OFFICE OF THE CITY COUNCIL
117 WEST DUVAL STREET, SUITE 425
4TH FLOOR, CITY
HALL
JACKSONVILLE, FLORIDA 32202
904-630-1377
Joint Rules Committee and Finance
Committee Workshop Minutes
June 9, 2016
3:00 p.m.
Location: Lynwood
Roberts Room, 1st Floor, City Hall – St. James Building; 117 West
Duval Street
In attendance:
Finance Committee: Council Members Bill Gulliford (Chair), Anna Lopez Brosche, Danny
Becton, Aaron Bowman, Lori Boyer, John Crescimbeni, Reggie Gaffney
Rules Committee:
Matt Schellenberg (Chair), Jim Love, Anna Lopez Brosche, Doyle Carter (arr.
3:10), Garrett Dennis, Tommy Hazouri, Sam Newby
Also:
Council
Members Joyce Morgan, Scott Wilson and Greg Anderson (arr. 3:28); Jason Gabriel,
Stephen Durden and Peggy Sidman - Office of General Counsel; Jeff Clements –
Council Research Division; Kyle Billy – Council Auditor’s Office; Jordan
Elsbury – Mayor’s Office
See attached sign-in sheet
for additional attendees.
Meeting Convened: 3:02 p.m.
Chairman Schellenberg
convened the meeting and the attendees introduced themselves for the record.
General Counsel Jason Gabriel distributed a page of proposed Finance Committee
amendments to pending Ordinance 2016-370. Council Member Bowman, the sponsor of
the ordinance, explained that he proposed the bill for purposes of job creation
and enhanced City revenue, which have been estimated at $5 million per year
based on the proposal for 1.5% of gross revenues on slot machine operations.
Paul Harden representing Jax
Greyhound Racing, the current pari-mutuel gaming operator in the city, stated
that 6 other counties have approved slot machine referenda, the effectiveness
of which are pending the outcome of a pending case in the Florida Supreme Court
challenging the authorization language in the Florida Statutes. Mr. Harden
stated that there can only be one slot machine operation in a county. Jax
Greyhound Racing does not seek expedited consideration of the bill – regular
consideration will get the bill in position for the referendum to be held at
the November general election.
In response to a question
from Council Member Becton, Mr. Harden explained the basis of the lawsuit
currently pending before the Florida Supreme Court, oral argument for which was
held this week. The case arose in Gadsden County regarding the right of that
county to authorize slot machines in its pari-mutuel licensed gambling
facility. In response to a question from
Council Member Crescimbeni, Mr. Harden said that the proponents want the
referendum to occur by the end of this year before the Florida Legislature’s
next session where the Legislature could potentially amend the statute to
prevent further county referenda authorizing additional slot machines in other
counties.
In response to a question
from Council Member Boyer, General Counsel Jason Gabriel stated that one of the
proposed amendments is intended to say that City Council has the right to hold
a referendum on any subject and is not intended to imply that the City sides
with the City of Gretna in the pending Supreme Court case. Chief Assistant
General Counsel Stephen Durden stated that another proposed amendment is worded
to say the City “may” impose the 1.5% of gross revenues fee rather than “shall”
so as to be clear that the referendum and implementation of slot machine gaming
cannot be conditioned upon the receipt of the 1.5% payment; it is an offer of a
gratuity, not an absolute requirement of the proponent pari-mutuel facility.
There is no provision in state law for payment by the pari-mutuel operator to
the city or county government for such operations. Council Member Crescimbeni
questioned whether the payment to the City from the slot machine gaming should
be commingled with the revenue into the trust fund created when the poker room
was first permitted to provide improvements for the vicinity of the building.
Council Member Boyer asked
for assurance from Mr. Gabriel that the City would not be entangled in a costly
lawsuit as a result of determining to put this question on the ballot for the
voters to decide. Mr. Gabriel suggested that any sort of hold-harmless
agreement or indemnification with a proponent for the measure should be the
subject of a separate agreement and not tied to the pending legislation. Ms.
