crews also respond to FOG cleanups in other areas of the City every 2 to 3 months. With no MEHKOs in operation, City staff estimated the cost to perform such work in 2018 totaled $208,483. We do not wish these costs to rise given that the City receives no state reimbursement for costs associated with implementing AB 377 or the MEHKO program in general. Finally, other secondary effects of MEHKOs would be more pronounced in National City than in most other cities given our population and geographical boundaries. Approximately 60,000 residents reside within 7.3 square land miles. These statistics render an approximate population density of 8,219 residents per square mile. Such high density would lead to more intense traffic, parking, noise, and waste generation than other cities might encounter because meals would be available via pick-up, delivery, or onsite consumption. I The County of San Diego will serve as the "enforcement agency" in San Diego County. Alejandro Sotelo-Solis, Mayor 1243 National City Boulevard, National City, CA 91950-4397 619/336-4283 Fax: 619/336-4239 www.nationalcityca.gov Email: asotelosolis(adnationalcityca.gov Senator Pan June 18, 2019 Page 2 For these reasons, the City of National City respectfully opposes AB 377. Sincerely, Alejandra Sotelo-Solis, Mayor City of National City Cc: Jeff Stone, Vice Chair, Senate Health Committee Melanie Moreno, Staff Director, Senate Health Committee Teri Boughton, Principal Consultant, Senate Health Committee Kimberly Chen, Principal Consultant, Senate Health Committee Reyes Diaz, Principal Consultant, Senate Health Committee Vincent D. Marchand, Principal Consultant, Senate Health Committee Hon. Eduardo Garcia. AD 56 Catherine Hill, League of California Cities, San Diego County Department of Environmental Health