MINUTES OF THE MEETING OF THE BOARD OF COUNTY COMMISSIONERS

BREVARD COUNTY, FLORIDA

 

 

June 3, 2008

 

 

 

The Board of County Commissioners of Brevard County, Florida, met in special session on May 13, 2008 at 9:03 a.m. in the Florida Room, Building C, 2725 Judge Fran Jamieson Way, Viera, Florida.  Present were:  Chairman Truman Scarborough, Commissioners Mary Bolin, Chuck Nelson, Helen Voltz, and Jackie Colon, County Manager Peggy Busacca, and County Attorney Scott Knox.

 

 

 

Lynda Weatherman, Economic Development Council Director, stated when a company goes to relocate into an area it is team effort; and the focus of the EDC is on the local team, which has been the County Commission, both airport authorities, both cities, and the Brevard Workforce Development Board.  She advised another team member is the State of Florida; having Embraer relocate in Brevard County is a win for the area as well as the State; and she would like to explain the State’s perspective and the role it has played and what it was able to do to make the project come to fruition. 

 

Bob Rohrlack, Enterprise Florida, stated Embraer is an important project; and he wants to make sure the Board knows how successful it has been.  He advised an RFP for the project went to 18 different counties; there were 13 responses, including two sites in Brevard County, that were up for consideration; Embraer narrowed the prospects down to three finalists; and of those three finalists, two were in Brevard County.  He stated it shows Brevard County has a strong image going forward and a strong potential for new jobs; during the site tour the decision was made to look at negotiating for an arrangement that could work in both parties favor at the Melbourne Airport; and as Enterprise Florida has been looking at the resources that can come into play, the State is bringing $18 million into Brevard County for the project.  He stated the Governor has made it clear he is watching closely, as this is also an important project for him; but the Governor is not the only one watching; Enterprise Florida on average has 200 projects that are in various stages of the decision making process; and some projects will fall through and some will go to other locations, but there are some that are looking at Brevard County.  He stated perspective companies look to see how the business climate is in Brevard County, and how businesses are being worked with to determine if it is somewhere the company wants to be and where they want to work; and Enterprise Florida is hoping Embraer will be a positive resolution for everybody as well as having a strong international company operating and growing in Brevard County.  He commented on the media attention being given to the Embraer project from all over the State, Country, and as far away as Singapore; and that is the kind of attention Enterprise Florida’s incentive package could not have paid for. 

 

  

 

Kim Brown stated she would like to explain to the Board where the business community stands; from a business standpoint there is a big difference between spending money and investing money; and clearly, the Embraer project is an investment.  She stated investing money, then ensuring the investment stays local is something the Board should consider when it makes the decision; she hopes her company will get a chance at the construction of the Embraer building; the local dollars will stay local; and she hopes the Board approves the project.

 

 

MEMORANDUM OF AGREEMENT, RE:  EMBRAER (CONTINUED)

 

Chairman Scarborough stated when the Embraer project was presented to the Board on February 27^th at a workshop, the board enthusiastically endorsed it; and the Board told the citizens it would essentially be the reversal of the tax abatement program, which has been used for many years.  He stated he agrees with Ms. Brown that the project is an investment; but the concept when it came forward was not within the context of Embraer because of confidentiality; and the Board needs to go back to the idea that it is creating a new tool for the EDC.  He stated a question he posed to County Manager Peggy Busacca and County Attorney Scott Knox was, could the Embraer project be used as a template to attract other manufacturing companies; and the idea is that the Board has something that is viable and could work.  He stated Attorney Knox has advised the Board may, in creating a template, consider the fact as such assessment value less than 100 percent by the Property Appraiser, to value of money, or to historical trends in tax increases; stated he has never thought a county gets the first contract the first time, as some people have misinterpreted; and he has never been a substitute County Attorney, as Attorney Knox does an excellent job.   He stated his job was to find out if the Board was working in the context of what it had as its basic understanding of creating a new tool for the EDC; that is what he has always gone back to; and it was misinterpreted that he is involved in a level he is not supposed to be involved in.  He noted on February 27, 2008 the Board said it would be a good idea to do cash advance; stated he has advocated that the project could be moved forward to taking land in lieu of cash advance as another tool; and the issue is whether or not the Board walks away with something that is understood and that the Board can work with.  He stated he has some problems with the Grant Agreement; some of the problems are small; and some problems are things he just jotted down.  He stated the first issue is on the first page of the Grant Agreement and it addresses Attorney Knox’s memo; Attorney Knox states Exhibit B would be the methodology for the dollar calculation; and actual dollar calculation for Melbourne is $1.6 million, and for TICO it is almost $1.8 million.  He stated in the language, the Board said between the two competing sites the highest potential tax exemption for the qualifying operator would be $1.8 million, which is the Titusville site; but Embraer did not go to Titusville; and that is a problem for him, but he will continue. 

