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Agenda 10/13/2010 W (Pre-Leg Session) BCC PRE-LEGISLATIVE SESSION WORKSHOP AGENDA OCTOBER 13, 2010 Board of County Commissioners Collier County Legislative Delegation 2010 Pre Legislative Session Workshop Wednesday, October 13, 2010 1 - 4 p.m. Collier County Government Center Boardroom AJ!enda I. Introduction - Board of County Commissioners Chairman Fred Coyle II. Remarks on behalf of Collier County Legislative Delegation - State Representative Matt Hudson, Chair III. Review of Collier County 2011 State Legislative Priorities IV. Other Topics of Discussion · Funding of dedicated Ochopee EMS & Fire Station on 1-75 (Alligator Alley) V. Public Comment VI. Adjourn Collier Co un tv 2011 State Le1!islative Priorities The Board of County Commissioners on behalf of the citizens advocates for the overall principles of preserving Home Rule authority of local governments; opposing state directives passed down as Unfunded Mandates which require local governments to deliver services without providing funds to cover the cost; and protecting against dedicated Trust Fund Raids. I. E- Verify - Support state legislation requiring use of "E- Verify," a free Internet-based employment verification website in all government construction contracts and hiring of employees in the public and private sectors. II. Offshore Drilling in Gulf of Mexico - Support permanently prohibiting offshore oil and gas drilling within Florida territorial waters. Support state demands that the federal government exert rigorous oversight of any current and future drilling and insist no monetary limitations for any drilling mishap are set. III. Libraries - Support State Aid to Libraries and cooperatives like the Southwest Florida Library Network IV. Revenue & Expenditure Caps (TABOR) - Oppose legislative or Constitutional restrictions on County authority to determine local tax burden or local financial commitments to services and quality of life. 1 V. Revenue Enhancements · Dot. com - Support the tourism industry position on Dot.coms, which is to have Online Travel Agencies (OTA's) collect and pay the sales and tourist development tax due on the total amount charged the visitor, not the net amount paid the hotel. The lost tourist tax revenue to Collier County from bookings by OTA's for FY 2010 is $435,000. The state's lost sales tax revenue is $652,500. · Support Gas Tax Indexing VI. Consultants Competitive Negotiation Act (CCNA) - Support Florida Association of Counties' (F AC' s) initiative for CCNA legislative reform that allows agencies the discretion to continue to procure architectural or engineering services based strictly upon qualifications, or as an alternative to select firms on a "best value" which is taking into consideration both price and qualifications. Enacted LeJ!islation & Issues to Monitor: · Transportation - Oppose raiding of the Transportation Trust Fund · Impact Fees - Support home rule authority over administration of Collier County's existing impact fee program. · Growth Management - Monitor Permitting, Transportation Concurrency Exception Areas (TCEA's), and Mobility Fees; Preserve Collier County's Real- Time Concurrency Program. · Non-Judicial Foreclosures - Oppose any foreclosure legislation that threatens residents' due process and property owner rights. · Pretrial Detention & Release Programs - Oppose legislation altering pretrial programs; increased jail populations result; $50 million impact statewide; bills supported by bail bond lobby and expected to return. · Hometown Democracy/Amendment 4 - Assess impacts of November 2010 election · Ochopee/EMS & Fire Station on 1-75 - Continue exploring funding options with FDOT; Critical public safety issue on roadway connecting the west and east coasts. 2 Collier Countv 2011 State Le1!islative Priorities The Board of County Commissioners on behalf of the citizens advocates for the overall principles of preserving Home Rule authority of local governments; opposing state directives passed down as Unfunded Mandates which require local governments to deliver services without providing funds to cover the cost; and protecting against dedicated Trust Fund Raids. I. E-Verify - Support state legislation requiring use of "E-Verify," a free Internet-based employment verification website in all government construction contracts and hiring of employees in the public and private sectors. On direction of the Board of County Commissioners, Collier County staff modified existing purchasing policy with an enhanced use of the E- Verify system to assure vendors and contractors are abiding by federal immigration law. E- Verify is an Internet-based, free program run by the United States government that compares information from an employee's Employment Eligibility Verification Form 1-9 to data from U.S. government records. If the information matches, that employee is eligible to work in the United States. If there's a mismatch, E- Verify alerts the employer and the employee is allowed to work while he or she resolves the problem within eight days. The program is operated by the Department of Homeland