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1 DIVISION OF HOTELS AND RESTAURANTS ADVISORY COUNCIL MEETING Monday, January 26, :00 a.m. 11:00 a.m. Department of Business and Professional Regulation Northwood Centre DBPR Board Room 1940 North Monroe Street, Tallahassee, FL Conference Call #: 1(888) , Conference Code: # MEMBERS: Gregg Nicklaus, Council Chair, Sirata Beach Resort; George E. Glover, Council Vice Chair, BayStar Hotel Group; Christina Johnson, On 3 Public Relations; Scott Justice, Walt Disney World; Rebecca Kelly, Street Chefs; Trey Goldman, Florida Association of Realtors, Dr. Jane Boyd Ohlin, Dedman School of Hospitality, Florida State University; Josh Gold, Florida Apartment Association; Carol B. Dover, Florida Restaurant & Lodging Association; Paul Hayes, Florida Vacation Rental Managers Association. * * * * * AGENDA * * * * * I. CALL TO ORDER A. Opening Remarks Gregg Nicklaus, Council Chair B. Roll Call Suzanne Keele, DBPR C. Introduction of Guests Gregg Nicklaus, Council Chair II. III. IV. ELECTIONS * * New Chairperson will now facilitate the meeting.* * REVIEW and APPROVAL OF MINUTES (Handout A) Chair DIVISION UPDATE A. Financial Report (Handout B) Larry Hurley, DBPR B. Division Report Diann Worzalla, Director Inspection Staff Retention Proposal (Handout C) C. Rules and Legislative Update (Handout D) Michelle Comingore, DBPR D. Operations and Support Guidelines Steven von Bodungen, Chief V. INDUSTRY UPDATE A. Florida Apartment Association B. Florida Association of Realtors C. Florida Restaurant & Lodging Association D. Florida Vacation Rental Managers Association VI. VII. VIII. OLD BUSINESS A. NEW BUSINESS Other issues open discussion Schedule next meeting/conference call ADJOURN

2 Handout A MINUTES Florida Department of Business and Professional Regulation Division of Hotels and Restaurants Advisory Council Meeting 1940 North Monroe Street Tallahassee, FL January 13, 2014 CALL TO ORDER The meeting was called to order by John Sebree, chair, at 9:02 a.m. ROLL CALL The roll was taken by Ms. Suzanne Keele, H&R staff, with the following members present: Eric Martin Carol Dover Christina Johnson Renee Yuen John Sebree Gregg Nicklaus Dr. Jane Boyd Ohlin George Glover OTHER ATTENDEES: Diann Worzalla, Division Director Rick Akin, Division Deputy Director Steve von Bodungen, Chief, BSSI Michelle Comingore, Division Rules Coordinator Michelle Haynes, Deputy Chief, BSSI Chris Carson, BSSI Marc Drexler, OGC Suzanne Keele, Division HR Liaison Larry Hurley, Finance and Accounting Susan McKinley, FRLA Geoff Luebkemann, FRLA A quorum for the meeting was confirmed and the chairman proceeded to the agenda. NOMINATIONS Chairman Sebree opened the floor for chair and co-chair nominations to the council. Motion: Motion: George Glover nominated Gregg Nicklaus as chair. Carol Dover nominated George Glover as vice-chair. Chairman Sebree called for nominations of other members and hearing none, the nominations passed unanimously. Mr. Nicklaus was not present during nomination procedures therefore vice-chair George Glover maintained the floor and proceeded with the agenda. APPROVAL OF MINUTES Mr. Glover opened the floor for review and approval of the January 22, 2013 meeting minutes. Motion: Second: Eric Martin made a motion for the minutes to be approved as submitted. Renee Yuen seconded the motion and the motion passed unanimously. DIVISION UPDATE Diann Worzalla, Division Director Director Worzalla gave a brief overview of the division s accomplishments for the past year. In 2013 the division adopted the 2009 food code, implemented the ipad technology, received (29) replacement vehicles for field staff which is now a reoccurring budget item for the division, added 11 staff positions to bring the total staff to 307, and for the first time in the last six years, all State of Florida employees received a pay raise. Division of Hotels and Restaurants Advisory Council Meeting January 13, 2014 Page 1 of 4