 

Commissioner Voltz stated she thinks the bottom line is if Embraer had gone to one site or the other, it does not matter as long as they are coming to Brevard County; and Brevard County could have given Embraer $1.8 million.  Chairman Scarborough stated the Board has said what the company would get under the tax abatement calculation; if it is not what the company gets on the tax abatement for that particular program, nor if the revenues are not actually generated, the Board is at a posture of not doing what it told people; and he wonders if just looking is enough.

 

Chairman Scarborough stated the Clerk has raised the issue that since the MOI (Memorandum of Intent)  is not  public  record, it should not be referenced in the Grant Agreement; he does not think it is a critical part of the document; and he would like to strike the reference to the MOI in the Grant Agreement.  He stated another issue is that under Awards Condition, it is directed to be delivered to the County Manager; the tax abatement ordinance deals a lot more with the Property Appraiser involvement; and he would like to include language that the Property Appraiser is involved in the calculations, if that is okay with Embraer. 

 

Mr. Rohrlack stated Embraer will agree to that.  County Manager Peggy Busacca stated because it would be largely a finance document, the Board may also want to ensure the Clerk of Courts or the Finance Office gets a chance to review it as well.  Bob Rohrlack inquired if the Board wants the company to deliver to each of the parties, or would it go through the County Manager; with Chairman Scarborough responding the County Manager will provide copies to each party.   Chairman Scarborough stated the next issue is under Reporting; the Board follows certain procedures with the tax abatement program by bringing back the ordinance and having it revoked by formal action of the Board; he suggests if it is not reported, it triggers something; if Embraer fails to report, the Board has a right to file a lawsuit; but there is a variation between the two programs.  Chairman Scarborough stated it can be left alone.

 

Chairman Scarborough stated he is concerned about the paragraph in the Grant Agreement dealing with acts of nature; the paragraph mentions a shortage of labor or material; if there is a shortage caused by revolution, or something happens in Brazil to create a problem, that is okay; but he is not comfortable with a shortage of labor or material because of a managerial failure to allocate resources; and he would like to strike through “shortage of labor or materials”. 

 

Gary Spulak, President of Embraer, stated if there is a shortage of labor or materials because of Embraer’s actions, he agrees; but it may be out Embraer’s control.  He stated there are instances in which there are shortages based on the demand of the product and the components that make up the product from other competitors that purchase materials; there are shortages that occur from time to time; and Embraer tries to plan for the shortages, but sometimes it just happens that way.  Chairman Scarborough stated everyone who goes into business has those problems; and as fiduciaries for the tax payer’s money, the Board has taken $1.8 million; and inquired if he would share the profit with Embraer if he was a partner.  Mr. Rohrlack stated the County does share in the profit because as Embraer grows and is successful, it will be hiring more people, buying more equipment to purchase planes, and be more taxable; and the more successful Embraer is, the more beneficial it is to the County. 

