CLB Minutes 09/17/2009 R
September 17, 2009
TRANSCRIPT OF THE MEETING OF THE
CONTRACTOR LICENSING BOARD
OF COLLIER COUNTY
Naples, Florida
September 17, 2009
LET IT BE REMEMBERED, that the Collier County Contractor
Licensing Board, in and for the County of Collier, having conducted
business herein, met on this date at 9:00 a.m., in REGULAR
SESSION at CI)ES on Horseshoe Drive, Naples, Florida, with the
following members present:
CHAIRMAN: Richard Joslin
Michael Boyd
Kyle Lantz
Tom Lykos
Lee Horn
Terry J erulle
Patrick White
ALSO PRESEN-T:
Michael Ossorio, Contractor Licensing Supervisor
Garrett Mullee, Manager of Operations, CDES
Patrick Neale, Attorney for the Board
Page 1
AGENDA
COLLIER COUNTY CONTRACTORS' LICENSING BOARD
DATE: THURSDAY - SEPTEMBER 17,2009
TIME: 9:00 A.M.
COLLIER COUNTY DEVELOPMENT SERVICES CENTER
2800 N. HORSESHOE DRIVE, ROOM(S) 609 - 610
NAPLES, FL. 34104
ANY PERSON WHO DECIDES TO APPEAL A DECISION OF THIS BOARD WILL NEED A RECORD OF THE
PROCEEDINGS PERTAINING THERETO, AND THEREFORE MAY NEED TO ENSURE THAT A VERBATIM
RECORD OF THE PROCEEDINGS IS MADE, WHICH RECORD INCLUDES THAT TESTIMONY AND
EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED.
I. ROLL CALL
II. ADDITIONS OR DELETIONS:
III. APPROVAL OF AGENDA:
IV. APPROVAL OF MINUTES:
V. DISCUSSION:
(A) Review Upcoming Fee Schedule (Section 2.1.5.)
VI. NEW BUSINESS:
VII. OLD BUSINESS:
VIII. PUBLIC HEARINGS:
IX. REPORTS:
X. NEXT MEETING DATE:
WEDNESDAY OCTOBER 21, 2009
W. HARMON TURNER BUILDING, 3RD FLOOR
(COMMISSIONERS MEETING ROOM)
3301 E. TAMIAMI TRAIL
NAPLES, FL. 34112
(COURTHOUSE COMPLEX)
September 17, 2009
MR. OSSC)RIO: Ready to go?
CHAIRM.AN JOSLIN: Good morning. I'd like to call to order the
September 17, 2009, Collier County Contractor Licensing Board
Meeting.
Any person who decides to appeal a decision of this board will
need a record of the proceedings pertaining thereto and, therefore,
may need to ensure that a verbatim record of the proceedings is made,
which record includes that testimony and evidence upon which the
appeal is to be based.
I'd like to open the meeting starting with roll call, starting to my
right.
MR. BOY.D: Oh, I'm sorry. Michael Boyd.
MR. LANTZ: Kyle Lantz.
MR. L YKOS: Tom Lykos.
CHAIRMJ\N JOSLIN: Richard Joslin.
MR. HO&N: Lee Horn.
MR. JERlJLLE: Terry Jerulle.
MR. WHITE: Patrick White.
CHAIRMAN JOSLIN: All right, gentlemen. Good morning. And
staff, are there any additions or deletions to the agenda?
MR. OSSC)RIO: Yes. For the record, Mike Ossorio, Collier
County Licensing Supervisor.
We sent the packet out to you last week, and in that packet was a
-- an item for fees, introducing new fees for the licensing board, and
since then they've been updated, since September 15, 2009. I want to
put it in the record, put it with your packet.
CHAIRMAN JOSLIN: Okay. Do we have the new -- the new
draft?
MR. OSSORIO: Yes, we do.
CHAIRMAN JOSLIN: Do you want to introduce that for
evidence just to make sure we've got the same piece of paper in front
of us.
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September 17, 2009
MR. OSS()RIO: It's going to be marked, updated September 15,
2009. We also have a document for the resolution, I want to pass out
as well for the record.
CHAIRM~t\N JOSLIN: Okay. Is that the only additions?
MR. OSS()RIO: That is the only additions. I do have some -- a
comment before we start.
CHAIRMi\N JOSLIN: Okay.
MR. OSSC)RIO: I got an email from Eric Guite', one of our
longstanding board members. He has resigned his seat on the
Contractor Licensing Board effective immediately. I've contacted the
City of Naples, and I've contacted Sue Filson, and we'll get that filled
as soon as we can.
CHAIRMJ\N JOSLIN: Another one from the City of Naples?
MR. OSSC)RIO: Both in the city. We have one consumer in the
city, and we have a contractor in the city, so we'll be advertising that.
I'm also communicating with the city council. One of these vacancies
has been almost a year. So I'll try to really hit that hard and try to get a
consumer from the city. If not, I'm going to try to get some kind of
resolution authorizing us to advertise in unincorporated Collier
County so we can get this thing filled.
CHAIRMAN JOSLIN: Try to get that position filled.
MR. WHITE: A word, Mr. Chairman?
CHAIRMAN JOSLIN: Sure.
MR. WHITE: I reside within the city limits, for your information.
MR. OSSORIO: Okay, okay. I will hang on --
CHAIRMA,N JOSLIN: Make a note of that one.
MR. OSSORIO: Well, that might be good news, because then we
just have to advertise in the unincorporated area. We still have a
problem with the consumer in the City of Naples, but I'll address that
with the city council.
CHAIRMAN JOSLIN: Okay. When you do that, I'd like you to
really be demanding as far as what -- we need that person on the
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September 17, 2009
board. This has gone on for about a year that I know of, for sure, that
we've been looking and searching for someone from the city to
represent them. If they don't want someone on the board, then at least
put it in our hands to be able to get someone here from the county.
MR. OSS()RIO: Yeah. I talked to Sue Filson. I made that pretty
clear. I didn't use those words, but--
CHAIRM.A.N DICKSON: Okay.
MR. OSSC)RIO: -- said it was imperative that we get a consumer
to bring more information and get their perspective on the board.
CHAIRMi\N JOSLIN: Okay. Did you have another question?
MR. WHITE: Just another point of order, Mr. Chairman. As
handy as I am with tools and, you know, other things like that, I
thought I was a consumer representative. I'm not a contractor. I hold
no contractor license. So I'm again just --
MR. OSSC>RIO: That's correct. I stand corrected.
CHAIRMAN JOSLIN: Okay.
MR. OSS()RIO: Mr. White is a consumer. And if that's the case,
he lives in the city, I'll talk to the city council and also talk to the city
building official. I'm sure it's just a formality.
CHAIRMAN JOSLIN: Okay.
MR. OSSORIO: We can advertise for the unincorporated for the
consumer.
CHAIRMAN JOSLIN: Both.
MR. WHITE: No.
MR. OSSORIO: I mean the contractor.
CHAIRMAN JOSLIN: Both.
MR. OSSORIO: I'll take care of it.
CHAIRMA.N JOSLIN: Okay. If there's no other additions or
deletions, I'll need a motion to approve the agenda as reviewed.
MR. LANTZ: So moved, Lantz.
MR. L YKOS: Second, Lykos.
CHAIRMAN JOSLIN: Motion and second for the agenda.
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September 17, 2009
All in favor, signify by saying aye.
MR. BOYD: Aye.
MR. LANTZ: Aye.
MR. L YKOS: Aye.
CHAIRM.AN JOSLIN: Aye.
MR. HORN: Aye.
MR. JERlJLLE: Aye.
MR. WHITE: Aye.
CHAIRM.A.N JOSLIN: Any opposed?
(No response.)
CHAIRM.,AN JOSLIN: Okay. I need the approval for the minutes
for the August 19th meeting.
MR. L YK~)S: Motion to approve, Lykos.
MR. LANTZ: Second, Lantz.
CHAIRMJ\N JOSLIN: Motion and a second.
All in favor?
MR. BOY]): Aye.
MR. LANTZ: Aye.
MR. L YK()S: Aye.
CHAIRM1\.N JOSLIN: Aye.
MR. HORN: Aye.
MR. JERULLE: Aye.
MR. WHITE: Aye.
CHAIRMAN JOSLIN: Any opposed?
(No response.)
CHAIRMAlN JOSLIN: Motion carries.
All right. Without further ado, we're going to go right into this
review of the upcoming fee schedules.
Are all the parties here that are going to represent this, that are
going to be speaking?
MR. OSSORIO: I believe so.
CHAIRMAN JOSLIN: Okay. As you all know, there was a
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September 17, 2009
resolution that was written way back in April about -- I'm sorry __
March of '07, March and April of '07. Just for the record, I'm going to
read the resolution that was written. This is the reason why -- one of
the reasons why we're here.
It says, number one, the fees set out within the attached new fee
schedule are fair and reasonable, which is the original fee schedule.
And, number two, the extremely poor state of economic conditions for
the construction industry makes this an extremely inopportune time to
raise fees charged to an industry that's suffering from this economic
downturn; however, the level of service provided by the contractor
licensing and enforcement departments should not be reduced due to
economic conditions because its enforcement activities are critical to
the protection of the health, safety, and welfare of the citizens of
Collier County.
