Agenda 08-08-2017 Item #13A08/08/2017
EXECUTIVE SUMMARY
To provide the Board of County Commissioners the Clerk of the Circuit Court’s Internal Audit
Report 2017-8 Fee Payment Assistance Program: Arthrex, Inc., Arthrex Manufacturing, Inc., and
RES Collier Holdings, LLC, issued on, July 26, 2017.
OBJECTIVE: To provide the Board of County Commissioners (Board) the issued Audit Report 2017 -8
Fee Payment Assistance Program: Arthrex, Inc., Arthrex Manufacturing, Inc., and RES Collier Holdings,
LLC.
Internal Audit delivered the Audit Report to the Board on Wednesday July 26, 2017. It is available
electronically on the Clerk of Courts website.
The Clerk’s website for published Internal Audit Reports, once they are no longer confidential:
https://www.collierclerk.com/finance/internal-audit/published-reports/
Internal Audits do not become public record until the Clerk’s office issues them to the Board.
GROWTH MANAGEMENT IMPACT: None
FISCAL IMPACT: None
RECOMMENDATION: That the Clerk’s Audit Report 2017-8 Fee Payment Assistance Program:
Arthrex, Inc., Arthrex Manufacturing, Inc., and RES Collier Holdings, LLC be entered into the record.
Approval of the following document(s) by the County Manager is subject to formal ratification by the
Board of County Commissioners. If the decision by the County Manager is not ratified by that Board,
the document(s) shall be enforceable against Collier County only to the extent authorized by law in the
absence of such ratification by that Board.
Prepared by: Michael Harder, Senior Internal Auditor, Office of the Clerk of the Circuit Court
ATTACHMENT(S)
1. 2017-8 Fee Payment Assistance Program Arthrex, Inc, Arthrex Manufacturing, Inc, and RES
Collier Holdings, LLC (PDF)
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08/08/2017
COLLIER COUNTY
Board of County Commissioners
Item Number: 13.A
Doc ID: 3530
Item Summary: To provide the Board of County Commissioners the Clerk of the Circuit Court’s
Internal Audit Report 2017-8 Fee Payment Assistance Program: Arthrex, Inc., Arthrex Manufacturing,
Inc., and RES Collier Holdings, LLC, issued on, July 26, 2017.
Meeting Date: 08/08/2017
Prepared by:
Title: Senior Internal Auditor – Clerk of the Circuit Court
Name: Michael Harder
07/26/2017 7:57 AM
Submitted by:
Title: Senior Staff Assistant – Clerk of the Circuit Court
Name: Jennifer Milum
07/26/2017 7:57 AM
Approved By:
Review:
Clerk of the Circuit Court Derek Johnssen Additional Reviewer Completed 07/26/2017 9:29 AM
Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 07/26/2017 10:57 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 07/26/2017 2:43 PM
Budget and Management Office Mark Isackson Additional Reviewer Completed 07/31/2017 9:42 AM
County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 08/08/2017 9:17 AM
Board of County Commissioners MaryJo Brock Meeting Pending 08/08/2017 12:00 AM
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Internal Audit Department
Audit Report 2017-8
Fee Payment Assistance Program:
Arthrex, Inc., Arthrex
Manufacturing, Inc., and
RES Collier Holdings, LLC
Dwight E. Brock
Clerk of the Circuit Court
and Comptroller
3299 Tamiami Trail East
Suite #402
Naples, FL 34112-5746
www.collierclerk.com
Issued: July 26, 2017
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Prepared by: Michael Harder, Senior Internal Auditor
Report Distribution: Board of County Commissioners
Leo Ochs, Jr., County Manager
Jeff Klatzkow, County Attorney
Nick Casalanguida, Deputy County Manager
Mark Isackson, Director, Corporate Financial and Management Services
Jace Kentner, Director, Business and Economic Development
Amy Patterson, Director, Capital Project Planning, Impact Fees and Program Mgt
Cc: Dwight E. Brock, Clerk of the Circuit Court
Crystal K. Kinzel, Director of Finance and Accounting
James D. Molenaar, Internal Audit Manager
Table of Contents
SUMMARY ...........................................................................................................................................2
OBJECTIVE ..........................................................................................................................................2
SCOPE ...................................................................................................................................................2
BACKGROUND ...................................................................................................................................2
MANAGEMENT RESPONSE ..............................................................................................................3
CONCLUSION ......................................................................................................................................3
The files and draft versions of audit reports are confidential and exempt from public records requests during an active audit under
Nicolai v. Baldwin (Aug. 28, 1998 DCA of FL, 5th District) and Section 119.0713, Florida Statutes. Workpapers supporting the
observations in this report become public record and will be made available upon request once the final audit report has been issued.
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Internal Audit provided a draft of this report to the Office of Business and Economic Development for
management response on July 5, 2017. County management provided that response on July 21, 2017.