 

Mr. Spulak stated Embraer is not talking about a minor delay due to something that was a supply chain issue happening over the course of several months; stated Embraer is talking about something very significant; and there are always going to be variances in the supply chain in competition for certain resources.  Chairman Scarborough stated the Board will leave it as it is written in the Grant Agreement.  He stated businesses take a certain risk; and there may be a supplier with a labor problem, but then all of a sudden the County is taking a business risk.  Mr. Spulak stated Embraer will take that risk and be responsible, unless there is an earthquake. Chairman Scarborough stated earthquakes are forgiven; but if Embraer has problems because it chose a supplier that is less than reliable, then that is Embraer’s problem.  Mr. Spulak stated he agrees.  Chairman Scarborough inquired if the Board can strike that part of the Agreement; with Mr. Spulak responding yes, as long as it is understood that if it is caused by Embraer or its mis-management of the process or our selection of suppliers it is not a problem; but if it is something that is caused by the outside that is out of Embraer’s control and the Commission understands that, then that is fine with Embraer. 

 

Commissioner Nelson stated if Embraer had a sole source provider that was suddenly no longer able to produce for whatever reason beyond Embraer’s control, it would come to the Board in terms of the annual assessment; and it would be up to the Board to determine whether or not it was legitimate.  Chairman Scarborough stated the Board can leave it as it is in the Agreement.  Commissioner Bolin stated she is fine with it.

 

Chairman Scarborough stated the County Manager has an ability to negotiate and execute changes in amendments; and he thinks that would need to come back to the Board to see if it wants to create some other dynamics.  Commissioner Nelson stated he agrees that it is a Board decision. 

 

Chairman Scarborough stated in going back to the first issue, if the Board is going to use something that was calculated from another site without a basis, he cannot support it today.  He stated the reason for that is the Board is deviating from what it told everybody; and the Board cannot use someone else’s project for tax abatement.  Lynda Weatherman stated in February the EDC presented the guideline to the Board using the numbers of the ABT as a guideline to go by in regards to how much cash would be offered; it was based on an earlier meeting with Embraer which said the ABT program is good, but there are other offerings that might be more competitive; and the EDC wanted to be more creative.  She stated February 29^th was the date of the best and final offer; at that time and for weeks after that there were two competing sites.  She advised the difference in the tax abatement value between the two competing sites over the life of the contract is $17,000; after the best and final offer and the negotiations with the County, there were several times when EDC team members had to go back and adjust the offerings; the EDC never came before the Board because it gave the best and final offer given the two competing sites at the time; and she wants the Board to understand how it was calculated. 

 

Chairman Scarborough stated he said $1.8 million with the assumption of the flip of doing tax abatement; the tax abatement is based upon a historical calculation; when a historical calculation is done on the site Embraer chose, the number is not there; and that is what he is talking about.  He stated there are many people in the community watching the project closely to see if the Board is deviating from what it previously said; and what is needed is a tool for many jobs.  He noted the County has lost 350 jobs from Sea Ray and is going to lose 6,400 from the Space Center; the 200 jobs is nice, but by the same token, there needs to be a viable program that is accepted by the community; and he thinks Ms. Weatherman appreciates the significance of the moment. 

 

Motion by Commissioner Bolin, seconded by Commissioner Voltz. to execute the Memorandum of Agreement with Embraer Holding, Inc., as amended; and authorized the Chairman to execute the Agreement.

 

 

Commissioner Nelson stated there were two numbers throughout the process; he does not fault Embraer as he feels it has negotiated in good faith; but he is concerned the Board ended up with $1.8 million and $1.6 as the numbers it thought it was talking about; and it locked into $1.8 million.  He stated he will support the Agreement because he wants to see the 200 jobs come into Brevard County; but the gap has to be closed; and the Board needs to find out what happened, because he thought the Board was talking about a different number.  He stated he hopes when the Board meets in July it can talk about the process.  Chairman Scarborough stated under his report he would like to talk about the process.

 

Chairman Scarborough called for a vote on the motion and it passed; Chairman Scarborough and Commissioner Colon voted nay.

 

 

 

County Attorney Scott Knox stated he sent the Board the proposed Charter Amendment drafted by Attorney Alan Watts; he is going to bring it back to the Board officially on July 8^th; and since the Board will be on a fast track to get it on the ballot by September 1^st, the language has to be finished.  He stated he would like the Board’s permission to contact the panel of lawyers that it used the last time in order to get them prepared to review the Charter Amendment in a fast-track fashion.