Since that time, our fee schedules, I believe, were put on more or
less of a hold pattern, not to increase them because of that particular
time. And now it's come before us that there's a need to do some type
of adjustment only to bring us up to the current code and maybe to
bring us up to the fee schedules that other municipalities charge.
So with that said, I'll open it up to any other questions, or Mr.
Ossorio, if you want to begin.
MR. OSSORIO: Well, I just have a -- want to comment on that,
that is, this fee schedule, we did deal with a reduction. Contractor
licensing staff and personnel are working 32 hours a week, so there is
a reduction in service. And this fee schedule is to address that issue.
Gary Mullee is here to go through the fee changes, and if you
have any questions, I'm sure you'll -- I have no other questions.
CHAIRMA.N JOSLIN: All right. Okay. To the podium, sir, and
you must have something to say. Could you please identify yourself,
and be sworn in.
MR. MULLEE: For the record, it's Garrett Mullee, and I'm
manager of operations support here at CDES.
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September 17, 2009
(The speaker was duly sworn and indicated in the affirmative.)
MR. MULLEE: Thank you. I appreciate the opportunity to talk
to you guys. You'll have to excuse me. From time to time I'll put on
my reading glasses. Unfortunately, I've gotten to that age where I've
had to -- no longer can see my own paper here.
What we're bringing before you is a fee proposal, and I think that
you guys saw the first draft at your last meeting. And basically I'm just
going to -- I've prepared an attachment. I assume it's the same one that
Mike has passed along. If not, I've got a copy over here.
And I'm just going to take about five minutes, just kind of
explain the history of this particular proposal, what's in the package,
and what the process is or has been up to this point in time, and then
I'd be happy to kind of go over any of the details and answer any of
your questions.
Over the course of time, you know, CDES really hasn't raised its
fees in a long tilne. Probably on the building side, on the building
permit side, it's been probably since the 1990s.
And so we are taking a look at the overall fees within the whole
organization, and contractor licensing is one part of that. Now, we
outsourced this Fund 113, the building permits and the contractor
licensing, to a vendor who's gone ahead and done a time study of the
actual time that the activities take and the associated costs with those,
and that's what came forward in the draft proposal, the original draft
proposal.
What we'v{~ done is, the package that we have here presents not
only the vendor's draft of the items, but a real detail of the cost
structure that went into -- into those fees, into that calculation, and
we've also -- in this package is a spreadsheet which summarizes the
cost -- the changes in the proposal over the last month or so.
Fund 113, \vhich contractor license is part of, has lost $2 million
this year, which :means our expenses have exceeded our revenue by
about $2 million, and that's despite the fact that we've made a very
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September 17, 2009
long and extensive series of cost cuts within the organizations, as
Mike has alluded to. Staff has gone on 32-hour workweeks. We have,
overall, in CDES let 120 people. We have cut every cost. We haven't
replaced a vehicle in the organization now in four or five years. We're
just running on vapor. And you know, obviously it's just an indication
of the economy and where things are.
Unfortunately, because we haven't -- you know, we've been
running on reserves now for a couple years, which is the -- you know,
the money that came in for future services like inspections and all at
the height of the boom. That money is essentially gone at this point in
time. And so now we need to kind of adjust fees to what our actual
costs of operations are.
You know:, we came into this process, and this really isn't an
attempt to hoist a fee schedule and a fee hike on you just cold, because
we really wanted to try to make this a consensus -- consensus proj ect
or process. We understand the economic environment that everyone
has to live in. Vie understand the times.
And so we understand that we are asking you for something
significant, and we understand the burden. And so what we've done in
this process, or 'Nhat we're hoping to do in this process, is to kind of
put everything on the table. We're asking you for something and we
realize that there's -- you know, we're here together in this thing, and
clearly you have expectations and needs for service, and we want to
have a discussion about those.
An example of that, you know -- and we've done in the building
department, obviously level of service has been a significant issue as
far as permit tunlaround times. And one of the things we've done in
the fee proposal on that side is that we've put forward a proposal for a
turnaround guarantee, land review standards, where we actually have a
-- in the fee schedule plan review standards. I think it's five -- right
now it's five days for residential. It's 15 days for commercial projects.
That's front door to back door within the organization. That's not onlya
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September 17, 2009
for reviews in the building department. It's zoning approval and it's
impact fee review with the permit.
And in fact, we are going to be issuing a 50 percent refund if we
don't meet that standard, and that's because obviously the industry has
-- you know, if we're going to increase fees and ask you for
something, we are willing to kind of step up to the plate and make a
real attempt to kind of resolve some issues and meet your needs.
As these contractor license proposals come forward, there's been
a couple of evolutions since the first draft came out. One, I think you
guys saw the first draft about the same time I saw it. And so, probably
shortly after your meeting there was a variety of minor fees, which I
just reduced. And what we're trying to do is keep the contractor
licensing fee proposal strictly to what the vendors and time studies are.
If I don't have a real detailed cost breakdown of a particular fee, I'm
not going to bring it forward. And so -- there's no point. We're going
to keep this right to the study.
As we went through this, we presented this along with the regular
building permit fees to a subcommittee of DSAC which is looking at
the fees. There's two subcommittees; one that's looking at the planning
review fees, and one looking at the building review fees.
And I think Mr. Lykos, who was in on that meeting who went
ahead and -- as 'Ne went through the cost structure, we were looking at
how costs were allocated to these contractor licensing fees, because
these fees -- within contractor licensing and within this spreadsheet
and this package, you know -- I can go through details -- not only is it
the actual cost of the costs that are involved in contractor licensing,
my staff, and his immediate costs, but there's several allocations that
are allocated to this section.
There's adnlinistrative costs, which -- Bob and his staff in
building departlnent, and there's a level of divisional oversight which
is kind of distributed across the organization, and Mike picks up a
little piece of that because he has staff.
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September 17, 2009
And that's the financial end, myself, that's Joe. There's also -- he
picks up a little piece of countywide allocations, which is IT, HR, a
variety of things. I can go through the detail of that.
So as we had that discussion, some concerns were raised about
the outcome of the specific allocation of costs. One was record rooms
and addressing section, which is a Fund 113 section. And since there's
only three revenue sections within 113, which is Mike's section,
contractor licensing, it's plan review fees, within Bob -- within the
building department, and inspection fees, we allocated those
addressing and record room costs across those sections.
And the concern was raised that, well, contractor licensing really
doesn't use those, per see It really isn't involved in record storage and
all that. And we took a look at that, and we decided, yeah, there's
some validity to that concern. And we also wanted to, you know, try
to kind of reach a consensus on this issue.
So what we've done is we've removed the record room,
addressing, costs allocation from this proposal. And then -- so what
you have is a revised set of fees which are probably, on average, down
15 -- 10, 15 percent from the original proposal because we've removed
those costs. It's $112,000 which was allocated to contractor licensing
included in this fee structure.
And we would -- we will -- though I'm not exactly sure how we'll
do that yet, but I'll figure it out -- we will remove those costs
completely frOIYl Fund 113, and I'll allocate those costs to other
sections, probably to Fund 111 and 131.
So what we're doing is we're working -- Joe's just figuring it out.
MR. SCHl\1ITT: Yeah.
MR. MULLEE: So don't worry about it.
And so what we're doing is we're trying to remove those because
we're trying to kind of reach -- reach an understanding where we __
where we're in agreement on what's a legitimate cost and what's a
legitimate set of fees for the organization.
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September 17, 2009
So with that, that's basically the process that we've kind of gone
through to get to this point. Like I said, I have the details of the cost
structures that went into this. I'm happy to kind of go over it line by
line. I'm happy to address your questions, whatever you'd like to do at
this point.
CHAIRM..t\N JOSLIN: Okay. What's the pleasure of the board?
Do you have any questions you may have at the moment?
MR. LANTZ: I have a question.
CHAIRM.A.N JOSLIN: All right. We'll start in the comer. Let's
try and keep it down to maybe one person at a time. Let's not get into
the same conversation if we can help it.
MR. LANTZ: All right. I've been going over this, and I want to
preface this by saying I'm biased because I'm a state-licensed
contractor who has five state licenses. So when I see my fee going
from $10 to $45, multiply that times five, that's a lot of money that I
don't want to spend.
So because of that, I'm your worst enemy right now. Let me
preface it by that.
Now, when I look this, you know, we were told at the last
month's meeting, you know, look at what other municipalities are
charging to register a state license, and so I did a little research. And I
looked, you know -- I do work in Lee and Collier County. Lee County
we have, you know, Lee County, Bonita Springs, Fort Myers Beach,
City of Sanibel, Fort Myers; then I have Collier County; then I have
City of Naples, ]\.1arco, and Everglades. That's nine different people
I'm paying a registration fee, which to me is ridiculous.
So I look around other places around the states. A lot of places
charge a state registration fee and a lot of places don't. And the ones
that don't specifically address state statute and the Contractor
Licensing Board that says -- it's 49.113, I think -- that says, state __
local governments cannot charge a fee to a state-licensed contractor
except for optional license fee and a regular building permit fee.
