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Productivity Backup 07/21/2010
Productivity Committee July 21, 2010 (BACKUP DOCUMENTS) Patricia L. Morgan From: Sue Flynn [processor @onebox.com] Sent: Tuesday, August 03, 2010 12:34 PM To: Minutes and Records Subject: Attachments - Productivity 7 -21 -10 Attachments: Productivity 7 -21 -10 Applications and Resumes.pdf; Productivity 7 -21 -10 Draft Cover Letter.pdf; Productivity 7 -21 -10 Economic Viability of Jax- Florida. pdf; Productivity 7 -21 -10 Email Jackson Laboratory Announcement. pdf Hi Trish, Part 1 of 2 - all the attachments for the CC Gov Productivity Meeting held 7/21/10. Thank you. Sue Flynn Express Pros Local: (239) 434 -8488 Fax: (877) 468 -6770 Patricia L. Morgan From: Sue Flynn [processor @onebox.com] Sent: Tuesday, August 03, 2010 12:38 PM To: Minutes and Records Subject: Attachments Part 2 of 2 Attachments: Productivity 7 -21 -10 Email Jackson Laboratory Announcement.pdf; Productivity 7 -21 -10 Financing for Jax- Florida. pdf; Productivity 7 -21 -10 Jackson Laboratory Project Review.pdf; Productivity 7 -21 -10 Jax - Viability.pdf Hi Trish, Here are the rest. Thanks again! Have a fantastic day. Sue Flynn Express Pros Local: (239) 434 -8488 Fax: (877) 468 -6770 07/31/2010 12:05 18774686770 DATE: June 21, 2010 TO: Michael Sheffield PROCESSOR MEMORANDUM FROM: Ian Mitchell, Executive Manager Board of County Commissioners RE: County Government Productivity Committee ck, -;L-I -10 PAGE 01 As you know, we currently have 3 vacancies on the above - referenced advisory committee. ,A. press release was issued requesting citizens interested in serving on this committee to submit an application for consideration. I have attached the applications received for your review as follows: (� Henry I. Struminger i+ 775 Broad Court North Nap les,l~lorida 34102 John Kerns 4711 West Blvd. Naples, Florida 34103 Leslie Prizant 9012 Gulfshore Drive Naples, Florida 34108 A &VA j kGerald E. Myers t , j 1889 Winding Oaks Way (�+ i � j Naples, Florida 34109 Scott Lowe 110 Channel Ct. Marco Island, Florida 34145 Cheryl Favlick (Schoenfeld) 10208 Boca Circle Naples, Florida 34109 C.., ,�- 07/31/2010 12:05 18774686770 PROCESSOR A E 020 Please let me know, in writing, the recommendation for appointment of the advisory committee within the 41 day time - Frame, and I will prepare an executive summary for the Board's consideration. Please categorize the applicants in areas of expertise. If you have any questions, please call me at 252 -8097. Thank you for your attention to this matter. IM Attachments 07/31/2010 12:05 18774686770 Mitchellian PROCESSOR From: strummail@comcast. net Sent: Thursday, June 10, 2010 1:24 PM ro: Mitchellian Subject: New On-line Advisory Board Application Submitted Advisory Board Application Form Collier County Government .3301 E. Tamlaml Trail Naples, FL 34112 (239)252-8606 Application was received on: 6/x0/201.01.:23:55 PM. Renry I. S ism.. res, , 05 Broad Court No 1110 F39-298-6488] [st_rummaiI@comcast.nJe t.:L of indicate etire �39-430-91 Productivity Committe 5-12 xi 0-IMPW MAN MEN 21 �Iot n��cate Rol of Indicated AGE 03 it. M.-q -,!, wi 07/31/2010 12:05 18774686770 PROCESSOR -4 ol of Indicate M-0-Iffij 0 j a W N7 NO %I'', Not Indicate Mom O=dian ad Litem 20th Judicial Circuij al MIN WE 11 lUniversity of Toronto B.A. ct- 17-1;q-to PAGE 04 Career in banking in USA. Canadaand Europe. Retired as Dewtv CEO and Chief Lendine Officer.) 07/31/2010 12:05 18774686770 Mitchelllan PROCESSOR !Tom: johnkems@kemsintl.com ient: Friday, June 04, 2010 5:01 PM To: Mitchellian Subject: New Online Advisory Board Application Submitted ,Advisory Board Application Form Collier County Government 3301 E. Tamiami Trail Naples, FY, 34112 (239)252 -8606 Application was received on: 6/4/2010 5:00:29 PM. Nailte: ohn K 136me.Phone: 39.262.0221 Home Address: R711 West Blvd. city: ale Zip Cade: 34103 Phone Numbers FIW Business: e-Mail Address: 'obn4msAkernsinfl.co Board / Committee Applied for: ounty Goverment Productivity or Consumer Adviso Boar Category: of indicate Work Place: erns International How long`have you.lived in Collier County: Eil Have you :ever been convicted of any offense against the law? ®o Not badicat ob ; -Ho PAGE 05 Do you or your employer do. business with the County? Not indicate NOTE: All advisory board members must update their proSle mud notify the Hoard: of County Commissioners in the event that their relationship changes relating to membersl>ips of. orgEv uiizations that mayb,enefr thom in the outcome of advisory board recommendations of they ,enter into contracts with the County. Would you and /or any organizations with whom you are aifxUiated benefit from decisions or 07/31/2010 12:05 18774686770 recommendations made by this advisory board? of indicate Are you a registered voter in Collier County? ©e Do you currently hold-pi iblic office? PROCESSOR Do you currently or ever served on a Collier County Board or Committee? ®o of lndicat Please list your community activities: oble of Indiana-Board Iyiemb Education: A, Bowling Grew State Universit Nan Ming Partner -Kerns International President -Wick Works, LLC Chief O qmi Officer-Day bushing Vice President - PepsiCo (T -7,N -,to PAGE 06 07/31/2010 12:05 18774686770 Mitchelllan PROCESSOR ,"'prom: scott.lowe@pmc.hma.org � . ant: Friday, May 28, 2010 3:34 PM To: Mitchelllan Subject: New On -line Advisory Board Application Submitted Advisory Board Application Form Collier County Government 3301 E. Tamiami Trail Naples, FL 34112 (239)252 -8606 Application was received on: 5/28/2010 3:34:15 Ply. Name: colt Lowe Home Phone: 39- 272 -9256 Home Address: 110 Channel Ct. City: Marco lslan Z; p Code: 414 Phone Numbers Fax 39,354 -6009 Business: 39- 354 -600 C, .-Mail Address: colt -lowe nac.lazna.or Board l Conimittee.Applied for: JCounty Go ernment Productivity Conmaitte Category;, Not indicate Work Place: h sician's Re ional Healthcare S ste How— have you lived in Collier County: fiore than 15 Have.you ever been cobvieted of any offense against the law. of Indicate Do you or your employer do business with the County? of indicate e7,gj�J() PAGE 07 NOTE: All advisory board members must update their profile and notify,the Board of County Cbmtdissivmers in the event that their relationship changes relating to xaembexsiups of E organizati6ns that, may benefi them in the outckae of advisory recommendations or they enter into cgoniraos with the County. Would you andloir Any, organizations with whom you are affiliated bene:dt from decisions or 1 07/31/2010 12:05 18774686770 recommendations made by this advisory board? PROCESSOR r. of Indicate Are your a registered voter in Collier County? Do you currently bold public once? No Do you currently or ever served on a Collier, County Board or Committee? io of Indicate Please list your community activities: of Virginia, Bachelor of Arts University of Texas Master in Public Health Business A.dmin CP- nGE 08� Of lJx erience: ecentl June 2008 Ph moved back to Naples to serve as the Chief Financial Officer for sicians Re for edical Center — Collier Boulevard. Prior to relocat' back to Na les I served as the Chief Financial 4i ur Partners in Tam a, Florida. A start-up ambulat snr a center ma»at ement company where 1 e onsible for the company's overall financial o erations, includm oversight of fmancial policies, gnat i and budgeting, the Central Business Office and man! ement of all financing activities. I began areer in them ed care indus including several ears with Nei borhood Health Partners and Blue lue Shield. I t eight ears with Cleveland Clinic Florida and was the financial lead for the develo n d construction ofthe Cleveland Clinuic N les facili on Pine Ri a road Currentl Ph sicians Re ion edical Center - Pine Ridize)• 2 07/31/2010 12:05 18774686770 Mitcheillan PROCESSOR (- -,Tom: cpavlick@collierenterprises.com ant: Thursday, May 27, 2010 3 :32 PM To: Mitchellla.n Subject: New Online Advisory Board Application Submitted Advisory Board Application Form Collier County Government 3301 E. Tamiami Frail Naples, FL 34112 (239)252 -8606 Application was received on: 5/27/2010 3:31:49 PM. Name: Che ryl Pavhck own by P_ a_vlick Phone: 39- 513 -1393 Home A,ddiress: 110208 Boca Circle City: ale Zip Code: 410 Phone Numbers ( "'av 39- 261 -548 Business: 39- 434 -4065 Cf- i A-10 PAGE 09 Schoenfeld - married legal last name Home e -Maid Address: c avlick collierente rises.co Board / Committee Applied for; Productivity Comnitte Category: uman Resources Work Place: lCollier Enterprise ;How loi g have you lived in .Collier County: ore than 15 Have'you ever'been convicted of any offense against the law? of Tndicat Do you or your employer do business with the County? N�o Not Indicate NOTE: All advisory board members must update theirpprofile and notify the Board of County t,. Comissi oueis in the event. that their relationship changes rela'fiug to m6mbeisbips of organizations that may beneft them in the outcome of advisory board &com=enda°tions of they . 61it Into contracts with'the County. 07/31/2010 12:05 18774686770 PROCESSOR Would., ,ou an.dlor any .qrtan.ixations with whom you. are affiliated benefit #irons, decisiopi or recoinnueridations made by.this advisory board? C . of Inadicat Are yoga registered voter in Collier County? es Do you currently hold, public office? �To Do you currently or ever served on a Collier.County Board or Committee? of Indicate Please list, our conamuni activities: a les Chamber of Commerce Board of Directors HR Collier President -elect RIMS SWFL oca Palms Homeowners Association Board of Director Education: .A.; Psychology and Business, Univers#y of South Florida, Tampa, FL M.S.; Indusb sychology, Univeristy of Central FL Orlando FL Ph.D. Classes at the University of e ree, Pittsburg, P Ex erience: 0+ years of 0gressive human resources ex 'ence beg innin g in 1985 at PPG Into. IPA; YMCA of the Palms, Naples, FL axed Collier En 'ses, Naples, 2 C-Iv -J,N -to PAGE 10 ration - did not 07/31/2010 12:05 18774686770 PROCESSOR Cheryl Pavfick, KS., SPHR 10208 Boca Circle Naples, FL 34109 (239) 253 -6083 ChervlPavl1ck9D.QM9il com OBJECTIVE Ck PAGE 11 Driven, analytical, and business savvy Human Resources professional with a passion for what she does! My excellent interpersonal skills and extensive experience enables me to be a strong contributor to an organization's success. I prefer to be a contributing member of a management team where I can apply my skills, experience and knowledge to maximize and capitalize on the organization's human resources and align HR goals with the business strategy. My experience spans all areas of HR including: organizational structuring and design, recruiting and selection, compensation, benefits, payroll, training, performance management, and risk management; and I have a proven track record for developing successful human resource programs and Initiatives. I am also proficient in designing policies and procedures that ensure legal compliance and promote a positive and productive work environment SUMMARY OF E KPERIENCE Director of Human Resources Collier Enterprlsss June 2006 - Present Naples, FL • Manage all areas of human resources and a staff of 5 including: recruiting and selection, payroll, benefits, compensation, employee communications, development & training, organization policies & procedures, risk management, safety, employee coaching & counseling, and performance management for over 200 employees in a diverse service, hospitality, and real estate business_ • Converted payroll processing and time keeping system from server based to ADP's web -based version ultimately reducing processing time and reducing paper needs by 50% through transition to virtual reporting, improved the ease and efficiency for manager approvals on timekeeping, and reducing overall payroll processing costs. • Rewrote the Employee Handbook and Corporate Procedures manuals to ensure policies are legally compliant, easy to understand and effective for both managers and