 

Commissioner Voltz inquired if it is for the fire assessment; with Attorney Knox advising it is the Charter Amendment dealing with the cap on taxes.  Commissioner Nelson inquired how the panel of lawyers are selected; with Attorney Knox advising the Board selected the panel the last time; and he proposes the Board use the same group.  Chairman Scarborough inquired who the lawyers are that are on the panel; with Attorney Knox responding he can provide the names to the Board. 

 

Commissioner Colon inquired when everything has to be in, in order for it to be on the ballot in November; the citizens have already voted; and the Board is only carrying through what has already been voted on.   Attorney Knox replied the deadline for getting the ballot language to the Supervisor of Elections is September 1, 2008.

 

Commissioner Nelson stated his concern is he does not know who the panel of lawyers are.  Chairman Scarborough stated he recalls Paul Googleman and Dwight Severs.  Attorney Knox stated the lawyers are from outside law firms, so Mr. Googleman and Mr. Severs will not be on the panel.  Commissioner Nelson inquired if the lawyers are the same ones that reviewed the Save Brevard Charter Amendment; with Attorney Knox responding yes, they probably are.  Commissioner Nelson stated he will not be voting in favor because he does not know who the lawyers are.

 

 

Motion by Commissioner Voltz, seconded by Commissioner Bolin, to grant permission to the County Attorney to contact three different outside law firms concerning the ballot language for the Charter Amendment dealing with the cap on taxes.  Motion carried and ordered; Commissioner Nelson voted nay.

 

 

Commissioner Nelson stated he believes the language needs to go forward, but he would like to know who the lawyers are.

 

 

 

Commissioner Voltz advised today is her son’s birthday; and he lives in Ohio.

Commissioner Colon stated on Friday, in Titusville, she attended a group meeting of Great to Wait, which is an organization that works closely with the youth in making sure young people stay positive and not do things they should not be doing; and she would like to thank Mary and Mr. Walker.

 

Commissioner Colon stated she attended the So You Think You Have Talent; it was a tremendous event; the community received the event very well; and it was a positive event.  She stated the event will be held on a quarterly basis.

 

 

 

Commissioner Colon stated she hopes today the Board can discuss the tax abatements and future projects; the biggest criticism with Project Jaguar was the secrecy; and she is uncomfortable when the Board is not able to have access to a Memorandum of Understanding.  She stated for the Board to have the County Manager as the middle man, it is uncomfortable; anything the County Manager has access to, the Board should have access also; and it puts the County Manager in an awkward position because she has to explain to the Board.  She stated she has done a lot of digging in regards to the issue; it is important the Board does not feel compelled to agree to something on its first round; and the Board is blessed because a company is coming to Brevard County; but she is more interested in discussing the process at a future date. 

 

 

Commissioner Bolin advised over the weekend she attended the Satellite Beach High School graduation.

 

Commissioner Bolin stated this morning was the ribbon cutting at the Rich Grissom Nature Park in Viera; Mr. Grissom is the County employee who was killed on the job; and Utility Services Director Dick Martens held a wonderful ceremony.

 

 

 

Chairman Scarborough stated everyone gets emails with the disclaimer that the email is confidential; he has had citizens, candidates, and the media go through his emails; and the Commissioners have put on their documents that Florida has broad public disclosure requirements.  He stated there are two different worlds; there is the corporate world where secrecy is encouraged in order to keep competitors from obtaining too much information; and when someone enters the process they have to have a full knowledge of the rules the Board has to operate under.  He stated on Tuesday the Board was supposed to vote on the Embraer contract and the evening before he received a copy of the document; and at the meeting County Attorney Scott Knox gave the Board something else. 