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September 17, 2009
And now 'we're getting all these extra licenses. I didn't care when
it was ten bucks, but when it's 45 bucks, you know, you start looking
at it.
So my curiosity is, what's the deal? Are we going against the
state statutes by charging a fee? And if so, can we get our money back
or reduce the fee? I mean, it just seems to me like we're getting fee'd
to death.
MR. OSS()RIO: No problem, Mr. Lantz. I'll go ahead and
answer that question. The term registration fee is probably a
misnomer. We're going to work on that, maybe even change it. It's a
process. Remember, this -- you've -- even though it's one fund, you
come to our office, which is a contractor licensing office. It's not a
building permit fee. It's not a building. You elect to register your
license with us to go ahead and -- so we provide you service. In other
words, we're going to update your insurance for you free of charge for
that fee, we're going to make sure we give you a pin number. This is
all a licensing issue, not a building issue.
I'm sure if you can -- Mr. Lantz, if you came in the office and
you said, I don't want to pay this fee; I'm going to go down and go
ahead and register my license, I'm sure we could make some
accommodations for you; however, you're not going to be put in our
system, you're not going to -- every time you call an inspection, you're
going to have to provide us workers' comp insurance. The statute you
referred to is a good statute; however, under the Florida Building Code
it says we can't issue you a building permit without checking your
workers' comp and your insurance. We have to make sure that you
have that.
And also 149 tells you that we must check to make sure you sub
list. So we also do that as well. We update all your subcontractors for
you as well. So ,ve will provide a -- licensing department provides you
with a service, and we're going to change state registration; it will
probably say licensing service fee. We give you the pin number.
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September 17, 2009
But I can assure you, if you want to get rid of this I have no
problem because we are losing money hand over fist providing the
state-certified contractor with this service.
If you want to, I will gladly get rid of it. And every time you pull
a building pemLit, you have to come in, show every time -- every time
you pull a building permit, you've got to show your business tax
receipt, your workers' compo insurance, all your sub lists, all your sub
lists' insurances, all your workers' compo of all your employees, all
your exemptions, every time you come in to pull a building permit.
Now, that's separate.
Licensing is providing a service for the state-certified contractors.
A lot of state-certified contractors -- we have over 7,000 of them __
register their license with us due to the fact that they like to be on our
system. And to give you an example, you're a glass and glazing
contractor, state'-certified glass and glazing contractor. You don't pull
building permits. Put in glass and doors in showers, you don't need to
come to our office, and we don't recommend you do so because you
don't need to be in our system, in the City View or in CDES to come
in and spend $3 million on them; however, when you go to your
homeowner's house and you say, here's my contract, I want to put
some glass in your house, or here's my state contract, I want to do
some work with you, they call our office, because -- find out before
you lose out. They call the county. That website for the State of
Florida is very unique. It's very difficult for processing, for people to
use. So they conle to our office and they go in our database, and they
check and say, hey, is this guy licensed? And you said, he's not
registered with us. And they can lose bids. I have many contractors,
state-certified contractors, come in my office and say, I want to update
you and pay your fee, because then it's another avenue for these
consumers to go to the licensing office and say, yeah, A Plus
Plastering is a state-certified general contractor, workers' comp.,
insurance is up to date, has a pin number, can go ahead and do
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September 17, 2009
everything online, which the licensing department does.
It's not a building department permit. It's a processing fee, and
we're going to work on that. So you've got two avenues. I mean, I
don't know how -- most jurisdictions are getting away with state
registrations.
If you go to these jurisdictions that we're talking about, you're
going to the building department; am I correct?
MR. LANTZ: Yes.
MR. OSS()RIO: Here, where do you go?
MR. LANTZ: Contractor licensing.
MR. OSSORIO: Contractor licensing. Totally separate. We
provide a service for a minimal fee for our staff, and our staff is paid
by specialty contractors, and it's not fair. It's not fair to you, not fair to
anyone that these state-registered, state-certified contractors are using
our system on the backs of specialty contractors. So it's a processing
fee.
MR. LANTZ: So I will agree that I disagree with you completely
on that. But my question is, if I want to build a house and I want to
pull a permit, can I do it without paying the $45 fee?
MR. OSSC)RIO: If you come in and you write me your letter
stating the fact of that state statute, you don't want to be registered in
our system and you provide workers' compo insurance and licensing
every single time, every time you want to call an inspection, all your
sub lists, I'm assuming that we'd probably make accommodations for
you and we'll talk to you. We'll talk to the county attorney; however,
it's a processing fee.
You might get charged a fee for using our system, our new
software system and our CD plus system, so it could be a charge;
however, that's something that -- to the county attorney. But I strongly
recommend, you know, for the price you're getting, $50 or $45 every
two years, it's a bargain for what you're getting, a bargain.
And to be honest with you, Mr. Lantz, if you do go that way,
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September 17, 2009
you're going to -- I guarantee you're going to suffer service-wise, so __
in the long-ternl. I mean, here you are, you have a staff that takes care
of your workers' compo insurance, your -- we are certificate holders for
your company. In other words, we renew your workers' compo
insurance. Your insurance company automatically faxes licensing to
our office and \ve update your system.
Now, if you don't pay that fee, you won't get that service.
CHAIRMlt\N JOSLIN: Do you want to add anything else to that?
Pretty much says it all, I guess.
MR. MULLEE: Yes.
CHAIRM1\N JOSLIN: More or less a nomenclature situation
where the registration is the real kicker or answer to the question. It's
more of a -- it's not going to be a registration fee. It's a processing fee?
MR. OSSC)RIO: It's a processing fee. And most counties call it a
processing fee. .And I apologize that we haven't really -- you know, we
haven't changed the name of it. We were going to do that, too, as well,
because it's a -- the state statute mandates the building official to go
ahead and issue a building permit to make sure that it's not issued
without insurance, to make sure the workers' compo is there, make sure
you check your business tax, to make sure that all -- make sure all
licensed general building residential contractors subcontract out
appropriate licensees, electrical and mechanical. All that is a business
practice that licensing handles, not building review and permitting. So
with that said --
CHAIRMAN JOSLIN: Okay. Another question as far as that
goes?
MR. JERULLE: Yes. We said that -- excuse me. The county has
said that this fee hasn't been raised since 1994, I think you said.
MR. MULLEE: I think overall the building permit fees haven't
been raised. There was a -- there was an adjustment probably in the
interim. I saw an adjustment on some of the contractor licensing fees.
MR. JERULLE: So we've gone 14 years, 15 years without
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September 17, 2009
raising the fees?
MR. MULLEE: Uh-huh.
MR. JERlJLLE: The economy has taken a drastic dive, and your
building permits are one-fifth, one-tenth of what they used to be?
MR. MULLEE: Actually, they're probably one half. We're still
running at about 20,000 permits a year.
MR. JERlTLLE: The size of the permits--
MR. MU:C~D: Yes, the mix of the permits is down, yes.
MR. JERlTLLE: The quantity of the permits have gone -- have
decreased by 50 percent?
MR. MULLEE: Yes, uh-huh.
MR. JERlrLLE: The money value of the permits have decreased
by how much?
MR. MULLEE: The money value of the permits have probably
decreased by about 60 -- 60, 65 percent. Our budget has decreased by
60 or 65 percent.
MR. JERU'LLE: So I'm trying to figure this in my mind. If you've
gone 15 years \vithout an increase and we have a very high volume of
permits and a dollar volume of permits, why are we now increasing
the cost when our permit fee has gone down and the quantity of
permits have gone down?
MR. MULLEE: Yeah. I think there's a couple of issues. One,
over the course of time, we have done a -- I think we've really -- you
know, some of the response, there's been a little lag in the timelines,
but we've been -- we've done a fairly good job of scaling the operation
according to the size of permits that have come in the door.
I -- as far as the number of staff and the organization per permit,
I'm at the exact same level now that I was in 2001, 2002. We went up,
we went down, like I said.
I think in the enterprise funds, we've cut more than 50 percent of
our staff, probably about 60 percent of our staff.
And so over the course of time there's a couple things that come
Page 16
September 17, 2009
into play, and this one is, there's a significant issue of economies of
scale within the organization, and that plays out in a couple ways.
One, the first w'ay it plays out is, a lot of our costs are fixed. There's
overhead costs within the organization that are fixed. This building is
an example.
Within -- 'Nithin Fund 113, I guess probably back in the late '90s,
the Board of Commissioners decided that this organization was going
to be totally fee supporting. So everything within the organization is
fee driven or fee supported.
This new building addition was build in 2004, I think it was, and
was all built on fees. And now the maintenance cost of the building,
debt service on the garage, all these kind of costs are fixed costs.
When I'm :running at 46 or '7 -- 46- or 47,000 permits, that fixed
cost is a much smaller percentage than when I'm running at 20,000
permits. And so the cost has remained the same. Actually over the
course of time, those associated costs have gone up. So that's one
factor in it, that my per-unit cost has changed over time because of
that kind of economy-of-scale issue.
