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Southern Nevada restaurants receive a reprieve from fee increase

Updated May 26, 2022 - 7:44 pm

Restaurants and other Southern Nevada businesses could get a reprieve of as much as a year before steep hikes in health fees go into effect, but only if pandemic-relief dollars can fill the gap.

The Southern Nevada Health District’s Board of Health approved Thursday — but will delay implementing — across-the-board 27 percent fee hikes for environmental health inspections and permitting. This buys time to pursue federal American Rescue Plan funding to cover the first year of the increase.

Rescue Plan dollars can be used by states and governments to respond to the health and economic impacts of the pandemic and to prevent cuts in public services.

The Legislature’s Interim Finance Committee in the coming months would need to approve the roughly $5.5 million allocation, board members Scott Black and Marilyn Kirkpatrick said.

The state has been working with the district on a plan to fund COVID-related expenses that it is incurring, said Meghin Delaney, a spokeswoman for the governor’s office. She said the proposal had not been finalized.

Although the funding remains uncertain, opponents of the hikes saw the step as a positive one.

“I think they listened to our concerns, and I think we’re appreciative of the actions they took today, the recognition that we’re still recovering,” said Virginia Valentine, president of the Nevada Resort Association, which has expressed concerns about the impact on resort restaurants.

District staff had recommended that the fee increases go into effect this July. But if the funding comes through, businesses won’t need to pay the 27 percent fee increases until the next fiscal year, in July 2023.

But if the Interim Finance Committee fails to approve the expenditure, businesses will be required to pay the increase in January, midway through the fiscal year. Representatives of the Nevada Restaurant Association said the increase could amount to $1,000 or more for a restaurant, depending on how many permits it’s required to have.

Still reeling from pandemic downturns and now facing mounting food and labor costs, restaurants have complained that the fee increases are extremely ill-timed.

More than 30 percent of Nevada’s restaurants permanently closed their doors during the pandemic, some failing to reopen after temporary COVID-19-related shutdowns, Alexandria Dazlich, director of government affairs from the Nevada Restaurant Association, said after the meeting.

But district staff said the increases were long overdue, noting that the fees had not been increased since 2009.

The fees support services that minimize the potential for foodborne illness, prevent hazardous waste from getting into the environment, and generally promote health and safety. The fee increases will fund 24 new positions in food operations, solid waste management and consumer health, said Chris Saxton, environmental health director.

The higher fees apply to permits and inspections for a range of businesses beyond food establishments, including hotels and motels, day care centers, commercial pools and spas, residential septic systems, recycling centers, tattoo parlors, and schools with kitchens.

The health board also voted to approve indefinite annual increases in the fees of between 1 percent and 3 percent based on the consumer price index. Business advocates including the resort and restaurant associations, and the Vegas Chamber, voiced opposition to the automatic increases as lacking transparency and accountability.

In response, the health board voted to review the CPI increases every two years after the first annual adjustment, which will take place in July 2024.

The district’s Environmental Health Division projects that without the increases, it would see $23.04 million in expenses for the next fiscal year but just $20.24 million in revenue, for a shortfall of $2.8 million. With the fee increases, it projects $25.75 million in expenses and $25.70 million in revenues, for a loss of $45,000.

Contact Mary Hynes at mhynes@reviewjournal.com or 702-383-0336. Follow @MaryHynes1 on Twitter.

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