Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: UPDATE ON LAWS AND POLICIES THAT REGULATE
SMALL-SCALE FOOD AND RETAIL BUSINESSES IN COTATI
Date: January 14, 2025
Written by: Autumn Buss, Associate Planner
Recommendation
It is recommended that the City Council receive a report on small-scale food and retail businesses.
This report will provide an overview of current laws and policies at the state and local level that regulate small-scale food and retail businesses, including microenterprise home kitchen operations, sidewalk vendors, cottage food operations, parklets, urban agriculture, and food trucks. Over the past several years there have been a number of regulatory changes that have impacted the way that these types of businesses operate in both the public and private spheres.
This report will also describe actions that the City may consider taking in the future to more effectively integrate these businesses into Cotati’s community fabric.
Microenterprise Home Kitchen Operations (MEHKOs)
MEHKOs are small-scale restaurants operated by a resident in a private home, established by State Assembly Bills 626 (2018) and 377 (2019). The intent of this legislation was to provide more home-based business opportunities to disadvantaged persons and those with limited access to capital, increase community access to healthy food, and increase food safety among existing MEHKOs. State law allows counties to “opt in” to the law to permit MEHKOs locally, and provides the health and safety standards for MEHKOs. On October 22, 2024, the County of Sonoma Board of Supervisors adopted an ordinance to permit MEHKOs in all jurisdictions and unincorporated areas of the county. Cities must comply with this ordinance, which will take effect January 1, 2025.
Under the new ordinance, MEHKOs must be allowed by-right in residential occupancies and may not be further regulated by local zoning or building regulations. However, the City may require a business license and enforce its existing noise and nuisance standards in MEHKO operations. These include rules related to solid waste disposal, prohibition of polysterene products, loud and unruly gatherings, blocking streets or sidewalks, parking in permitted areas, outdoor lighting, and operating hours. In addition, each MEHKO will require an annual health permit from Sonoma County Environmental Health. See Attachment 1 for a summary of the MEHKO standards set by state law.
The County’s ordinance does not fully address responsibility for regulation and enforcement of MEHKOs within individual jurisdictions. However, Sonoma County Environmental Health plans to convene a working group of city staff early in 2025 to discuss these issues and determine an effective structure for communication and coordination between the County and cities.
Sidewalk Vending
State law created by SB 946 (2018) allows sidewalk vending of food and merchandise on public sidewalks and in parks, subject to certain restrictions. SB 972 (2022) clarified that Compact Mobile Food Operations, which conduct limited food preparation, are also protected as sidewalk vendors. Sidewalk vendors may make sales from a pushcart, stand, wagon, or other nonmotorized conveyance, or from their person, and they may be roaming or stationary. A permit from Sonoma County Environmental Health is required for many vendors selling prepared foods, but under state law, local jurisdictions have little latitude to regulate sidewalk vendors. Some of the standards that a city may enforce without adoption of a related ordinance include limited locational restrictions and caps on the total number of vendors in an area for health, safety, and welfare concerns. Attachment 2 is a summary handout of the regulations that are in effect in Cotati at this time.
Local jurisdictions do have the option to adopt an ordinance to further regulate sidewalk vendors, within significant limits. The ordinance may:
• Refine limits on operation within specific parts of the public right of way, in public parks, or designated neighborhoods or areas, if the restriction is directly related to objective health, safety, and welfare concerns
• Limit operating hours
• Require maintenance of sanitary conditions
• Require a sidewalk vending permit or valid business license • Require a California Department of Tax and Fee Administration seller’s permit • Allow a jurisdiction to cite, fine, or prosecute a sidewalk vendor for violation of regulations.
The City Council may choose to direct staff to pursue an ordinance in the future to further regulate sidewalk vendors.
Cottage Food
The California Homemade Food Act (AB 1616) of 2013 created a new category of food enterprise in California called a cottage food operation, which allows the use of a home kitchen for processing food for sale to the public. The types of foods that a cottage food operation can sell are limited to “non-potentially hazardous foods,” which are foods that are unlikely to grow harmful bacteria or other toxic microorganisms at room temperature. This includes certain baked goods, candies, dried foods, extracts, certain jams and other preserves, nuts/nut butters, certain mustards and vinegars, honey, and powdered drink mixes. Cottage food operators require a permit from Sonoma County Environmental Health. Cottage food sales may occur directly, from the producer to the consumers at community events or from the home; or indirectly through shops, restaurants, or another third party.