Another issue over the course of time is -- of my costs going up
is obviously personnel costs. The organization, the way it's structured,
right now it's probably 70 -- actually in some of the funds in the
zoning fund, personnel is 90 percent of our cost. And on the building
side, it's probably 80, 85 percent of our cost right now as we have
gone ahead and eliminated nearly everything.
Over the course of time, those personnel costs have gone up as
organization's gone ahead and given cost-of-living adjustments each
year. I think probably the average salary increase on a yearly basis is
probably about 4 percent. Since the 90's, that's really compounded.
Probably what happened -- we would have had this discussion
probably in 2003 or 2004 had not the boom happened. And with the
boom happening and all the rush coming in here and us having a lag in
staffing up -- and for those who lived through the boom, I'm sure you
Page 1 7
September 17, 2009
can remember the vocal discussions about turnaround times within the
organization and how long it took us to get a permit out the door, and
that was just silnply a factor of how long it took us to gear up.
And so reserves clearly built up during that time frame, and we
had several million dollars of a surplus that built up in reserves. We
really developed a much better economies of scale than we had
previously. We had large volumes of permits to go ahead and
distribute fixed costs against.
And so when things started turning around probably -- for us
things turned around at the end of 2006, started turning around. Since
then we've been losing money, and what has been -- and living off the
reserves. And the reason we didn't come forward in 2006 with a fee
increase is because we were sitting on a large amount of reserves, and
we were sensitive to that very concern, that obviously times were
difficult. We had built this money up from permits and some of the
cost advantages we got with the higher volume operation.
And so we wanted to go ahead and use that money to try to hold
costs down as long as we could. And in fact, we've reached the point
now where we're actually -- on the planning side, we're actually out of
reserves now, and probably on the building reserves we'll run out of
reserves in a fevv months.
And so that's the basis to it. We've really kind of scaled according
to workload. But my per-unit cost is significantly different than what
it was in the 1990s.
MR. JERULLE: What I'm concerned with is -- you know, and I
have said this at earlier meetings. I want people to have workman's
comp, I want them to have a license, I want them to register with the
county. I want to bring them into the fold, so to speak, because a lot of
the people that we see are people that don't bother to come and
register.
And now by raising the fee schedule, I think we're giving them
an excuse to work outside of the parameters rather than inside. And by
Page 18
September 17, 2009
raising it, I think we're going to maybe get less money, if that makes
any sense at all.
MR. MULLEE: Yeah. There's a couple --
MR. JERIJLLE: There are people that aren't going to pay these
fees that will still go out and work.
MR. MULLEE: Yeah. I understand that concern, and there's a
couple things in that concern. One, it has been brought forward, within
this fee structure, it certainly is proposed another contractor licensing
inspector, and that will be hired inside of this fee structure. That was
brought forward to me as a need of the industry or a request of the
industry, and that's inside this structure.
But yeah, we're sensitive to the concerns about raising fees too
much and its possible effect on activity levels, and we understand that.
But as we 'went through this, unfortunately, we're in a position
where this is what the cost is to us. And so we're kind of in this
situation where if we don't raise the fees to cover our costs, we're not
going to be able: to provide the services, period, and -- because there
just isn't sufficient revenue.
I've got to tell you, you know, we're in the position where,
without a fee increase -- without some kind of adjustment on the fee
revenue, we're coming to some kind of consensus within the industry
on this issue where come November, I think we have, what is it, 55
people left in the building department?
MR. SCHMITT: Fifty-six.
MR. MULLEE: Fifty-six.
MR. SCHl\.1ITT: Counting contractor licensing.
MR. MULLEE: Counting contractor licensing, 56 people in the
building departnlent. Without some type of adjustment in the revenue
structure, I -- you know, probably my recommendation would
probably be in November to let 20 of them go. It's just, that's just the
way it is.
And so what we're trying to do is, you know, be sensitive to those
Page 19
September 17, 2009
concerns and trying not to raise fees a penny above our actual costs.
And that's why you've seen this particular proposal go down over the
last month is bt:~cause I don't want to raise these fees more than one
penny above what our -- what our costs are, and what our costs are not
in terms ofwhe:re we were in 2003, because we were replacing
computers, we 'were replacing vehicles.
We're raising these to what our costs are now, which is really
running a very thin operation around here. People in the organization
MR. JERlJLLE: I'm not disagreeing with that at all. I'm a
member of the licensing board. I believe in the licensing board. I think
what Mike does and his staff does, they do great work.
My concerTI is, is that, you know, we're going to be seeing more
and more people that are not going to register, are not going to get
workman's compo insurance, are going to work outside the law, so to
speak, because they're going to look at these fees and say, geez, they
were too expensive before and you raised them with this economy, is
what I'm concerned with.
CHAIRMAN JOSLIN: Terry, I think -- and this is a quick
comment I'll make.
I think you're going to see that this is going to get -- it's going to
get worse. It will get worse without fee increases also because of the
fact, this is going to be able to provide one other investigator; it's
going to provide the level of service that it's going to take to keep the
people that are working here honestly protected against people that
don't have licenses, because if we don't have some type of -- and I've
looked over this kind of closely. If we don't have some type of an
increase, we're going to lose probably another investigator. Now,
when you start losing investigators and you open the door and allow
unlicensed work to continue, you're going to open this place up until
everybody in the~ county is working without a license.
Now, how are you going to provide the service to protect you,
Page 20
September 17, 2009
that is a licensed contractor, that's trying to do the job right, and
everyone else?
MR. JERlJLLE: I'm confused. Either we're raising the fees to add
an inspector, or if we don't raise the fees, we're going to lose an
inspector?
MR. MULLEE: It's both.
MR. SCHMITT: For the record, Joe Schmitt. Let me make sure
you all understand the situation.
CHAIRM.A.N JOSLIN: One, one quick question. You need to be
sworn in, please, just so we can put it on record.
(The speaker was duly sworn and indicated in the affirmative.)
CHAIRMi\N JOSLIN: Thank you.
MR. SCHMITT: Let me address that issue, but I also want to talk
about state licensing as well, because that's another issue that we kind
of glossed over, and I want to make sure you understand what's going
on there.
Let me talk about the budget. Gary said, this is simply a matter of
raising sufficient revenue to provide the level of services demanded by
the industry. I'rrL not subsidized. The building department is __
functions entirely on fee revenue 100 percent. Other counties, some
other counties, your ad valorem tax dollars pay for certain portions of
the operation. Down here they do not.
Other counties, including Lee, the building is provided by the
taxpayers. This building was paid for by you all. You purchased this
building. You pay to operate it, you pay to maintain it. There were no
government impact fees that paid for this building. And I'll correct the
record. This building was planned for, I think, in '98 or '99, contracted
in 2001, and built in 2002. So it was even before my time.
The issue here is, it's a pretty simple fact of, I -- the revenue
needs to support the staff or the staff needs to -- will be cut
commensurate with the revenue that I receive, unless one of two
things happen. One, the board subsidizes or, two -- and there's been
Page 21
September 17, 2009
discussion about attempts to even look at contracting this service out
to a private provider or private contractor. And if that happens, it's
going to cost even more, because the contractor most likely will cost
more.
So when I look at both the zoning department, engineering, and
environmental review, which are the zoning funds, the 131 and this
113 fund, the fe:es have to pay for the staff. The staff has been reduced
110 percent. The staff has been reduced commensurate even beyond
what is -- was -.- we should have more staff to support the workload
that we have, but I can only afford what I can meet based on the fees
that I receive.
And the choice will be -- there will be no choice. The choice will
be to reduce staff, and that will impact contractor licensing; it will
impact them hard. It will impact them hard. I would probably -- it will
be more than one investigator, and I don't -- that's not a threat. I mean,
that's just the reality.
One of the things the industry approached, I think when Tom
came in and we met, CBIA -- and we also met with the subcommittee,
the DSAC, there were concerns about providing support. Mike
provides a licensed investigator -- licensed investigator for the City of
Naples full time. They provide no money for that service. I have an
interlocal -- that's the piece I want to make sure you-all bring up. I
have an interlocal agreement with both the City of Marco Island and
the City of Naples. Now, the fees that you pay to register in Collier
County, we provide that service to both the City of Marco Island and
the City of Naples.
So Kyle, I'ln not sure what you're paying for when you register
for the city. That's something you may have to go back and ask the
city what you're paying for, because we provide the service for both
the incorporated and unincorporated areas of Collier County, and that
service we provide through interlocal agreement.
Now, some people may say, well, we ought to go back to the city
Page 22
September 17, 2009
to ask for the city to compensate for the services provided. The
interlocal agreement that was passed, Mike, what, probably ten years
ago, I think --
MR. OSS()RIO: That's been updated since then, but--
MR. SCHMITT: Basically it was an agreement between the
Board of County Commissioners and the city council. We charge the
fees, the fees pay for the service, the service we provide would be
provided based on the fees we collect meaning that -- in the city as
well for contractors who do work in the city.
And I want to talk about state licensing a minute. We get
numerous state contractors who come over here, register, and we
provide letters of reciprocity to other counties because our fees are so
low. Mike can allude to that. He gets hundreds of those, $10. We'll get
many contractors coming over from the east coast, coming over here
registering, and then we send letters of reciprocity. Every letter I send
I lose money. Every letter.
