Subcommittee Minutes 06/11/2010
June 11, 2010
MINUTES OF THE COLLIER COUNTY
GOVERNMENT PRODUCTIVITY
FINANCE SUB-COMMITTEE
Naples, Florida, June I], 20 I 0
LET IT BE REMEMBERED, that the Collier County Productivity Finance
Sub-Committee in and for the County of Collier, having conducted
business herein, met on this date at ] 0:00 AM in REGULAR SESSION in
Building "F" of the Government Complex, in the County Manager's
Conference room, Naples, Florida with the following members present:
Chairman: Steve Harrison
Janet Vasey
James Gibson
ALSO PRESENT:
Mike Sheffield, Assistant to the County Manager
Crystal Kinzel, Clerk's Finance Department
Productivity Committee's
Subcommittee to
Analyze Financing in regard to
the Jackson Labs Project
County Manager's Conference Room
June 11, 2010
10:00am
1. Call to Order
2. Assessment/Analysis of Possible Financing Options
3. Public Comment
4. Adjourn
June 11,2010
1. Call to Order
Chairman Harrison called the meeting to order at 10:00 AM.
2. Assessments/Analysis of Possible Financing Options
The purpose of the meeting was for the Subcommittee to develop funding options for
the Counties funding requirement of $130M over 30 years for construction of Jackson
Labs in Collier County. The concept is for the building to bc constructed in 2011 and
occupied in 2012. The funding is required to match the $130M appropriated by the
State of Florida through a program to attract businesses to Florida.
It would need to be determined if the $25M land donation offered by Barron Collier
Investments would be considered part of the $130M required for County Funding. At
this point. the Subcommittec determined to base the discussions on funding $130
without consideration of land cost donation.
The funding option would need to be met in following calendar year (CY)
increments:
CY 10/1 1 ~ $28M
CY 12 ~ $36M
CY 13 - $17M
CY 14~$12M
CY 15 - $13M
CY 16~$14M
CY 17~$10M
The document "Jackson Laboratories Economic Feasibility Review ~ Revenue
Options" was circulated for review. The document provided the following 6 fund
raising options for consideration:
Option I - 10 percent Property Tax Surcharge.
Option 2 ~ Electric Franchise Tax
Option 3 - Sales and Gas Tax
Option 4 - Property Tax on Construction
Option 5 ~ Rental Income on Jackson Labs Facilities
Option 6 ~ Royalty on Jackson Labs Commercial Revenue
The Subcommittee identified a further option:
Option 7 ~ Y, percent sales tax increase
It was noted that a sales tax assessment may only be implemented on the first of the
year and requires voter approval. A question was asked if it was approved in
November, would there be ample time to implement thc increase by January 1, 2011?
Staffwould review past increases and determine the amount of time to implement a
tax increase.
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Junc11,2010
The Subcommittee reviewed the ramifications of the various options and evaluated
difTerent scenarios revising the variables affecting the overall financing outcomes.
Following the analysis, the following 4 Options were determined to be the most
feasible: (in no particular order of preference)
Option 2 ~ Electric Franchise Tax
The Option would require a 2.5% increase in electric bills to customers. It would
generate approximately $9.5M annually and meet the funding requirement in 25
years. Bonding would be required at an estimated 4.5% interest rate. It would not
inelude rate payers in the City of Naples or the City of Marco Island. This would
have an impact of approximately six dollars on an electric bill of $200.
Option 7 ~ Sales Tax Increase
The Option would require a y,% sales tax increase and generate approximately
$22.3M annually. It would sunset in 6 years and not require bonding. To meet the
annual requirement, it would be necessary to utilize a combination of property tax
revenue in the first two years of the term. Approximately.1 millage increase in the
first year, and .2 millage increase for the second year.
Option 2 ~ Property Tax Increase
This Option would require a .15 millage increase for a term of 30 years. This would
require bonding and have an impact of approximately $20 annually on a property
valued at $200,000.
The Subcommittee formulated Option "2a", property tax increase, but "pay as you
go," requiring no bonding.
Option 2a - Propertv Tax Increase - Pay as yOU go
The following millage rate increase schedule was outlined to meet the annual
req uirements:
Year 1 - .45
Ycar 2 -,6
Year3-.3
Year 4 thru 30 -.2
Options 2, 2a and 7 would require voter approval.
It was noted the analysis is based on a "worst case scenario" and does not incorporate
secondary benefits of construction employment and related spending, possible
increases in property taxes due to an intlux of employees, spin ofT businesses that
may locate to the area, etc. This benefit would require a separate analysis.
The Subcommittee determined:
Ms. Vasey would develop a matrix for use by the Committee outlining the
requirements and ramifications of each Option.
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June 11,2010
Mr. Hoppenstadt is being charged with revicwing thc "Burnam Agreement."
Another individual (Joe) to be charged with rcviewing the OTTED Report and
Jackson Labs Agreement.
Staff to email all Productivity Committee members a copy of the Report/Agreement.
3. Public Comment
Speakers
Mary AIcoff, expressed concern that the Subcommittee is viewing/favoring options
that do not require public approval.
The Suhcommillee noted they were charged with developing recommendations for the
funding options. Some of the Options do require public approval. The
recommendations will be scnt forward to the Productivity Committee and ultimately
the Board of County Commissioncrs will make the final decisions.
Dr. Jack Conroy, former President Chamber of Commerce exprcssed concern
that the number of employees generated, thc number of spinoff businesses, the
amount of secondary spending, etc., may be grossly overestimated. In addition, asked
if there is an avcnue for the County to capture revenue based on thc "intellectual
property" created and sold by Jackson Labs.
The Subcommittee noted they have not received the business pIan from Jackson Labs
and the analysis is in its preliminary stages with many numbers estimatcd. The
analysis does contain a category on "Royal tics" which envisioned the intellectual
property scenario.
Duane Billington thanked the Subcommittec for their work and noted the analysis
should includc the "exemption of impact fees"
James Athenus requcsted elarification if the County has investigated the viability of
Jackson Labs. He did some research on the company and had trouble acquiring any
information. Hc questioned Jackson Labs track record, financial status and how the
$130M funding figure was dcrived.
The Subcommillee noted thc State of Florida has initiatcd a program to attract thesc
typcs of businesses. There are modcls for this type of venture with facilities in
Miami, Orlando, Palm Beach, St. Lucie, etc. The contributions for thc total projcct
are: State ofFlorida $130M, Collier County $130M, Philanthropic $120M and
Jackson Labs of$500 - $700M.
Larry Basik expressed concern on the concept ofraising the sales tax and questioned
if the County has reviewed Jackson Labs financial statements.
The Subcommillee noted The County is in possession of the 2009-auditcd financial
statement of Jackson Labs.
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June 11,2010
Judy Hill questioned if Options 2, 2a and 7 will require any fees for collection.
The Subcommillee noted this would need to be investigated.
There being no further business for the good of the County, the meeting was
adjourned by order of the chair at 11 :55 A.M.
COLLIER COUNTY PRODUCTIVITY
COMMITTEE SUBCOMMITTEE
Steve Harrison, Chairman
These minutes approved by thc Board/Committee on
as presented or as amended ___
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