Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: COUNTYWIDE IMPLEMENTATION OF MICROENTERPRISE
HOME KITCHEN ORDINANCE
Date: August 13, 2024
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council review background materials, the prior letter issued by the City Council, and the proposal from the County of Sonoma to allow Micro Enterprise Home Kitchens in Sonoma County and provide direction to staff on updates/revisions to the prior letter from City Council, if any.
Background
The City Council previously discussed this item on October 12, 2021. The link to the meeting packet can be found here:
https://cotaticity.primegov.com/Portal/Meeting?meetingTemplateId=392. The letter sent to the County following that meeting is attached.
Analysis/Discussion
Microenterprise Home Kitchen Operations (MEHKOs) are small-scale retail food facilities established by Assembly Bills 626 (2018) and 377 (2019), allowing individuals to run small restaurants (dine-in or take-out) from their private residences. The intent of this legislation was to provide home-based business opportunities, particularly for those with limited access to capital or facing barriers such as child or elder-care responsibilities. The legislation was also intended to increase community access to healthy food, offering options for cultural or regional foods that may not be available locally.
MEHKOs must be operated by a resident in their private home, with no more than one full-time employee from outside the household. Food must be prepared, cooked, and served on the same day, and sales are limited to 30 meals per day or 90 meals per week, with annual sales capped at $100,000. Third-party delivery services, catering, resale, and sales from food trucks or carts are prohibited, and outdoor signage is not allowed, though online sales are permitted. Issuance of permits and compliance is performed by the applicable Health Department, in this case the County of Sonoma Environmental Health Department.
For the service of alcohol, MEHKO’s are regulated by the California Department of Alcohol Beverage Control (ABC) like other retail establishments. In accordance with ABC, there are various factors that are considered when licensing any business for the sale or consumption of alcoholic beverages, and there are various restrictions on what licensed and unlicensed businesses are permitted to do. Before issuing an alcohol license, ABC would be looking to see if they meet the minimum qualifications of a bonafide eating place and then if they are going to be selling alcohol out of their home, then they would have to go through the permitting process first for approval. If that is granted and their neighbors or the Police Department do not protest, then the alcohol in the house would be limited to what they are authorized to sell. ABC would do a full investigation as if they were any other applicant. The link to ABC‘s frequently asked questions on the topic are at the following link: https://www.abc.ca.gov/wpcontent/uploads/2019/11/MEHK-AB-626-ABC-FAQ-11.5.19.pdf Once a County opts-in with a MEHKO ordinance, all the cities within the county are also optedin. In accordance with Part 7 of Division 104 of the California Health and Safety Code, Chapter
11.6, Section 114367(b), ”A permit issued by a county that has authorized the permitting of microenterprise home kitchen operations in accordance with this chapter shall be valid in any city within the county regardless of whether the city has separately enacted an ordinance or resolution to authorize or prohibit the permitting of microenterprise home kitchen operations within that city.” The City of Cotati has permissive zoning, which means that unless an activity is listed as an allowed activity, it is not allowed. Currently, restaurant uses are not allowed in most residentially zoned areas under the City’s land use zoning.
The County has indicated that they will propose to opt into the MEHKO statute via ordinance in September. As part of the ordinance to opt in, the County has indicated that they would require that the applicant demonstrate that a MEHKO is consistent with the governing General Plan of the applicable city or the County.
• In the cities, the form of this demonstration would be a letter from the city, or if the city does not respond in a timely manner, Environmental Health’s interpretation of the city’s general plan. Alternatively, cities could provide Environmental Health with a list of General Plan designations that allow and disallow MEHKOs. • In the unincorporated part of the County, Permit Sonoma would provide a list of consistent general plan areas. The County General Plan has many of the agricultural zoned areas (wineries, farms) that prohibit restaurants on the properties. In a nutshell, MEHKOs would not be allowed on agricultural land in the unincorporated areas of the County where the General Plan disallows restaurants.
Under this proposed review process, the County will consult with cities when they receive new applications in their respective jurisdictions. If a permit is issued, staff believe it will be required to allow the MEHKO use, in accordance with state law. For the first year, MEHKO permits would not have fees, because the permitting fees would be covered by the grant received from the State.
Financial Considerations
There is no financial impact from issuing a revised letter to the County. If the County authorizes MEHKO’s within the City, there may be future costs associated with code enforcement activities, if necessary.
Environmental Issues
Issuing a revised letter will have no impact on the environment. Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review. This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.