MR. OSSC)RIO: That's right.
MR. SCH~v1ITT: So it's just a matter of -- and you're right. And
what a time to come in and ask for a fee increase. When I had the
boom, I had the economies of scale, and at one time I was sitting on,
between both funds, probably $12 million in reserves.
And we paid off this building. We purposely bled that down.
We've been living off -- or not -- well, we bled that -- the reserves
down. We've been living on the reserves. But I'm at a point now where
I can't let the reserves go down any further because those reserves are
actually services for prepaid services. Those are reserves to pay for
inspections that are, frankly, associated with permits that have been
pulled that we have to -- we have to perform those inspections.
Meaning, if I shut down tomorrow, I still have to have inspectors.
But the reality is, if I don't have the revenue, I can't meet payroll,
and if I can't mel~t payroll, I have to reduce staff. It's that simple.
Unless the board chooses to subsidize through the general fund the
Page 23
September 17, 2009
operations in community development, and that's way above my pay
grade.
MR. WHITE: Mr. Chairman?
CHAIRM.AN JOSLIN: Yes.
MR. WHITE: Mr. Schmitt, that may be well above your pay
grade and everyone that's in this room, but I think the fundamental
issue -- years going back, and use the verb subsidize. If you look at the
distinction between what was done relative to capital costs to fund
construction, modeling of the physical plant in Lee County versus
Collier County, I think it's clear that there was a difference of opinion
as to the utility and function that those reserves or other permit fees
were utilized for.
And part of the rationale, I think, that supports what I hear other
board members saying is that, but for those dollars having expended
for capital costs, we would not require or at this time need fee
changes.
MR. SCHMITT: No, that's not --
MR. WHITE: So it begs the question of whether, in fact, subsidy,
or whatever you want to call it, is something that more appropriately
should be looked to to provide the services that are needed.
CHAIRMJ\N JOSLIN: Mike?
MR. OSSC)RIO: I just wanted a quick comment on that because
it makes a good point. We are in the licensing board, and you're
talking about building -- building permit fees. As long as I've been
here, if you look at our numbers, we haven't changed very much; $10
here, $2 for the reciprocity letter. We've been subsidized by the permit
fees.
Licensing has also been in the red, black and white. Also been in
the red. And, unfortunately, the building department cannot sustain
our operation anymore. And in our code, we've probably been in
violation of that under the fee schedule. The fee schedule says,
licensing and application fees should pay for itself. And Bob Dunn
Page 24
September 17, 2009
and his group has been subsidizing you and us for years.
I mean, I'm talking about, you know, the industry's going down,
you know, the economy's going down. Well, I can assure you this,
looking at our numbers: We are up in citations, we are up in our fees,
we're up in our -- just alone in our -- we are up in everything we do.
We collected and we mitigated $295,000 back to the consumers. You
can't put a price tag on that. You can't. State contractors, local
contractors, whatever. It is about time that the licensing department
really gets into gear and figure out this -- we are in violation of the
ordinance. Bob Dunn and his group has been subsidizing us for years.
That's why we're here today.
The permit fees, that's a fight that you and I, you know, can't look
at. It's nothing to do with us. Is it, are licensing fees where they need
to be to provide a service?
MR. SCH~v1ITT: Well, let me add, Patrick --
MR. WHITE: I don't disagree. Let me just interject, if I may, Mr.
Chairman.
CHAIRMAN JOSLIN: One at a time.
MR. WHITE: Thank you. I don't disagree with what Mr. Ossorio
has said. I think he's absolutely right on. My point is simply, if the
rationale that's going to be provided to us by the county has something
to do with the other uses of this fund, I'm challenging that.
CHAIRMAN JOSLIN: Right. Where's the money and how is it
being used is what you're saying.
MR. WHITE: What I'm not challenging is that if there's a need
and it's supposed to be self-supporting, then that's fine. But let's not
bring in some other inapplicable rationale that may have some merit as
to building fees, may have some merit as to planning and zoning fees.
That's not part of our discussion. So I just didn't want to get wrapped
around the axle 'Nith it.
MR. SCHlVHTT: Patrick, I mean, the issue was brought up about
workload, and we answered that. But Mike was spot on. I'm going to
Page 25
September 17, 2009
turn the microphone back over to Gary. The issue here is, the budget
was set up strictly for Mike as a separate cost center to raise the
revenue needed to provide the services he provides. And that's the way
the budget is prepared. That's way this FY10 budget was.
Mike needs to raise the revenue based on the services he
provides. He's been subsidized for years through building permit fees.
I can no longer do that. In fact, there are state statutes that clearly
define what building fees can pay for.
But this budget -- and these fees are based solely on the money
Mike needs to provide the services he provides to include an
additional investigator.
Gary?
MR. MULLEE: Yeah. Let me go ahead and -- specifically to
your specific point, Patrick.
Two levels. First of all, kind of a theoretical and, second, what
actually Mike is providing along those lines and what costs are
specifically in this proposal.
Theoretically, you know, in terms of the past and the decisions
for capital expenditures and all that, that's water under the bridge. The
building's here and the costs are here.
Now, what is being allocated, for example, for this building
today? Within the budget there's a detailed rent structure. So 113 went
ahead and built this building, built the addition and built that. But 113,
the building department fund, does not subsidize the total cost of the
building and the operation. Every occupant of this building, no matter
what fund they are in, are allocated the costs. We call it a rent
structure. We charge them, but it's part of the -- actually, the primary
-- the primary fund bearing costs inside this building is Fund 111,
because the way the organization has shrunk, we actually have more
Fund 111 employees in the organization than any other employees,
code enforcement, comprehensive planning.
And so their portion of the building is charged up. And this
Page 26
September 17, 2009
allocation is based purely on the physical space that each section takes
up. We take a look at the physical space, we allocate the total costs of
the building across that.
So when Mike has to pick up part of the -- that -- on a permanent
basis, that cost is up because it's a fixed cost. And it's up -- so it's up
on a permanent basis. So when Mike in the Contractor Licensing
Board picks up -- contractor licensing organization picks up part of
that allocation, it's based purely on the space that Mike is taking, just
like you guys have to pay rent. It's not -- it really isn't any different.
Should the -- should we have gone on this long capital project of, you
know, building the buildings and all? It really doesn't matter. They're
here.
So, Mike -- Fund 113 is not picking up a disproportionate amount
of the allocations of these costs. These costs are allocated everywhere
across the organization.
CHAIRMi\N JOSLIN: So each department has its own little, so
to speak, rent in order to keep this building happening?
MR. MULLEE: Each -- yes. Each section right down to -- we
were happy to get tourism. Tourism has joined the building over on
this side. We actually twisted an arm to get tourism. They're paying
rent. Everyone who's coming in the door is paying rent.
CHAIRMAN JOSLIN: Mr. Jerulle?
MR. JERULLE: Yeah. Going back to my point. And like I stated
earlier, I believe: in the licensing board and I believe in Mike Ossorio
and his department, and they do a great jobs, you're going to raise the
fees. Are you going to hire someone right away?
MR. MULLEE: We will hire someone upon passage of this fee.
MR. JERULLE: And therefore my question or -- I don't want to
say problem, because I'm just asking the question.
If it were lYLe in my business, that would be me spending money
before I made it. And my point is is that -- how many licensed
contractors do you have currently?
Page 27
September 17, 2009
MR. OSS()RIO: Which one, state or registered?
MR. JERIJLLE: Registered.
MR. OSS()RIO: Locally, contractors, I would say we have
between 4- and 5,000 at any given time.
MR. JERlJLLE: And are you losing contractors because of the
economy?
MR. OSSC)RIO: I looked at -- I did look at the numbers and--
from last year and the year before. We are -- revenue has stayed
exactly the same, but we have lost, I would say, this year we've lost a
lot of contractors, because we're doing our renewals right now in
September. We have lost a couple, but I anticipate they're waiting for
their renewals to be suspended, and they're going to come in in
January.
So I anticipate that we're going to be, you know, where we are
for this year in the next year. I don't anticipate a downturn. In other
words, everyone wants a license.
You've got to understand something, that you layoff 15
contractors, you layoff 15 employees, ten employees, and they've
been in the construction business, what are they going to do? They're
going to try to get a license. And that takes time and effort.
Our licensing applications are up. Our applications of new
licenses are up. I think we're down on the renewal side, yes, but I think
we're going to capture that probably in January.
Our citations are up. And no matter how many times I say we're
up, up, up, every single number, licensing has always been in the red.
And this is investigator --
MR. JERULLE: My concern is, is that I know a lot of the
subcontractors who are barely hanging on, and this increase, they just
may say, I'm not going to register anymore.
MR. OSSORIO: Two things. One, when you -- you're going from
100 to, I think, 40 whatever it is, I think that's pretty minimal. I don't
like to go ahead and base my cost center and base what I do here on
Page 28
September 17, 2009
other counties. But you can assure you, we are very competitive with
the other counties.
MR. JERlJLLE: Oh, I'm not questioning that at all.