 

 

He stated the Board had a 1:00 p.m. meeting last Thursday; he received something from Attorney Knox and he made some notes and informed Attorney Knox that he may want to have someone look over the document for grammar; he then received something back from Attorney Knox and then asked Attorney Knox to send him back a marked-up copy; and he only had three hours to read the document and get back in touch with Attorney Knox.  He stated as the Board moved from having the document as an exhibit, to the idea that Embraer could not only take the site that it is going to, but also the site it looked at in determining the tax abatement.  He stated anytime the Board is dealing with somebody in the public, it needs to have information for the public; the Board is the decision makers and it has the right to come in at the last moment and hear something from the public and change its minds.  He stated somehow, the input staff was giving the Board was not adequate because Embraer thought it was dealing with another company; the Commissioners cannot call each other to see what they each think because of the Sunshine Law; and he would like to tell the public the rules under which the Board operates.  He stated if those ground rules are set in the future, people who come in from the private sector will understand the Board is required by law to do certain things in certain ways. 

 

Commissioner Voltz stated from what she can recall, this is the first time the Board has had a company come in and say something is confidential.  Chairman Scarborough stated every one of the Board’s tax abatements can proceed up to a point totally confidential, and then it becomes totally disclosed; this time, the Board had the confidentiality, but the trouble was the flip of the tax abatement; and Embraer saw it as $1.8 million the County has voted on.  He stated he voted differently than the rest of the Board, but he is going to sign the contract; the $1.8 million will be Embraer’s because three Commissioners voted to do that; and that is fine, but there is still a stewardship role on each Commissioner and part of the stewardship role is having information in a timely manner so the Board can be a good fiduciary. 

 

Commissioner Nelson stated Chairman Scarborough was hitting the key points that he saw as being important; and the questions Chairman Scarborough asked were very good.  He stated if the Board makes the process more structured and uses Embraer as a template, then it will take off the table much of the bumping the Board ran into; but this was the Board’s first experience.  He stated he does not think the Board should ever take away confidentiality because that will drive away high quality companies; that is the last thing the Board wants to do; and the Board has to create the point where everyone knows up to a point it will be confidential.  He stated people were concerned the Board was using a rubber stamp; but it really did get hammered out in public; and he was always comfortable that it would happen, and it did happen.  He noted he is still troubled by the $1.6 million and the $1.8 million because there was a point when the Board should have been told that it had changed and was morphing into something else; but he was comfortable enough to vote for the Agreement because in the past there have been offers of $1 million associated with no program to get a company to come to Brevard County; and this has been a blend of the two, but his preference is to have a program in place in which the Board has the ability to know what the numbers are and if the numbers change.  He stated the Board uses Economic and Financial Programs Director Greg Lugar, who is the Board’s representative in the process, to bounce things off of and to give the Board history; he felt like the Board did not have that this time around; it was troubling to him because he wanted to know if there was anything he needed to be looking at; and Mr. Lugar needs to be the core person to give the Board the background, and he does a good job at that. 

 

Commissioner Colon stated she is happy the dollars are coming to Brevard County, but she was uncomfortable  with  the process; it  seemed  like  the  County  Manager  was put in the position

where she had to be an advocate to give out information; and that is not how it should be done, as it should be between the particular company and the Board of County Commissioners.  She noted some companies have had their tax abatements revoked because they did not deliver the kind of jobs they said they would deliver. 

 

Commissioner Bolin stated she likes the idea that the EDC worked directly with the County Manager because then Ms. Busacca was her point of contact as far as representing the County; and to her that worked out well.  Commissioner Colon stated the part that is uncomfortable is that it comes across as Ms. Busacca is championing for the company; in the past, it has been the company and the EDC meeting with the County Commissioners; and she has never seen the County Manager’s Office involved with one particular company.  Commissioner Bolin stated to her, it worked out well to be able to contact Ms. Busacca. 

 

Commissioner Nelson inquired how Ms. Busacca became the point of contact.  Lynda Weatherman, EDC Executive Director, replied each project is unique; Ms. Busacca was very much involved in the Delta IV Project; in this case of Embraer, the reason for the involvement was because of the confidentiality issue; and the EDC had to have one point of contact with the County it could interface with, and if not, the EDC would have violated the confidentiality issue.  She stated Ms. Busacca was able to interface with the Board; it was for the protection of the County Commission; and then when it was announced that Embraer would come to Brevard County with some contingencies, it was vetted in the public.

