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Thousands of businesses in Clark County that are inspected by the Southern Nevada Health District are likely to see their fees increase by 27% in the next fiscal year and up to 3% annually after that, following a vote by the SNHD finance committee Monday. SNHD officials say a lack of funding prevents it from hiring adequate staff and is putting public health at risk.
The agency’s environmental health division inspects a variety of businesses and services, including restaurants, hotels, health clubs, swimming pools, and septic systems. Fees have remained the same since 2009.
The cost of a fast food restaurant permit would increase from $391 to $497 a year; a tattoo parlor would pay $368, up from $290; and a school with a kitchen would pay $304 instead of $239.
The district says its work protects the health of Clark County citizens and millions of tourists, but a funding shortfall of almost $3 million a year is preventing the agency from hiring adequate staff to carry out its responsibilities, including annual inspections of restaurants, as mandated by state law. The additional staff would possibly reduce wait times for SNHD customers, officials said, and help crack down on unpermitted food outlets.
But some businesses that would pay higher fees complained SNHD lacks transparency when it comes to how it spends its money.
Alexandria Dazlich of the Nevada Restaurant Association testified the increase “is not justified due to the lack of individual line items and disclosure of funds” by SNHD. She said the increase would have “an extreme and immediate negative effect on the restaurant industry,” adding “many of our operators have reported that while their sales are up, their cash flow is decreased…”
“With food costs doubled in most cases, electric and gas increases, shortage of qualified employees along with small profit margins most of us will be out of business in the next 6 months as we do not have deep pockets to support everyone’s increases when we can not increase our prices,” Heather Hanoff of Palermo’s Pizza wrote in the business impact statement.
Virginia Valentine, president of the Nevada Resort Association, cited a “recurring theme” in the statements about the cumulative effects of inflation and asked the committee to consider increases slated to take effect July 1.
“Solid waste disposal rates will increase. Minimum wage will increase, creating upward pressure on all job classes. Water rates will increase. Sewer rates will increase,” she said. “Natural gas rates have increased and the PUC (Public Utilities Commission) is considering rate increases proposed by Nevada Energy as a result of new mandates approved in the 2021 session.”
Opponents said businesses are likely to pass the increase on to customers, including other businesses regulated by SNHD subject to the same hike.
David Dazlich of the Las Vegas Chamber said the organization “does have concerns” about the fee hike and automatic consumer price index increase.
“It is our belief philosophically that that should be reviewed and voted on by the Board of Health as those come up,” he said. He also asked that the committee allow in-person comment at future meetings on fee increases.
A business impact survey asked business owners if the proposed increase would “impose a significant burden” on their operation. 69 said yes and 37 said no. Asked if the fee hike would restrict their operation or expansion, 54 said yes and 52 said no.
With the increase, SNHD projects 2023 revenue of $25.71 million and expenses of $25.75 million, with revenue of $26.48 million in 2024 slightly under expenses of $26.53 million. Without the increase the annual loss is close to $3 million.
The committee approved the staff recommendation to raise the fees 27% a year with an annual increase thereafter up to 3% a year, but agreed to phase in the increase by splitting it over two payments – one in July and one in January 2023.
Only Station Casinos executive Scott Nielson, who chairs the committee, voted against it.
“Scott, you suck. Honestly,” said County Commissioner Marilyn Kirkpatrick, a member of the committee.
“I would really like us to focus on some of these individual things that can be done to raise money and to more appropriately pair the cost of services with services,” Nielson responded..
The full SNHD board meets Tuesday to take up the business impact statement and the proposed fee hike.
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