County Refunds Food Vendor Fees

July 23, 2007
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GRAND RAPIDS — County commissioners and the Kent County Health Department recently served up a nice treat for seasonal food vendors when they cut the food license fee in half.

Instead of charging these business owners $400 for their annual license, the fee is now $200. The price change affects 116 businesses and will cost the health department $23,200 in revenue. And because those business owners have already bought their licenses at the old fee, refund checks for $200 will be in their mailboxes within a month.

The vendors that will receive refunds include, but are not limited to, ice cream and frozen yogurt shops, sandwich shops, drive-in restaurants, restaurants located at golf courses and country clubs and the kitchen at Fifth Third Ballpark. Any business that serves food for nine months of a year or less and has already paid the annual fee will get a refund check.

"If an operation is only open nine months of the year, we're only required by law to inspect them once a year," said Cathy Raevsky, administrative health officer for the health department. "As long as people understand that we're only going to inspect them once a year and everybody is happy with that, then we can reduce their fee, as far as I'm concerned, by half, because we're basically putting in half the work," she added.

The county's average cost for inspecting a restaurant and issuing a report is $200. Because the Michigan Department of Agriculture only requires seasonal operations to be inspected once a year, the health department and county commissioners halved the yearly license fee for those businesses. Commissioners have asked all county department heads to base their fees on what it costs them to provide a service.

It took the health department and commissioners some time to come up with the new license fee. The sticking point was finding a reasonable basis for the charge. Raevsky said her department began by looking at what other counties were doing, and that effort didn't exactly generate a lot of new ideas. She said the department toyed with the old tried-and-true methods such as basing a fee on seating capacity, gross sales and business type.

But basing the fee on whether a vendor was a bagel shop, full-service restaurant or something else resulted in nine complex classifications that business owners could dispute — and that could change at the drop of a menu item. So Raevsky determined that using the business type as the starting point was too clumsy and had the potential of creating too many headaches for her staff and the vendors.

"A change in menu could take a restaurant from one category into another category," she said. "It was hard for us administratively because if they did a menu change in mid-year, they could go from one to another easily."

Using seating capacity as a measurement was seen as having problems similar to using business type. Gross sales didn't work, either. Raevsky said setting a fee on that variable would result in vendors having to submit tax documents, and her staff having to wade through those returns, a taxing effort she thought neither group wanted to do.

"The other way they could do it is the way that we adopted. It was to say that you're paying for a business license. And if you're a builder, we don't care whether you build one Section 8 house a year or $29 million mansions. You're going to pay the same fee to get a license," she said.

Raevsky said owners in the seasonal food business told her that charging everyone the same fee made the most sense to them.

"So we decided to approach this in a way that I could make the most sense of and the people could understand the best, and that was we're selling a license," she said.

Year-round restaurants are inspected twice each year and pay $400 for a license. But Raevsky added that some restaurants also hire companies to make inspections throughout the year as an extra precaution to prevent a food-borne outbreak from occurring, which could put a restaurant out of business.

"They not only have us come in twice a year, they hire private concerns, or if they're large enough, their corporation hires people who go around and do two or three (inspections) during the year just like what we do," said Raevsky.

"But I think for the seasonal vendors, they will be happy, because they'll be getting a refund and it will feel like Christmas."

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