employees. • Developed organizational structure and hiring plans for hospitality business opened in 2008; also developed organizational structure, employee positions and specifications for real estate development venture including utilities company and development division. • Regularly consult with and provide guldence to hospitality and real estate managers on all employee and HR issues to create positive work culture while maintaining legalty,compliant procedures. Implement HR Initiatives that support the department and company wide strategies and assist the management team in achieving the corporate objectives. E=xamples of some initiatives Include creating an on- boarding process for new employees, creating and delivering coaching and counseling training for managers, Implementing virtual training for skills training, creating performance based compensation and benefits programs, and implementing a companywide rewards and recognition program. • Created and spearheaded Corporate Wellness programs, Heart Walk 2008, employee events and other employee wellness and engagement programs. • Certified trainer for Harassment Prevention Training; delivered training for all employees in 2008 (N =200 +) with overall average rating of 4.74 on a 5 point scale. Serves as Company contact for discrimination and harassment complaints and conduct investigations to resolve Issues or complaints, Vice President, Human Resources, Communications, & Risk Management YMCA of the Palms March 2002 - June 2006 Naples, FL Managed Human Resource, Communications and Risk Management activities for a large, diverse national non -profit organization; managed staff of three HR/Communication employees. Consulted with division managers to administer customer surveys and identify and seats numerous HR solutions and programs to achieve the department goals. 07/31/2010 12:05 18774606770 PROCESSOR PAGE �12D Cheryl Pavtick, M.S., SPHR resume Page 2 of 2 • Created employee recruiting, selection and retention processes to reduce turnover, conducted training needs analyses and created training and orientation programs to improve customer satisfaction scores and achieve t l corporate goals; created employee on boarding and orientation training programs, conducted team building sessions and organized strategic planning retreats for management. • Managed volunteer program and developed recruiting, selection, screening, servioe and recognition for large, diverse volunteer base. • Created and conducted the 2006 strategic planning process for the Corporate Board, conducted pre - interviews, organized and facilitated two -day planning process; presented results to all employees and boards and facilitated Goal Teams and action plans. • Served as the Interim Director of Child Care Services for 6 months overseeing two departments with a total of 48 employees while maintaining current HR position. Consultant —Team Member Nov. 9998 — March 2002 FGCU; CenfsrforLeadwship & Innovation Ft. Myers, FL Worked as a member of the consulting team to diagnose organizational issues and create solutions to enact change or resolve current operational or employment problems. • Served as a facilitator for focus groups, nominal grouping sessions and employee interviews. • Provided training programs in Behaviorally Based Interviewing Techniques, Time Management, Stress Management, Coaching and Counseling and Performance Management. Manager, Organ!Wlonal & Employment Technology March 9985 - Nov, 1998 PPG Industries, Inc. Pittsburgh, PA Served as external consultant from Virginia (1991 -1996) • Provided employment and human resource consultation to factory managers in a large, global Fortune 100 ( manufacturing company with over 35,000 employees worldwide with Glass, Coatings, Chemicals and 810- Medical divisions. Developed employment testing processes Including cognitive ability testing, behavior based Interviewing and assessment center technology far all levels of employees. Developed and implemented Supervisor Assessment Centers inGuding In U.S. locations and Manchester, England. • Conducted the bi- annual employee attitude survey in five languages for 30,000+ employees; created reports and implementation plans and reviewed with management and employees. • In support of the organization worldwide goal of Improving the quality of products and processes, led the Initiative for Total Quality by training factory employees and plant management in the Crosby TOM program and worked as part of a team to monitor and measure quality improvements. SUMMARY OF EDUCATION M.S., Industrial/Organizational Psychology University of Central Florida Odando, FL B.A., Psychology /Sualness University of South Florida Tampa, FL SUMMARY OF COMMUNITY INVOLVEMENT Naples Chamber of Commerce Board of Directors, elected May 2010 HR Collier, Member and Past President -elect Volunteer trainer for SHRM certification classes HRMA, Member SWFL RIMS, Member and Treasurer Guest lecturer for FGCU School of Hospitaltty, Adjunct Profeaaor FGOU College or Business (2002 - 2000); Claaaea include: Training and Development; Organizational ,Behavlar, and Human Resource Management. 07/31/2010 12:05 10774686770 PROCESSOR Mitchefflan 'Zrom.' I"ie.prizent@hma.com .ent., Wednesday, June 02, 2010 1:48 PM To: Mitcheillan Subject: New On-line Advisory Board Application Submitted Advisory Board Application Form Collier County Government 3301 E. Tamiam! Trail Naples, FL 34112 (239)252-8606 Application was received on: 612120x01:48:23 PM. esHe Fri 39-214-14118 012 QWfshore D ri v 9 -552 -353 ".A I WIVI a need for my services or Not indicate P47 Government Productivity Committee or any other Committee ft'Fft cites, Inc. Pealth Management Asso� 9.0 .'P K 600 Not bdicat "jW*".0 ii t n..Y . Yse dth Ma emout Associates, luc. (NYSEIMA) is a premier operator of acute =e hospitals southeast and southwest•areas of non-urban America. The corporate headquarters is located in I as two of our hospitals: Physicians Regional Pine Ridge Boulevard and Physicians Repional 1 07/31/2010 12:05 18774686770 ages necessitated b 2 legislative m the company to accomplish their C. CJQ� p -7 • ]- l PROCESSOR PAGE 14 altemative policies and procedures to enable the C1- q.A -10 07/31/2010 12:05 18774686770 PROCESSOR PAGE 15 LESLIE PRIZANT • iplizautattomey@yahoo.com a 9012 ClWfshore Drive Naples, FL 34108 • (239) 214 -1418 J,JCATTUN: SAM70" UNnTIRSITY, CUMBERLAND SCHOOL OF LAW Juris Doctorate, cum laude HONORS AND AcTmms; Merit Scholarship Recipient; Dean's List (three years); Merit of Scholar Award fc Excellence - Criminal Law; Williams Freshman Trial Competition Semifwalist, Spring 2002; Caruthers Teachiro Fellow for the Legal Research and Writing program 2002 -2o04; Executive Editor, Cumberland Law Review Curia Honoris; Who's Who Among Law Students in America, Cumberland School of Law, 2004 UNXVWSrrY OF ALABAMA AT BnEMI NGHAM, BIRMINGHAM Master of Public Administration, emphasis in Non -Profit Management HONORS AND ACTryTrM.- Graduate Student of the Year, Master's of Public Administration, Department c Government and Public Service; Ronald B. Casey Fellowship for Excellence in Government and Public Service Alabama City - County Management Scholarship; Master's of Public Administration Scholarship; Pi Alpha Alpt Honor Society President; Dean's List- 1999 -2001; American Society of Public ,A,dmb istration UNIVERSITY OF ALABAMA AT BIRNIINGHAM Bachelor of Science, cum laude HONORS AM AC rrVnUSc Chancellor's Scholarship; Brookwood Hospital Endowment Scholarship; Dean's Lis 1994 -1997; Gamma Beta Phi Honor Society LEGAL EXFFRIENCE: HLALTH MANAGEMENT ASSOCIATES, INC. NAPLES, F.LOXDA 2007 - present Associate General Counsel for PublUely Traded Health Care Company Company currently owns and operates over 200 corporate entities across the country (for profit and non- profit) • Advise hospital Board of Trustees, hospital directors and administration on corporate matters and day -to-da W operational issues related to corporate and securities litigation; employment litigation; class action litigatim acedgenera employmmnt matters Represeut the company in legal proceedings, coordinate litigation; coordinate activities and actions wit outside counsel retained to represent hospitals and the company a Research and advise corporate entities on various issues relating to various state and federal regulatxo including compliance with regulatory requirements a Negotiate, structure, review and approve a wide variety of general corporate agreements for transaction including commercial real estate deals, asset purchases and sales, stock purchases and sales, and unite liability company interest acquisition and assignments a Draft, review and approve various types of contractual arrangements for corporate organizations such a employment agreements, management agreements, medical director agreements, and recruitment agreements a Confer with corporate administrators on matters involving legal interpretation and decisions related t company activities, policy questions and operating problems a Direct and participate in the research of state and federal legislation and administrative and court decision: investigate legal problems and make recommendations a Receive and investigate inquiries and complaints from corporate administrators including, but not limited tc matters relating to employment law, tax law, labor law, insurance, risk management, patents and copyright, delinquent fees, contracts and hospital and corporate policies a Serve on company committees to provide recommendations regarding applicable legal matters. Recommen operational changes necessitated by legislative mandates; develop alternative policies and procedures t enable the hospital and the company to accomplish their objectives FOWLER WHITE BOGGS BANI= ]FORT LAUDERDALE, FL �2007 ,Au- seciiato Attorney for Prominent Mid-Siaa Florida Based Law Nirm - a Counsel health care clients in acquisition and divesture of corporate entities a Research and advise clients on various issues relating to various state and federal and state regulation including compliance with those, programs G(L 07/31/2010 12:05 18774686770 PROCESSOR PAGE 16 LPSM PPJZA,NT • 1priza:ntattorney @ yahoo.com • 9012 GuYshore Drive Maples, FL 34108 • (239) 214 -1418 BRADLEY ARANT ROSE & WHITE, LLP BUM NGRAM, AL 2004-2006 Corporate and Securities, Health Care and White Collar Crime Associate Attaruey for Prominent Large Alabama Based Law Firm • Negotiate and structure acquisitions and divesture of corporate entities; formation of joint ventures among fo: profit and non -profit entities; Advise clients on the connbivation and growth of corporate organizations • Assist clients on matters such as forming corporations, limited liability companies and limited partnership including asset purchases and sales, stock purchases and sales, limited liability company interest acquisitic and assignment, management agreements, buy -sell agreements and other related matters a Counsel clients as well as draft summary judgment and appellate briefs, motions, pleadings, and discovei responses and requests; Negotiate settlements Defense of clients who are involved in litigation matters such as fraud and qui tam cases brought under tb federal False Claims Act a Defense of employers, HMOs and insurers in F,RISA litigation as well as representation of hospital; physicians and managed care organizations in healthcare matters; class action and other complex litigatio matters; health care provider reimbursement claims, physician de- selection claims, and health care frau claims, as well as trade secret litigation matters BRADLEY ARANT Rom & WinTE, LLP BI awNGHAM, AL 2002-2004 Law Clerk for Prominent Large Alabama Based Law Firm • Performed entry-level technical legal work wader immediate supervision of partners on a part-time basis whil pursuing a law degree • Prepared draft pleadings, correspondence, legal memoranda, opinions, briefs, and other documents on variety of legal issues �R �DICIISSTONSi Alabama Florida