Analysis of Public Safety Costs for Certain Business

Posted by admin2 on November 26, 2012
Financial Costs

This is a presentation I am making to the San Diego City Council as public comment on the City of San Diego Fiscal Year 2014-2018 Five-Year Financial Outlook and IT Sourcing Transition Update. My goal is to emphasize the amount of potential funds as low hanging fruit the city can analyze.

Introduction to Issues
It’s a known fact taxpayers are subsidizing many bar and restaurant owners who rely on the city’s public-safety system to manage their patrons after exiting their businesses. Too drunk patrons leave these establishments and victimize each other, innocent bystanders and even sleeping residents. They’ll critically injure or kill others through fighting or driving drunk, commit sexual assaults, break-in occupied residences, vandalize or conduct many other quality-of-life crimes—typically requiring a combination of police, fire-rescue and ambulance services. Other services such as detox, medical, judicial and punitive are also required however this document focuses primarily on first-response public-safety services.

Cost Determination
To assess first-response public-safety services costs the California city of Fullerton conducted an extensive analysis. Their conclusions documented excessive financial burdens on the city—which they directly correlated to their burgeoning bar and restaurant industry.

When applying their calculations here in San Diego projections indicate the community of Pacific Beach alone may be costing taxpayers, even after accounting for sales tax and local business-tax revenues, an annual net loss of about two-million dollars ($2m). In Pacific Beach our observations, combined with limited publically available city and county data, strongly suggest a few establishments are likely responsible for the bulk of this cost.

Current Situation
Alarmingly, volumes of evidence suggest systemic issues throughout the city including:

  1. San Diego has a well-known and highly attended responsible beverage service training program. Yet, a peer-reviewed study conducted by a local university shows these staff—when serving a patron whose body mass dictates they should only be served one drink per hour—were in fact served eight drinks (8) in less than fifty minutes (:50) over ninety percent (90%) of the time.
  2. San Diego police catch thousands of DUI drunk drivers annually and many of them take a voluntary county-funded Place of Last Drink Survey. About forty-five (45%) report having their last drink at a house party, while about forty-five percent (45%) say a licensed bar or restaurant.
  3. The ABC earmarks fifty-percent (50%) of licensing fees for enforcement, yet they do not provide the city adequate funding. Even though the city receives state grants for DUI checkpoints, this is a fraction of the amount needed to adequately manage resource demands.
  4. The odds of an alcohol licensee in the City of San Diego getting a citation for breaking state laws from the ABC or the SDPD is about once every hundred-fifty (150) years. Even though the ABC is responsible for enforcing their outlets, in 1996 Southern San Diego County’s ABC office had sixteen (16) enforcement personnel while today they have three to five (3-5).
  5. The San Diego Police Vice Department reported last year that of the nearly thirteen percent (13%) of its budgeted time to focus on alcohol-outlet issues, it is able to do so for less than ten percent (10%) of the outlets which are the nearly two-hundred fifty (250) outlets with entertainment permits. The entertainment permit fees collected for these establishments cover the administrative documentation process and a single annual compliance visit.
  6. Not one penny is collected from any establishments to investigate and enforce state and local laws, actual police and fire-rescue services or, to help the city with myriad second-tier costs.

The poor service behavior of some establishments, even though staff are highly trained, combined with little to no state or local enforcement and a chronic lack of funds to address the issues proactively, enables some business operators to take advantage of the city and taxpayers. To cap it all off, the city faces legal liabilities in caring for these drunken patrons yet, the alcohol outlet typically faces none.

Known Solutions
There are proven solutions to these issues that typically include a combination of collaboration among stakeholders, contemporary municipal code, operator education and enforcement. When implemented consistently, these programs help reduce alcohol related crimes by 20-40%.

State and City Laws
State law and San Diego’s municipal code allow the city to establish citywide licensing decision-making authority over its alcohol outlets through tools such as Conditional Use Permits (CUP). Yet, we’re the only top-ten California city that has not done so—effectively ceding licensing control to Sacramento.

California’s Proposition 26 allows cities to assess cost-recovery fees to groups of businesses where a nexus between the cost and the service can be proven. We believe, and have expert opinions from the state’s research community, concluding such fees fall well within the intent and parameters of Prop 26.

Referral to Office of Independent Budget Analyst (IBA)
This is a formal request for City Council to refer an issue to the Office of the Independent Budget Analyst (IBA) for their analysis and potential determination of the reasoning and feasibility of establishing an alcohol-outlet licensing and enforcement cost-recovery mechanism allowed under California’s Prop 26.

The answers that we the people and the city itself seek lie in the data. What’s needed is an un-biased analysis of police and fire-rescue calls-for-service to high alcohol-outlet concentrated neighborhoods such as Pacific Beach and cost determinations when alcohol is a factor. High-value data analysis would include efforts at determining second-tier costs for detox, judicial and medical and related services.

Ultimately our goal is to learn how much these issues cost taxpayers, what solutions exist and begin working together implementing proven best-practices to relieve both financial and social burdens.

Industry Response
We encourage the city to engage all stakeholders, including industry and non-industry business representatives, to make a fair assessment of the issues and develop a fair and balanced response.
Yes, the industry will react with alarm at the prospect of such analysis but, since when is making a community safer bad for business? Surely we can agree no citizen or responsible business owner should subsidize a few identifiable businesses linked as the source of excessive public safety costs?

We are ready to conduct a full presentation to document each of these arguments. We are also willing to provide voluminous, cited and peer-reviewed documentation which the IBA can use to develop a solid foundation, as well as help develop an analytical model looking at both historical and current data.

Thank you very much.

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