Agenda 04/24/2012 Item #16K2Proposed Agenda Changes
Board of County Commissioners Meeting
April 24, 2012
Move Item 16131 to Item 14B1: Recommendation to provide "after- the - fact" approval of the submission of
the attached Community Development Block Grant (CDBG) Application to Collier County Housing and
Human Service Department seeking grant funding in the amount of $360,000 to support further
implementation of the services provided by the Immokalee Business Development Center (IBDC).
(Commissioner Henning's request)
Move Item 16C1 to Item 11E: Recommendation to approve a work order in the amount of
$648,324.35 to Haskins, Inc., for construction tasks set forth in Request for Quotation 08- 5011 -60,
Davis Boulevard from Santa Barbara Boulevard to Radio Road. (Commissioner Coyle's request)
Move Item 16J5 to Item 13A: Recommendation that the Board accept the investment status update report
for the quarter ending March 31, 2012. (Commissioner Fiala's request)
Add Item 16J6: Recommend that the Board of County Commissioners serve as the local coordinating unit of
government for the Florida Department of Law Enforcement's Federal Fiscal Year 2012 Edward Byrne
Memorial, Justice Assistance Grant (JAG) Countywide Program and authorize the Chairman to execute the
Certification of Participation, designate the Sheriff as the official applicant, Sheriffs office staff as grant
financial and program managers, approve the grant application when completed, and authorize acceptance
of awards and associated budget amendments. (Sheriffs Department requires Board approval in order to
continue in the capacity of local coordinating agency receiving the Edward Byrne Memorial JAG grant
funding.)
Move Item 16K1 to Item 12A: Recommendation pursuant to Collier County Resolution No. 95 -632, that
the Board of County Commissioners authorize the Office of the County Attorney to represent Airport
Authority Executive Director Thomas C. Curry, and Airport Manager Thomas Vergo, who are all being sued
by Stephen J. Fletcher and Fletcher Flying Service, Inc., a tenant at the Immokalee Airport, in the case styled
Stephen J. Fletcher and Fletcher Flying Service, Inc. v. Thomas C. Curry and Thomas Vergo, Case No. 12-
1124-CA, Twentieth Judicial Circuit in and for Collier County, Florida. (Commissioner Hiller's request)
Move Item 16K2 to Item 12B:
Request for authorization
to join the Florida Association of Counties as a plaintiff in
litigation challenging the constitutionality of Chapter 2012-
33, Laws of Florida (HB 5301). (Commissioner Fiala and
Commissioner Henning's separate requests)
Time Certain Items:
4/24/2012 Item 16.K.2.
EXECUTIVE SUMMARY
Request for authorization to join the Florida Association of Counties as a plaintiff in
litigation challenging the constitutionality of Chapter 2012 -33, Laws of Florida (HB 5301).
OBJECTIVE: To receive the Board of County Commissioners' authorization to join in
litigation challenging the constitutionality of Chapter 2012 -33, laws of Florida (HB 5301).
CONSIDERATIONS: Since 1972, the State of Florida has utilized billing and payment
mechanisms to charge its counties a percentage of the costs for certain services provided to
county residents through Florida's Medicaid Program. Between state fiscal years 1994 -1995 and
2006 -2007, the counties contributed approximately 93 percent of the total Medicaid billings in
any fiscal year. Subsequently, however, county contributions to Medicaid collections have
steadily decreased with only 64.7 percent of billings in 2010 -2011 being paid that year. This
backlog in billings, and resulting shortfall in the state's General Revenue Fund, is blamed on an
electronic billing system implemented by the Agency for Health Care Administration around
2008. The purpose of HB 5301 (now Chapter 2012 -33, Laws of Florida) is to collect past
disputed bills through an automatic withholding or garnishment of the county revenue sharing
and half -cent sales tax distributions.
At its April 12, 2012 Board of Directors Meeting, the Florida Association of Counties (FAC)
authorized litigation to challenge the constitutionality of this statute as an unfunded mandate.