COURT ADMISSIONS: United States District Courts Northern, Middle and Southern Districts of Alabama 2003 BRADLEY ARANT ROSE & win L, LLP, BY1uwNGBAM4 AL SumNmIi Assoc7ATE BURR & FOREMAN, LLP, BIRMINGHAM, AL Summm ASSOCIATE WALLACE, JORDAN, RATLIFB & BRANDT, LLC, ButMINGHAM, AL SUMMER ASSOCIATE 2002 BRADLEY ARANT ROSE & WHITE, LLP, BIRMINGHAM, AL SUMMER ASSOCIATE BmR &. FOREMAN, LLP, Bnum iGHAM, AL ,Sumiv It AssocrA I x OTI)ER. EXPERWNCE: UAB D- FPARTMENT of GOVERNMENT, BIRMINGHAM, AL 2000 -2001 Graduate Assistant • Research and Co- Authored article for Public Atbn nistrardon Quarterly journal 6 Designed and conducted surveys on government financial practices, economic and community developmen and intergovernmental relations; analyzed results and wrote journal article • Researched best practices for state and local government consulting project • Assisted professors in Department of Government in various projects, research and class preparation COA MUNM vu'r+:� Pro bond capitel. litigation; Volunteer Lawyers Program; First Loop Volunteer in Birmingham, Alabama city school system advocating Community involvement for city students t& 07/31/2010 12:05 18774686770 PROCESSOR PAGE 17 LESLIE PRIZANT • IprL- antawmeygyahoo.com • 9012 CWfShore Drive Naples, FL 34108 • (239) 214 -1418 C- AISHED w0pao: PUBLIC ADM 41STRATION FUBLICAbAIMS, OYTOXQUA.MRLY "Local Government and the Implementation of Alabama's Economic Development Policy" (Spring 2005): 29 -1 07/31/2010 12:27 18774686770 DRAFT Letter for County Commissioners PROCESSOR Subject: Proposed Jax- Florida Biomedical Research Complex July 21, 2010 Cf- . i%d! -ID PAGE 01/01 The productivity committee has reviewed the requested documents, conducted independent research, and held subcommittee and full committee meetings to provide the attached information. We have prepared two reports: the Jax - Florida Economic Viability report and the Jax - Florida Financing report (enclosed). The Economic Viability report includes information on the potential benefits of the project and the risks to achieving those benefits. The Financing report includes a variety of funding alternatives with cost, bonding and impact on individual properties. We have included a great deal of information, and our observations, to assist you in making your own evaluation. At our meeting on July 21, 2010, the productivity committee agreed that the economic viability of the proposed Jax - Florida biomedical complex While the potential benefits are significant, the success of the project depends heavily on whether the research infrastructure (medical school, research hospital, etc.) would move to Ave Maria, followed by the other cluster businesses. The Washington Economic Group (WEG) report, which quantified the potential economic impact in Collier County, appears significantly overstated. Our concerns are included in the report for your consideration. Even so, the WEG return on investment is extremely low, especially considering the level of risk involved. Also, there is a strong possibility that additional county money would be required to attract other biomedical employers, increasing the overall cost and reducing the return. If a decision is made to bring Jax-Florida to Collier County, the recommended financing is As always, we are available to answer your questions and members of the committee will attend the July 27th BCC meeting to provide any assistance you may require. We have enclosed a power point presentation to discuss at the BCC meeting. Sincerely, 07/3112010 11:40 18774666770 vom-A 'j,'owty PROCESSOR PAGE 01 Draft Draft Economic Viability of Jax- Florida A) What are the potential benefits of establishing Jax - Florida in Collier Coun ? 1) Potential benefit from diversification. Collier County's economy currently 'relies primarily on tourism, agriculture and construction. The county needs to attract sustainable high technology, high wage jobs that are less affected by economic downturns of tourism and construction to diversity and stabilize our economy. The plan is for Jackson Laboratory to establish Jax - Florida in Collier County to provide genetic research and personalized medicine health care and to anchor a biomedical research complex that would draw other high tech medical- related companies here — to provide the needed economic diversity and stabilization. Y . '2) Potential benefit from infusion of millions of dollars into the local economy. Through the Innovation Incentive Program, the Florida legislature has spent about $450 million to bring seven major biotechnology research institutes to the state to improve Florida's economy. With local matching funds, Flprida is spending nearly $1 billion to finance catalysts for economic growth. If Scripps Research Institute (funded. prior to the innovation Incentive Program). is included, over $1.5 billion is being spent. Now the Florida Legislature has offered $130 million to bring Jackson Laboratory to Collier County. We would need to provide $130 million in local matching funds and Jax - Florida expects to raise a total of $290 million over the next 10 years from donations, grants from the National Institutes of Health (NIH) and service and education revenues. The flow of outside money into Collier County could equal about $420 million ($130 million from the state and $290 million through Jax - Florida) over r the 10 -year period, with a large part of that money being spent right here. 3) Potential benefit from lobs created as a result of Jax - Florida. The expectation is that Jax - Florida would act as an anchor to bring other not- for - profit organizations, a hospital, a medical school and /or graduate school department, charter high school and for- profit biomedical research companies to the complex at Ave Maria. These new direct jobs, as well as indirect support and induced jobs, would be expected to bring substantial economic benefits to Collier County. The Washington Economics Group (WEG) prepared A Brief: Economic Impact and Return on Investment to Collier County, Florida from the Jackson Laboratory -- Florida, dated July 9, 2010. Their analysis estimated the potential economic impact, specific to Collier 07/31/2010 11:40 18774686770 Draft PROCESSOR PAGE 02 Draft Draft County, to be an average employment of 5,891 jobs, with resulting gross domestic product of $10.6 billion over 23 years. According to the WEG report, at build out in 2032, an estimated 11,490 new jobs would be created and the earnings of these employees would be nearly $1 billion per year. WEG conclusions are evaluated in paragraph N. An earlier WEG report that evaluated the economic benefits within Florida indicated that there would also be substantial regional benefits. While not separately quantified, the benefits to Lee County, due to spillover effects, would also be very significant. 4) Potential benefits to existing Collier County residents. In addition to the potential economic benefits discussed above, Collier County taxpayers can expect to benefit if other businesses come here to establish a robust biomedical research complex. They will help to: Create an improved and more stable economy, and an environment for other new and expanded businesses. Make Collier County a more desirable destination. Increase housing values and the net worth of taxpayers. Provide improved health services by translating results of Jax- Florida's personalized medicine more quickly to local doctors and hospitals, improving their diagnostic and treatment alternatives. Local residents may be able to participate in genome studies and genetic testing to benefit their health. More businesses mean more people, more support businesses and greater conveniences (stores, restaurants, entertainment, higher quality of life). Educational opportunities are expected to increase, including training opportunity by Jax - Florida. Jax - Florida health care conferences will have a positive impact on 'hospitality services. B) What are the risks to achievin the potential benefits? The potential benefits of bringing Jax - Florida to Collier County are significant and could well be worth the expenditure of $130 million. However, there are also significant risks regarding whether these benefits would be realized. • Would Jax - Florida succeed? • Would Jax - Florida attract cluster companies to Collier County? • Would the new companies expect money to relocate here? • What are the lost opportunity costs and unintended consequences? While the productivity committee can identify some of these risks, we are not able to quantify them. They should be taken into consideration when evaluating whether the potential benefits discussed earlier would actually be achieved. C) Would Jax - Florida be successful? 2 07/31/2010 11:40 Draft 18774686770 1) Jackson Lab would bee andm r personalized medicine at Jax- Florida. PROCESSOR Draft inni el,A✓ 10 AGE 03 The productivity committee does not have the expertise to determine whether Jax - Florida would be successful in their genomic research and personalized medicine and, if they were, how long it would take. It could be a good investment to have a small group of consulting scientists evaluate the feasibility of the Jax - Florida genetic research and provide an impartial view of what it takes to start and maintain a biomedical cluster. However, the committee can address some factors that could influence success. One thing is certain: Genetic research is a long -term effort and "success" would not be known for many years. 2) According to PricewaterhouseCoopers, the market for personalized medicine is already $232 billion and is projected to grow 11 percent annually to as much as $452 billion by 2015. Personalized medicine targets individualized treatment and care based on personal genetic information. Genomic testing would enable physicians to: • identify an individual's susceptibility to disease, • predict how a given patent will respond to a particular drug, • eliminate unnecessary treatments, • reduce incidence of adverse reactions to drugs, • increase the efficacy of treatments and • improve healthy outcomes. Healthcare is a changing and growing market and there is considerable potential for success in this area. 3) According to a New York Times article, A Decade Later, Genetic Map Yields Few New Cures by Nicholas Wade, (June 12, 2010), the "primary goal of the $3 billion Human Genome Project - to ferret out the genetic roots of common diseases like cancer and Alzheimer's and then generate treatments - remains largely elusive." However, "the new switch among geneticists to seeing rare variants as the major cause of common disease" is "a major paradigm shift in human genetics." Rare genetic variants are discovered by sequencing an individual's genome - which is the direction planned by Jax - Florida's Institute for Personalized Medicine. While there hasn't been huge success from genetics research so far, it looks promising in the future -- highlighting the risk involved in this type of venture. 