 

Chairman Scarborough inquired at what point does Ms. Busacca have to share information with the Board; stated if she is not sharing information with the Commissioners, is she breaching her duty as the County Manager; and the Board needs to figure out how to deal with these particular issues. He stated the Board appreciates the need for confidentiality, but the more County staff is involved as opposed to the EDC, confidentiality is relinquished that is afforded under Florida Statutes.  He stated there are a lot of dynamics in the whole issue; when the Board comes back together in July, it should talk about the roles of different people, the confidentiality issue, and the role of the County Manager; each Commissioner believes when Ms. Busacca has information, the information belongs to the Commissioners; and if the Board asks for information, it should be able to attain it, particularly if it is part of a decision making process as opposed to dealing with a personnel issue. 

 

Ms. Weatherman stated she appreciates the fact that the Board wants to continue the discussion; but each company is different; when the ad valorem tax abatement was passed in 1994 and again in 2004, those were early days; the EDC had to vet its way through it; and the Board is doing the same thing now and she appreciates it.  Chairman Scarborough stated he had been taking the calculation that worked out over a number of years and he transitioned it over to cash up front; there is a time value to money; if a company gets tax abated ten years in the future, the tax abatement is worth less than having money today.  He stated the Board agreed to the number with certain base assumptions that it reverted back to prior methodologies; but the Board can work that out.  He stated he still would like the EDC to be able to use it as a tool; since it is cash up front as opposed to abatement, the Board may want to up the ante; if the Board is going to have cash up front, it is not just going to use the formula, but it is going to use an enhanced formula; with Embraer, the formula did not work and the Board gave more money than the formula kicked out; and if that is where the Board is going in the future, then he will vote against it.

 

Commissioner Colon stated she agrees with Chairman Scarborough; she made it clear to Embraer there were things she wanted to discuss, but did not; it reminds her of when the Board passes an ordinance and a citizen wants the rules and regulations changed; the Board first puts an ordinance in place; and then it approves the item.  She stated the Embraer project was the same concept in which the rules were changing; but unfortunately Embraer was caught in the crossfire; it is not about Embraer or the jobs it is bringing; it is about the rules changing in the middle of the game; and that is why she told Embraer the discussion is not directed at Embraer.  Chairman Scarborough stated he hopes Embraer understands it is the Board’s failure, and not theirs because what was communicated to Embraer was a dollar amount rather than a manner in which the Board does things; and that is what the Board will handle at its workshop. 

 

Ms. Busacca stated perhaps even if the Board had a process in place, the first time it is applied, everybody learns a lot; staff has a lot to bring to the discussion; and staff will schedule the discussion for the second meeting in July. 

 

 

 

Chairman Scarborough stated he has noticed that Brevard County School Superintendent Frank DiPatri and Brevard Community College President Jim Drake have addressed the desire to take cuts at upper management levels instead of the lower paid employees; and inquired if Ms. Busacca could do a disproportionate cut in the budget.  He stated Board should wait and see what Dr. DiPatri and Dr. Drake are doing and perhaps Ms. Busacca could meet with them; and the Board could possibly look at getting leaner at the top.  Ms. Busacca advised she has already spoken to Dr. DiPatri and Dr. Drake.  Chairman Scarborough stated Dr. DiPatri and Dr. Drake have some good ideas; and the Board could dissipate the quality of the County when it could perhaps look at getting a little leaner at the top. 

 

Commissioner Nelson stated the County is already leaner than the School Board or the College has ever been at the top. 

 

Upon motion and vote, the meeting adjourned at 3:07 p.m.

 

 

 

 

                                                                        _________________________________

                                                                        TRUMAN SCARBOROUGH, CHAIRMAN

                                                                        BOARD OF COUNTY COMMISSIONERS

ATTEST:                                                         BREVARD COUNTY, FLORIDA

 

 

 

__________________

SCOTT ELLIS, CLERK 

        (S E A L)

                                                                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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