3 Division-wide there are fewer positions overall than 17 years ago but the division has had a 34.7% increase in licensed accounts, for both food lodging and elevators during this 17 year period. Approximately 65% to 70% of the field staff has vehicles assigned to them but that number should increase as additional cars and replacement cars are added through the legislative budget process. Looking forward to the coming year, the division is implementing a risk based frequency inspection program, which will only apply to food service for right now. The division has been submitting Davis Productivity Award nominations for the past 17 years and will be receiving its 100 th Davis Productivity Award this year. This equates to over $62 million in cost savings or recurring cost avoidance to the State of Florida. H&R continues to experience an unacceptably high turnover rate among field staff of 19%, which costs the program more than $2 million dollars a year in annual training expense. In addition, the current position classification and performance system for the food and lodging inspection program is over 20 years old. The division has been unsuccessful in the past at getting better pay for the inspectors, so Director Worzalla is approaching this issue differently this year. The State of Florida is in the process of getting all agencies on the same annual evaluation reporting period and the way employees are evaluated has also changed. Therefore, the division is taking this opportunity to develop expectations that are updated, more job classification appropriate, and meet the Department of Management Services SMART methodology (Specific, Measurable, Achievable, Relevant and Time-Bound). To address the retention problem, meet the new SMART expectations, and reflect current duties, the division is developing a plan to update the >20 year old classification system for its professional inspection staff. Director Worzalla has the support of administration on this plan, but this will take a legislative budget amendment to demonstrate the pay to be substandard for the work that is being performed. George Glover asked if we were able to isolate the reason for the turnover rate within the division and Director Worzalla indicated we are tracking this and, to date, the majority of resignations are due to accepting jobs in private industry or other state agencies for better pay. At this time Mr. Gregg Nicklaus joined the meeting and as the newly elected chairman retained the floor to proceed with the agenda. Financial Report Larry Hurley Finance and Accounting Mr. Hurley provided the council with financial spreadsheets showing prior years as a reference point to demonstrate where the division has been and where the division is headed. Mr. Hurley reviewed the projections, actual expenditures and revenue for the period June 30, 2008 through June 30, Revenues remain consistent and expenditures increased over $1 million the last fiscal year, largely due to a department project that required all licensees due a refund be reimbursed any overpayments. Expenditures are running about the same from year to year minus the refund project that is now complete. Transfers in the last fiscal year amounted to $5 million dollars and was swept to general revenue and $2 million for the Visit Florida campaign. Rules Update Michelle Comingore Division staff Ms. Comingore reported in 2013 the division adopted six food and lodging amendments and three elevator amendments; a 50% reduction from For the upcoming year the division will continue to implement statutory changes from previous legislative sessions including remedial education from Division of Hotels and Restaurants Advisory Council Meeting January 13, 2014 Page 2 of 4