4) The Jax - Florida Business Plan was reviewed and the committee met with Jackson Laboratory's chief operating officer Chuck Hewett. We examined the Statement of Operations and found that, over the 10 -year period, the revenue for Jax - Florida would consist of 3 07/31/2010 11:40 18774686770 Dre l� ��✓ �0 PROCESSOR PAGE 04 Draft Draft State funding of $130 million Local funding of $130 million Grants estimate of $63 million Service and collaborative revenue estimate of $71 million Donations estimate of $151 million Investment income estimate of $7 million Total income estimate of $552 million. During the first 10 years, state and local funding, accounting for nearly 1/2 (47 %) of Jax - Florida revenues, would pay for capital costs as well as operating losses_ After 2020, Jax- Florida would no longer have any state and local funding to subsidize annual costs. Reviewing the financial plan by year, Jax - Florida experiences a net operating loss in years 2014 through 2022, which is reduced by philanthropic donations and investment income. As can be seen above, financial viability depends heavily on Jax - Florida's effectiveness in fund raising, attracting grants and collaboration efforts. While $10 million in donations are expected in 2013, 2014, 2015 and 2018, anticipated donations increase to $20 million in 2016 and $25 million in 2017. Failure to achieve these larger donations would result in negative cash flow balances at yearend in 2016 and 2017. There is not much verifiable information in the business plan upon which to evaluate a $260 million funding decision, making the risk substantial. At a minimum, to protect our $130 million investment, the county should own the facility and have liens on major items of equipment purchased with county funds. if not successful, remaining county funds would be returned. Mr. Hewett appeared open to an arrangement with Collier County to share revenues (royalties) on patents to help recover county outlays. The business plan provided to the committee does not include any milestones by which to evaluate Jax - Florida performance, other than annual employment objectives. There should be operational measures to determine success in obtaining research grants, donations, patents, licensing agreements, etc. Reviewing the Jackson Laboratory 2009 Audit for the year ending May 31, 2009, the Committee noted that endowment investment losses were significant last year and asked whether Jax - Florida funds would be invested similarly. Jackson Lab responded that the county's $130 million would be conservatively invested in money market and treasury investments. Private donations would be invested in a variety of funds that are much more conservatively structured than in 2008. Conservative investments could affect an investment income level of $7 million over the 10 -year period. The state's funding for Jax - Florida is divided into $50 million in FY11, $40 million FY12 ki 07/31/2010 11:40 18774686770 Draft CC -7. ;4 -lo PROCESSOR PAGE 05 Draft Draft and $40 million in FY13. If the state does not provide the future $80 million, the economic viability of the project would be at risk. Jackson Lab has said the project cannot go forward without the state's funding in FY12 and FY13_ 5) Jax- Florida competition with other genetic institutes. Jax - Florida will have'to compete for top genetic scientists as well as research grants and donations. There is significant competition for these resources in Florida alone. Genome research work, some very similar to Jackson Lab, is being done in a variety of locations in the US, several in Florida. The Huffman Institute for Human Genomics in Miami is exploring genetic influences on human health, Burnham Institute in Orlando is studying the fundamental molecular mechanisms of diseases and Torrey Pines Institute for Molecular Studies in Port St. Lucie is conducting biomedical research related to disease treatment. The committee asked questions regarding how Jax - Florida would compete for top genome scientists with other Florida institutes, such as The Huffman lnstitute (Miami) and the Burnham Institute (Orlando), which are in major metropolitan areas that have a wide variety of activities and entertainments. Jackson Lab said: To attract the best, we will offer attractive financial packages, the opportunity to create a new initiative and the opportunity to hire people they want to work with ... Our project offers the quality of life and community values of Collier County, the reputation of The Jackson Laboratory, an opportunity to work on the most exciting biomedical science today, and the opportunity to create a new institute. When asked about Collier County's ability to compete with major Florida metropolitan areas in offering spousal career employment, Mr. Hewett said that scientists were frequently part of a 2- career couple and that spouse employment, which was very important, represented a challenge. He suggested that NCH, Physician's Regional and Lee Memorial hospitals could provide opportunities, as well as the biotech park in Ft. Myers. Ultimately some of the cluster organizations would also offer opportunities. Jax - Florida, located 30 miles from the gulf coast and city of Naples, in a small county of about 300,000 people, with limited spousal career opportunities, would have serious competition from major metropolitan areas offering similar genetic research opportunities. 6) Cluster organizations that are needed to ensure Jax - Florida's success. Apr. Hewett discussed the human focus of the personalized medicine institute where they plan to work on neuro- ,degenerative disease, cancer and diabetes and they expect to be on -line within 1 to 2 years after building construction is oompleted (2014/2015). 5 cl- 7'A -(D 07/31/2010 11:40 18774686770 PROCESSOR PAGE 06 Draft Draft Jax- Florida wants to collaborate first with a 60 -bed specialty hospital, that would become a general and teaching hospital over the decade. They want to conduct clinical trials, patient rounds and medical doctor (MD) participation in research. Second, they would anticipate a medical school department to work in conjunction with the specialty hospital. Third, they expect a biotechnology park to develop with biomedical research companies that would benefit from Jax - Florida research in sequencing and apply that science. Retail development would follow_ They also expect a charter school and university with a BS program. The Committee expressed concern that the research support organizations, that Jax - Florida needs to be successful, do not currently exist in Collier County, while they are available in many biomedical hubs in other cities. For example, the Huffman Institute and the Burnham Institute are co- located with medical schools. Burnham indicated they would not have come to Orlando without a local medical school. A Burnham director said: "Absolutely critical for our success is proximity to medical schools and universities." They are co- located with two hospitals (VA and Nemours), a new University of Central Florida medical school and a University of Florida research program going into the Medical City outside of Orlando. While Burnham was not the initial catalyst for the Medical City, it, along with the VA and medical school, helped draw the Nemours hospital and University of Florida research program. Mr. Hewett told Jeff Lytle: "it would not make any sense to come to Collier County where there is no research infrastructure, no research hospitals, no medical school, unless we could envision a future where those would start to come together ... We need to attract a good medical school with a research and clinical focus." Mr. Hewett was asked why Jackson Lab chose to expand in Collier County rather than in another location that already had the hospitals, medical school and other organizations essential to the success of Jax - Florida. His response was that Collier County had asked them to come. The state and county's willingness to provide $260 million to stimulate and diversify Collier County, and a loyalty by Jackson Lab to try to make the project work, is not necessarily the formula for a good business decision. The absence of these essential support research organizations adds significantly to the risk of success. There would be less risk if agreements were in hand for a hospital and medical school to co- locate with Jax - Florida before making a $130 million funding decision. D) Would Jackson Lab successfully anchor a biomedical complex, attracting related businesses to Collier County? 1) The major economic benefit to Collier County comes from the total number of 10 07/31/2010 11:40 18774686770 Draft ,-19, -7--7-;4 1'0 PROCESSOR PAGE 07 Draft Draft businesses that are expected to cluster around a successful Jax- Florida and be successful themselves. As mentioned earlier, the WEG report predicted over 11,000 jobs and over $10 billion in economic impact over a 20 -year period. However, without the cluster of new businesses (a geographic concentration of interconnected companies and institutions in a particular field), the predicted economic benefits would not accrue. 2) The Florida Office of Program Policy Analysis and Government Accountability (OPPAGA) report #10 -05, dated January 2010, evaluated the 7 publicly funded medical research ventures (grantees) in Florida and found that the biotechnology clusters were developing slowly. The report speculated that significant cluster growth would take decades. Unfortunately, it was too early in the process, only 2 or 3 years after funding for each institute was provided, to determine success or failure. The depressed economy of the last few years would also have had an impact. The report found that "relatively few biotech companies have begun operations in Florida since the grantees were established." Most grantees were in operation only two years or less and the four approved in 2008 were in temporary facilities. "Experts in biotech industry agree that significant cluster growth often takes decades. "'This investment has not yet resulted in the growth of technology clusters." 3) The State Science and Technology Institute (SSTI) prepared A Resource Guide for Technology -based Economic Development, dated August 2006. This report states that major research universities are the anchors for fast - growing tech nology- oriented economies, interacting with a robust technology- oriented private sector. SSTI Guide stated that: • Research conducted at universities generates new knowledge and technology that form the basis for creating new firms and new products. • Universities attract and produce highly trained personnel who provide the technically educated workforce. The presence of the workforce attracts the technology companies to locate in proximity to the universities, - Universities generate intellectual property that can lead to new products and processes and the creation of new companies. According to this Guide, the chance for success would be vastly improved if a research university would agree to co- locate with Jax- Florida in the near future. 4) The Washington Economics Group (WEG) report on the Economic Impacts in Collier County from Jax- Florida was reviewed by the productivity committee. The Collier County Economic Development Council (EDC) provided the building square footage estimates for cluster companies, based on what the 700 available acres would hold. These estimates were then used to determine employment and economic impacts. The EDC estimated the cluster would include: 7 07/31/2010 11:40 18774686770 I Cft' 7.1A110 PROCESSOR PAGE 08 Draft Draft 3,000,000 square feet used for research and development, 750,000 square feet for a teaching hospital and education campus, 20,000 square feet for goods and services, 8,000 square feet for local government services and 780 residential units. The WEG model takes the square footage estimates and translates them into jobs and subsequent economic impacts. However, the square footage assumptions appear greatly overstated compared to the cluster complex envisioned by Mr. Hewett (paragraph C6). The teaching hospital and education campus (750,000 square feet) would meet all the needs described by Mr. Hewett, leaving the remaining 2.8 million square feet to be filled with biomedical research and pharmaceutical companies, wanting to co- locate with Jax- Florida. The 2.8 million square feet of building space equates to 33 county administration building (Building F with 8 stories). Using the 4 -story height limit at Ave Maria, that translates to 66 four -story buildings for research and development companies, which is hard to imagine. When pushed to identify businesses that could occupy those buildings, WEG could only suggest pharmaceutical companies and suppliers of high tech equipment. If the total square footage estimates were reduced by 50 %, 750,000 square feet would remain available for the hospital and education campus, 165,000 square feet for Jax - Florida and about 1,000,000 square feet for research and development. There would be room for 22 four -story buildings for companies that want to co- locate and use Jax - Florida research /personalized medicine results — still a significant number. WEG uses a multiplier based on national experience that may or may not be applicable to Collier County_ However, to the extent square footage assumptions are too high, the economic impact calculations are overstated. The WEG analysis assumed a linear build out over 20 years producing an average increase of 360 direct employees at the Ave Maria site each year with an additional 160 indirect and induced employees each year. It is difficult, some would say impossible, to accept that constant level of hiring, based on Mr. Hewett's stated expectations. Another problem with the report is that it calculates only the "gross" economic benefit — not the "net" economic benefit. WEG calculates the jobs and economic impact of spending $130 million for Jax - Florida. WEG does not consider that $130 million, if not collected in taxes and used for Jax - Florida, would be spent in the local economy, by individuals, generating jobs and producing a different, but significant, economic impact. The real, "net" economic impact of funding Jax -- Florida is the difference between those two economic impacts. And this "nef impact would be substantially less that the "gross" WEG projections. This issue is covered under Opportunity Costs (paragraph 8 1..1Ci 'l�a.j -10 07/31/2010 11:40 18774686770 PROCESSOR PAGE 09 Draft Drat Draft F4). 