Fullerton Restaurant Overlay District (ROD) Revenues vs. Public Safety Costs

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┬ávs. 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
Annual Costs
$ 14,796. Average Net Cost to City per Establishment

Source: Fullerton Overlay District Revenue & Costs

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