The purpose of this agenda item is to consider on First Reading Ordinance No. 2136, an ordinance to amend Chapter 2, Article V (Fees for Various City Services) and Chapter 3, Article IV (Food and Food Services) of the Code of Ordinances.
Background
The Food Truck strategic project was established in order to define the vision for mobile food vendors in the City of Sugar Land and develop the necessary regulations to carry out the vision. In January 2017, staff presented draft operational standards for food trucks to City Council in a workshop. Council concurred with staff’s recommendation and provided direction for staff to complete the operational and implementation phase, which was Phase II of the strategic project. Multiple City departments were involved in research and drafting the framework, including Planning, Economic Development, Fire, Food Inspection, Legal and Parks. Through research and continued work, staff discovered there is no standard approach for local governments to regulate food trucks. Additionally, in doing so, the Planning and Environmental and Neighborhood Services Departments identified the need to conduct a comprehensive assessment of the City’s ordinances pertaining to food establishments in order to provide clarification and more efficient processes to better suit the needs of the community.
As a result, staff worked cooperatively across departments and obtained feedback from a group of stakeholders to prepare an ordinance to amend Chapter 3, Article IV (Food and Food Services) of the Code of Ordinances and the associated fees within Chapter 2, Article V. The majority of the identified ordinance modifications will have a direct impact on mobile food units, while others would only impact fixed food establishments.
During two workshops at the July 17, 2018 City Council meeting, staff presented the draft ordinance framework for changes to Chapter 3 of the Code of Ordinances. The Planning Department presented the draft ordinance framework for food trucks to operate in the City of Sugar Land, including appropriate minimum requirements for food and fire safety, approved locations, and the processes through which trucks will be permitted. In addition, Environmental and Neighborhood Services Department staff presented the draft ordinance framework to adopt the 2015 Texas Food Establishment Rules, create a Temporary Type II permit, update definitions, clarify regulatory requirements and create a variance process for dogs on restaurant patios.
During these workshops, City Council asked staff whether it would be appropriate to provide private schools the same opportunity as public schools to have food trucks. Council also asked how the City would collect sales tax from the food trucks, and whether additional provisions should be added to the ordinance to ensure sales tax collection. Regarding private schools, staff does not recommend the same permissions be granted for ongoing food truck operations at private schools as at public schools – recognizing that private schools are required to go through the Conditional Use Permit (CUP) process in order to locate in the City, and the P&Z and City Council would not have had the opportunity to consider food truck operations as part of the CUP process. This, however, would not preclude a private school from inviting a food truck for an event through the City’s Special Event process. Additionally, mobile food vendors are required by the state to collect and report the appropriate sales tax for the location the sale is made, and the cost to the City associated with continually monitoring and implementing an audit program over and above the State Comptroller’s process would exceed the amount of collections from these food truck vendors. Therefore, no changes are recommended.
Stakeholder Meeting
Following the July workshops, staff met with the food vendor stakeholders group for a third time during which all verbiage pertaining to mobile food units was reviewed and discussed. Attendees included various food truck owners, food truck scheduling companies and Skeeters representatives. Overall, stakeholders were supportive of the draft ordinance and expressed only one concern, which is the Temporary Type II permit requirements. Some stakeholders expressed concern with the fee, and others expressed concern with property owners maintaining and reporting food truck activity on the site.
With that, it is important to note that the Temporary Type II permit is the responsibility of the property owner or authorized agent to obtain. Staff believes it is important for the property owner to be involved and aware of the activity taking place on their property. Additionally, staff also believes the fee is appropriate based on inspections necessary to verify compliance with permit requirements, ongoing monitoring to ensure the permit holder does not exceed 110 days, and processing of additional vendor applications as necessary based on the event operating under the Temporary Type II permit.
Also, for context - while events in the city range in duration, the majority are either long-term ongoing events or recurring one day events. For a long term event, it's less expensive to obtain a Temporary Type II permit if the event is 18 days or longer. For short term recurring events, such as the farmers market, it's less expensive to obtain a Temporary Type II permit if the event is held 9 or more times. Additionally, a Temporary Type II permit is not limited to just food trucks. Various events such as festivals and swim meets will have additional tent food vendors that will need to comply with City regulations under the Temporary Type II permit that is issued to the property owner or authorized agent.
Fees
Ordinance No. 2136 will provide for the following new fees:
- Temporary Food Establishment Permit – Type 2: $475
- Temporary Vendor Fee: $20
- Fire Mobile Food Unit Inspection Fee: $40
- Dog Variance Fee: $200
All other existing food inspection fees as are currently in place are included without any change in the amount. Additionally, the annual update to the City’s fees – which is also being considered on tonight’s agenda – will adjust all of the existing fees with a CPI adjustment of 2.6% to be effective January 1, 2019. The four new fees adopted as part of Ordinance No. 2136, however, will not be adjusted with CPI this year.
Recommendation
At this time, staff recommends approval upon first reading Ordinance No. 2136. Second reading of the ordinance is scheduled for September 18, 2018.