5) The WEG report also calculated the overall rate of return on the county's $130 million investment, based on net sales tax and net operating revenues back to the county. At estimated build out in 2032, the return was projected to be 2.6 %. If a bonding alternative were selected, the return rate on the total $216 million investment (principle and interest) would be 1.6% The return rate calculation does not include any measure of risk, which is significant compared to the small rate of return. WEG estimated that, after 23 years, the $130 million county match would only generate $74 million in revenues returned to the county. The calculations are based on theoretical multipliers, which fail to include the costs of growth. The model includes the positive economic impacts, but it does not include the costs to taxpayers. In a related issue, the financial return to taxpayers, for their $130 million (or $216 million if bonded), could be limited in the future by an Innovation Zone designation and Tax Increment Funding. If this cluster area was eventually designated an Innovation Zone and Tax increment Funding (TIF) established, taxes from increased property values in the Zone could be put in an Economic Development Trust Fund to support area improvements in that Zone as well as in other Innovation Zones. The increasing property taxes (or some portion thereof), due to increased property values, would not come back to the General Fund to benefit taxpayers. if the $130 million local match is provided by county taxpayers, the BCC should make a commitment that, if the Jax- Florida biomedical research complex was designated an Innovation Zone, the Tax Incremental Funding provision would not be used and future increased property taxes revenues would go to the General Fund, benefiting those who paid $130 million for the Jax - Florida. 6) There has been no outside financial support for the Jax - Florida project so far. Outside financial interest would appear to be an indicator of success in establishing a biomedical cluster. Other Innovation Incentive projects in Florida generated donors wanting to help attract the biomedical institutes with contributions to the county's local match. The Huffman Institute came to Miami with $100 million in donations (meeting the full county match) from the Miller School of Medicine at the University of Miami where the institute co- located. The Burnham Institute came to Orlando with city and county taxpayers funding $74 million of the $155 million local match. Private, hospital, developer and Disney donations made up the rest of the local match. While there are many letters of support for Jax - Florida, there have been no commitments of money toward the county's $130 million local match_ There has been nothing from Lee County, where Jax- Florida would have a major 0 Cry -744 •-10 07/31/2010 11:40 18774686770 PROCESSOR PAGE 10 Draft Draft Draft spillover effects in new jobs, businesses and economic impact. There has been nothing from the hospitals and universities that want to work with Jax- Florida. There has been nothing, but the value of 50 acres, from Barron Collier Companies, while they stand to benefit greatly from the development of 700 acres of their properly at Ave Maria. They are donating $10 million directly to Jax - Florida, but that money would not be applied against the county's local match. The lack of outside financial support contributes to the level of risk. At this point, the 316,000 residents of Collier County would be responsible for the full $130 million, less the value of the land donation. Every effort should be made to generate outside financial support to contribute toward the county's local match. E) Would other companies /businesses expect money to cluster here? 1) Some companies, clustering with a biomedical anchor under the Florida Innovation Incentive program, required taxpayer money themselves. Scripps came to Jupiter in 2004, at a total cost of $570 million (state funding and local Palm Beach match). In 2008, Max Plank came to Jupiter with $94 million in state funding and an additional $93 million local match from Palm Beach County. Torrey Pines Institute for Molecular Studies came to Port St. Lucie in 2006 with $24.7 million in state funding and a local match of $71.5 million. Two years later, the Vaccine and Gene Therapy Institute came to Port St. Lucie with $60 million in state funding and an additional $60 million local match was required. SRI International came to St. Petersburg /Pinellas in 2006 with $20 million in state funding and a local match of a least $30 million. Two years later, Charley Stark Draper Laboratory came to St. Petersburg /Pinellas and Tam pa/H illsboroug h. with $15 million in state funding and an additional $15 million local match was required. 2) In an interview with Jeff Lytle, Mr. Hewett said he's "unsure whether the county's finance plan would leave any money to attract other biomedical employers." In response to a productivity committee question, Jackson Lab said: "Some other non- profits may need public funding in order to locate or move to Collier County. . . we expect that most organizations will not." 3) The decision to fund Jax - Florida should be made with the full recognition that additional county funding could be required for other businesses locating here. Conceivably, a new business, important to the success of the Jax - Florida biomedical complex, could want to come to Collier County, but they would require Innovation Incentive funding — from the state with a local match. Potential funding sources for additional local matches should be considered prior to the decision to fund $130 million for Jax - Florida. F) What are the lost opportunity costs and unintended consequences of sipendina $130 million on Jax - Florlda? 10 07/31/2010 11:40 18774686770 PROCESSOR PAGE 11 Draft Draft Draft 1) Opportunity cost is the cost we pay when we give up something to get something else. If Collier County spends $130 million for Jax- Florida, that is $130 million of taxpayer money that is not available for other economic development purposes. There could be other alternatives (or combinations of alternatives) that would produce significant benefits to Collier County - diversification and stabilization, new jobs contributing to a robust economy — at substantially less cost. $130 million is a lot of money. With the state's $130 million, a total of $260 million would be spent for one economic development project that has substantial risk. Local businesses have come forward looking for Collier County financial support. Arthrex is considering a plan for an accelerated healing institute in Collier County and, at one point, was looking for county subsidies. Another medical - related institute was interested in coming to Collier County, needing county subsidies. Money spent on Jax- Florida would not be available to support these potentially desirable businesses. Or additional county funding would be required. At some point, the county's ability to pay for additional economic development incentives will be exhausted. 2) The first objective of county government is to provide services to its residents. Funding Jax - Florida could make it more difficult to fund other county operations without additional millage increases. Or, without millage increases, county services could be reduced below the levels generally expected by Collier County residents. The county budget has been greatly reduced from prior years and the capital program has almost been eliminated. These programs will eventually need to be restored and cost (wage) increases, which have been suppressed, will occur in the future. To put the magnitude of the Jax - Florida financial commitment in perspective, $130 million is about the size of the Sheriff's budget. $260 million could reduce the county debt by one - third. While the projected economic impact of Jax - Florida would spur development, the WEG report has shown that the county will not recover its $130 million through taxes and fees, even after 23 years. Many of the planned cluster businesses will not pay taxes and the existing commercial and housing inventory will delay new construction and the associated increases in property tax revenue. The existing inventory of housing in Collier County (excluding Marco), is 8,845 units plus a couple of thousand in shadow inventory held by the banks but not on the market. Lee County's housing inventory would be even greater than ours. These new people and businesses will create additional demand for county services, while property tax revenues may be slow to increase. 3) While opportunity cost is the cost we pay when we give up something to get something else, Collier County residents may not want "to give up something." 11 07/31/2010 11:40 18774686770 PROCESSOR COIL e7 —.�1 -I0 PAGE 12 Draft Draft Draft Under any financing alternative, county residents will have to pay hundreds of dollars to make up the $130 million (or $216 million with bonding). Do they want to make that financial commitment? 4) The committee considered opportunity cost when reviewing the WEG report. The WEG analysis gave the gross economic impact of spending $130 million of local money on Jax- Florida. But it didn't consider that if Collier County.residents were not taxed to provide $130 million, they would spend some /most of that money creating jobs, earnings and economic impact in the local economy. "Gross" impact minus alternative use impact would equal the "net" impact. This is the actual economic impact of spending $130 million for Jax - Florida. If bonding were used, $216 million would be used for Jax - Florida to generate the same jobs and economic impact in the WEG report. But $216 million spent in the local economy, by individuals over 20 or 25 years, would have a substantially greater impact than $130 million spent over that period. This would make the "net" economic impact from spending on Jax - Florida even. less. Unfortunately, these alternatives can't be quantified using the WEG model, unless the specific use for the money is known. 