State law requires that local jurisdictions allow a cottage food operation in any residential dwelling, either by 1) classifying it as a permitted use in residential zoning districts, or 2) providing for a nondiscretionary permitting process. Cottage food operations would most likely be considered a “Home Occupation,” a land use which is allowed by CMC Section 17.22.020 as a by-right, permitted use in all residential and mixed-use zoning districts. However, Cotati’s home occupation standards, set forth in CMC Section 17.42.080, were last updated in 2004, predating the state’s cottage food law. Therefore, cottage food is not referenced in that section or elsewhere in the Code. Section 17.42.080 provides sufficient standards to ensure that cottage food operations do not negatively impact neighboring uses. The City Council may wish to amend Section 17.42.080 to specifically add cottage food operations as an allowed home occupation use. The text of Section 17.42.080 can be found in Attachment 3.
Parklets
The City embraced parklets for outdoor dining during the Covid pandemic, and when the shortterm “tent” parklets were removed in 2023, prepared guidelines for the installation and maintenance of permanent parklets. One permanent parklet has been installed, at Flagship Taproom, on parking spaces in a privately owned lot. City staff are considering adding guidelines for temporary parklets that would allow businesses the opportunity to occasionally use public or private parking spaces for outdoor dining without installing an expensive permanent fixture or going through the Limited Term Permit process which is also costly. The City’s current Parklet and Outdoor Dining guidelines are included as Attachment 4.
Garden Stands and Produce Stands
With the adoption of its urban agriculture ordinance in 2022, the City approved garden stands as a permitted use in residential areas, allowing residents to sell produce, eggs, and cottage foods from their gardens at small temporary stands up to three days per week. Produce stands, which may be larger than garden stands and operate up to seven days per week, are allowed with a use permit in the Open Space-Recreation, Rural Residential, and Residential Very Low Density zoning districts.
Food Trucks
Cotati’s Code does not contain any references to food trucks, and currently food trucks are only allowed at an event with a limited term permit or on a private property with a restaurant with which the food truck is affiliated. This is based on the staff interpretation that food trucks are classified as outdoor dining and addressed in the “Outdoor Displays and Sales” standards in CMC Section 17.42.130(E)(1), which states: “An outdoor dining area may be allowed accessory and incidental to a restaurant with an indoor eating area on the same site.” With the exception of minor amendments included in the urban agriculture ordinance of 2022, Section 17.42.130 was last updated in 2007.
Over the intervening years since 2007, food trucks have become increasingly popular across the U.S. as a tool to incubate small businesses, enliven street scenes, and expand the range of culinary offerings in a community. There is a common concern that food trucks compete with brick-and-mortar restaurants. However, “Food Truck Truth,” a 2022 study by the Institute for Justice, indicates otherwise. The study analyzed 12 years’ worth of data from counties across the U.S., which showed that not only do food trucks not harm restaurants, but that growth in the number of food trucks seems to correlate with growth in the number of restaurants. The study authors posit that food trucks may actually help restaurants, by doing the following:
• Functioning as incubator businesses for entrepreneurs who may go on to open restaurants • Primarily competing with fast food outlets, rather than all restaurants • Allowing brick-and-mortar restaurants to test new markets and products • Increasing foot traffic to an area, which can benefit restaurants • Stoking the fire of innovation and healthy competition The full study is available at: https://ij.org/report/food-truck-truth/.
In addition, the changes described above related to MEHKOs, sidewalk vending, cottage food operations, parklets, and garden/product stands have shifted the small-scale food and retail landscape such that food trucks may now be very complementary to other businesses of this type, particularly in relation to local economic development. For these reasons, the City may wish to consider updating its policies related to food trucks. This might include allowing food trucks on private properties without restaurants and/or in public parking areas. If the City wishes to allow food trucks in a greater range of situations, it can adopt standards to ensure that impacts to businesses and residents are minimized. In addition, all food trucks require a Mobile Food Facility Permit from the County of Sonoma Environmental Health Department.
Summary of Potential Future Actions
As described above, the following are potential future actions that the City might consider to better integrate small-scale food and retail businesses into the community:
• Adopt an ordinance creating additional standards for sidewalk vendors as allowed by state law
• Update CMC Section 17.42.080 to classify cottage food operations as home occupation businesses
• Adopt an ordinance allowing food trucks in a greater range of locations and setting standards for their operations.