Okaloosa County BOCC — October 13, 2016 — I. a. Administration of TDT Collections — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: October 18, 2016 TO: Honorable Chairman and Members of the Board FROM: John Hofstad, County Administrator SUBJECT: Update on Administration of Tourist Development Tax DISTRICT: All DEPARTMENT: County Administration STATEMENT OF ISSUE: The Board previously directed staff to review options related to the administration of Tourist Development Taxes. BACKGROUND AND ANALYSIS: HISTORY The County began levying Tourist Development Taxes (the “TDT”) in 1989 and the Department of Revenue (the “DOR”) administered the TDT collections on behalf of the County. Pursuant to Ordinance No. 89-23, DOR was authorized “under the applicable rules of the Career Service Commission, to employ persons and incur other expenses as appropriated by the legislature of the State of Florida to administer this ordinance.” The DOR administered TDT collections from 1989 to 1992, at which time the Okaloosa County Clerk of Court took over the administration of TDT collections. In 2013 the Okaloosa County Tax Collector requested that the Board transfer such duties and responsibilities from the Clerk of Court to the Tax Collector. As a result, in April 2013 the Board adopted Ordinance No. 13-19 authorizing the Tax Collector to begin administering TDT collections on behalf of the County effective October 1, 2013. Since 2013 the Tax Collector has continued to administer TDT collections at a rate of 3% of total TDT collections. Based on information provided by the Tax Collector at the September 22nd TDC meeting, annual increases in TDT collections and Tax Collector’s fees are as follows: YEAR TDT Collected Tax Collector’s Fees 2013 $13,523,219.59 $405,696.59 2014 $14,786,891.31 $443,606.74 2015 $16,715,554.33 $504,466.63 1 CURRENT STATUS On June 23, 2016, the TDC voted to recommend revisions to the Tourist Development Plan, which among other things, proposed limiting the Tax Collector’s costs of administering TDT collections to actual costs not-to-exceed three percent of collections to conform with the requirements of Florida Statutes. On August 2, 2016, the Board adopted Ordinance No. 16-13, which authorizes the Tax Collector to retain up to three percent of costs of administration as set forth in Florida Statutes. The Board also requested that the Clerk review the costs of administration incurred by the County for TDT collection services. In a letter, dated August 9, 2016, the Tax Collector notified the Chairman of the Board that his office would work with the County, but if the parties were unable to reach a mutually beneficial agreement his office would discontinue their services in the collection, enforcement and audit of TDT effective March 31, 2017. A copy of the letter is attached. Also attached are a few options for the administration of TDT collections. In the event TDT collection services are transferred, it is anticipated that a 90-day transition period will be necessary. This matter will be presented to the TDC at its October 13, 2016 meeting for a recommendation to the Board. OPTIONS: Provide Staff Direction. RECOMMENDATION: Provide staff direction related to the administration of TDT collections. 2  OPTIONS FOR TDT COLLECTIONS 1. SELF ADMINISTRATION. The County may administer TDT collections by: a. Performing it in-house utilizing county staff; or b. Entering into an agreement with the Tax Collector or Clerk of Court. 2. DOR ADMINISTRATION. The County may authorize DOR to administer TDT collections whereby: (Note: the audit function referenced herein shall in no way interfere with the Clerk’s statutory authority to audit TDT collections) a. DOR handles all collections, enforcement and audit of TDT; or b. DOR handles the collections, while the County:  Performs enforcement/audit utilizing county staff; or  Engages an individual/entity to perform enforcement/audit. Currently, DOR does not charge for the costs of administration. However, under Florida Statutes, they are authorized to incur expenses not to exceed three percent of TDT collections. DOR mirrors its TDT collection process through its collection of sales tax and has greater enforcement power with the ability to bring criminal charges. Under any of the above scenarios, the Board should anticipate a 90-day transition period if it becomes necessary to transfer the services of TDT collections. SURVEY OF FLORIDA COUNTIES Of the 67 counties in Florida, TDT collections are administered by:  Tax Collector in 32 counties  DOR in 22 counties  Clerk of Court in 8 counties  5 counties do not levy TDT