5) There could be major unintended consequences of providing $130 million to Jax - Florida. Local non- profit organizations and charities are concerned that large local donations for Jax - Florida would seriously reduce their level of donations and impair their ability to provide services to the community. Collier County's interest in spending $130 million for Jax - Florida could change the expectations of businesses. Other companies could demand substantial subsidies to come to Collier County, including other companies joining the Jax - Florida cluster. Arthrex threatened to leave the county, saying other states were offering them $50 million to relocate. It sets the bar very high if county taxpayers are required to offer large subsidies to bring companies to Collier County and then large subsidies to retain them. A county with only 316,000 people cannot afford to pay large subsidies, over and over, for economic development. 12 07/31/2010 13:46 18774686770 SheffieldMichael PROCESSOR Subject: FW: Jackson Laboratory, USF Announce New Partnership in Collier County PAGE 01 From: kristi @enaplesflorlda.com [ mailto :kristi @enaplesflorida.com] Sent: Wednesday, July 21, 2010 12:01 PM To: kristi@enaplesfiarida.com Subject: Jackson Laboratory, USF Announce New Partnership in Collier County The Jackson Laboratory Eeadi ^.� the spwtr Eo+ Icra ravS c. -as PRESSS CONTACTS Joyce Peterson Media Relations Manager The Jackson Laboratory Joyce. peterson(ED-iax.org 207.288.6058 Lisa Greene Director of Strategic Communications USF Health 813.833.5333 Cell 813.833.4312 Office LGreene@health.usf.edu Jackson Laboratory, USF announce new partnership in Collier County NAPLES, FL (July 21, 2010) -Today The Jackson Laboratory announced that its first medical partner for the new research and education village in Collier County will be the University of South Florida, one of the nation's fastest - growing biomedical research universities. Jackson and USF will collaborate on a variety of initiatives to lead the nation toward personalized medicine, in which disease prevention and treatment are based on a person's unique genetic makeup, or genome. The partnership will result in new research gains and education programs, as well as providing better health care and increased economic opportunities for the citizens of Collier County and Southwest Florida. "Jackson is an ideal partner for USF," said Dr. Stephen Klasko, dean of the USF College of Medicine and CEO of USF Health, which consists of USF's Colleges of Medicine, Nursing and Public Health. "The Laboratory's longstanding expertise in mammalian genetics and its cutting -edge genomics research are known around the world," Dr. Klasko said. "We want to give our students and residents an education that will help them become leaders in the new era of genomics -based personalized medicine. The possibilities for collaboration are limited only by our own imaginations." 07/31/2010 13:46 18774686770 PROCESSOR CP- AT102D In turn, USF Health's strong research environment and academic entrepreneurial model will be assets for Jackson, said Charles E. Hewett, PhD, Jackson's vice president and chief operating officer. . "USF Health looks toward the future of health care," Dr, Hewett said. "Whether it's researching the secrets of deadly diseases; helping doctors join the electronic age or teaching surgeons how to use high -tech robots, USF Health keeps pushing the boundaries of medicine forward. As we build our partnership, that forward - thinking philosophy will help us deliver on the promise of personalized medicine." That promise comes with the power to transform how medicine is delivered today. imagine a future in which a diagnosis comes with a specialized prescription: a reading of a patient's genome, and recommendations for how to target medicines and other therapies for a particular individual. Treatments will be more effective and side effects diminished. That's what Jackson and USF will hope to deliver. "For physicians and patients to make knowledgeable decisions in the era of personalized medicine, they must be able to access and understand the complex genetic basis of health, disease and medicine," Dr. Klasko said. Working together, The Jackson Laboratory and USF have the expertise, experience, leadership and medical and scientific connections to be the definitive source of information on the role of genomics in human health and disease." Jackson and USF plan to collaborate in three key areas: research, education and clinical care. • RESEARCH. Jackson and USF researchers will collaborate on work in such endeavors as computational biology and bioinformatics; cancer; Alzheimer's disease and the neurosciences; metabolic diseases; and a host of other diseases. researchers and clinicians will work together to bring the latest discoveries into clinical practice, with an emphasis on new medicine that is tailored to respond to the individual. EDUCATION. Advancing technologies demand a different kind of education for the next generation of healthcare professionals. USF Health and Jackson are leaders in medical and scientific education. The partnership will lead the way in educating students in medicine, nursing, pharmacy and emerging health professions in the areas of personalized health, pharmacogenomics, and bioinformatics. The partnership also expects to develop continuing medical education programs to help teach doctors and other practicing health professionals about these new areas of medicine. • CLINICAL CAFE. Jackson and USF Health will team with other health care organizations to develop a clinical campus that will provide the latest in cutting -edge personalized medicine and health care to patients from Collier County and beyond. USF already is creating new models to help patients with chronic conditions live optimistically, The partnership will be ideally positioned to provide personalized medicine across a continuum of care, from home therapies to outpatient and inpatient services. Those initiatives will further increase the economic impact of the research and education village planned for eastern Collier County. An economic analysis performed by the Washington Economic Group predicts that within 10 years, the research and education village will generate 7,500 jobs and $500 million in annual economic activity in cumulative economic impact in Collier County - and even more across the southwestern Florida region. The partnership with USF Health will accelerate these economic benefits. "Collier County's vision of building a biomedical cluster, and its determination to become a key player in the biomedical revolution are very powerful incentives for USF Health to act now," said Dr. Klasko. Noting that Edison State College has already committed to creating a charter high school in the research and education village, Dr. Hewett said "There will be many more announcements like this one. We look forward to welcoming scientific, educational and medical partners from around the world. We will also see a growing number of commercial ventures locating here." "This is a great day for the citizens of Collier County and southwest Florida as well as for us," Dr. Hewett said. 07/31/2010 13:46 18774686770 PROCESSOR CP- P4GE 03 "Together, we will transform the economy of this region, and help southwest Floridians lead longer, healthier lives." The Jackson Laboratory - The Jackson Laboratory (wow jax ora) is an independent, nonprofit biomedical research institution based in Bar Harbor, Maine, with a facility in Sacramento, Calif. The Laboratory was founded in 1.929 and it employs about 9300 people. Known internationally for its leadership in mammalian genetics, its mission is to discover the genetic basis for preventing, treating and curing human diseases, and to enable research and education for the global biomedical community. Its 38 research teams study the genetic basis of cancers, heart disease, osteoporosis, Alzheimer's disease, glaucoma, diabetes and many other diseases and disorders, as well as how genes affect normal development, reproduction, and aging. - USF Health - USF Health (www. health. usf.edu) is dedicated to creating a model of health care based on understanding the full spectrum of health. It includes the University of South Florida's colleges of medicine, nursing, and public health; the schools of biomedical sciences, pharmacy, and physical therapy & rehabilitation sciences; and the USF Physicians Group. With more than $380.4 million in research grants and contracts last year, the University of South Florida is one of the nation's top 63 public research universities and one of only 25 public research universities nationwide with very high research activity that is designated as community - engaged by the Carnegie Foundation for the Advancement of Teaching. C� 07/31/2010 11:55 18774686770 PROCESSOR PAGE 01 Draft Draft Draft Financing for Jax- Florida A) What are the financing alternatives to bring Jax- Florida to Collier Count The productivity committee has identified 7 funding alternatives: a franchise fee, three property tax options, non -ad valorem revenue, a combined franchise fee /property tax and a sales tax. The alternatives address basic provisions, cost, bonding, payout requirements, advantages and disadvantages. Calculations are based on current assumptions and reasonable expectations. Most calculations are general estimates, since future economic conditions (cost increases, revenue increases due to growth, etc.) over the funding timeframe are not factored into the analysis. However, these estimates are sufficient to compare the provisions and costs of the different alternatives. B) What is the estimated payout of county match by year? The Jackson Laboratory Proposed Business Plan (June 2010) provided a graphical schedule of when combined state and local funds would be required by calendar year. The initial assumption is that state funding and local match funding would be, required in equal amounts each year based on the Business Plan. The $130 million county's local match payout, by fiscal year, would be: $28 million in FYI $36 million in FY12 $17 million in FY13 $ 9 million in FY14 $10 million in FY15 $ 9 million in FY16 $ 8 million in FYI $ 6 million in FYI $ 4 million in FYI 3 million in FY20 $130 million all years The state's initial $50 million appropriation would run out the middle of FY12. Collier County should consider the economic viability of the project if the additional state funding is not provided in FY12 and FY13. Jackson Laboratory has said the project cannot go forward without the state's future $80 million. C) Who is contributing to county's 030 million share? 1) During the last 5 years, the Florida Legislature has provided $450 million to bring 07/31/2010 11:55 18774686770 PROCESSOR '7�_1° PAGE 02 Draft Draft Draft earlier biomedical research institutes to seven other counties under the Innovation Incentive Program. The productivity committee reviewed how some of the largest local matches were financed. The Burnham Institute for Medical Research is located in Orlando /Orange County. The required local match of $155 million (identical to the state share) is being paid by: -- City of Orlando $33 million -- Orange County $41 million — Private donations $15 million -- Developer (land) $23 million -- Hospital (in -kind) $31 million Walt Disney (in -kind) $11 million Max Planck Florida is located in Jupiter /Palm Beach County. The required local match of $93 million (nearly identical to the state share) is being paid by Palm Beach County through a series of non -ad valorem revenue bonds, which didn't require a voter referendum. There are 1.2 million people living in Palm Beach County. Huffman Institute for Human Genomics is located in Miami/Dade County. State funding is $80 million and the local match is at least $100 million in private funds, The Miller School of Medicine, at the University of Miami where the institute is co- located, is providing the donation. 2) Barron Collier Companies is donating 50 acres to Jax - Florida. The actual value of the land will need to be determined. Donated land has generally been counted as part of the local match. The Jackson Laboratory Business Plan states that $125 million of the County's $130 million local match must be in cash, or infrastructure agreed to by Jackson Lab, and up to $5 million may be the value of the land donated to the Laboratory. With the actual value of the land unknown at this time, the full $130 million local match was used in the cost calculations of the various alternatives. 