4 compliance cases and risk based inspection frequency. The division is also working to update food code references, ensure current forms are adopted in rule, and add statute and rule violation descriptions to disciplinary guidelines. Active elevator rule amendments include safety inspection requirements, continuing education course applications and general authority updates and corrections. For the upcoming 2014 legislative session Ms. Comingore will be monitoring bills for impact on the division but the division is not actively pursuing any legislative proposals this year. Instead the focus will be on efforts to implement the risk based inspection rule passed last year. Risk Based Inspection Frequency Update Steven von Bodungen - DBPR staff Mr. von Bodungen reviewed the risk based inspection categorization for the four different levels of risk that are being used to measure food service establishments during the inspection process. This process will become effective July 1, Initial classifications and annual reclassifications will be completed in July of each year beginning in New licenses are being classified based on information from the application and verified upon the first inspection. The division anticipates full implementation of this process by July 1, IPad/Technology Update Michelle Haynes DBPR staff Ms. Haynes reviewed the changes in technology the division has made since November 2012; specifically, the IPad inspectors currently use to perform inspections. The enhancement capability with the IPad includes capability and continuous internet access. Ms. Haynes gave a brief demonstration on how the technology functions in the field and the different screens an inspector uses during the inspection process. Another updated tool the division has acquired is the thermal printer now used to print the inspection report upon completion. The thermal printer uses special printing paper and because of its small size is much less cumbersome than the printers inspectors had to carry around previously. The printer is necessary because the division is required by statute to leave a printed copy of the inspection report with the customer at the end of the inspection. INDUSTRY UPDATE Marjorie Cook Florida Apartment Association No report not in attendance John Sebree - Florida Association of Realtors The most recent home sale statistics show 26 months in a row of increased home prices in Florida in addition to the number of home sales. However, there is some cause for uncertainty due to the flood insurance issue within the state. Sellers can t sell or buyers aren t interested in buying homes that may have to have flood insurance until the issue of what is going to happen with flood insurance cost is decided. The Association s top legislative issue for this year will be reducing the sales tax on commercial rent. Florida is the only state in the nation that currently pays sales tax on rent. The tax has recently been reduced from a 6% sales tax to a 5% sales tax and Mr. Sebree is hoping this rate will be reduced further in future years if the budget allows. Geoff Luebkemann Florida Restaurant and Lodging Association Tourism marketing continues to be a big ticket item for the Association again this year. FRLA partnered with Visit Florida on marketing campaigns last year, which led to seven events and Division of Hotels and Restaurants Advisory Council Meeting January 13, 2014 Page 3 of 4

5 festivals around the state. The Association also had a very successful first season with the Emeril Legasse cooking shows last year and there will be a repeat of those shows again this year. On the to-do list for this year is the school to career programs and the Association continues to oppose any expansion of gambling in the state that threatens the family friendly destination in Florida. They also continue to support Governor Scott s efforts to bring more visitors to Florida. Last year the state had over 92 million visitors and Governor Scott has proposed an increase in the Visit Florida budget to $100 million with the goal to get 100 million visitors this year. FRLA will continue to support the division as it continues to do an amazing job with the technology and resources they have to do their job. Brad Lear Florida Vacation Rental Managers Association No report not in attendance OLD BUSINESS None. NEW BUSINESS Eric Martin noted that if it would be possible to set up something where the callers would be able to view the presentations as they are given he would like to see that happen in the future if possible. NEXT MEETING Director Worzalla indicated that the council will continue to be apprised with s throughout the year and suggested polling the council after the legislative session to see if there would be a need to meet prior to January ADJOURNMENT Having no other business, the meeting was adjourned at 10:33 a.m. Division of Hotels and Restaurants Advisory Council Meeting January 13, 2014 Page 4 of 4

6 Handout B HOTELS AND RESTAURANTS STATEMENT OF REVENUE AND EXPENDITURES JUNE 30, 2014 HOSPITALITY HOTELS AND EDUCATION RESTAURANTS ELEVATORS PROGRAM REVENUES Fees and Charges $ 2,363, $ 4,707, $ 982, $ 8,053,615 $ Licenses 20,393, ,393,182 Fines 1,461, , ,489,616 Investment Earnings 64, , , ,980 Refunds 104, , , ,616 Miscellaneous Revenue 843, , ,578 Total Revenues 25,231,972 4,780, ,306 31,009,587 EXPENSES Division Office Division Administrative Office 17,095, ,620, , ,491,382 Service Charge to General Revenue 1,936, , , ,391,432 Refunds 306, , ,586 Service Operations Central Intake/Licensure 123, , ,746 Call Center 476, , ,813 Bank Charges 82, , ,093 Department Administrative Costs - Administration 954, , ,469,087 Information Technology 1,134, , ,745,058 General Counsel/Legal 187, , ,672 Total Expenses 22,298,734 4,591, ,214 27,744,869 Excess (Deficiency) of Revenues Over (Under) Expenses 2,933, , ,092 3,264,718 TRANSFERS Transfer of Excess Cash to General Revenue - - Transfer to Visit Florida - Total Transfers CHANGE IN ACCOUNT BALANCE 2,933, , ,092 3,264,718 ACCOUNT BALANCE, Beginning of Period 5,461, ,592 1,161,097 6,741,641 ACCOUNT BALANCE, End of Period $ 8,395,190 $ 306,981 $ 1,304,189 $ 10,006,359 $

