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