MR. OSS()RIO: The thing you have to understand is, these
contractors here are to pay -- competing against Miami-Dade
contractors. So how would you like to pay a license contractor here for
ten years and then a license contractor from Miami comes over, takes
our exam, passes it, and conducts business in Collier because maybe
Collier County's the last of the counties that are actually doing
business.
Because w'e're busy . We have to be busy . We've issues over 750
citations this year, which is more than last year and twice as much as
the year before that. So it's not fair.
I mean, there's not a day goes by that I don't get a specialty
contractor who tells me, Mike, I'm losing, I'm barely hanging on;
however, I'm getting underbid. I need help to get out there, to check
workers' comp., to check liability, to make sure we're on an even
playing field.
MR. JERU'LLE: We're not helping them by--
MR. OSSC>RIO: We're not helping them--
MR. JERU-LLE: -- being underbid by increasing the fees.
MR. OSSC)RIO: Okay.
MR. JERULLE: I just think that the overall costs -- excuse me. I
think your overall amount of subcontractors are not going to be there
next year, but that's my caution.
MR. OSSC~RIO: I respectfully disagree.
MR. WHITE: Can I follow up on that rationale, Mr. Chairman?
CHAIRMPlN JOSLIN: Sure, go ahead.
MR. WHITE: And I apologize, gentlemen. I don't make my
living in the samLe fashion you do as a contractor, but I do operate
essentially in a larger economic environment where we interface with
you all the time.
Page 29
September 17, 2009
I have a slightly different view of what Terry's saying, and that
is, what is going to happen to all those people who may elect to not
follow the law .--
CHAIRMAN DICKSON: Exactly.
MR. WHITE: -- based upon what these fees may be? I think the
problem is one that says, all the more, is there a reason to have a full
staff for the purposes of investigating those claims?
The question to me comes down to, how do you best level the
playing field in the economic hardship that is currently ongoing for all
of the people who want to play by the rules? To me, it may sound like
the argument of more government versus less. But in this instance, it
really seems to be that, without the cops, who are you favoring
operating out there in the market?
CHAIRMJ\N JOSLIN: Right.
MR. WHITE: The people who want to operate legitimately, or
the people who want to cut costs in an attempt to, quote, underbid? If
you don't have the cops out there to help protect and keep the playing
field level, I suspect that we're going to create an environment where
there's more disadvantage or more economic incentive for someone to
not follow the ndes.
CHAIRMAN JOSLIN: I agree.
MR. WHITE: That's what my fear is.
CHAIRMAN JOSLIN: I agree with you totally. That would be
no more than if you have people in the street without the cops. If you
take down all the speed limit signs, are they all going to go 50? I
doubt it. If you take out the license factors and you take out the
investigators, are they all going to still go out and work for a licensed
contractor? They're going to go work anyway.
MR. WHITE: I think there's a certain percentage of __
CHAIRMAN JOSLIN: We need to have this done.
MR. WHITE: -- contractors and people who believe that in a
reasonable society, you follow the rules that are common-sense based.
Page 30
September 17, 2009
It really comes down to, is this a common-sense based number?
Whether it's one that people can economically afford and continue to
operate on is a legitimate question, but it has to exist within the
context of that larger issue. So that's the point of view I'm taking from
it.
CHAIRM~t\N JOSLIN: On the calculations that you've done, or
the calculations that were finished out that we've got before us here,
was this basically the lowest level of increase that we can -- that we
can live with in order for this to happen?
MR. MULLEE: Yeah, I think -- I really think so. I really believe
that what it does is it covers the actual costs that are this year's costs of
this section. It doesn't budget in any vehicle replacement, it doesn't
budget in for this immediate section. It doesn't budget in capital
replacements. It's a very tight thing.
There's approximately -- we went ahead and took a look at the
entire activity level that was going on this year. We projected out
these fees in terms of revenue. I would categorize it that I've got
probably $70,000 -- came out -- the projection came out about
$70,000 above the immediate cost of this section, which is what we
figure is sufficient to go ahead and fund another investigator.
CHAIRMAN JOSLIN: Okay. Let's --let's see now. Tom, let me
hear from Tom for a minute.
MR. L YK()S: When we were in our subcommittee meeting, I
think it was last week -- is that right? I don't remember the date.
MR. SCH~1ITT: It was two weeks ago.
MR. L YKC)S: Two weeks ago. One of the issues I brought up,
which I think Joe addressed and it might come to play in all the
comments that have been made so far, the primary concern I had -- let
me take a step back. I want to preface my comments with, Gary, I
think you've done a great job on the math. If you've listened to the
comments so far, they tend to be about the philosophy of what we're
trying to accomplish and not about the math, and I know that we've
Page 31
September 17, 2009
dug into the math during the subcommittee meeting. I think you've
done a great job addressing our questions and breaking everything
down for us.
Nobody's really had a math question, and I think it's because
you've done a great job in your presentation, so I want to thank you
for your efforts. You've done a great job.
MR. MULLEE: Appreciate that.
MR. L YK'OS: The primary concern I had was that we know that
licensing perfolms services outside of documenting contractors, which
is what Kyle's concern was. There's a tremendous amount of time
investment in contact and in investigations. And if you look at the
hours and the \vay they were calculated by the contractor that did
these calculations, the majority of the hours, probably close to 100
percent, are allocated just to contractor licensing and the services that
Mike's department provides.
If we were to go through the citations -- and you're issuing 60,
70, 80, 90 citations a month, you have, if I remember right,
somewhere about eight times that number of contacts. If you were to
look at the actual allocation of your man-hours towards the services
you provide, I ~rould bet that a majority of your time is spent in
following up on contacts and those citations, which has got nothing to
do with new licenses or renewal licenses regardless of the type of
license that it is; however, all the costs are allocated directly to
licensing.
Joe, we brought this issue up at the subcommittee. About half of
your investigations are done with -- and I hate this term unlicensed
contractors, because if they're not licensed, they're not contractors, but
it's just the term that's recognized by our industry.
So half of your hours are dedicated to investigating unlicensed
contractors which are not directly related to the fees that licensed
contractors pay, which means that those services are provided to the
general public.
Page 32
September 17, 2009
Now, Mike, you made a comment at our last meeting that, well,
that's done in support of the licensed contractors. And I'll give you a
little bit on that one. But the point that I want to make is, those are
services that directly benefit the general public, like code enforcement,
and code enforcement is paid for by the general fund.
So if we did -- I'm sorry.
CHAIRMlt\N JOSLIN: Take a small -- want to take a small
break? Are you ready?
THE VIDEOGRAPHER: Yes.
CHAIRM..AN JOSLIN: Okay. If you'll hold your comments for
just a minute, w'e'll take a five-minute recess so he can just change the
tape in the camera.
(A brief recess was had.)
CHAIRMJ\N JOSLIN: Open the floor back up. Thank you.
MR. L YK()S: Yep, thank you.
So a good portion of what Mike's department does is a direct
benefit to the general public; however, there is no funding from the
general fund for those services. So all of the expenses for Mike's
department come from the revenue generated by citations and license
fees.
I think if we were to break down the man-hours spent in Mike's
department, we -would find that more than half of the time is spent on
investigation contacts and then the subsequent legitimate
investigations, which means that more than half of the revenue for that
department should come from the general fund.
That being said, we know it's not going to happen. If our
licensing board 'Nants to go down to a BCC meeting or if we want to
send a resolution to the BCC and let them -- and do the math on the
time that Mike's staff spends on the non-licensing activities and then
go down to the Board of County Commissioners and show them that
they should be subsidizing Mike's department so that all of the
revenue does not come from licensing, we could probably reduce the
Page 33
September 17, 2009
fees for licensing.
If we did a real calculation based on the cost of providing that
service and then collected an appropriate revenue, the costs would
probably be less for licensing than what they are currently, let alone
adding to them.
The problem is, we are not going to get the Board of County
Commissioners to approve subsidizing of the 113 for specifically
contractor licensing from the general fund. It is absolutely not going to
have happen.
So we could have philosophical questions for the rest of the day
today, at our next meeting and our next meeting and our next meeting.
It comes down to whether or not we want to fund the efforts of the
licensing board for why we're here, which is to protect licensed
contractors and to find and discipline unlicensed activities and
contractors that operate without permits and without proper
Insurances.
I don't knO'w that without doing a lot more math to find the true
costs of providing the service that's being funded by the license fees
and then going to the Board of County Commissioners for a subsidy
for this department that we're going to solve this issue today without
additional funding from the general fund.
MR. MULLEE: Yeah. Can I -- just very briefly on this topic.
You know, this :is an issue, or kind of a philosophical issue which has
confronted many sections of the organization. It's not just this one.
Clearly we're on the planning and zoning side. What they do that's fee
related and what they do that's really general in nature is a significant
issue and a significant question.
Unfortunately, you kind of hit the nail on the head in that it is a
philosophical question that we -- within the context of how we have to
fund the organization right now and how we have to meet payroll, you
know, I can't do anything about it. I have to go ahead and meet costs
based on the revenue structure that's in place.
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September 17, 2009
Certainly, as part of this proposal, I'd certainly be happy to put it
on the record, that we would be happy to cooperate with any kind of
effort to identify things that are a legitimate general fund in nature.