7 STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION HOTELS AND RESTAURANTS OPERATING ACCOUNT ACTUAL REVENUES AND EXPENSES AND CHANGES IN ACCOUNT BALANCE FISCAL YEARS ENDING JUNE 30, 2008 THROUGH JUNE 30, 2014 REVENUE JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE Fees and Charges $ 7,807,178 $ 8,080,318 $ 7,682,125 $ 7,770,156 $ 7,691,230 $ 7,667,628 $ 8,053,615 Licenses 19,013,481 19,028,667 19,178,841 19,443,494 20,112,218 19,940,954 20,393,182 Fines 2,722,170 3,300,533 4,371,406 2,354,964 1,355, ,322 1,489,616 Investment Earnings 1,173, , , , , ,438 81,980 Refunds 50,424 85, ,089 8,099 10,314 39, ,616 Transfers In (AB&T Catering Licenses) 156, , , , , , ,530 Miscellaneous Revenues 219, , , ,338 (5,427) 536, ,048 Total Revenue 31,142,556 32,119,620 32,540,398 30,772,121 29,736,881 29,629,186 31,009,587 Actual EXPENSE Division Office Division Administrative Office 18,423,760 18,912,348 17,686,070 18,008,812 18,350,342 18,614,885 19,991,382 Service Charge to General Revenue 2,238,883 2,344,750 2,517,440 2,487,561 2,391,940 2,279,643 2,391,432 Refunds 67, , , , ,851 1,069, ,586 Service Operations - Central Intake 619, , , , , , ,746 Call Center 39, , , , , , ,813 Bank Charges 88,433 94,093 Department Administrative Costs - Administration 1,577,042 1,961,195 1,206,720 1,519,374 1,405,903 1,445,369 1,469,087 Information Technology 1,557,095 2,019,461 2,469,143 1,977,273 1,934,280 1,876,728 1,745,058 General Counsel/Legal 361, , , , , , ,672 Total Expense 24,885,330 26,635,353 25,205,820 25,417,501 25,575,901 26,523,494 27,244,869 Excess (Deficiency) of Revenues Over (Under) Expenses 6,257,226 5,484,267 7,334,578 5,354,620 4,160,980 3,105,692 3,764,718 TRANSFERS Transfer Excess Cash To General Revenue 18,000,000 5,000,000 5,000,000 8,400,000 5,000,000 Transfer to Visit Florida 700,000 2,000, ,000 Total Transfers - 18,000,000 5,000,000 5,700,000 8,400,000 7,000, ,000 CHANGE IN ACCOUNT BALANCE 6,257,226 (12,515,733) 2,334,578 (345,380) (4,239,020) (3,894,308) 3,264,718 ACCOUNT BALANCE, Beginning of Period 19,144,277 25,401,503 12,885,770 15,220,348 14,874,968 10,635,948 6,741,641 ACCOUNT BALANCE, End of Period $ 25,401,503 $ 12,885,770 $ 15,220,348 $ 14,874,968 $ 10,635,948 $ 6,741,641 $ 10,006,359

8 "New Hires" Sanitation Safety Specialist by Fiscal Year (7/1 through 6/30) Division of Hotels Restaurants Bureau of Sanitation Safety Inspections Total Authorized FTE "New Hires" Sanitation Safety Specialist Sanitation Safety Specialist % Fiscal Year (Class Code 8888) Staff (Class Code 8888) 2008/ % 2009/ % 2010/ % 2011/ % 2012/ % 2013/ % Handout C What Does This Mean? During the course of the past six fiscal years (from FY through FY ), the division has hired 181 Sanitation Safety Specialists. This is 126% replacement rate of the 144 total authorized FTE for class code These entry level positions are the foundation of the division's food safety and lodging inspection program % 30.00% 25.00% Percentage of Sanitation Safety Specialists Hired by Fiscal Year 26.06% 23.94% 31.25% 20.00% 15.00% 10.00% 10.96% 16.90% 17.61% 5.00% 0.00% 2008/ / / / / /14 Source: PeopleFirst "New Hires Report" for Class Code 8888 on 12/30/2014 individually generated by each Fiscal Year

