Las vegas restaurants

Las Vegas restaurants slam proposed 27% fee hike

Restaurants and other food businesses in Southern Nevada say a proposed 27% overall increase in health inspection and licensing fees would be a blow to businesses struggling to get back on their feet after pandemic downturns.

“We just rehired our team that was laid off in March 2020,” said Tori Halfon of Astor Chocolate, who estimated her company would see a $500 increase in annual fees for inspections that take about half an hour in their warehouse.

“With inflation and the costs of goods and wages, we’re struggling,” Halfon said in comments included in the Southern Nevada Health District’s business impact statement for the fee proposal.

And companies say they can’t just pass the increases on to their customers.

“There aren’t many people who will pay for a chocolate bar,” Halfon said.

Still, the health district, whose board of health will review the fee hike on Thursday, says an increase in its environmental health fees is long overdue. The last increase dates back to 2009, despite rising inflation and spending. The district’s environmental health division, which is funded by fees, projects $23.04 million in expenses for the next fiscal year, but only $20.24 million in revenue, for a shortfall of 2.8 millions of dollars. The proposed increase would reduce the shortfall to $45,000.

The higher fees would apply to permits for a range of operations, including restaurants, residential septic systems, recycling centers, spas, tattoo parlors, schools with kitchens and more.

Different facilities pay different amounts in fees. Momofuku’s Victor Ratliff said the restaurant paid $1,727.64 in health district fees last year. “The increased fees will hamper our ability to operate and thrive as we hopefully emerge from the crippling effects of the pandemic,” he said.

To ease the burden, the district is proposing that companies pay the previous year’s fee amount at the start of the new fiscal year in July and the increase three months later.

“The timing and scale…are difficult”

When the health district first proposed the fee increases in 2019, it was met with a chorus of objections, including from restaurant, retail and resort associations, who demanded more data. clear to support the proposal, as well as family businesses.

A 2½-year pandemic interlude apparently didn’t make the proposal any more popular. Of the businesses that responded to a health district survey, 69 said the fee increases would impose a direct and significant economic burden on their business.

Thirty-seven said the increases would not represent an excessive burden.

“We are very pleased with the rigorous approach you are taking to the safety of our restaurants,” said Lincoln Spoor of Feel Good Brands. “We stumble sometimes, but we always know you are doing what you have to do.”

Of the 106 companies responding to the survey, only six felt that the fee would have a beneficial economic effect on their business.

The district notes that the fees support essential services that minimize the risk of foodborne illness, prevent hazardous waste from entering the environment, and generally promote health and safety.

However, the Nevada Resort Association, which represents the resort and gaming industry, questioned why fees pay for programs unrelated to inspections or permits. As a concession, the health district reduced the initial proposal of a 29% increase to 27%, removing an increase for the vector control program, which includes mosquito control in the community.

Citing visitor and Las Vegas Convention Authority statistics, the resort association notes that despite increased gaming revenue, visits remain down 18% from 2019, convention business down 41% and midweek occupancy by 24 percentage points. This affects resort restaurants, which face increases of up to 18% for certain meats, poultry and eggs, association president Virginia Valentine said in a letter included in the impact statement on businesses.

“The timing and magnitude of the fee increase is challenging for operators trying to recover from this difficult time,” Valentine wrote.

In turn, the health district presents its own economic statistics that indicate an improving economy. He notes that Nevada ranks first in the nation for economic momentum, according to a report on state policy from Federal Funds Information for States, ranking first in growth in personal income, population and employment.

But these statistics do not reassure companies in difficulty.

“I just think it’s ridiculous,” said Pasquale Romano, owner of Squally’s Cafe. “Anyone considering passing this has no heart for the sacrifices small businesses make.”

The current proposal would also implement automatic annual fee increases linked to the Consumer Price Index. The resort association expressed “deep reservations” about such an approach, which it said “lacks public accountability.”

With the onslaught of rising costs, some companies said it would not be easy to stay in business.

“We can’t have any more additional expenses,” said Michael Gillet of Mg Patisserie LLC, who estimated an indirect business impact of $3,000 from the proposed increases. An indirect business impact may include the restriction of the operation or expansion of a business.

What should his pastry and coffee shop do to cope? Sell ​​$3,000 more in croissants, he said.

Contact Mary Hynes at [email protected] or 702-383-0336. Follow @MaryHynes1 on Twitter.