We'd be happy to assist you, and if you wish to, go ahead and take that
to the board.
And if you so -- I think you have almost no chance, but if the
board wishes to go ahead and subsidize certain parts of the operation,
I'll take it penny for penny off these fees. I don't -- I don't have a
problem with that at all.
But the reality of the immediate situation is that I've got to fund
this organization, I've got a fiscal year coming up, I'm out of money,
and I need to do something fairly immediately.
MR. OSSC)RIO: I've just got one comment real quick.
CHAIRMJ\N JOSLIN: Okay.
MR. OSSC)RIO: We've collected over $200,000 this year in
citations. We've got a budget for this upcoming year of -- I think it's
going to be around 800,000, 850-, so we're looking at one-fourth.
Issuing the citations from our office is one of the easiest things to do.
What's not easy is investigating licensed contractors under
misconduct. That takes time and effort.
I'm not saying that we're working smarter, but we are double
duty. I have Karen Clements who does the citations, who does the
territory, that does licensing board. I have -- and the office personnel.
So collecting $200,000 in the citation is easy. Doing the investigation
on misconduct under the ordinance is difficult, and I'll leave it at that.
CHAIRMAN JOSLIN: Mr. Boyd, you had a question?
MR. BOYI): Yeah. I can sympathize with, this is not the time to
be raising fees, but I think these are all in line with what everybody
else is charging. I mean, we're going to go up for registering a state
contractor, which I am, to $45, correct?
MR. OSSORIO: That's our intention.
MR. BOYI): And that's two years.
Page 35
September 17, 2009
MR. OSS()RIO: Every two years.
MR. BOY-D: In Lee County, City of Fort Myers, I pay $25 a
year. So it's not out of line. Yeah, maybe this isn't the time to raise it.
But, Terry, isn't it cheaper for somebody to pay the fee than to get a
citation of300 to $500? And if we fund another investigator, we've
got the chance to catch these people, and the word gets around that,
hey, you need to -- you need to register your license.
I'm totally for this. I mean, I see no other way . We can talk about,
you know, raising fees is going to destroy this, going to destroy that.
We have to raise the fees. But I don't see a whole lot changing here
until five commissioners do something about the impact fees. That's
my personal opinion.
MR. OSSC)RIO: Mr. Boyd, you're absolutely right.
CHAIRMJ\N JOSLIN: That's a whole 'nother badge now. Let's
not put any other hats on right now, okay?
MR. OSSC)RIO: I just wanted to say one thing, then I'll probably
be done because I always talk too much.
If you are a legitimate contractor, no matter if you are on the
teetering thing, you know, going under or if you actually filed for
chapter -- you know, bankruptcy, paying an extra $40 a year to go
ahead and get to another person to protect your interest as a licensed
company is cheap. And if you go out of business because the county's
going to charge you $40 a year extra, well, then you shouldn't be in
business, I'm sorry to say.
Other than that --
MR. BOYI): Oh, I agree with you totally, Mike. Just -- the fees
are not out of line cost-wise.
CHAIRMA,N JOSLIN: A new person at the podium one time. I'd
like to hear some comments.
Mr. Dunn, be sworn in, please, and let's hear your comments.
MR. DliN1'~: Yes. For the record, Bob Dunn, building director.
(The speak{~r was duly sworn and indicated in the affirmative.)
Page 36
September 17, 2009
MR. DUNN: Hi. I'm just -- I just want to bring you up to date.
I've been meeting with HR. I've been working on reorganizing
contractor licensing. I don't know if you realize it, but Mike, when his
investigator is out, he has to go out in the field all day, you know, and
I don't have a supervisor. And we're trying to fix that.
We want to bring a new person in. We want to keep him in the
office all day, so if somebody's not in Naples, we don't have to have
him go out to ~raples all day.
And in reorganizing this department, we want to, you know, put
somebody underneath him that can be a lead, that can supervise, can
go out there and lead these investigations and work with him in
learning his skins. I mean, he's -- he does a great job, but we also need
to make sure that we have somebody when he's out on vacation that
can step up and -- to take over managing his department. Currently I
do it, and I don't know that much about contractor licensing.
But he does a great job. We depend on him, his organization is
servicing the county. I don't know how they do it. Two thousand
square miles, you know, four investigators. I mean, they do a great job
and, you know, we're looking for your support in raising the fees so
we can do a better job.
CHAIRM)\.N JOSLIN: I have one quick question for you. I think
at the DSAC mt:~eting we had, didn't the funds that we're going to
increase, they're also going to allow the licensing to go back to a
five-day workweek?
MR. DUNJ~: That's correct. We're going back October 2nd.
CHAIRMAN JOSLIN: So we're not going to lose that Friday
anymore, so --
MR. DUNN: No, we want to go back to work.
CHAIRMAlN JOSLIN: Okay.
MR. DUN1~: I need to get -- currently right now they're coming
in on Fridays. He has his administrative staff coming in, and they're
keeping up with the licensing. We need to get those checks posted, we
Page 37
September 17, 2009
need to get everybody's license updated, so his administrative staff is
working on Fridays.
CHAIRMAN JOSLIN: I got you.
MR. DUNN: And he's doing filing on Fridays.
CHAIRMAN JOSLIN: Okay.
MR. DUNN: Thank you.
MR. OSS()RIO: Just one comment on that, relating to the
processing for licensing of state contractors. We have over 150
certificates for insurances from state contractors, so we have to enter
into the system so they can pull a building permit. That's what we're
doing now for the state certified --
CHAIRMi\N JOSLIN: Mr. White, you have one other question?
MR. WHITE: Just -- I appreciate Mr. Dunn's comments, and I
don't disagree necessarily with any aspect of it. But I just wanted to
kind of drill back down on some of that math-versus-philosophy
discussion as to the differences in the amounts of change as
percentages and get some explanation on the record why some things
changes not at all, others of them changed 120 percent, but on
average, most of them are right around 50 to 60 percent increase.
If I could just get some explanation, Gary, as to what explains
that range of variation, I think that might help with a greater comfort
level.
MR. MULLEE: Yeah. The way the -- when we went through the
fee study, when the vendor went through the fee study, it wasn't -- you
know, there's basically two ways of doing this. And one of the ways is
to go ahead and take a macro, you know, kind of broad-level look at
your costs, a broad-level look at your revenue and just go ahead and
make an adjustrrlent.
And then \\i'hen you take that approach, you get a very consistent
number, you get a very consistent, you know, 40 percent across the
board kind of thing. And in fact, probably we'll have an overall macro
level across the whole fund, that's probably what we're looking at in
Page 38
September 17, 2009
terms of the fee increase, that's probably 40, 45 percent.
That wasn't done in this particular case because the vendor went
ahead and looked at each individual activity associated with the fee
increase. And so he -- doing a time study, he came up with individual
hours that each activity took. And so what you have is a little bit of a
mix in terms of the adjustment amount, because he found some
activities took longer than the -- what was really associated with the
fees.
And we see this across all the fee studies that there will be some
on the planning side, and there are some fees which are projected to
go up 7- and 800 percent, and there's some fees which will actually go
down.
And so that's -- because we're really trying to -- we've decided in
this process a couple things. One, we've decided to really try to
associate the fee with the immediate cost to providing that individual
activity .
Oftentimes: in the past -- I've got to be completely honest, and I'm
doing it on the record, I guess -- that in the past here a certain number
of our fees within our fee structures, there was a political -- or I say
political, but it's kind of an internal political consideration for the fee.
That we -- that a lot of the fee studies in the past in the organization
have been on a, kind of, more macro level, and people have raised __
an individual concern that we heard here today is, you know, I can't
charge somebody that much money for this particular activity because
I'm going to los{~ the revenue, they're not going to come in the door.
And we've heard this before with fence permits; we've heard it from
various things.
So an intenlal political decision was made, well, let's don't raise
that fee, or let's not raise that fee that much. We'll just lower that fee.
And what happens when you do that is, you still have the overall
macro cost structure in place. Somebody else has got to make up for it.
So if we don't raise the fee here, somebody else has got to pay
Page 39
September 17, 2009
more for it than what their actual costs are for the individual thing
they're coming in the door for to make up for it.
And so as we go through this particular fee schedule, we've
decided, hey, let's really make an effort, if we're going to raise any fee,
that it has a time-tracking basis for it and that we're really kind of
charging for the immediate costs of providing that individual service.
It's only the -- I mean, we really feel it's only the fair thing to do.
And that's why some of these small fees I put back to zero because
there wasn't that kind of time -- I mean, I put back to the original level
because there ~'asn't that kind of time-tracking basis for it. But the net
result is that sorne fees will increase more than others on a percentage
basis.
MR. WHITE: Thank you.
CHAIRMJ\N JOSLIN: This packet that we have in front of us
shows a bunch of fees, costs, and adjustments, and then I see one page
here where apparently it looks like contractor fee proposal. Should we
approve this factor of raising these fees, I can see where -- I'm just
taking -- I'm taking just a couple here in general, but one of them was
certificates of competency annual. You've got a current cost, I
suppose, we're paying now, what the people are paying now for this
particular service, then you've got an August 19th initial
recommendation?