9 Division of Hotels and Restaurants Trust Fund Balance by Fiscal Year $44.6 Million transferred to General Revenue and Visit Florida over the past six years $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 $18,000,000 $12,885,770 $5,000,000 $15,220,348 $700,000 $5,000,000 $14,874,968 $8,400,000 $10,635,948 $2,000,000 $5,000,000 $6,741,641 $500,000 *Projected $500,000 $10,006,359 $13,202,787 $16,943, / / / / / /14 *2014/15 *2015/16 Fiscal Year Ending Trust Fund Balance Transfer to General Revenue Transfer to Visit Florida

10 BSSI Inspector Performance Based Incentive Timeline MILESTONE 1 ONE-YEAR ANNIVERSARY 10% FOR COMPLETION OF PROBATIONARY PERIOD; TRAINING, CERTIFICATIONS, AND FDA STANDARDIZATION $34, CAREER PATH START; HIRE AT BASE RATE $30, MILESTONE 2 FOUR-YEAR ANNIVERSARY 7% FOR COMPLETION OF RE- STANDARDIZATION $36, MILESTONE 3 SEVEN-YEAR ANNIVERSARY 7% FOR COMPLETION OF RE- STANDARDIZATION $39, /1/2016 7/1/2017 7/1/2018 7/1/2019 7/1/2020 7/1/2021 7/1/2022 7/1/2023 Division Goal: Increase Employee Retention by Implementing an Incremental Salary Adjustment to Build and Retain a Quality Inspection Team DATE July 1, 2016 July 1, 2017 July 1, 2020 July 1, 2023 MILESTONE Career Path Start; Hire at Base Rate $30, Milestone 1 One Year Anniversary 10% for completion of probationary period; Training, Certifications, and FDA Standardization $34, Milestone 2 Four Year Anniversary 7% for Completion of Re Standardization $36, Milestone 3 Seven Year Anniversary 7% for Completion of Re Standardization $39, Inspectors hired prior to 7/1/2016 will receive salary adjustments based on years of service in the above timeline. Additional Career Path/Incentives for all Inspection Staff, Plans Examiners, Settlement Officers, and FDA Trainers include the following non mandated national credentials: 3% increase for achieving and maintaining certification as Certified Professional Food Safety 5% increase for achieving and maintaining

11 Handout D THE RULE ADOPTION PROCESS Public Hearing on the Rule Statement Estimated Regulatory Cost Workshop on Rule DOAH Administrative Determination Rule Development Notice Published F.A.R. Notice of Rule Special Proceedings if Requested in 21 Days: Materials to JAPC at least 21 days before Adoption Notice of Changes to JAPC & Published 21 days before Adoption Rule filed for Adoption between 28 Days and 90 Days after Notice Rule Effective 20 Days Later OPTIONS REQUIRED STEPS As Presented to the House Rulemaking Oversight & Repeal Subcommittee, January 24, 2013, by Ken Plante, Coordinator of the Joint Administrative Procedures Committee.

12 Updated: 1/13/2015 Food and Lodging Rule Adoption Status 1 Active Rule Promulgations Rule # Description Current Action Next Step FAW Publications HRAC Notice TBD 61C-4.010, 61C & 61C C C Implement remedial education component of Adopt current forms, update Food Code references and conform to Food Code Update disciplinary guidelines and adopt F.S. and F.A.C. violation lists Adopt current forms and conform to Food Code Workshop(s) Draft language/step 1 Step 1 Draft language Draft language Workshop, if requested Workshop: 7/22/11 Wkshop: 7/27/11 OFARR: 1/6/15 Step 1: 1/15/15 Step 1: 1/13/15 KEY: Step 1 Notice of Proposed Rule Development NOC Notice of Change SERC Statement of Estimated Regulatory Cost Step 2 Notice of Proposed Rule WD Notice of Withdrawal FAW Florida Administrative Weekly Step 3 File for Adoption Draft Draft Language Provided HRAC Hotels and Restaurants Advisory Council OFARR Office of Fiscal Accountability and Regulatory Reform