Security (DHS) in partnership with Social Security Administration. According to the DHS website, more than 196,000 employers now use E- Verify. Over 1,400 companies enroll in the program every week. The program was originally established in 1997 as the Basic Pilot Program along with two other programs created to prevent illegal aliens from getting jobs. The others were discontinued. All employers, by law, must complete Form 1-9. E-Verify is closely linked to Form 1-9, but participation in E- Verify is voluntary for most employers. After an employee is hired to work for pay, the employee and employer complete Form 1-9. After an employee begins work for pay, the employer enters the information from Form 1-9 into E-Verify. E- Verify then compares that information against millions of government records and returns a result. On August 31, 2007, the program began to include biometric data to help enhance searches. The 14 million images kept by federal immigration authorities are being used in the program, and the government is in talks with some states to cross reference with state drivers license records. About 5 percent of queries are identified as "not authorized to work." A 2008 Center for Immigration Studies Backgrounder states that the E- Verify system is 99.5 percent accurate. State laws - There are several state laws regarding the requirement and prohibition of E- Verify for employers. Arizona - The state of Arizona requires employers to participate in E- Verify: the Legal Arizona Workers Act has survived a number of constitutional challenges and is currently in effect. The Legal Arizona Workers Act requires all Arizona employers to use E-verify with all newly hired employees, effective January 1,2008. As of December 2008,5.6 percent of Arizona businesses had signed up with E-verify. California - California currently has no statewide e-verify law. However, on December 31, 2009 Ordinance No. 934 went into effect requiring all employers to use E- Verify and providing for business license suspension for repeat offenders. Colorado - Passed in 2006, H.B. 1343 requires prospective contractors use E- Verify to ensure legal work status of all employees. In 2008, S.B. 193 was passed requiring contractors with state contracts to use E- Verify. The effective date for SB 193 was August 6, 2008. Georgia - Georgia requires all public employers and government contractors to use E- Verify to verify the work authorization of their newly hired employees. Illinois - Section 12(a) of the Illinois Right to Privacy in the Workplace Act prohibits Illinois employers from using E-verify to verify the work authorization of their employees, due to the inaccuracy rate ofE-verify. The United States Department of Homeland Security sued to prevent the law from taking effect as scheduled on January 1, 2008. On March 12,2009, agreeing with the federal government, the U.S. District Court 2 for the Central District of Illinois ruled that Illinois' law is invalid under the Supremacy Clause to the U.S. Constitution because it conflicts with the federal Illegal Immigration Reform and Immigrant Responsibility Act (I1RIRA). The case was United States v. Illinois, (No. 07-3261, C.D. Ill., 2009). Mississippi - The Mississippi Employment Protection Act requires all Mississippi employers to use E-verify with new hires. Mississippi employers with 250 or more employees must comply with the law as of July 1, 2008. The law goes into effect for employers with 100 to 249 employees as of July 1,2009. Employers with 30 to 99 employees must comply by July 1, 2010. The law is effective for employers with fewer than 30 employees on July 1,2011. Rhode Island - In March 2008, Governor Carcieri issued an executive order requiring executive agencies to use E- Verify; and for all persons and businesses, including grantees, contractors and their subcontractors and vendors to use E- Verify. Proposed legislation is pending. South Carolina - South Carolina has passed a law requiring public employers and public contractors employing more than 500 people to use the E- Verify database to electronically check and verify the employment eligibility of new employees, effective January 1,2009. Every public employer must register and participate in "federal work authorization program to verify the employment authorization of all new employees." See SC Code Section 8-14-20(A). Public employer must also require public contractors and subcontractors to agree to use e-verify or "to employ only workers who" possess or qualify to obtain a SC drivers license or identification card. See SC Code Section 8-14- 20(B). The latter requirement applies as follows: "(1) on and after January 1,2009, with respect to contractors, subcontractors, or sub-subcontractors of five hundred or more employees; (2) on and after July 1,2009, with respect to contractors, subcontractors, or sub-subcontractors of one hundred or more employees but less than five hundred employees; and (3) on and after January 1,2010, with respect to all other contractors, subcontractors, or sub-subcontractors." See SC Code Section 8-14-20(D). SC Code Section 41-8-20(B) requires