Agenda 10/24/2017 Item #16J 410/24/2017
EXECUTIVE SUMMARY
To provide the Board of County Commissioners the Clerk of the Circuit Court’s Internal Audit
Report 2017-11 Job Creation Investment and Fee Payment Assistance Programs: Haynes
Corporation, issued on, October 18, 2017.
OBJECTIVE: To provide the Board of County Commissioners (Board) the issued Audit Report 2017-11
Job Creation Investment and Fee Payment Assistance Programs: Haynes Corporation.
Internal Audit delivered the Audit Report to the Board on Wednesday, October 18, 2017. It is a vailable
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 2017-11 Job Creation Investment and Fee
Payment Assistance Programs: Haynes Corporation be entered into the record.
Prepared by: Michael Harder, Senior Internal Auditor
Office of the Clerk of the Circuit Court
ATTACHMENT(S)
1. 2017-11 Job Creation Investment and Fee Payment Assistance Programs Haynes Corporation
(PDF)
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10/24/2017
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.J.4
Doc ID: 3937
Item Summary: To provide the Board of County Commissioners the Clerk of the Circuit Court’s
Internal Audit Report 2017-11 Job Creation Investment and Fee Payment Assistance Programs: Haynes
Corporation, issued on, October 18, 2017.
Meeting Date: 10/24/2017
Prepared by:
Title: Senior Internal Auditor – Clerk of the Circuit Court
Name: Michael Harder
10/16/2017 4:51 PM
Submitted by:
Title: Senior Staff Assistant – Clerk of the Circuit Court
Name: Jennifer Milum
10/16/2017 4:51 PM
Approved By:
Review:
Clerk of the Circuit Court Derek Johnssen Additional Reviewer Completed 10/17/2017 7:35 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 10/17/2017 7:41 AM
Office of Management and Budget Valerie Fleming Level 3 OMB Gatekeeper Review Completed 10/17/2017 7:53 AM
Budget and Management Office Mark Isackson Additional Reviewer Completed 10/17/2017 10:09 AM
County Manager's Office Leo E. Ochs Level 4 County Manager Review Completed 10/17/2017 11:59 AM
Board of County Commissioners MaryJo Brock Meeting Pending 10/24/2017 9:00 AM
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Internal Audit Department
Audit Report 2017-11
Job Creation Investment and Fee
Payment Assistance Programs:
Haynes Corporation
Dwight E. Brock
Clerk of the Circuit Court
and Comptroller
3299 Tamiami Trail East
Suite #402
Naples, FL 34112-5746
www.collierclerk.com
Issued: October 18, 2017
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Prepared by: Gabriela Molina, Internal Auditor
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 October 9, 2017. County management provided that response on October 11,
2017.
Summary
Staff from the Office of Business and Economic Development and the Clerk’s Internal Audit Department
conducted a site visit to Haynes Corporation (Haynes) to test that job creation and retention requirements
were met in accordance with the Job Creation Investment and Fee Payment Assistance Programs.
These tests validated that Haynes has created and retained the required number of jobs paying more than
$34,320 in annual wages for the fiscal years under audit for both programs. As part of the Impact Fee
Payment Assistance program, Haynes was required to pay its tax bill in full annually to the Tax Collector’s
office. Testing in this area validated that Haynes was in compliance with this requirement. Having satisfied
all requirements under both programs, Haynes is eligible to be paid $ 4,666.68 under the Job Creation
Investment program and $ 78,464.50 under the Fee Payment Assistance program.
Objective
The objectives of this engagement were to validate that Haynes had paid its tax bill in full to the tax
collector’s office for the years under audit, and to validate that the number of eligible jobs were created and
retained in accordance with Hayne’s Incentive Agreements with Collier County.
Scope
This engagement consisted of validating jobs created, retained, and their wages, including, but not limited
to, the following:
Reviewing Collier County Ordinances 2003-60, 2003-61, 2004-24, 2004-45, 2005-30, 2006-36, 2008-
25, and 2008-46;
Reviewing applicable Florida Statutes;
Reviewing applicable Board of County Commissioners (BCC) agenda items and meeting minutes;
Checking the Tax Collector’s records of tax payments;
Examining payroll and personnel records of Haynes;
Visiting Haynes and interviewing its management; and
Annualizing, averaging, and comparing pay rates of the jobs to program requirements.
