No Money in a Dirty Kitchen: The Repercussions of NYC's Restaurant Grading System

Almost two years after his new system for grading restaurant cleanliness went into place, Mayor Bloomberg is calling victory. But some feel the stringent regulations are wreaking havoc on already overburdened restaurant owners.

RTX5YASmain.jpgBrendan McDermid/Reuters

Iggy's is just about as close as you'll get to a neighborhood pizzeria. Located on 2nd Avenue between 10th and 11th Street in New York City's historically bohemian East Village, Iggy's is well-priced, homey, and remarkably clean on the inside. The floors are spotless, the pizza display case is free of smudges, and the steel counters glisten.

If you asked the New York City Department of Health and Mental Hygiene (DOH) however, they'd tell you that Iggy's is far from being perfectly clean. Under the department's new letter grade system, Iggy's was docked 24 violation points and given a B grade for infractions that include "Hot food item not held at or above 140º F," and "Food worker does not use proper utensil to eliminate bare hand contact with food that will not receive adequate additional heat treatment," according to the inspector's report.

Health inspections are nothing new to the New York restaurant scene, but in the summer of 2010, Mayor Michael Bloomberg announced that he was augmenting the process. Whereas the old system entailed a once-per-year pass or fail inspection, the new program would involve random examinations on an A to C scale. Restaurants would then have to pay fines for certain demerits and place their letter grade in plain sight on their front door or window. 0-13 points means an A, 14-27 a B, and 27+ a C. Anything less than an A is fined -- sometimes upwards of $1,000, depending on the type and severity of violation -- and automatically re-inspected again that year. The worst offenders are sometimes shuttered immediately if the inspector feels the restaurant is a critical risk to public health.

After almost two years of the program, the earliest quantifiable returns are coming in and the mayor couldn't be more pleased. Salmonella cases are down 14 percent and diner satisfaction is sky high, but restaurant owners aren't as enthused as the mayor is. They're saying the grade is a scarlet letter, and that the new requirements are burdensome and trifling. In the end, they say, the city is just using the system to create more fines and fill city coffers at their expense.

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In tightening restrictions, Bloomberg and the DOH's main concern was the spread of foodborne illnesses in New York City restaurants, which they felt was spiraling out of control and gravely endangering the public. In 2008, the DOH reported that 1,300 salmonella cases in New York City were linked to undercooked or improperly stored food. To combat these issues, the Mayor's administration began targeting food handling, storage, and cooking, as well as sanitary negligence in the kitchen.

Forbidden practices include cooking meats at a temperature under 140º F (salmonella is often the product of raw or undercooked meats, storing cold items at over 40º F (where dangerous bacteria can grow exponentially), and improperly sanitizing utensils, such as cutting raw meat with a knife and then using it to slice vegetables, contaminating them in the process. Cracking down on infractions like these, said commissioner of the Health Department Dr. Thomas Farley to The New York Times, would "force restaurants to be diligent about good food-safety practices."

Foodborne illnesses aren't always spread due to bad handling or storage methods, however. For instance, the fecal-borne Norovirus accounts for nearly 50 percent of foodborne illness outbreaks in the US, according to the Center for Disease Control. It's normally spread when an infected worker contaminates food he or she is preparing.

One effect of a sick worker or a dangerous type of bacteria infiltrating a restaurant is called "clustering," where a certain number of reported foodborne illnesses all originate from the same restaurant. Ryan Osterholm, a personal injury lawyer specializing in foodborne illness, looks for this phenomenon when he's investigating a client's case. "Sick food handlers have a role in foodborne illnesses," says Osterholm. "Restaurant cluster cases usually lead back to specific sick food handlers."

Osterholm's firm doesn't take on minor cases involving slight vomiting and sickness. Instead, he and his associates see clients whose medical bills top $10,000 because of a foodborne illness they contracted. If it's E. coli, patients can experience extensive renal and colon damage. Even salmonella can be fatal sometimes, especially with elderly patients. In a study of US salmonella-related mortalities from 1990-2006, PL Cummings found a 25 percent mortality rate among adults between the ages of 75 and 84.

Rosenberg recently experienced the culinary seppuku of having to throw away a $10,000 piece of tuna because an inspector felt it was improperly handled.

