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Agenda 01/09/2018 Item #11BProposed Agenda Changes Board of County Commissioners Meeting January 9, 2018 Add On Item 11B: Recommendation to direct the Collier County Clerk of the Circuit Court to pay Request for Payment numbers 2018-1 ($15,237.23), 2018-2 ($14,979.74), 2018-3 ($14,847.44), and 2018-4 ($14,947.46) totaling $60,011.87 under Fiscal Year 2018 Agreement between Collier County, Florida, and Economic Incubators, Inc. (Staff’s request) Continue Item 5C indefinitely: Presentation by the Everglades Society for Historic Preservation to discuss a resolution in support of a “Historical Village” project in Everglades City (Presenter’s request) 1/9/2018 8:31 AM EXECUTIVE SUMMARY Recommendation to direct the Collier County Clerk of the Circuit Court to pay Request for Payment numbers 2018-1 ($15,237.23), 2018-2 ($14,979.74), 2018-3 ($14,847.44), and 2018-4 ($14,947.46) totaling $60,011.87 under Fiscal Year 2018 Agreement between Collier County, Florida, and Economic Incubators, Inc. OBJECTIVE: That the Board of County Commissioners (Board) direct the Clerk of the Circuit Court to pay Request for Payment numbers 2018-1 ($15,237.23), 2018-2 ($14,979.74), 2018-3 ($14,847.44), and 2018-4 ($14,947.46) totaling $60,011.87 under the Fiscal Year 2018 Agreement between Collier County, Florida, and Economic Incubators, Inc. (“EII”). CONSIDERATIONS: On November 14, 2017, the Board approved the Fiscal Year 2018 Agreement between Collier County, Florida, and Economic Incubators, Inc., for management of the County’s accelerator program (“Agreement”). The Agreement was the subject of much scrutiny, and input was garnered from interested parties, including amendments verbally made by the Board from the dais before its approval. The Agreement provides funding for the County’s accelerator program for FY 2018. The Agreement adds the next phase of the Collier County Innovation Accelerator Business Plan, the Florida Culinary Accelerator @ Immokalee. Staff (2 FTE) from our partners at the University of Florida are in place to support the Florida Culinary Accelerator @ Immokalee. The business office for the Florida Culinary Accelerator @ Immokalee is open. As licensing and certifications are obtained Florida Culinary Accelerator @ Immokalee, functions will commence. The rollout efforts will culminate in a grand opening, which is scheduled for March 28, 2018. Since the start of the fiscal year on October 1, 2017, no reimbursement has been made under the Agreement by the Clerk of Courts. Four requests for reimbursement have been made for reimbursement of personnel costs. Although county staff and EII have worked closely with the Clerk of Courts’ Finance Department, they indicated no payment will be forthcoming from the Finance Department without Board approval. County Staff has approved payment in accordance with the terms and conditions of the Agreement. The supporting documentation is complete and accurate. EII staff, County staff and numerous volunteers have worked diligently to ensure that the terms of the Agreement are fulfilled for the Naples Accelerator and the opening of the Florida Culinary Accelerator @ Immokalee. The accelerator program cannot go forward without the timely reimbursement because the cash requirements of opening the Florida Culinary Accelerator @ Immokalee are significant. FISCAL IMPACT: This direction imposes the payment of $60,011.87 from the contractually budgeted amount of $572,100 for personnel costs. The Fiscal Year 2018 Agreement provides County funding of up to Eight Hundred Thousand Dollars ($800,000) for reimbursement of personnel costs for both facilities, rent for the Naples Accelerator, equipment and facilities for the Florida Culinary Accelerator @ Immokalee in FY 18. Sufficient budget amounts are appropriated in Economic Development Fund (007) to support this agreement in furtherance of the Collier County Innovation Accelerator Business Plan. GROWTH MANAGEMENT IMPACT: This request is consistent with Objective 3 of the Economic Element of the Collier County Growth Management Plan, which states: “Collier County will support programs which are designed to promote and encourage the recruitment of new industry as well as the expansion and retention of existing industries in order to diversify the County’s economic base.” LEGAL CONSIDERATIONS: This item is approved for form and legality and requires a majority vote for Board action. - JAB RECOMMENDATION: To direct the Clerk of Courts to pay Request for Payment numbers 2018-1 ($15,237.23), 2018-2 ($14,979.74), 2018-3 ($14,847.44), and 2018-4 ($14,947.46) totaling $60,011.87 under Fiscal Year 2018 Agreement between Collier County, Florida, and Economic Incubators, Inc. Prepared by: Jace Kentner, Director, Office of Business & Economic Development January 8, 2018 Economic Incubators, Inc. Naples Accelerator 3510 Kraft Road, Suite 200 Naples, Florida 34105 Board of County Commissioners of Collier Mr. Leo E. Ochs, Jr., County Manager County Florida County Manager's Office 3299 Tamiami Trail East, Suite 303 3299 Tamiami Trail East, Suite 202 Naples, FL 34112 Naples, FL 34112 Mr. Dwight E. Brock Clerk of the Circuit Court 3315 Tamiami Trail East, Suite 102 Naples, FL 34112 Re: Economic Incubators, Inc (Ell). — Naples and Immokalee Accelerators Ladies and Gentlemen: The purpose of this letter is to inform you that EII currently lacks the funds necessary to carry on its operations including meeting its next payroll on January 12, 2018. Consequently, the Board of Directors