The attached FAC Executive Summary and Background Report provide additional information
and detail the legal issues raised by the enactment of Chapter 2012 -33, Laws of Florida. Prior to
and in anticipation of FAC's action, Leon, Manatee, Pasco, and Polk counties voted to be named
plaintiffs in a constitutional challenge to this new law. FAC anticipates that more counties will
come forward to join in the lawsuit. The suit will be handled by Bryant, Miller & Oliver, with
whom the County has an existing relationship.
LEGAL CONSIDERATIONS: This item is legally sufficient for Board action and requires a
majority vote for approval. - JAK
FISCAL IMPACT: FAC has proposed a flat fee cost - sharing arrangement, with the amount of
the fee based on population. Collier County's fee would be $3,500. The County Attorney has
sufficient funds in his litigation budget.
GROWTH MANAGEMENT IMPACT: None.
RECOMMENDATION: That the Board of County Commissioners authorizes the County
Attorney to take the steps necessary for Collier County to join the Florida Association of
Counties as a plaintiff in litigation challenging the constitutionality of Chapter 2012 -33, Laws of
Florida.
Prepared by: Jeffrey A. Klatzkow, County Attorney
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4/24/2012 Item 16.K.2.
FAC Board of Directors
Special Board Meeting
April 12, 2012
Agenda Item # 1
Statement of Issue or Executive Summary:
Seeking authority to pursue, in the name of the Florida Association of Counties
(FAC), litigation that constitutionally challenges the Medicaid revenue share
withholding scheme as a result of Ch. 2012 -33, Laws of Florida.
Background:
Forty years ago, in 1972, the Florida Legislature created a mechanism to charge
counties for a portion of the state's Medicaid responsibility. Through the
decades, there have been little that has changed in the state's billing and
payment scheme. However, the public record reflects that around 2008, when a
new electronic billing system was implemented by the Agency for Health Care
Administration, the amount of collections for Medicaid payments from the
counties decreased significantly. This collections drop caused a financial hole in
the state's General Revenue Fund. Counties have disputed a portion of these
electronic bills as being inaccurate, such that there are estimated $325 million in
disputed bills. During the 2012 legislative session, the Legislature passed and
the Governor signed HB 5301 (now Ch. 2012 -33, Laws of Fla.), requiring the
state to collect the past disputed bills through an automatic withholding of the
county revenue sharing and half -cent sales tax distributions.
For a complete and thorough background analysis along with a summary of HB
5301, please click here.
Since sine die, FAC legal staff has been hosting conference calls and
discussions with the county attorneys around the state concerning possible
litigation strategies. A Medicaid Legal Task Force, composed of county
attorneys, has been assembled for the purposes of: (1) providing a peer forum
for those counties which choose to administratively challenge the backlog
amount certified by AHCA as unpaid; (2) providing analysis and strategy on any
constitutional challenges to Ch. 2012 -33, Laws of Florida that are filed by FAC
and the counties, individually; (3) providing advice on the development of the
future administrative procedures for challenging AHCA statements by the
counties.
The law, Ch. 2012 -33, Laws of Florida, became effective upon the Governor's
signing of the HB 5301 and the law first begins to impact counties on May 1,
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4/24/2012 Item 16.K.2.
2012, with the first withholding from the counties' half cent sales tax distribution
later in May 2012.
Analysis:
There are several legal issues that arise from the passage of Ch. 2012 -33. Of
particular note is that the bill failed to achieve a 2/3 vote in either the House or
the Senate, thus, triggering three different paragraphs of the unfunded mandate
constitutional provision.
• Article VII, section 18(a): Need a 2/3 vote in both chambers and an
important state interest statement in order to require an expenditure of
cities and counties in order for those local governments to be bound by
the bill.