Boyer wants assurance that the proponents will fight the litigation and not
drag the City into an expensive legal battle over the intent of the state law
in question. Mr. Harden stated that Jax Greyhound Racing would take the lead in
any litigation and would reimburse the General Counsel’s Office for any
reasonable expenses, subject to an agreed upon cost cap.
Mr. Harden stated that his
client is happy to have the 1.5% of gross revenues payment be mandatory rather
than optional, but understands the General Counsel’s Office’s rationale for
preferring the optional. In response to a question from Council Member Lopez
Brosche, Mr. Harden stated that Jax Greyhound Racing’s live racing is conducted
at the Orange Park track and the poker room on Monument Road has been in
operation since 2012. Council Member Gulliford felt that the ordinance should
not make any reference to the optional 1.5% gross revenue contribution, which
he believes would muddy the waters and potentially open up an avenue for
litigation if the optional payment is not made in the future. Council Member Dennis
suggested the need for the City to tighten up its regulation of the current
internet cafes so that there is no implication that the referendum in any way
permits the gambling that some contend goes on in those facilities. Mr. Gabriel
said that the two issues are separate and the City needs to do a better job of
enforcing the current regulations on internet cafes. Any slot machines
operating in the county today are by definition illegal.
In response to a question
from Council Member Hazouri, Mr. Harden confirmed that none of the 1.5%
voluntary payment would be directed to the School Board. He also stated that
the current Best Bet facility on Monument Road could only be moved to another
location with the proper zoning following the normal processes. In response to
a question from Council Member Morgan about the future oversight of the
facility, Mr. Harden said that the gaming operations are closely regulated by
the state. Non-gaming factors (land use, traffic, etc.) are all subject to the
normal City regulations and ordinances applying to any property or business.
Ms. Morgan noted that the Regency Square area where the Best Bet facility is
located has experienced an economic decline and needs quality development and
quality jobs. The Best Bet facility has been a good corporate citizen and
community supporter since its opening.
In response to a question
from Council President Anderson, John Lockwood representing Jax Greyhound
Racing stated that all regulation of the gambling at the facility will be done
by the Pari-Mutuel Wagering Division of the Florida Department of
Business and Professional Regulation. No new pari-mutuel facility can be
located within 100 miles of the existing Best Bet facility on Monument Road, so
there can be no other license granted in Jacksonville. Council President
Anderson asked questions about the zoning classifications where pari-mutuel
operations could be located; Mr. Lockwood stated that if the Best Bet facility
wished to relocate, the operator would have to receive permission from the
Pari-Mutuel Wagering Division in addition to the City’s control over the zoning
of the proposed new location. Aside from the tribal gaming facilities that have
different rules than non-tribal facilities, the proposed 2,000 slot machines at
the Best Bet facility would be the largest slots operation in the state (as the
Best Bet is already the largest poker room). In response to a question from Mr.
Anderson, Mr. Harden stated that none of the 6 counties that have passed slot
machine referenda have any automatic sunset language.
In response to a question
from Council Member Becton, Mr. Harden said that Jax Greyhound Racing is in
discussion with St. Johns County about holding a similar referendum to allow
slot machines in that county, although at a different location than the current
dog track on Racetrack Road (further south so as not to compete with the card
room and potential slot machine operations in Jacksonville). Mr. Lockwood
stated that the Jacksonville and St. Johns County pari-mutuel licenses were
issued many years ago and are grandfathered in with regard to the 100 mile
separation requirement. No new licenses could be issued in either Jacksonville
or St. Johns County with the current separation requirement. Mr. Harden agreed to provide information to
the Council Auditor’s Office about how the existing slot facilities in South
Florida pay their percentage fees to their counties (Quarterly? Annually? How long after the close of the quarter or fiscal
year? How is the payment audited?).
Mr. Harden offered to meet
with any council member to answer any questions they may have in the next
couple of weeks before the council takes up the issue again.
Meeting Adjourned: 4:30 p.m.
Minutes: Jeff Clements, Council Research Division
6.9.16 Posted
5:00 p.m.
Tapes: Special Committee on Solid
Waste – LSD
6.9.16