that "[o]n and after July 1,2009, all private employers of one hundred or more employees who are required by federal law to complete and maintain federal employment eligibility verification forms or documents must... (1) ... "participate in the E-Verify" [system] '" or "(2) employ only workers who, at the time of employment" have or qualify for a SC driver's license or identification card. SC Code Section 41-8-20(C) extends this requirement to private employers who employ less than one hundred employees on or after July 1,2010. II. Offshore Drilling in Gulf of Mexico - Support permanently prohibiting offshore oil and gas drilling within Florida territorial waters. Support state demands that the federal government exert rigorous oversight of any current and future drilling and insist no monetary limitations for any drilling mishap are set. 3 The letter below expresses the BCC position on offshore drilling following the Deepwater Horizon oil spill: June 8, 2010 The Honorable Charlie Crist, Governor State of Florida The Capitol 400 S. Monroe St. Tallahassee, FL 32399-0001 Re: Offshore Oil and Gas Drilling Dear Governor Crist: On behalf of the Collier County Board of County Commissioners, I am writing to express the unanimous agreement by this Board that we are simply fed up with the burden placed on our constituents by the failures of those who do not properly live up to their corporate fiduciary responsibilities. We have witnessed recent taxpayer-financed bailouts for large banks, auto manufacturers and Wall Street financiers. Now we are witnessing BP's and the federal government's inept efforts to bring the largest oil spill in U.S. history under control. In the wake of the unconscionable adverse impacts to coastal states by the catastrophic Deepwater Horizon oil spill, which a government science team reported on May 27 has been pouring up to 19,000 barrels of oil- 5 times original estimates - into the Gulf of Mexico each day, Collier County officials can only watch the images and prepare for the worst as leaking oil destroys precious environment and marine life in once thriving, pristine ecosystems. It will be years - perhaps decades - before those areas regain their natural quality, if ever. At the same time, the spill has caused untold economic damage in coastal communities. Although the oil has not reached Florida yet, we certainly share the anxiety and frustration of our neighbors. This event has become a national disaster of monumental proportions in every respect. The Collier County Commission encourages you, Governor Crist, and the Florida Legislature to support measures which will permanently prohibit offshore oil and gas drilling within Florida territorial waters. Additionally, recognizing that the federal government has had a 125-mile drilling ban imposed since 2006, I urge you to do what it takes to retain that prohibition. Before the Deepwater disaster, the President proposed expanding offshore drilling to include areas of the Eastern Gulf of Mexico no closer than 125 miles of the Florida shoreline. However, even that 125-mile buffer offers little comfort as we monitor this current ecological debacle day by day. It is critical for the state to emphasize to the federal government the need for rigorous oversight of any current or future drilling operation in the Gulf. 4 Also. under no condition can there be monetary limitations for any drilling operation mishap. No cap or maximum limit is acceptable. Collier County government is cognizant of the fact that the Board has no authority to address drilling operations in federal waters, however as elected officials we share constituencies whose interests we all represent. Some things are more important to our country than allowing business to earn a profit regardless of the consequences or without proper regulation. I would be happy to address any questions you or your staff might have regarding Collier County's position on this issue of major importance. Sincerely, /' ^ C~i~. Fred W. Coyle, Chairman Board of County Commissioners F redcoyle@colliergov.net FWC C: President Barack Obama Board of County Commissioners Collier County Congressional Delegation Collier County Legislative Delegation Leo E. Ochs, Jr., County Manager Jeffrey Klatzkow, County Attorney III. Libraries - Support State Aid to Libraries and cooperatives like the Southwest Florida Library Network The impact to Collier County Public Libraries is at least $200,000 if the aid is cut. The State Library and Archives of Florida announces the publication of Taxpayer Return on Investment in Florida Public Libraries (2010), a research study assessing the taxpayer return on investment (ROI) in Florida's public libraries. Study results are available at http://dlis.dos.state.fl.us/bld/roi/. The study was completed by The Haas Center for Business Research and Economic Development at the University of West Florida and provides an update to the original 2004 study. Key Findings of the 2010 Study: 5 ./ Florida's public libraries return $8.32 for every $1.00 invested from all sources. ./ For every $3,491 spent on public libraries from public