• Article VII, section 18(b), Florida Constitution prohibits the enactment,
amendment or repeal of any general law, without a 213 vote of each house
of legislature, when the anticipated effect is to reduce the authority that
cities or counties have to raise revenues, as such authority existed on
February 1, 1989.
• Article VII, section 18(c), Florida Constitution prohibits the enactment,
amendment or repeal of any general law that is anticipated to reduce the
percentage of a state tax shared with counties and municipalities as an
aggregate on February 1, 1989.
There are also other constitutional arguments that the county attorneys, FAC
legal staff, and special counsel are examining, analyzing, and evaluating. These
issues arise from the fundamental unfair and unequal positions that the bill
places counties. In addition, these issues address the authority that may not be
correctly being exercised at the agency level in implementing the cost share
requirement.
The arguments that are being analyzed are sound and well founded. While there
are never any guarantees of outcome, the arguments are strong.
As of April 11, 2012, there are four counties, Leon, Manatee, Pasco and Polk,
that have already voted to be named plaintiffs in a constitutional challenge on Ch.
2012 -33, Laws of Fla. If FAC decides to also be a named plaintiff, it is
anticipated that there will be more counties that come forward. Others have
already placed action on the authority to Join such a suit on their agendas for the
remaining weeks in April.
If the Board so authorizes, FAC staff proposes to hire special counsel to
represent the entire coalition of counties and FAC, allowing consistent, focused
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4/24/2012 Item 16.K.2.
and cost efficient advocacy. This is the model that the counties have used in
past pieces of litigation of statewide concern, with great success. If any appeal is
taken or deemed advisable, the Executive Committee would be briefed and
should be authorized to act on any recommended filing of an appeal.
FAC staff anticipates engaging two former county attorneys, Susan Churuti and
Tom Draoe, both with the firm of Bryant, Miller & Olive, to represent the coalition.
Both have worked with FAC, in their former capacities as county attorneys on
pieces of statewide litigation.
Division and Staff Person's Name:
Office of the General Counsel
Virginia °Ginger" Delegal
Fiscal Imoact:
Only the counties which choose to engage in a cost- sharing arrangement with
FAC and are therefore named plaintiffs would be responsible for a share of the
costs. To supplement this defense fund, it is recommended that FAC financially
contribute to the cost of the litigation, using funds drawn from FAC's legal reserve
fund for litigation of statewide impact.
While the actual cost of the litigation cannot be determined, it would be cost -
effective for FAC and all counties to work together in this suggested and tested
fashion. By sharing the cost among those plaintiff counties and FAC, the costs
for counties and ultimately the taxpayers are not only minimal but guaranteed.
All counties would be asked for a flat fee based off of population. FAC would pay
any and all shortfalls from these contributions.
• Large urban counties - $5,000
• Medium counties - $3,500
• Small rural counties - $1,000
Recommendation:
That the Board approve a motion to:
(1) authorize FAC to appear as a plaintiff challenging the constitutionality of
Ch. 2012 -33, Laws of Florida,
(2) authorize FAC to engage special counsel for the purpose of representing
FAC and Florida's counties, and
(3) authorize the use of the legal reserve fund for cases of statewide impact
for the purpose of contributing to the cost of such litigation, including any
approved appeals or defense therefrom, and
(4) authorize the Executive Committee to direct the filing of any appeals and
to engage special appellate counsel.
cAuseMcmostellerldropboAfinal medicaid bod agenda item.4.12.12.doc
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4/24/2012 Item 16.K.2.
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.K.2.
Item Summary: Request for authorization to join the Florida Association of Counties as a
plaintiff in litigation challenging the constitutionality of Chapter 2012 -33, Laws of Florida (HB
5301).