of Ell has unanimously determined that it will be necessary to suspend the operations of the Naples and Immokalee Accelerators and to furlough our staff unless funding from the county is promptly forthcoming. While we do have an available credit line from which funds could be drawn, at this juncture, we have no reliable commitments from the Clerk's office as to when or, more importantly, IF funding might be forthcoming. Given these circumstances we do not believe it is prudent to continue to borrow money from a credit line to meet regular ongoing expenses. EII operates on the County's fiscal year. It is now approaching mid-January 2018. Over twenty- five percent of the EII and the County's 2017/2018 fiscal year has elapsed. Yet Ell has received no current fiscal year funding based upon requests for payment and reimbursement for services in the current fiscal year. The current fiscal year Ell budget is over $800,000. Twenty five percent of that is $200,000. We recognize that it was not until late November 2017 that a contract between EII and the County was actually entered into such that payments could not be processed or funded until then, but at this juncture EII has accumulated unpaid receivables due from the County in the amount of approximately $60,000 with another approximate $30,000 to be shortly submitted. EII receivables increase at the rate of approximately $15,000 every two weeks, based upon payroll costs. 1 At the same time that Ell is attempting to operate the Naples Accelerator and Woodstock's, as it has, Ell is endeavoring to get the Immokalee Accelerator open and running. The board of county commissioners provided additional funding in the current fiscal year for that purpose, but again it is available only on a reimbursement basis. In order to obtain reimbursement, EII has to employ personnel to work at the Immokalee facility, pay their compensation, and then seek reimbursement. It has been the EII plan and expectation that the accumulated receivables, once paid, would be utilized to fund initial compensation of personnel at the Immokalee facility. Without assurances that those funds will be forthcoming, EII cannot comfortably employ personnel for Immokalee. So, none have yet been employed. During the past nine months, the EII staff and volunteers, the County staff and the Clerk's staff, as well as members of the EII board of directors executive committee have spent significant time working to address reporting issues that have been raised by the Clerk with regard to the operations of EII. We fully recognize that there have been things that needed to be corrected and addressed, and that improvement in the financial reporting was needed. We believe that significant progress has been made to correct this and to remediate these matters, and we believe that the County staff and the Clerk's office recognize that Nonetheless, the process of obtaining funding continues to be tedious and difficult. For some inexplicable reasons its takes much longer than it would reasonably seem it ever should. The Clerk's office, for whatever reasons it has, does not seem to limit its review to individual payment requests and the underlying supporting documentation for each request, but as well it reviews performance against benchmarks that the contract with the County imposes on Ell, but which are not necessarily applicable in every pay period. The Clerk continues to raise questions and seek data to determine to its own degree of satisfaction that EII is sustainable even though there is no contractual requirement for this. This questioning and data request delay the funding process. Ell has a staff of only three personnel. They have duties that involve operating Ell including the work of getting the Immokalee facility open. They also have to spend significant time working on contract compliance and financial reporting. In this regard EII has had the good fortune in the past four months to have obtained the volunteer services of Mr. Fred Krieger, who is an experienced and credentialed certified public accountant with significant financial management experience as the CFD of several substantial public companies or their subsidiaries. His efforts have been invaluable to improve our processes, our reporting, our presentations, and our record keeping. We believe that the Clerk recognizes that too. So, with much thoughtful deliberation and considerable reluctance, the board of directors has determined that it needs to take this action unless (i) funding of the current $60,000 plus reimbursement request takes place promptly and (ii) Ell can receive assurances that, on an ongoing basis, its regularly submitted reimbursement requests will be promptly reviewed, approved and funded- absent some promptly communicated contractual justification for not funding. We hope this situation can be promptly resolved. We are prepared to meet and respond to questions as needed. We do not want to take this action no do we take it lightly. We believe in EIl and the 2 two accelerators and want to have them °fulfill their intended purpose. Our belief in the good purpose and role of EII is the reason why the dedicated volunteer board of directors of Collier County community leaders spend their time and energy serving EII. But we have to run EII as the business that it is and we need regular and reliable funding in order to do that. The current situation just cannot continue. Very truly F. Fred P eshkan Chiinmfn of the board for the entire board of directors &a-4e�� Marshall Goodman, PhD President and CEO