3) Donations from medical schools, hospitals, cities, private sources or federal stimulus /job creation funds should be pursued, as they have in prior Innovation Incentive programs, to reduce the amount of the $130 million local match that Collier County residents would otherwise be required to pay.. Some of these organizations have expressed written support for, and would benefit from, Jax- Florida and their financial support should be solicited. Jackson Laboratory acknowledges that Barron Collier Companies plans to donate $10 million (exclusive of land) to Jax - Florida. However, that amount will be counted as a private donation to Jax - Florida and will not be included as part of the county's local match. Barron Collier Companies stands to make a lot of money if county taxpayers spend $130 million for Jax - Florida to anchor a biomedical cluster on their property and 2 07/31/2010 11:55 18774686770 PROCESSOR PAGE 03 Draft Draft Draft they should make a substantial contribution to the local match. Other landowners, with sufficient property to house a biomedical cluster, should be contacted to see if they would be willing to donate 50 acres to Jax- Florida and also agree to a: substantial contribution toward the local match. 4) Collier County should ask Lee County to contribute to the local match. The potential benefits of proximity to Jax- Florida would be felt regionally in Southwest Florida. In fact, the Washington Economic Group report identifies substantial "regional benefits" and a large part would apply to Lee County. The multiplier effect of the new Jax - Florida and cluster jobs would have a spillover effect for new /expanding supporting businesses, jobs and expenditures in Lee County, including increased activity at the SW Regional airport_ New residential housing would be built in Lee County, as new employees look for housing in a variety of price ranges. Many parts of Lee County, from Bonita Springs to Lehigh Acres and even western Hendry County, would be an easy commute to Ave Maria. 5) Jax - Florida should also consider applying for Recovery Zone Facility Bonds, which are used for the financing of private activity business in a Recovery ,Zone. They are tax - exempt private activity bonds, available under the American Recovery and Reinvestment Act (ARRA) of 2009. Recovery Zone bonds must be issued no later than January 31, 2010. 6) Every effort should be made to secure additional revenue from other sources to reduce county tax outlays. There are 316,000 people in Collier County to pay the $130 million local match. No other county in the state has had to pay such a large per capita cost to secure a biotechnology research institute under the Innovation Incentive Program. Chuck Hewett, in an interview with Jeff Lytle, left the door open for Collier County to partner in royalties from new patents. There may be other ways for the county to recover some of our investment from the future profitability of Jax - Florida. D) What revenue sources could be used to pay the $930 million? 1) A Franchise l=ee, for use of county right -of -way, could be added to utility bills. Electric companies would pass fee collections to Collier County. A franchise fee could be instituted by a simple majority vote of the Board of County Commissioners. An ordinance would be prepared and collections could start shortly thereafter. The county can only establish a franchise fee in unincorporated areas of the county, which would exclude the City of Naples, Marco Island and Everglades City, about 10% of the county's population. In the unincorporated areas, a franchise fee would be collected from both Florida Power & Light (FPL) and Lee County Elective Co -Op (LCEC). 07/31/2010 11:55 18774686770 Draft 010 vlo PROCESSOR PAGE 04 Draft Draft The maximum franchise fee that could be established is 5.9 %, which would produce $22.3 million annually. If a franchise fee rate of 2.33% was established, $8.8 million would be collected annually. This amount would be sufficient to pay the debt on two bond sales ($80 million in FYI and $50 million in FYI 3), assuming a 4.5% interest rate, retiring the bonds in a maximum of 25 years. The franchise fee could be eliminated once the bonds were retired. A residence with an average $120 monthly electric bill would pay less than $3 monthly, $34 annually and about $840 over the 25 year period. A residence with a $200 monthly electric bill, would pay about $4.60 monthly, $56 annually and $1,400 over the 25 year period. An average commercial property would pay about $14 monthly, $170 annually and $4,200 over the 25 year period. An average industrial property would pay about $8.50 monthly, $102 annually and $2,550 over the 25 year period. Advantages: Bonding the franchise fee would spread the cost over the 10 to 20 year period required to achieve projected full benefits of extended job creation. Disadvantages: The franchise fee would not paid by all Collier County residents, which would be a fairness issue for an economic development effort of this size. A franchise fee is regressive, hitting the lower income taxpayer harder than those with a higher income. 2) Property taxes could be used on a pay -as- you -go basis. ( #1) The FYI county budget has been developed at a millage neutral level. Property values dropped 12% and FYI General Fund revenues are $31.9 million lower that the FYI level. Non - homesteaded properties will pay 12% less than last year. Some homesteaded properties will pay less than last year, and some will pay 2.8% more than last year due to the Florida "recapture" provision. According to the assumptions provided, property values and tax revenues in future years are not expected to increase dramatically. Property values for the FYI county budget are expected to drop 6% and, at a millage neutral level, General Fund revenues would be $13 million lower than in FYI 1. Property values are expected to stabilize in FYI and FYI and General Fund revenues would remain constant. Property values in FYI through FY20 are expected to increase at a 5.5% rate, providing additional revenue of $11 million to $15 million in those years. Funding Jax- Florida on a pay -as- you -go basis from property taxes would require tax rate increases. This alternative assumes that state funds and the local match must be 4 07/31/2010 11:55 18774686770 R ■ PROCESSOR PAGE 05 Draft Draft paid equally each year_ The Board of County Commissioners would set the property tax rate to fund Jackson Lab for FYI with a majority vote, and collections would start in November 2010. In subsequent fiscal years, the appropriate millage rate would need to be included for Jax- Florida. Using the assumptions on property values and the county's payout schedule listed above, the following tax rate increases would be required over the FYI millage neutral rate. Tax impacts on some assessed property values are provided. Year Millage Tax increase Increase $200k property FYI 1 .45 $ 90 FY12 .62 $116 FYI .29 $ 55 FY14 .15 $ 28 FYI .16 $ 32 FYI .14 $ 29 FYI .12 $ 26 FY18 .08 $ 19 FYI .05 $ 12 FY20 .04 10 $417 Tax increase $300k property $135 $174 $ 83 $ 42 $ 48 $ 44 $ 39 $ 28 $ 18 X15 $626 Advantages: Property taxes, unlike franchise fees, would be paid by all county property owners and indirectly by all renters. No bonding is required so there are no interest costs. Proposed millage increase could be halted if the project does not proceed beyond a certain timeframe. Disadvantages: Costs are front - loaded, over a 10 -year period (with 60% of the costs paid in the first 3 years), for a project whose full benefits would probably not be realized for 10 to 20 years. During the 10 -year payment period, additional millage rate increases would be required for other county operations (costs increase for purchases, wages and other expenses, as well as delayed infrastructure needs). Without millage increases, the county would probably need to reduce services below the levels generally expected by Collier County residents. 3) Property taxes could be used on another pay -as- you -go basis. ( #2) Funding Jax - Florida on a different pay -as- you -go basis, out of property taxes, would also require tax rate increases. This alternative assumes that all state funds are paid out as soon as they are available in the first 3 years and then the county's local match is used, as required, to 5 07/31/2010 11:55 18774686770 PROCESSOR U_ I'V-10 PAGE 06 Draft Draft Draft meet the Jackson Lab payout schedule. It is possible that this payout schedule could be negotiated to our advantage with the state's Office of Tourism, Trade and Economic Development. The Board of County Commissioners would set the property tax rate to fund Jackson Lab for FY11 with a majority vote, and collections would start in November 2010. In subsequent fiscal years, the appropriate millage rate would need to be included for Jax- Florida. Using the assumptions on property values and the county's payout schedule listed above, the following tax rate increases would be required over the FY11 millage neutral rate. Tax impacts on some assessed property values are provided. Year Millage Tax increase Increase $200k property FY11 .26 $ 52 FY12 .27 $ 54 FY13 .27 $ 54 FY14 .24 $ 48 FY15 .23 $ 46 FY16 .18 $ 36 FY17 .18 $ 36 FY18 .15 $ 30 FY19 .10 $ 20 FY20 .07 14 $390 Tax increase $300k property $ 78 $ 81 $ 81 $ 72 $ 69 $ 54 $ 54 $ 45 $ 30 1 $585 This methodology costs less than the property tax #1 method because the state's funding is spent first, then the county's local match. Advantages: Property taxes, unlike franchise fees, would be paid by all county property owners and indirectly by all renters. No bonding is required so there are no interest costs. Proposed millage increase could be halted if the project does not proceed beyond a certain timeframe. Annual costs would be more uniform over the 10 -year period, unlike the front - loaded costs of the prior #1 pay -as- you -go alternative. Disadvantages: During the 10 -year payment period, additional millage rate increases would be required for other county operations (costs increase for purchases, wages and other expenses, as well as delayed infrastructure needs)_ Without millage increases, the county would probably need to reduce services below the levels generally expected by Collier County residents. R 07/31/2010 11:55 18774686770 PROCESSOR lam'' I_2r �lo PAGE 07 Draft Draft Drat 4) Property, taxes could be used as a pledge for a general revenue bond. (##3) Funding Jax- Florida by pledging ad valorem (property) taxes, to pay bond debt service, would require a voter referendum on November 2, 2010. August 20 is the deadline for referendum language to be sent to the Supervisor of Elections office to be included on the November 2nd ballot. Two staggered bond offerings, an $80 million bond in FYI and a $50 million bond in FYI 3, at 4.5% interest over a maximum 25 -year period, would meet the payout requirements. A dedicated property tax of .143 mil would produce $8.8 million in annual revenue to pay the debt service on these bonds. The impact of a .143 mil increase in property taxes on typical properties is provided. Other property values can be extrapolated. A $200k taxable value property would pay about $29 more per year and about $715 over 25 years. A $300k taxable value property would pay about $43 more per year and about $1,070 over 25 years. Advantages: All property owners, in the cities and unincorporated areas of Collier County, would pay to support this major economic development project. Payment would be over the 10 to 20 years needed to realize full benefits of the project. Annual financial impact would not be excessive. Disadvantages: Costs for this option are higher than the property tax pay -as- you -go alternative because of the length of payment (25 years versus 10 years) and the bond interest cost. A $200,000 house would pay a total cost of $715 with bonding versus $417 without. Bonding is required so interest costs are included. 