Meeting Date: 4/24/2012
Prepared By
Name: CrotteauKathynell
Title: Legal Secretary,County Attorney
4/16/2012 12:06:59 PM
Approved By
Name: GreenwaldRandy
Title: Management/Budget Analyst,Office of Management & B
Date: 4/16/2012 2:04:50 PM
Name: KlatzkowJeff
Title: County Attorney
Date: 4/16/2012 3:24:38 PM
Name: IsacksonMark
Title: Director -Corp Financial and Mgmt Svs,CMO
Date: 4/17/2012 10:56:28 AM
Packet Page -1286-
4/24/2012 Item 16.K.2.
Background Report for Agenda Item #1
FAC Board of Directors Meeting
April 12, 2012
County Medicaid Billing I HB 5301
Chapter 72 -225, Laws of Florida, created section 409.267, Florida Statutes, which
required county participation in the cost of certain services provided to county residents
through Florida's Medicaid Program. In 1991, section 409.267, Florida Statutes, was
repealed and replaced with section 409.915, Florida Statutes, which provides that the
state must charge counties for certain items of care and service. Counties are required
to reimburse the state for: 35% of the cost of inpatient hospitalization in excess of 10
days, not to exceed 45 days, with the exception of pregnant women and children whose
income is in excess of the federal poverty level and who do not participate in the
Medicaid medically needy program, and for adult lung transplant services; and 35% of
the cost of nursing home or intermediate facilities in excess of $170 per month, limited
to $55 per resident per month, with the exception of skilled nursing care for children
under age 21.
Counties are required to set aside funds to pay for their share of the cost of certain
Medicaid services based upon statements provided by the Agency for Health Care
Administration (AHCA). AHCA provides counties with a monthly bill listing Medicaid
residents for which the county is responsible for paying. Counties review the information
to verify the individuals' county of residence and determine whether the bill is accurate.
If the county determines that the bill is correct, it remits a payment to the AHCA that is
deposited into the General Revenue Fund.
If a county determines that an individual for which it has been billed is not a county
resident, the amount of the bill is denied and returned to AHCA. The AHCA researches
each rejected bill and provides additional documentation to the county to support Its
original determination of residency or identifies another county that should be billed.
This process continues until the county pays the bill, another county is billed for the
individual in question, or until AHCA determines that the cost cannot be billed to a
specific county. The majority of disputes with the AHCA are over determining the correct
county of residence.
As of December 31, 2011, unpaid billings from all counties totaled $325.5 million. For
the period from state fiscal year 1994 -1995 through 2006 -2007, county contributions to
Medicaid collections totaled approximately 93 percent of total billings in any fiscal year.
Each fiscal year since 2007 -2008, county contributions to Medicaid collections have
dropped to less than 90 percent of total billings, with only 64.7 percent of billings billed
in 2010 -2011 being paid in that year. The decline in amount of billings collected has
resulted in the backlog of past due billings.
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4/24/2012 Item 16.K.2.
So that the state would more guarantee collections from the counties, the legislature
enacted Ch. 2012 -33, and altered the billing and collection methods in significant ways.
The bill provides for the following changes to county contributions to Medicaid:
• Revises the methodology for determining a county's eligible recipients for the
purpose of county contributions to Medicaid.
• Identification of each county's eligible Medicaid recipients will be based on
information in the federally approved Medicaid eligibility system.
• Institutes a payment plan to eliminate the backlog of unpaid billings to counties
(from November 1, 2001 through April 30, 2012), over a five year period of time.
• Authorizes counties to dispute the total amount of past due billings in an
administrative hearing. Such an administrative proceeding is the exclusive
remedy for challenging the amount of past due billings. Counties that so
challenge will be billed for 100% of the total past due amounts that are certified
by AHCA. Whereas, counties that do not choose to dispute the total amount will
be billed for only 85% of the total past due amounts.
Authorizes, beginning in October 2012, the Department of Revenue (DOR) to
reduce each county's monthly County Revenue Sharing distribution by 1/36 of
the back log amount. Beginning October 2013, DOR will reduce the monthly
shared revenue distributions by 1/48 of 2/3 of the backlog amounts. The amount
of the reduction cannot exceed 50 percent of the monthly distribution, and must
leave sufficient revenue to service outstanding debt.