MR. MULLEE: Yeah, that was the initial draft that was sent
forward.
CHAIRMAN JOSLIN: And then you have a draft from DSAC,
and then you have a draft from contractor licensing.
MR. MULLEE: Right. And so it's the last -- the last line.
CHAIRMA,N JOSLIN: The last line is the one that we're looking
at, correct?
MR. MULLEE: Yes, yes.
CHAIRMAN JOSLIN: Okay. So in some senses of the word,
having been at that DSAC meeting, I think we've made some kind of
Page 40
September 17, 2009
an average behveen what was current and what DSAC thought and
now what actually is going to come out when the contractor licensing
board makes its decision.
MR. MUI)D: Yeah. I think we really wanted to give
consideration into the input that we received.
CHAIRMA.N JOSLIN: Okay. Just making sure that the fees that
are on here are some of the DSAC costs --
MR. JERlJLLE: So we're going to be voting upon the one that
says updated S{~ptember 15th?
MR. MULLEE: Uh-huh.
CHAIRM.A.N JOSLIN: Yes.
MR. OSSC)RIO: If you look -- if you look on the contractor
licensing fee proposal, I think it's halfway back.
CHAIRMi\.N JOSLIN: Right.
MR. OSS()RIO: It says current, August 19th, September 9th, and
then September 17th, which is today, and these are the fees that we are
proposing today, September 1 7 CLB.
CHAIRMJ\N JOSLIN: Mr. Lykos?
MR. L YKC)S: Terry, you expressed the biggest concern about
raising the fees under the current circumstances, and I wanted to just,
in general, address our efforts from the DSAC subcommittee before
this meeting.
We went through the direct costs and the allocations or overhead
costs that beCOITle part of these fees and objected strongly to the
records and addressing costs associated with this, which represented, I
think, between 11 and 12 percent of the total costs, and got that
removed.
MR. JERULLE: Good job, good job.
MR. L YK()S: Completely removed. So we did go through -- and
I don't want you to think that what we did was scientific or that we all
got our calculators out. But the point is, we went through the line
items. They appeared to be appropriate without spending several days
Page 41
September 17, 2009
in Gary's office and going over the supporting documentation.
But the anlounts that were -- that were calculated for the labor
costs, direct costs, and then the allocations -- the description of the
costs seemed appropriate, the dollar amount seemed appropriate.
When there was a number that seemed inappropriate, we
challenged it. Clary was either able to explain it or, in the case of
addressing and the records, removed it from the calculation.
So I want to say that when we spent time looking at the numbers
specifically, th{~y seemed to be reasonable. I'm not saying that I'm
endorsing the nlath so much as I am saying that we did look at them
individually, and they seemed reasonable.
So -- the ones that didn't seem reasonable, we addressed. And I'm
comfortable, based on the work that we did two weeks ago, that the
numbers that you see now are reasonable based on the information
that Gary provided us.
MR. JERlTLLE: Yeah. I think you did a good job, and I don't
have any problem with the amount so much, that we're charging it, as
I'm concerned with the amount of revenue that we're going to
generate, because I think some people are going to drop out.
And I just want to make sure that my point is clear. Like I said
several times today, I believe in the board, I believe in Mike, and I'd
liked to have another investigator out there. But I'm just concerned
that by raising the fee so much, that some people are not going to
participate in the program, so to speak.
MR. MULLEE: And I can give you my reassurance that we will
monitor that and look at -- there really is kind of a -- I guess you
categorize it as l~lasticity of the fee issue involved. So we will go
ahead and monitor that over the next several months.
MR. L YK()S: I want to make a motion --
CHAIRM1\.N JOSLIN: Okay.
MR. L YK()S: -- that we endorse the contractor fee licensing
schedule proposed in our packet today.
Page 42
September 17, 2009
CHAIRMAN JOSLIN: I second the motion.
MR. WHITE: More specifically on the motion and second, Mr.
Chairman, as to the resolution itself that I think would be the vehicle
for the motion, if approved, I would like to make a suggestion as to
adding some text at the end of the Page 2, if you want to look at the
resolution itself
It does not: specifically incorporate or reference what the motion
maker and the second have said in a specific way. And I'd like to put
on the record, if it's acceptable to the motion maker and the second,
that what we would incorporate by reference would be Pages 8 and 9
of the handout table that's labeled, updated September 15, 2009,
entitled the Collier County contractor's licensing, and specifically
we're looking at, on Pages 8 and 9, the column entitled recommended
fees that says proposed in the right-hand column.
I know that's probably more specificity than Mr. Neale would
care for, but I \vant to make sure that our resolution, if we pass it,
hopefully with this motion, is one that actually brings forward the
specifics of the recommendation.
CHAIRM..AN JOSLIN: You're talking about the contractor
licensing fees proposed that are proposed now as of this September
15th draft (sic)?
MR. WHITE: Correct. On Pages 8 and 9 --
MR. L YK()S: 8 and 9.
MR. WHITE: -- in the right-hand column where it says proposal.
It's 8 and 9 because the page that follows, in fact, is a summary of the
fees as recommended and as they exist across a period of time. Pages
8 and 9, very specifically, are what I think the resolution simply puts
in front of the Board of County Commissioners as the proposed fees
so that they can look at those.
I'm assuming the backup that the board will have for
consideration may look at that next page so they can compare. But the
actually resolution, I believe, if it's agreeable to the motion maker and
Page 43
September 17, 2009
second, ought reference just those two pages as exhibits.
MR. L YKOS: Does that sound right administratively?
MR. NEALE: Yep.
MR. L YKOS: Then I accept that amendment to my motion. I'm
not going to restate it though. What he said.
CHAIRM"AN JOSLIN: I'll accept the second, and I'm not going
to restate it either. Hopefully the court reporter's got it all down.
MR. L YKOS: That's fine.
MR. NEALE: That's fine.
CHAIRM.A.N JOSLIN: I have a motion and a second to approve
the resolution as we amended the motion. I'm not going to say those
again. So I'm going to put this to a vote.
All in favor of the motion to increase the fees as stated, signify
by saying aye.
MR. BOY:D: Aye.
MR. L YK~)S: Aye.
CHAIRMJ\N JOSLIN: Aye.
MR. HORJ~: Aye.
MR. JERU"LLE: Aye.
MR. WHITE: Aye.
CHAIRMJ\.N JOSLIN: Are there any opposed?
MR. LANTZ: Aye.
CHAIRMJ\.N JOSLIN: Motion carries, 6-1, in favor. Motion
carrIes.
MR. MULLEE: Thank you, gentlemen. I appreciate it.
CHAIRMAN JOSLIN: You're welcome. Thank you for all your
work and your energy and your time that's gone into this, and also Mr.
Dunn, Mr. Schrrlidt, being here at the meeting. That's very nice. And
hopefully you'v{~ explained everything in detail and we're going to go
on and we're going to have a really good county here.
MR. MULLEE: I thank you.
MR. OSSORIO: Mr. Chairman, for the record, are you going to
Page 44
September 17, 2009
sign the resolution sometime today?
CHAIRM.AN JOSLIN: Yes, I will.
MR. NEALE: I'll get you an updated resolution within -- as soon
as I get back to the office.
CHAIRMAN JOSLIN: Okay.
MR. L YKOS: Well, based on our motion, we have to get the
correct wording of the motion --
CHAIRMt\N JOSLIN: Right.
MR. L YKOS: In all this mess, I've lost my copy of it.
CHAIRM.A.N JOSLIN: It's on a piece of paper.
Anything else on the agenda as far as what's -- we have left on
the agenda?
No. We're done.
No new business, no old business?
MR. OSSC)RIO: Mr. Chairman, you want to send the resolution
to Bob Dunn when you're done.
CHAIRMJ\N JOSLIN: Immediately, yes. Let's hand deliver it so
we can get it there and get it before the commissioners so we can get
this underway.
MR. WHITE: Just to mention that our next meeting is October
21 st.
CHAIRM)\.N JOSLIN: Y es. We haven't gotten that far yet.
No public hearings today? No reports? We've done them all?
Next meeting is October 21st in the Harmon Turner building
agaIn.
And other than that, I need another motion.
MR. WHITE: Motion to adjourn.
MR. L YKC)S: Second, Lykos.
CHAIRMAN JOSLIN: Motion and second.
All in favor, signify by saying aye.
MR. BOYI): Aye.
MR. LANTZ: Aye.
Page 45
September 17, 2009
MR. L YKOS: Aye.
CHAIRM.AN JOSLIN: Aye.
MR. HORN: Aye.
MR. JERlJLLE: Aye.
MR. WHITE: Aye.
CHAIRM.AN JOSLIN: Any opposed?
(No response.)
CHAIRM.AN JOSLIN: Motion carries. Have a good weekend,
gentlemen.
******
There being no further business for the good of the County, the
meeting was adjourned by order of the Chair at 10:21 a.m.
CONTRACTOR LICENSING BOARD
RICHARD JOSLIN, Chairman
TRANSCRIPT PREPARED ON BEHALF OF GREGORY COURT
REPORTING SERVICES, INC., BY TERRI LEWIS.
Page 46