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Agenda 09/23/2014 Item # 6B9/23/2014 63. zz. MV n In Office of the County Manager +�a Leo E. Ochs, Jr. 3299 Tamiami Trail East, Suite 202 • Naples Florida 34112 -5746 • (239) 252 -8383 • FAX: (239) 2524010 September 12, 2014 Mr. David P. Bolduc 2649 Tarpon Road Naples FL 34102 Re: Public petition request from David Bolduc requesting that the Board of County Commissioners place an item on a future agenda to discuss the creation of a public bank. Dear Mr. Bolduc: Please be advised that you are scheduled to appear before the Collier County Board of Commissioners at the meeting of September 23, 2014, regarding the above referenced subject. Your petition to the Board of County Commissioners will be limited to ten minutes. Please be advised that the Board will take no action on your petition at this meeting. However, your petition may be placed on a future agenda for consideration at the Board's discretion. If the subject matter is currently under litigation or is an on -going Code Enforcement case, the Board will hear the item but will not discuss the item after it has been presented. Therefore, your petition to the Board should be to advise them of your concern and the need for action by the Board at a future meeting. The meeting will begin at 9:00 a.m. in the Board's Chambers on the Third Floor of the W. Harmon Turner Building (Building "F ") of the government complex. Please arrange to be present at this meeting and to respond to inquiries by Board members. If you require any further information or assistance, please do not hesitate to contact this office. Sincerely, Mike Sheffield Communications and Customer Relations Manager MJS:mjb cc: Jeffrey Klatzkow, County Attorney Mark Isackson, Corporate Financial and Management Services Director Packet Page -16- 9/23/2014 6.B. Request to Speak under Public Petition Please print Name: David P. Bolduc Address: 2649 Tarpon Rd., Naples, FL, 34102 Phone: (239) 682 -1143 Date of the Board Meeting you wish to speak: September 23, 2014 Must circle yes or no: Is this subject matter under litigation at this time? No Is this subject matter an ongoing Code Enforcement case? No Note: If either answer is "yes ", the Board will hear the item but will have no discussion regarding the item after it is presented. Please explain in detail the reason you are requesting to speak (attach additional page if necessary): Given the Federal Reserve, FDIC and Office of the Controller of the Currency's recent decision to exclude municipal bonds from U.S. bank's list of high - quality liquid collateral assets, and since banks are the largest holders of municipal bonds, the borrowing cost for states, counties and local governments will, most likely, be increasing. With this in mind, I would like to introduce the Commission to the concept of creating a Public Bank, much like the highly successful Bank of North Dakota, established in 1919, as an alternative to funding municipal infrastructure projects with municipal bonds. Please explain in detail the action you are asking the Commission to take (attach additional page if necessary): I am asking the Commission to create a future Agenda Item to discuss the concept of a Collier County Bank in greater detail, then vote to fund a Feasibility Study to be completed by the Public Banking Institute, the leading Research Think Tank on international, national, state, county and city public banking history and implementation. C:\ Users\ brodc _mWppData\LocaMAicrosoft\Windows \Temporary Internet Files \Content.Outlook\AMH9H7N\Public Petition Request Form - 2008 new form.doc Packet Page -17- COLLIER COUNTY Board of County Commissioners Item Number: 6.6.B. 9/23/2014 6.B. Item Summary: Public Petition request from David Bolduc requesting that the Board of County Commissioners place an item on a future agenda to discuss the creation of a public bank. Meeting Date: 9/23/2014 Prepared By Name: BrockMaryJo Title: Executive Secretary to County Manager, County Managers Office 9/15/2014 4:14:18 PM Submitted by Title: Executive Secretary to County Manager, County Managers Office Name: BrockMaryJo 9/15/2014 4:14:19 PM Approved By Name: DurhamTim Title: Executive Manager of Corp Business Ops, Date: 9/15/2014 4:25:26 PM Packet Page -18- Patricia L. Morgan From: Sheffield, Michael Sent: Monday, September 22, 2014 12:45 PM To: Patricia L. Morgan Subject: FW: Discussion Document - Attachments: Collier County Bank .pdf Back up material for 9/23/14 6b: Public petition request from David Bolduc /creation of a public bank. From: David Bolduc [mailto:dpbolducCd)yahoo.com] Sent: Monday, September 22, 2014 11:20 AM To: Sheffield Michael Subject: Discussion Document Hi Mike, Please see the attached discussion document for tomorrow. Please contact me with any questions. Best, David .,3 A e; _it. =a ! o ".V. C: rnzai a",A es::: > ar p9. b k' records. If pcx; d o Gut wo I It t 'o"i. ' 'nm i .tt > >dr ;ss i'.; .,2'aso'I in' '£_s,. ()? sc. tc, punk , lccads req,d£.st C.C. not SEmd c mai€ k" th :s £?nfity, isle° ad' C'.... tact this offic£ by 1'f If i.j .