• Authorizes, beginning in May 2012, the state to reduce the portion of the sales
tax it shares with counties through the one -half cent sales tax sharing program
for future county billings. The amount of the reduction will be equal to the monthly
amount billed by AHCA. The reduction must leave sufficient revenue to service
outstanding debt.
• Counties may request refunds of billed amounts they believe are incorrect.
Directs AHCA, in consultation with DOR and the Florida Association of Counties,
and subject to certain requirements, to develop a process for refund requests
from counties. Beginning in Fiscal Year 2013 -2014 through Fiscal Year 2020-
2021, amounts withheld from revenue sharing /half -cent tax distributions will be
transferred to the Lawton Chiles Endowment Fund, to the extent that they exceed
the official estimate for reimbursements from counties as adopted by the January
12, 2012 Revenue Estimating Conference until $350 million is reached.
Packet Page -1288-
Counties agree to sue over state Medicaid repayment law Tampa Bay Times 4/24/2012 Item 16.x.2.
tampabay.cum Know it now
Counties agree to sue over state Medicaid
repayment law
By Brittany Alana Davis, Times/Herald Tallahassee Bureau
Published Thursday, April 12, 2012
TALLAHASSEE — The Florida Association of Counties said Thursday that it will sue the state over a new law that requires
counties to pay $323.5 million in disputed Medicaid bills.
Pasco, Polk, Manatee and Leon counties vowed to join the suit in an effort to reverse the law, which requires counties to
pay millions of dollars in backlogged bills. Others may follow.
The counties blame the debt on glitches in the state software system that led to thousands of errors and duplicate invoices.
"From the outset, we've said that local taxpayers shouldn't be forced to pay for Tallahassee's accounting errors," said Chris
Holley, executive director of the Florida Association of Counties. "And to ensure that they are not, we will be pursuing legal
action."
The board voted unanimously in favor of the suit during a conference call with attomey Ginger Delegal, who discussed the
counties' legal standing. The call was closed to the media.
The problem stems from an agreement between the state and the counties to split long -term hospital care and nursing
home bitis for patients on Medicaid, the health care program for the poor and disabled.
The state has the authority to withhold its share of funding to recoup the money it says the counties owe. The law allows
the state's 67 counties to pay back only 85 percent 'of their debt but will hold them responsible for the entire bill if they
contest.
Florida Association of Counties spokeswoman Cragin Mostseller said the suit will likely pin on a provision in the state
Constitution that protects counties from "unfunded mandates."
In other words, Florida can't reduce the percentage of taxes it shares with the counties without a two- thirds vote in the
House and Senate, a threshold neither chamber achieved.
Florida counties and members of the tea party lobbied hard against the bill, accusing the state of refusing to fix its own
errors and balancing its budget on the backs of counties,
When Gov. Rick Scott signed the bill two weeks ago, he took the unusual step of submitting a letter to the secretary of state
and ordered officials with the Agency for Health Care Administration, which oversees Medicaid, to travel to every county to
discuss billing issues.
The letter does not allude to a specific plan to fix the billing system, but Scott assured the counties that they will only be
required to pay what is due.
Some of the counties have money in reserves, but others may have to raise taxes or trim expenses, The Tampa Bay Times
reported Thursday, for example, that the law may force Pasco County, already facing a $5.3 million shortfall, to find another
$3.5 million for the unexpected Medicaid expenses.
That's not fair, said Henry Kelley, legislative liaison for the Tea Party Network.
Packet Page -1289 -
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Counties agree to sue over state Medicaid repayment law - Tampa Bay Times 4/24/2012 Item 16.x.2.
"The state gets to have a nice press conference that says, yeah, we balanced our budget," he said. 'But from the taxpayer
perspective, you just shifted the cost around."
Brittany Aisne Davis can be reached at bdavrs @tampabay.com.
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