Background
The Job Creation Incentive program was a performance-based initiative authorized in Collier County
Ordinance 2003-60, as amended. The program provided general revenue funding to businesses for the
creation of jobs that met the criteria specified in the Ordinance. Those criteria, which varied by geographic
location within Collier County, included minimum numbers of new jobs at or exceeding specific wage
levels.
Collier County Ordinance 2003-60 stated that the program’s purpose was “to promote and foster economic
diversification through the retention and creation of high wage jobs in targeted industry clusters.” Ordinance
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2006-36 defined jobs as “limited to individual permanent legal residents of the United States who are
employed in each new created position of employment at a primary location in Collier County, and as
applicable maintained, as a result of the program.” Ordinance 2003-60 originally terminated this program
on October 1, 2008, but on September 9, 2008, the BCC enacted Ordinance 2008-46, which extended the
Job Creation Investment program through October 1, 2013.
The BCC approved a Job Creation Investment program agreement with Haynes on December 10, 2013, that
would pay Haynes $2,000 per job, spread over three-years, for up to 17 new jobs created in three phases.
These jobs must average at least $ 34,320 in annual wages and be held by a Collier County resident. The
maximum payments under this agreement cannot exceed $ 34,000. Haynes has previously earned and been
paid $ 29,333.32.
On July 13, 2017, Internal Audit observed the Office of Business and Economic Development’s validation
of Haynes compliance with this program’s requirements. The audit validated Haynes’ retention of
previously created and verified new jobs in Collier County for the testing period starting August 1, 2013
and ending July 31, 2015. Specifically this audit validated the following:
Haynes maintained 3 jobs (Phase II), initially validated at July 31, 2012, through the third and final
year ending July 31, 2014.
Haynes maintained 2 jobs (Phase III), initially validated at July 31, 2013, through the second and
third years ending July 31, 2014 and July 31, 2015, respectively.
By meeting the terms of its Job Creation Investment program agreement, Haynes has earned the final
installment payment of $ 4,666.68.
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:
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.
The BCC approved an Impact Fee Payment Assistance agreement with Haynes on December 10, 2013, that
would reimburse Haynes a portion of their impact fees for the project. The legal description for the property,
located at 3581 Mercantile Avenue, Naples, was included in Exhibit A to the agreement. Haynes agreed to
pay its tax bill in full to the Tax Collector’s office annually and to create and maintain 20 new jobs for six
years at an average annual wage of not less than $ 34,320 starting from August 1, 2010. (On September 26,
2017, the BCC approved, on consent agenda, item #16F7 which was an amendment to the agreement that
corrected a “scrivener’s error” on the number of jobs required for validation. The amendment reduced the
number of jobs required from 20 down to 17.) On January 13, 2012, Haynes prepaid $ 82,110.94 of impact
fees on the project, of which $ 78,464.50 qualified for reimbursement under this agreement.
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On July 13, 2017, Internal Audit observed the Office of Business and Economic Development’s validation
of Haynes compliance with this program’s requirements. This audit validated Haynes’ retention of the 17
previously created and verified new jobs in Collier County and the timely payment in full of its tax bill for
the testing period starting August 1, 2013 and ending July 31, 2016.
By meeting the terms of its Fee Payment Assistance program agreement, Haynes has met its obligation and
qualifies to receive a refund of impact fees in the amount of $ 78,464.50.
Management Response
“I have reviewed the submitted Audit Report #2017-11 regarding Haynes Corporation’s compliance with
incentive criteria established by the Job Creation Investment Program and the Fee Payment Assistance
Program approved December 10, 2013. I concur with the audit observations and consider Haynes
Corporation in compliance with the obligations within the Job Creation Investment Program Agreement
and the Fee Payment Assistance Program Agreement.
Staff appreciates the professional and pragmatic approach exhibited by the Internal Audit Department for
this performance validation process. ”
Conclusion
Haynes has complied with the requirements of both the Job Creation Incentive and Fee Payment Assistance
Programs and has earned an economic incentive payment totaling $ 83,131.18.
Internal Audit gratefully acknowledges the cooperation of both Haynes and the Office of Business and
Economic Development’s management and staff for their support in the audit process.
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