13 Updated: 1/13/2015 Food and Lodging Rule Adoption Status Adopted Within Previous Twelve Months 2 Rule Summary of Changes Date Effective 61C Adopt a risk-based inspection frequency for all public food service establishments, describe when inspection frequencies will be assigned and reassessed, define the annual inspection cycle, and adopt updated temporary event application forms. Filed for Adoption: May 14, 2014 July 1, 2014 Implement Timeshare Project license component of Add timeshare project licenses 61C-1.002, to the application requirements, licensing classifications, operator responsibilities, specified 61C & sanitation and safety exemptions, and the license fee schedule, and adopt updated applications November 20, C for vacation rental, timeshare project, and food service licenses. Filed for Adoption: October 31, 2014 Implement Timeshare Project license component of Exempt timeshare project 61C licenses from the glassware, tableware, and utensil requirements, unless the licensed establishment provides the listed services. November 20, 2014 Filed for Adoption: October 31, C Correct rule subsection references that apply to hot dog carts. Filed for Adoption: December 17, 2014 January 6, 2015 KEY: Step 1 Notice of Proposed Rule Development NOC Notice of Change SERC Statement of Estimated Regulatory Cost Step 2 Notice of Proposed Rule WD Notice of Withdrawal FAW Florida Administrative Weekly Step 3 File for Adoption Draft Draft Language Provided HRAC Hotels and Restaurants Advisory Council OFARR Office of Fiscal Accountability and Regulatory Reform

14 Updated: 1/7/2015 Bureau of Elevator Safety Rule Adoption Status Page 1 of 2 Active Rule Promulgations Rule # Description Current Action Next Step FAR Publications ESTAC Notice 61C Requirements for safety inspections Step 1 Workshop, if requested OFARR: 6/14/13 Step 1: 6/24/13 OFARR: Step 2: Step 1: 6/21/13 Step 2: 61C C Amend citation form and disciplinary options Adopt periodic test witness forms to comply with A17 Draft language Step 1 Draft language Step 1 KEY: Step 1 Notice of Proposed Rule Development NOC Notice of Change SERC Statement of Estimated Regulatory Cost Step 2 Notice of Proposed Rule WD Notice of Withdrawal FAR Florida Administrative Register Step 3 Adoption Draft Draft Language Provided ESTAC Elevator Safety Technical Advisory Council OFARR Office of Fiscal Accountability and Regulatory Reform

15 Updated: 1/7/2015 Bureau of Elevator Safety Rule Adoption Status Page 2 of 2 Adopted Within Previous Twelve Months Rule Summary of Changes Date Effective 61C Change the rulemaking authority from the division to the department and correct a rule citation. Filed for Adoption February 4, 2014 February 24, C Correct the authority for continuing education requirements, registration, and approval; add a 30-day continuing education course application time limit; and adopt an updated application. February 24, 2014 Filed for Adoption February 4, C Provide process for continuing education course instructors to obtain credit for teaching a course, specify course identification numbers are assigned by the department upon approval, specify changes that require department notification, create consistency with statutory requirements, provide registration records requirements for interactive distance learning August 26, 2014 courses, require course providers to submit course records to the department, and adopt an updated form to reflect changes to the rule. Filed for Adoption August 6, C Adopt updated applications and the Affidavit of Elevator Plans Code Compliance, specify when elevator cab alterations require a permit, require inspections to close alteration permits and corrects a rule citation. Filed for Adoption December 9, 2014 December 29, 2014 KEY: Step 1 Notice of Proposed Rule Development NOC Notice of Change SERC Statement of Estimated Regulatory Cost Step 2 Notice of Proposed Rule WD Notice of Withdrawal FAR Florida Administrative Register Step 3 Adoption Draft Draft Language Provided ESTAC Elevator Safety Technical Advisory Council OFARR Office of Fiscal Accountability and Regulatory Reform