5) Non -ad valorem revenue could be used as a pledge for bonding. Reviewing other Innovation Incentive programs in Florida, only Palm Beach County has a local funding match even close ($93 million) to Collier County's $130 million requirement. They are using a series of non -ad valorem revenue bonds (which don't require a voter referendum) to bring Max Planck to Jupiter. There is sufficient non -ad valorem revenue capacity (sales tax, revenue sharing, communications fee, etc.) available to cover the $130 million bond requirement. Two staggered bond offerings, an $80 million bond in FYI and a $50 million bond in FYI 3, at 4.5% interest over a maximum 25 -year period, would meet the payout requirements. Non -ad valorem revenues would be used to pay the $8.8 million annual debt service on the combined bonds. Adding $8.8 million in debt would bring our total general government debt ratio up to 12.2% (from 9.3% at the end of FY09), which is just under the 13% maximum adopted 7 07/31/2010 11:55 18774686770 Draft 1 A- lD PROCESSOR PAGE 08 Draft Draft in the Collier County BCC Debt Policy_ It is unclear whether this level of debt would affect bond ratings. If a new $8.8 million revenue source was added, the debt ratio would be reduced below 12.2 %. If another revenue source was not provided, county General Fund operations would need to be reduced by $8.8 million. With a reduction in property tax revenue of $32 million (12 %) in FYI and another projected reduction of $13 million (6 %) in FYI 2, there is limited flexibility to find $8.8 million in cost reductions without affecting the level of services. provided to county residents. Other revenue sources could be instituted or increased to pay for General Fund operations. Franchise fees have already been discussed and the impact on typical properties has been calculated, as well as advantages and disadvantages. Property taxes could be increased to provide additional revenues for essential county operations. A.143 mil increase, for 25 years, would generate $8.8 million in additional income. The impact on typical properties has already been calculated, as well as advantages and disadvantages. 6) A combination of franchise fee and prourty taxes could be used. Another alternative, evaluated by the Office of Management and Budget, would combine a .1 mill property tax increase with a 2.5% franchise fee to fund the $130 million according to the required payout schedule. The franchise fee revenue would be pledged on a $50 million bond at 5% interest for 15 years. Debt service on the bond would be $4.8 million per year. The franchise fee revenue would produce $9 million per year and the. 1 mil increase in property taxes would produce about $6 million per year until the debt service and payout options were completed. The following table shows the annual cost for typical single family residences and typical condos in the City of Naples, the City of Marco Island and the unincorporated county. As stated earlier, all county property owners would pay the property tax, while only unincorporated residents would pay the franchise fee. An average residential home was considered to have a $120 monthly electric bill. Typical Single Family Residential Property Owner 8 Unincorp. County Naples Marco Island Tax Value - Avg $244,000 $1,200,000 $484,000 Prop Tax ,1 mil $ 24 $ 120 $ 48 Franchise Fee 2.5% 36 $ 0_ -L—Q Total/year $ 60 $ 120 $ 48 Total /15 years $900 $1,800 $720 8 07/31/2010 11:55 Draft -7 uY-l0 18774686770 PROCESSOR PAGE 09 Draft Draft Typical Single Family Condo Property Owner An average commercial property would pay about $15 monthly, $180 annually and $2,700 over the 15 -year period for the franchise fee, plus the cost of the .1 mill increase in property taxes annually for 15 years. An average industrial property would pay about $9 monthly, $110 annually and $1,640 over the 15 -year period, plus the cost of the .1 mill increase in property taxes annually for 15 years. Advantages: Bonding the franchise fee and paying property taxes over 15 years, would spread the cost over the 10 to 20 year period required to achieve projected full benefits of the extended job creation. Disadvantages: Using a combination approach attempts to equalize the tax burden between franchise fees (where only unincorporated residents pay a fee) and property taxes (where city taxpayers pay more on higher property values). However, the combination would still be regressive, hitting the lower income taxpayer harder than those with a higher income_ 7) A Sales tax increase could be used as a revenue source. Florida Statute 212.055 allows a discretionary sales surtax of either 0.5% or 1 %. Under the Local Government Infrastructure surtax option: Collier County would need to own the land and infrastructure (building) and the Jackson Laboratory building would have to qualify as a "public facility" to use the discretionary sales surtax. Florida Statute paragraph (2)(d)2 would allow 15% of the proceeds to be put into a trust fund for economic development projects. The sales surtax would have to be approved in a voter referendum and a sunset provision could be included. A discretionary sales surtax must start on January 1$1 according to Florida Statute and end on December 31 't. If the referendum were approved by voters and certified before November 16, Z Unincorp. County Naples Marco Island Tax Value - Avg $200,000 $477,000 $355,000 Prop Tax .1 mil $ 20 $ 48 $ 36 Franchise Fee 2.5% $ 36 0 �--Q Totaltyear $ 56 $ 48 $ 36 Totall15 years $840 $720 $540 An average commercial property would pay about $15 monthly, $180 annually and $2,700 over the 15 -year period for the franchise fee, plus the cost of the .1 mill increase in property taxes annually for 15 years. An average industrial property would pay about $9 monthly, $110 annually and $1,640 over the 15 -year period, plus the cost of the .1 mill increase in property taxes annually for 15 years. Advantages: Bonding the franchise fee and paying property taxes over 15 years, would spread the cost over the 10 to 20 year period required to achieve projected full benefits of the extended job creation. Disadvantages: Using a combination approach attempts to equalize the tax burden between franchise fees (where only unincorporated residents pay a fee) and property taxes (where city taxpayers pay more on higher property values). However, the combination would still be regressive, hitting the lower income taxpayer harder than those with a higher income_ 7) A Sales tax increase could be used as a revenue source. Florida Statute 212.055 allows a discretionary sales surtax of either 0.5% or 1 %. Under the Local Government Infrastructure surtax option: Collier County would need to own the land and infrastructure (building) and the Jackson Laboratory building would have to qualify as a "public facility" to use the discretionary sales surtax. Florida Statute paragraph (2)(d)2 would allow 15% of the proceeds to be put into a trust fund for economic development projects. The sales surtax would have to be approved in a voter referendum and a sunset provision could be included. A discretionary sales surtax must start on January 1$1 according to Florida Statute and end on December 31 't. If the referendum were approved by voters and certified before November 16, Z 07/31/2010 11:55 18774686770 PROCESSOR OP e7-?,1 1() PAGE 10 Draft Draft Draft 2010, the sales surtax could be made effective January 1, 2011, with monthly checks remitted to the county starting March 2011. A 1/2% sales tax would generate about $22.3 million per year, starting in 2011. Sales tax revenue does not fit the required payout schedule. Insufficient funds would-be available without bonding and too much money would be available with bonding. If the sales tax started on January 1, 2011, a property tax rate increase for 2 years, combined with the sales tax for 5 years, could meet payout requirements. An FY11 millage increase of .2 mil ($12.4 million) and an FY12 millage increase of .2 mil ($11.7 million), added to the annual $22.3 million in sales tax revenue would cover the higher payouts in the first 2 years. A .2 mil would be $40 in both FY11 and FY12 on a $200,000 taxable property, and $60 each year on a $300,000 taxable property. The cost of the sales tax increase depends on purchases of taxable items. In FY15, the sales tax would bring in about $10 million more than needed, depending on the health of the local economy and tourism. This excess could be accommodated if the ballot language were to allow any remainder sales tax revenue to be used on county infrastructure in the Jackson Lab area. The Florida Statute says that any sales surtax would be distributed to the county and the municipalities. The cities would have to sign an interlocal agreement to use their share of the sales tax revenue for Jax- Florida. The County Attorney is of the opinion that the term "public facility" refers to buildings such as Courthouses, and that the remaining 85% of the entire infrastructure sales tax cannot be used to fund the Jackson Labs Building. He believes that by carving out the 15% to fund economic development projects, the Legislature implicitly negates a local government using the remaining portion of the sales to fund economic development by any method. Our outside bond counsel is of the same view. However, they agree there is little case law on this issue. The Board could put the sales surtax on the ballot, and if it passed, we would need to go through a bond validation process in order to satisfy the bond market. This entails going to the circuit court to seek validation that the bond is lawful, and if appealed (and it likely would be), the issue would go directly to the Florida Supreme Court for review. The estimated timeline for this process is a minimum of 9 months and a maximum of a year and a half. If we put it the issue on the November 2010 ballot, the funding would be contingent on a validation that, if successful (which the County Attorney does not believe is likely), would not be until sometime between August 2011 and May 2012. Advantages; The property tax increases in FY11 and FY12 would not be large. Non - residents would pay a significant percentage of the sales surtax, lowering the burden on county residents. Disadvantages: 10 07/31/2010 11:55 18774686770 Draft PROCESSOR PAGE 11 Draft Draft According to the County Attorney, the "public facility" designation could be challenged in court, either delaying implementation of the sales tax until 2011 or 2012 or, more likely, denying the use of the sales surtax altogether. A sales tax would be regressive, hitting the lower income taxpayer harder than those with a higher income. 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CL �. o 0) aq (:T) n C LM n 3 rD x cn 0 O � ° 3 cz- r-F C m �• o cr -6 3 rD 0 �r-+ r o aa LA. n rD 0 r+ 0 • V) Z 0 (D n 0 LA o' cl) e+ 0 CL o Ln (D C -� CL 0 0 cr lD Oa o r+ � � "t3 O O 0 cn o O CL c: CL o �:3 0 � r+ s� 3 r+ PROCESSOR m 7L21"zoto PAGE 09 0 0 �. O O rah 3 3 Q °—' ;w 0 '-"• Zn C R =- M -• cD o• � O C � C i o 3 3, 3 rD 3 �. L r) tb_ O CD D�� ry c: rD CD crQ rna C 0' (n+ 3� m <' C rD n m Ln r+ o l sv 0 O 0_ o CL m �CL) O 0_ z Ul 07/31/2010 12:25 10774686770 PROCESSOR Jax Viability Potential Benefits Diversification • Job creation 4, Improved healthcare Infusion of money into local economy Potential Risks Will Jax - Florida be successful? Needs research university and medical school Will Cluster be successful? WEG benefits overstated; Collier competes with other biomedical clusters; Clusters slow to develop. -7 ie- y1 -MIO p►Od,1L4,Vf {�G*if� PAGE 1/01 Other financial issues? Low rate of return for risk level; No outside financial support for local match; Could have to pay to attract other companies; Can't afford other economic incentives; Could need tax increases for future services.