To assess the revenues and costs of their Downtown Restaurant Overlay District (ROD), the City Manager of Fullerton, California conducted a comprehensive audit. They sought to determine the effects of a newly high-concentration of alcohol outlets in their downtown community. In part, they concluded that the high concentration of downtown bars and restaurants cost the city a significant amount of money – even after factoring state sales tax and other revenues.
We focused on the public-safety facets of this study alone, and did not include the development and maintenance services costs Fullerton audited. We illustrate below Fullerton taxpayers were effectively subsidizing bar and restaurant establishments – to the tune of about $15,000 per establishment – all to cover the costs of police, fire and rescue services provided to the establishments and their patrons.
Cities and community advocates can learn the financial impact of high-concentration bar and restaurant districts throughout their communities by following this model. Once cities make such a practical assessment, they can take measures to mitigate these costs through the adoption of local land-use policies, adopting and enforcing best business practices, and recover program costs through fee-based assessments.
Public Safety Costs vs. Sales Tax Revenues – 49 Bar & Restaurant Establishments
|Fullerton Public Safety Costs|
|$ 811,880.||Police Services|
|$ 326,950.||Fire Services|
|$ 1,138,830.||Total Public Safety Costs|
|$ 23,241.||Average Public Safety Expense per Establishment|
|Sales Tax Revenues|
|$ 413,790.||Sales tax, business registration, fire permits and engineering revenues to city.|
|$ 8,445.||Average Sales Tax Revenue to City per Establishment|
|$ 14,796.||Average Net Cost to City per Establishment|
Source: Fullerton Overlay District Revenue & Costs