funding sources in Florida, one job (in the economy, not just in libraries) is created. ./ For every dollar of public support spent on public libraries in Florida, Gross Regional Product (the value of all goods and services produced in the state) increases by $10.57. ./ For every dollar of public support spent on public libraries in Florida, income (wages) increases by $22.97. The study provides an analysis of return on investment at the state level as well as estimates for individual Florida counties. While the ROI figures vary widely from county to county, they demonstrate how even a small investment yields an extremely high value to the community. Social value questions were also posed to library users in the study survey. Findings include: ./ Library users perceive their local public library as an essential service. ./ Over half of library users believe a public library close to their home increases property value. ./ Library users prefer a public library on their street compared to other facilities such as a police station, an elementary school, a job center, etc. The study concludes Florida public libraries offer both perceived and real value to Florida's citizens. IV. Revenue & Expenditure Caps (TABOR) - Oppose legislative or Constitutional restrictions on County authority to determine local tax burden or local financial commitments to services and quality of life. The Taxpayer Bill of Rights (TABOR) reappears each year and has been a priority of Senator Mike Haridopolos, incoming Senate President, who continually sponsors legislation. TABOR is a movement to set revenue and spending caps on governments and place oversight of those caps in the hands of the electorate. No matter how good it may sound in theory, in practice TABOR stunts economic growth and slashes funding for critical services and infrastructure. F AC reports Florida's local governments have reduced property taxes by $2.3 billion in 2007 and more than $24 billion over the next five years. TABOR would create many problems for Florida's economy and the way our government provides services. Typically TABOR ties government revenue increases to the Consumer Price Index (CPI). The cpr is a tool of the federal government as an indicator of inflation and therefore, great pains are taken to keep this number low. When this number rises to any degree, then it also means that your cost of goods such as milk, eggs and other necessities have risen as well. Therefore, in a time when the people can least afford it, TABOR would require 6 government revenues to rise. CPI is not an indicator of the health and viability of the economy or your personal income and should not be the economic factor setting government growth. V. Revenue Enhancements Dot.com - Support the tourism industry position on Dot.coms, which is to have Online Travel Agencies (OTA's) collect and pay the sales and tourist development tax due on the total amount charged the visitor, not the net amount paid the hotel. The lost tourist tax revenue to Collier County from bookings by OT A's for FY 2010 is $435,000. The state's lost sales tax revenue is $652,500. Online Travel A1!:encv Le1!:islative Issue BACKGROUND: Online travel agents (OT A's or Dot Coms) who book hotel accommodations for consumers via the Internet have followed a business practice that has been called deceptive and perhaps illegal. The major players in this travel channel are Expedia, Hotel.com, Travelocity, HotWire and Orbitz. They contract with hotels to sell rooms on their Internet sites at highly discounted prices. Usually these rooms are allocated to these OT A's from unsold inventory for last minute travel decisions. In most cases, these OT A's are acting as a contracted agent for the hotel and should not be considered a wholesaler. The OT A's charge a service fee for booking these rooms that is, on average, 20-25% of the transaction amount. Included within that service fee, but not specifically disclosed to the traveler, is supposed to be the sales and hotel tax due on the transaction. However, the amount of tax is calculated on the net amount of that hotel room rate that the OT A contractually pays to the hotel, not the amount the traveler actually pays the OT A. That net contracted amount and the tax due are then sent to the hotel to pay for the room when the traveler arrives. EXAMPLE: Customer A uses the Expedia online website to book a hotel in Naples. The rate they agree to pay is $100. A fee of $20 is added to the transaction and the traveler's credit card is charged $120. The OTA pays the hotel $80 plus the $3.20 for the tourist development tax and $4.80 for Florida Sales Tax for a total of$88. Customer B calls the same Naples hotel and books a room for the same night and is quoted $100. When that customer checks out of the hotel, their credit card is charged $100 plus $4 in tourist development tax and $6 in Florida sales tax. The tax loss from Customer A's online transaction to Collier County is $ .80 in tourist tax and $1.20 to the State of Florida in sales tax or a total tax loss on this one transaction of $2.00. The tourist tax loss in 2009 to Collier County