Osterholm says his job has been made easier by modern technology and advanced microbiology. The Pritzker firm he is a part of has pioneered the use of pulsed-field gel electophoresis (PFGE). This cutting edge process involves fingerprinting an individual's blood or stool and then matching individual pathogenic bacteria with the CDC's national database of PFGE patterns. Given that bacterial subtypes have unique fingerprints, it's then easy to match samples and determine if they derive from the same restaurant.

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Two years into the system, the Bloomberg administration claims it has forced restaurants to clean up their acts, and they've released the data to prove it. Reported cases of salmonella dropped 14 percent in the program's first year, whereas no significant decline was reported in areas like New York State, New Jersey, or Connecticut where new systems were not implemented. Bloomberg also noted that violations most associated with foodborne illness, according to the DOH -- such as not having a trained food protection supervisor on duty, inadequate hand washing facilities for food workers, holding food at unsuitable temperatures -- were now occurring less frequently, with a ten percent drop in the number of restaurants that are penalized for signs of live mice.

Diners, he says, are especially happy with the new measures designed to keep them safe. In a study conducted by the DOH and Baruch College, 91 percent of the consumer respondents said they were satisfied with the new grading system. Then, to combat claims that the reforms were enacted to levy more fines and fund budget deficits, Bloomberg announced that restaurant revenue had actually increased by 9.3 percent to $800 million during the first nine months of the new program

Overall, the mayor says, the program has been a massive success. But do foodborne illness experts agree with him? Dr. Philip Tierno, a clinical professor of microbiology and pathology at the NYU Medical Center, believes the program has made a difference and that there is a factual basis to the DOH's findings. Any trend lower, he says, is for the better, and he feels that the new grading system has forced restaurants to take added responsibility in their kitchens. "If you look at the whole scope, it causes restaurants to pay stricter attention to vermin, temperature control, and proper food handling," he adds.

Likewise, Ryan Osterholm believes there's a plausible link between the mayor's new system and the decline in the instances of foodborne illness. "It's consistent with what we know about food handling and cross-contamination," he says.

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Restaurant owners and industry leaders, on the other hand, remain largely opposed to the new method of grading their businesses. In fact, in a recent anonymous survey of restaurant owners set up by City Council Speaker Christine Quinn, nearly 66 percent ranked the system as "poor." That's not just the ones who received a bad grade however; 60 percent of owners who received an A grade likewise ranked the system as "poor," and another 68 percent said the grades significantly increased their cost of operations, forcing them to hire high-priced lawyers and restaurant consultants to appeal their grades.

"Anyone can walk into my restaurant and see it's clean," says Ignatius Sono, the owner of Iggy's, who has been given a "Grade Pending" sign from the City as he chooses to appeal his "B" in front of a tribunal. He's had to hire a lawyer and a restaurant consultant to ensure that he's ready when inspectors come to reexamine Iggy's. While he's unsure of the exact amount their services will cost him, Sono is sure it won't be cheap, and the extra costs have left him with a sour taste in his mouth. "The system is all about the money," he says.

In the summer of 2010, Mayor Bloomberg assured restaurant owners that his new system was targeting unsafe kitchens, not owners' pockets. The numbers, however, tell a different story. In 2011, according to the mayor's 2012 preliminary budget report, the city levied $42 million in restaurant fines, a 145 percent increase from 2006 when the city collected only $17.3 million. Then, despite public assurances that the fines would not be used to raise city revenue, Mayor Bloomberg stated in his 2012 environmental health budget report that he chose to reduce the budget because of "increased revenue from restaurant inspections."

The city is also cracking down on restaurants that try to hide their grade. In 2011, according to The New York Times, the DOH issued 704 citations to eateries that hadn't posted their letter grades, and another 100 to restaurants that hadn't placed theirs in a "clearly visible place."

Aside from financial concerns, opponents of the system believe it has very little to say about the cleanliness of a restaurant. Owners and industry insiders complain about the unpredictability of an inspection. For example, an inspector can come one week and find five problems. A different inspector can then return a month later and find five more problems that went unreported during the first inspection. Restaurant owners are adamant that this inconsistency is unwarranted and detrimental to their grade. Why would they stop practicing good sanitary policies, en masse, that the first inspection said they were up to par on?

Sometimes, however, the re-inspection date isn't so predictable. While DOH policy states that "B" and "C" re-inspections should occur at least a week after the initial inspection, Iggy's "B" re-inspection did not take place until seven months after its initial exam, leaving the pizzeria saddled with a dubious "Grade Pending" sign.

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Eli Epstein is a freelance journalist in New York City. His work has also appeared online in Fortune and Esquire.

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