Summary
Staff from the Office of Business and Economic Development and the Clerk’s Internal Audit Department
conducted a site visit to Arthrex, Inc. (Arthrex), to vouch ten created jobs at their eastern Collier location in
compliance with the Fee Payment Assistance Program. Pay rates of those jobs were annualized, averaged,
and compared to ordinance requirements.
Payroll data was compared to the personnel records of employees filling the ten created jobs. The data
consisted of employees’ names, addresses, hire dates, job titles, pay rates, and legal residency. The
procedures revealed no exceptions.
These tests validated that Arthrex has created and retained ten jobs paying more than 115% of the County's
private-sector average wage for the fiscal years ending 2015 and 2016, and remains eligible to participate
in the Fee Payment Assistance Program.
Objective
The objectives of this engagement were to validate ten jobs created by Arthrex at their eastern Collier
location and to verify that the wages paid for those jobs meet or exceed ordinance requirements.
Scope
This engagement consisted of validating jobs created and their wages, including, but not limited to, the
following:
Reviewing Collier County Ordinances 2003-61, 2004-24, 2004-45, 2005-30, 2006-36, 2008-25, and
2008-46;
Reviewing section 125.045, Florida Statutes;
Checking the Tax Collector’s records of tax payments;
Validating payroll records from Arthrex;
Visiting Arthrex and interviewing its management;
Tracing names, addresses, hire dates, job titles, and pay rates, to the personnel records of Arthrex;
Reviewing I-9’s for legal residency;
Scheduling payroll data for all employees filling the created jobs; and
Annualizing, averaging, and comparing pay rates of the ten jobs to program requirements.
Background
The Fee Payment Assistance program was a performance-based Collier County initiative authorized in
Board of County Commissioners (BCC) Ordinance 2003-61, as amended. The program paid selected impact
fees for eligible development projects. Eligibility criteria included the creation of minimum numbers of new
jobs at or above specific wage levels. Ordinance 2003-61 states that the program’s purposes were to:
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1) Provide a performance-based program offering financial relief for eligible targeted industry
development or expansion projects in Collier County to mitigate the effects of rising Impact Fee
rates;
2) Provide for the economic well-being of Collier County residents by providing high-wage
employment opportunities in Collier County;
3) Lessen the seasonal cycle of Collier County’s economy; and
4) Encourage investment opportunities for new or existing companies thus increasing and diversifying
the County’s tax base.
Ordinance 2003-61 originally terminated this program on October 1, 2008, but on September 9, 2008, the
BCC enacted Ordinance 2008-46, which extended the Fee Payment Assistance Program to October 1, 2013.
To be eligible, businesses had to apply to the County Manager prior to making the decision to locate or
expand within Collier County. The maximum incentive award was calculated by multiplying the total capital
investment (land, building, equipment) of the expansion or relocation by the current millage rate, then
multiplying by either ten (projects located in areas outside the enterprise community) or 15 (projects located
within the enterprise community). This project used the multiplier 10 because it is located in Eastern Collier
County. The impact fees actually paid for the project, $581,936.78, were less than the BCC-approved award
of $597,513.71. Payments made under this program were subject to funding availability.
On June 28, 2011, the BCC approved the application of Arthrex, Inc., Arthrex Manufacturing, Inc., and
RES Collier Holdings, LLC, for the Fee Payment Assistance Program. The BCC approved a Fee Payment
Assistance Agreement with those three entities on January 24, 2012. The legal description for the property,
located at 6875 Arthrex Commerce Drive, Immokalee, was included in Exhibit A to the Agreement.
Internal Audit observed the Business and Economic Development Office’s verification of jobs created in
accordance with Collier County’s Fee Payment Assistance Program in order to validate the ongoing
eligibility for participation. For Arthrex’ eastern Collier location, program criteria called for a minimum of
ten new jobs paying at least 115% of the County's average private-sector wage in effect at the time of
application. The business also had to pay its property tax bill in full annually on or before its due date. As
noted in the Summary above, Arthrex met these requirements.
Management Response
“I have reviewed the submitted Audit Report #2017-8 regarding Arthrex, Inc., Arthrex Manufacturing, Inc.,
and RES Collier Holdings, LLC’s compliance with incentive criteria established by the Fee Payment
Assistance Program with Collier County, approved January 24, 2012. I concur with the audit observations
and consider Arthrex, Inc., Arthrex Manufacturing, Inc., and RES Collier Holdings, LLC in compliance
with the obligations within the Fee Payment Assistance Agreement.
Staff appreciates the professional and pragmatic approach exhibited by the Internal Audit Department for
this performance validation process.”
Conclusion
Arthrex continues to comply with the requirements of the Fee Payment Assistance Program; therefore, there
are no adverse observations to report.
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