from these online hotel booking transactions is estimated to be $435,000 and $652,500 to the State of Florida in sales tax for a total tax loss of $1.087.500. The calculation of this tax loss is outlined at the end of this document. The model we use was developed by the Florida Association of Convention & Visitors Bureaus (F ACVB) 7 and the Florida Tourist Tax Collectors Association and is used throughout the state as the preferred tax loss calculation model. OTHER ACTIONS: In 2010, Collier County participated in a class action lawsuit with Monroe County (Florida Keys) against all of the OT A's. The court has ruled in favor of the plaintiffs and Collier County will be a part of the settlement decision. One of the concerns with this settlement is that accepting the estimated $600,000 as Collier County's share of past lost revenue, we will be asked to not pursue future actions against the OTA's. In fact, the settlement on the Monroe County suit may not be binding for future tax payments from the OT A's after an initial two years stipulated in the settlement. This time period may be how long the OT A's think it will take for federal legislation to take effect that would give them permanent amnesty from further taxes on these transactions. The concern is that the OT A's will continue their practice of collecting only on the net amount of the transaction and we will be blocked from pursuing that lost tax revenue. It is our understanding that the Florida Restaurant and Lodging Association has decided to not take a position on this OT A legislation in 2011. And during the last legislative session, F ACVB worked tirelessly behind the scenes to help draft legislation to block the attempts to exempt these OTA's from paying the correct tax amounts due on their transactions. Both associations have received a lot of push back from their members that there may be retaliation from the OT A's against the hotels they contract with and the destinations they promote. We feel these concerns are unfounded and a concentrated effort is needed to get the desired end result. Numerous other lawsuits are in process or have been dismissed or settled in Florida and in at least 10 other states. In every case, the OTA's have opposed any attempt to require them to pay the tax due on the full consideration. They contend that they are providing a service to the traveling public and are due their fee for that service. ADDITIONAL INFORMATION & CONCERNS: There has been concern expressed that this is somehow a new tax on hotels. This is not at all correct. Most travelers pay the full amount of tax due to the hotel when they check out. It is only the on-line transactions that are shorting the state and counties on the full amount of tax due. There has also been concern that this is a tax on Internet use. This is also not correct. This is a tax on a transaction, not the use of the Internet. Another concern is that by requiring the OT A's to collect and pay to the hotel the full amount of the tax due on the transaction that this somehow makes Florida less competitive. This is also not correct. The vast majority of hotel booking transactions collect the correct amount of tax. Online hotel bookings represent less than 50% of the total transactions. Most consumers use the Internet sites to shop for rates and then they go to the hotel corporate website to book the room, or they call the hotel directly. The majority of the transactions in question are last minute, convenience bookings. But, the tax loss over a year is substantial to both the County and the State. RECOMMENDATION: 8 We request that our State Legislative delegation oppose any action in the next legislative session to exempt the OT A's from paying the required tax amount due on the full amount of the on-line hotel room transaction rather than on the net amount. TAX REVENUE LOSS CALCULATOR FROM OTA'S (Internet Bookers of Travel or Dot Com's) Step 1 Calculate the total annual Hotel and Motel Room Rent Revenue by dividing the total tourist tax collected for the year by 4% (Tourist Tax Rate) $326,250,000 Step 2 Multiply the answer in Step 1 by 10%. (this is the estimated portion of the annual room revenue booked by the OT A's for their web clients into hotels/motels in our destination. Result is the estimated hotel room revenue generated by OTA's $32,625,000 Step 3 Divide the final answer in Step 2 by 0.75 (OTA's estimated 25% margin/service fee for on-line bookings) $43,500,000 Step 4 Subtract the answer in Step 3 from the amount of OT A's hotel/motel room revenue calculated in Step 2 The result is the unreported/untaxed hotel room revenue booked by OT A's. $10,875,000 Step 5 Multiply the final answer from Step 4 by the 4% (Tourist Development Tax) The result is the estimated uncollected Tourist Tax from rooms booked by OTA's $435.000 Step 6 Multiply the final answer from Step 4 by 6% (State Sales Tax) The result is the estimated uncollected State Sales Tax from rooms booked by OTA's $652,500 Step 7 Add the results in Step 5 and in Step 6. The result is the estimated total tax revenue lost from hotel/motel rooms booked in our destination