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2015-7 FINAL 2015-7 Guadalupe Center   Cle 3 N Dwight E rk of the C 299 Tamiam Suite # Naples, FL 3 www.collier E. Brock Circuit Cou mi Trail East #402 34112-5746 rclerk.com   In A F urt ntern Aud Fee Pay G Iss nal Au it Re yment uadalu sued: udit D epor Assist upe Ce Augus Depa rt 20 tance P enter, I st 3, 2 artme 015- Progra Inc. 2015 ent 7 am: 1 Prepared by: Patrick Blaney, Senior Internal Auditor Report Distribution: Board of County Commissioners Leo Ochs, Jr., County Manager Nick Casalanguida, Deputy County Manager Mark Isackson, Director, Corporate Financial and Management Services Bruce Register, Director, Business and Economic Development Amy Patterson, Manager, Impact Fee and Economic Development Jeff Klatzkow, County Attorney 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. 2 Internal Audit provided a draft of this report to the Office of Business and Economic Development for management response on July 24, 2015. County management provided that response on July 29, 2015. Summary Internal Audit conducted a site visit to vouch five Guadalupe Center, Inc., employees, filling created jobs, to payroll data. 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 five created jobs. The data consisted of employees’ names, addresses, hire dates, job titles, and pay rates. The procedures revealed no exceptions. These tests validated that Guadalupe Center, Inc., had created and continued to retain five jobs paying more than 50% of the County's private-sector average wage, and remains eligible to participate in the Fee Payment Assistance Program. Objective The objectives of this engagement were to validate the five employees in the jobs created by Guadalupe Center, and to validate the wages paid for the jobs created. 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 Guadalupe Center, Inc.;  Visiting Guadalupe Center and interviewing the Chief Financial Officer;  Tracing names, addresses, hire dates, job titles, and pay rates, to the personnel records of Guadalupe Center;  Scheduling payroll data for all employees filling the created jobs; and  Annualizing, averaging, and comparing pay rates of the five jobs to Program requirements. Internal Audit examined applicable payroll and personnel records for Guadalupe Center. 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: 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. 3 To be eligible, businesses had to apply to the County Manager prior to making the decision to locate or expand within Collier County. The Fee Payment Assistance 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 15 because it was located within the enterprise community. This award, $73,998.79, equaled the amount of impact fees due for the project. Payments made under this program were subject to funding availability. On January 25, 2005, the BCC approved the application of Guadalupe Center, Inc., to participate in the Fee Payment Assistance Program. The County Manager executed the BCC approved Fee Payment Assistance Agreement with Guadalupe Center on March 17, 2005. The legal description for the property, located at 509 Hope Circle, Immokalee, was included in Exhibit A to the Agreement. The Agreement required the creation and retention of five new jobs at “an average wage equal to or greater than 50% of the County’s current private-sector average wage…” The Agreement also provided that the Fee Payment Assistance Program would pay EMS, Correctional Facilities, Road, General Government Buildings, and Fire Protection impact fees totaling $73,998.79. 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 ongoing eligibility for participation. For Guadalupe Center’s location, program criteria called for a minimum of five new jobs paying at least 50% 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. However, Guadalupe Center is a Section 501(C)(3) not-for-profit corporation that is exempt from property tax. Management Response “I have reviewed the submitted Audit Report #2015-6 regarding Guadalupe Center, Inc.’s compliance with incentive criteria established by Fee Payment Assistance Program in place with Collier County. I concur with the audit findings and consider the Guadalupe Center, Inc., currently eligible to participate in the Fee Payment Assistance Program. Staff appreciates the professional and pragmatic approach exhibited by the Internal Audit Department for this performance validation process.” Conclusion Guadalupe Center, Inc. complied with the requirements of the Fee Payment Assistance Program; therefore, there are no adverse observations to report.