£, o ;n 1 Collier County Commissioners Collier County Bank Petition Submitted by: David R Bolduc, CFA September 23, 2014 Rule Seen Cooling Demand for Municipal : Bloomberg i -The Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency recently changed the liquidity requirements for the nation's largest banks. - Municipal Bonds have been eliminated from a bank's list of High Quality Liquid Collateral Assets (HQLCA) starting January 1, 2015. - Banks, the largest owners of Municipal Bonds, will most likely start dumping them in favor of Treasury and Corporate Bonds, which remain on the HQLCA list. - As of March 31, 2014, banks held $425 billion of municipal bonds. - JP Morgan Chase - $44 Billion & Wells Fargo - $47 Billion. -Tom Dresslar, a spokesman for California Treasurer Bill Lockyear, "It will increase their [municipal bonds] borrowing costs because it will reduce demand for municipal bonds." - Ben Watkins, Director of Florida's Bond Finance Division, "banks have been large purchasers of Municipal Bonds, and that's certainly been helpful in keeping rates low." Banks Created The Money To Buy Municipal Debt • "Banks create money. That is what they are there for .... The manufacturing process to make money consists of making an entry in a book. That is all ... Each and every time a Bank makes a loan ... new Bank credit is created... brand new money." - Graham Towers, Governor of the Bank of Canada, 1935 -1955 • "When a bank makes a loan, it simply adds to the borrower's deposit account in the bank by the amount of the loan. The money is not taken from anyone else's deposit; it was not previously paid in to the bank by anyone. It's new money created by the bank for the use of the borrower." - Robert B. Anderson, United States Secretary of Treasurys 1957 -1961 IMF Working Paler Confirmation • "The key function of banks is money creation, it is not intermediation ... banks do not wait for granny to walk through the door and deposit some money so they can lend it to someone else. Instead, what banks do, is create new money, ex nihilo, out of thin air, in the act of lending ... and I emphasize this is not a theory, this is a fact." -IMF Economist, MichaA Kumhof, London School of Economics Presentation, The Chicago Plan Revisited, November 12, 2013 The Bank of North Dakota Municipal Bank vs. Municipal Bonds • State, County & City Municipalities cannot print their own money, but they can create their own banks modeled afterthe highly successful Bank of North Dakota. • Established in 1919, the Bank of North Dakota (BND) is the only public bank in the United States — 100% owned by the State of North Dakota. State of North Dakota deposits all state tax and fee revenue at the BND, then the BND can create loans to finance infrastructure projects. • Having its own bank allows North Dakota municipalities to fund municipal projects without raising taxes or incurring debt. • This makes North Dakota municipal projects effectively interest - free since North Dakota owns the BND, and the BND receives the benefit of the interest. • BND returns profits to the State of North Dakota. Returning $400 million over the past decade. North Dakota Top Economy in the United States • Only state to be in a continuous budget surplus every year since the 2008 banking and economic crisis. • Lowest unemployment rate in the country. • In 2011, North Dakota reduced income and property taxes by nearly $500 million. • In 2013, North Dakota reduced income and property taxes by a combined $1.1 billion. • Since 2009, the North Dakota Legislature has reduced all forms of taxation by nearly $2.4 billion. It's Not About Oil, It's About The Bank Rankings: Total Energy Production 2012 Rank State 1 Texas 2 Wyoming 3 Pennsylvania 4 Louisiana 5 West Virginia 6 Oklahoma 7 Colorado 8 Illinois 9 Kentucky 10 California 11 New Mexico 12 North Dakota 13 Alaska 14 Arkansas 15 Alabama Total Energy Production (trillion Btu) 141,201 9,611 4,720 3,794 3,721 2,961 2,921 2,446 2,391 2,335 2,316 2,138 1,563 1,472 1,434 Debt Level of Canada World's Most Resource Rich Country • From 1939 to 1974 the Government of Canada borrowed from the Bank of Canada. In 1974, Canada joined the Basel Committee at the BIS and was discouraged to borrow from their own bank. In 1974, Canada began financing public projects by selling Canada's bonds to private banks. • From 1939 to 1974 Canada funded major public projects including the production of aircraft during WWII, Free Education, Old Age Pensions, Trans - Canada Highway, St. Lawrence Seaway, Welland Canal, Hydro Power Dams, Universal Healthcare and Canada Post virtually debt -free. Global Finance Magazine The World's 50 Safest Banks 2014 Top 10 -All Public Banks No Bank Country 1 KfW Bank Germany 2 Zurich Cantonal Bank Switzerland 3 Landwirtschaftliche Rentenbank Germany 4 L -Bank Germany 5 Bank Nederlandse Gemeenten Netherlands 6 Nederlandse Waterschapsbank Netherlands 7 NRW.Bank Germany 8 Caisse des Depots et Consignations France 9 Banque et Caisse d'Eparange de I'Etat Luxembourg 10 Societe de Financement Local (SFIL) France These banks are to be honored during the IMF /World Bank Annual Meeting in October Financial Benefits of a Collier County Bank • Loan Collier County Government $550 million to buy back outstanding Collier County Municipal Bond Debt - $55.7 million interest service annual savings. A savings of $1.4 billion over the next 25 years. Loan NCH Healthcare $104 million to buy back their 2012 Municipal Bond issue. Total payments back to the Collier County Bank from NCH Healthcare would total $179 million over the next 25 years. • Loan the Arlington of Naples $190 million to buy back their 2013 Municipal Bond issue. Total payments back to the Collier County Bank from the Arlington of Naples would total $408 million over the next 25 years. • Combined savings and potential new revenue of $2 billion over the next 25 years. • Collier County will never have to engage an outside bank for cash management and check clearing services.