by OT A's. $1.087.500 Support Gas Tax Indexing Indexing of Local Option Gas Tax - The state about 14 years ago authorized that the State Motor Fuel Tax be annually indexed to the Consumer Price Index (CPI) to allow the purchasing power of the tax to be maintained as costs increased over time. However, they did not provide for the same indexing of the Local Option Gas Taxes imposed by the counties. As such, the buying power of the local tax has decreased as costs have increased. The county supports legislation giving counties the authority to index their Local Option Gas Taxes to annual changes in the CPI. 9 VI. Consultants Competitive Negotiation Act (CCNA) - Support Florida Association of Counties' (FAC's) initiative for CCNA legislative reform that allows agencies the discretion to continue to procure architectural or engineering services based strictly upon qualifications, or as an alternative to select firms on a "best value" which is taking into consideration both price and qualifications. CCNA REFORM UPDATE County staff participated in the first full discussion with representatives from the architecture and engineering industry regarding CCNA reform on Sept. 23 at the Florida Association of Counties Policy Committee Conference in St. Petersburg during a breakout session. Several representatives attended from various disciplines within the industry, including American Institute of Architects officers Rick Logan, Steve Jernigan and Mickey Jacob; engineers Andy Cummings and Tom Berry; Jack Breed and David Daniel of survey and mapping. Those attending from the public entity side of the issue included Sarasota County Administrator Jim Ley and Deputy County Administrator Dave Bullock; F AC Legislative Director John Wayne Smith; Collier Purchasing Director Steve Carnell; Martin County Schools Purchasing Manager Neil Appel; St Johns County Commissioner Cyndi Stephenson; and Cheryl Shanaberger, City of Port St. Lucie. Both sides of the issue provided formal presentations, followed by a productive discussion that included clarification about what the reform actually means. Among the points in favor of maintaining the status quo presented by the industry include the following: . . . . . . . . Qualifications Based Selection (QBS) is a tried, tested, widely accepted (47 states) procurement method. Price "bidding" based selections could jeopardize health, safety and welfare of the public. QBS is ethical. Price bidding is unethical. Elected officials and governments will want to give too much weight to pnce. "Price bidding" takes more time and promotes change orders. Price competition could trigger bid shopping of sub-consultants. No public outcry against the status quo. Price bidding requires clearly written scope of services. Price bidding thwarts the creative design process. . In the course of the discussion, the public group gave an initial response to most of these points and also advanced the following arguments for the reform: · Best value alternative would not replace or eliminate QBS. · Best value competition would only occur among the most qualified firms. 10 · Agencies don't always want to select the most qualified firm under the present QBS system. · Current law forces agencies to decide to terminate/continue negotiations without any knowledge of what competing fees are available. · Current law doesn't promote transparent competition. The public doesn't know if it is getting value for the tax dollar. · Public health and safety should not be at risk if we are only considering price in selecting from among the top firms. · Many states allow QBS and "best value" processes. At the end of the meeting, both sides seemed willing to continue the discussion. The industry was gracious about being asked to the table. County staff noted progress on two fronts in this meeting: · We were able to explain the concept to the industry in a constructive setting that may ultimately reduce some of the resistance to the issue. · We had a sufficient showing of support from our side that I believe communicated that we are serious about the reform issue and aren't going away. Enacted Legislation & Issues to Monitor: Transportation - Oppose raiding of the Transportation Trust Fund ($120 M in FY 2010, $160 M in FY 2011 but Gov. Crist vetoed) Impact Fees - Support home rule authority over administration of Collier County's existing impact fee program. Growth Management - Monitor Permitting, Transportation Concurrency Exception Areas (TCEA's), and Mobility Fees; Preserve Collier County's Real- Time Concurrency Program. Non-Judicial Foreclosures - Oppose any foreclosure legislation that threatens residents' due process and property owner rights. Pretrial Detention & Release Programs - Oppose legislation altering pretrial programs; increasedjail populations result; $50 million impact statewide; bills supported by bail bond lobby and expected to return. Hometown Democracy/Amendment 4 -Assess impacts of November 2010 election Ochopee/EMS & Fire Station on 1-75 - Continue exploring funding options with FDOT; Critical public safety issue on roadway connecting the west and east coasts. 11