Collier County’s economy is broken, but is the costly Jackson Laboratory the right fix?
Collier County manager Leo Ochs sizes it up on this week’s "One on One with Jeff Lytle.’’
He also says there are no big service cutbacks or user fees in the county’s proposed budget.
Video highlights as well as partial video/texts of past interviews are available at naplesnews.com/oneonone.
The entire 30-minute program airs today at noon on Comcast CN14.
Lytle is editorial page/Perspective editor of the Daily News.
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Lytle: Take us behind the scenes of Jackson Laboratory project. What are you advising the commissioners in terms of fiscal policy, in terms of what makes sense for economic development. What role are you playing in this?
Ochs: Well, at a staff level we’re really trying to work hand-in-hand with the county commission’s Productivity Committee. We try to look at the deal as it’s been laid out, try to determine the economic benefits for the county and for the public and try to give the board some options on if they want to proceed with the program, what funding opportunities may be available to the board.
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Lytle: They may look to you for advice on all kinds of matters, large and small. Are you advising them on which way to go in the mix of either a franchise tax, property tax? There are lots of options out there on the table right now.
Ochs: Specifically task their Productivity Committee to look at those funding options and also to help them with the overall economic analysis of the deal. The staff has been working quite closely, frankly, with the Productivity Committee as they go through numerous subcommittee meetings and analysis of various funding options and what kind of economic impact, both short term and long term, this deal may have for the community.
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Lytle: So you’re staying out of the policy. You’re just staying as a resource for now?
Ochs: That’s correct. Obviously, the decision will be made by the policy makers and not the staff.
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Lytle: But there will come a time when they will look to you and say, Leo, you’re the CEO and the COO. What do you recommend?
Ochs: Sure. Well I think one thing is for certain — to me anyhow — and that is the traditional economic model here locally of relying on construction and real estate sales, agriculture, tourism, is not a model that appears to be sustainable on a long-term basis. I think for many years, most of us in the community thought we were bulletproof with regard to recessions, and that economic model would just keep on chugging.
I think it’s been painfully obvious over the last few years that we do need to look to diversify our economy, if not this project, then something else. I think there’s fairly wide consensus among most of the people in the community and stakeholders that we really do need to look at other ways to diversify our economic and business portfolio if we want to sustain growth and prosper as a community long term.
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Lytle: The question now is, as we see the details of the Jackson Labs proposal are at what price? And does it have the capability of delivering on the promise of bringing in more businesses and employers like it?
Ochs: Sure. And I think that’s the key. I think you’ve heard most of the commissioners say that this is not really about ultimately Jackson Laboratory bringing in 200 jobs to Collier County. It really is about developing a large cluster of life science medical research institutes that can create a synergistic economic development environment. Jackson Laboratory, perhaps being kind of analogous to an anchor tenant, if you will, in a mall — someone who can attract those other like businesses and institutes, both for profit and nonprofit, with the hopes that will gain some momentum and bring some economic development, some high-wage jobs, some knowledge-based jobs that will help diversify our community going forward.
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Lytle: When you hear Arthrex say, well, Jackson Labs is getting preferred treatment and that Arthrex has achieved the success and expansion it has over the years and the county really hasn’t done anything, or very much, for Arthrex. Is that true?
Ochs: No, I don’t think it’s true, Jeff. The county commission has had a series of economic incentives in place for many years. In fact, Arthrex was one company that took advantage of those economic incentives a few years ago when they were going to actually locate a facility out in the Ave Maria community, and they had applied for some economic incentives and some relief through those programs for various impact fees; and the board granted those particular incentives to Arthrex. Unfortunately, so far they have not been able to move forward with that particular program.
So, they’ve been a phenomenal success in the community, and we certainly embrace everything they’ve done, both in their business and philanthropically for the community.
But to say that the county commission has not reached out to Arthrex or been receptive to their needs, I don’t think that’s accurate.
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Lytle: We’ll move on to a different topic. We could do a whole half-hour on that.
The Chicago Cubs spring training: it appears now as if the private-sector business people have at least put their plans on the bench, so to speak.
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Lytle: Do you have any insights there? Was your office involved? Or are you leaving that to the private sector?
Ochs: We actually are leaving that to the private sector. Of course, the board never got to the point with the Cubs’ potential deal where they were presented by the group here working in Collier County with a formal proposal, so they were never asked to make any formal decisions, because it never quite got to that point.
You know I did stay in touch obviously with Councilman Gary Price and some of the folks who were working on the private side of the deal just so that I was staying abreast of what was happening. So certainly I could understand from them what public investments might be needed and where the county would ultimately fit into the deal if it was going to come forward to the board.
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Lytle: You weren’t a part of any of the dealing and advising and the negotiations.
Ochs: No, sir. Not at all.
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Lytle: Some county managers in the past would not have been able to resist being part of that.
Ochs: Well, I was able to do that.
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Lytle: Stay away from it.
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Lytle: Can you give us some insights now at this stage about what sites, what locations were being considered?
Ochs: All I know is that there were three sites that had been identified. I don’t know specifically what they were location-wise.
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Lytle: They didn’t tell you?
Ochs: No. I was told a couple were in the East Naples area, and one was further north in Collier County.
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Lytle: Oh, come on. You can tell us.
Ochs: That’s about all I know.
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Lytle: I was truly hoping to get that. We’ll ask the proponents of the idea about that.
On the budget — huge issues coming up. Are there any new user fees? Are there any additional layoffs or staff reductions coming?
Ochs: No, sir. The board gave us guidance back in the spring that they would like the staff to bring them a budget for 2011 that has no increase in the property tax rate. So we worked very hard over the spring, and in late June we had a workshop with the board; presented them with our proposed budget for fiscal year 2011 that contained no increase in the property tax rate.
There are no layoffs or furloughs planned. No reduction in frontline services. No further reductions in operating hours for facilities or any cutbacks in what I call frontline central services.
So we were very pleased to be able to bring that to the board. If the board adopts that budget in September, it will reduce ad valorem revenues by $32 million alone in our countywide general fund next year.
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Lytle: Will there be any services that we know of from median grass-cutting or anything we’re going to notice?
Ochs: As I warned the board during the workshop, I said I think looking long term obviously, as your revenues continue to decline and your demand for service remains constant or in some areas might even grow, you need to get creative. You need to get very efficient.
Quite frankly, some of the things that you would normally tend to in terms of maintenance or replacement of equipment, you defer, just like any other business. The art, of course, is knowing how far you can defer those before you run into major mechanical breakdowns or system failures.
I don’t think we’re facing any of those in fiscal 2011, but I did tell the board that I’ll be closely monitoring that along with my leadership team to make sure that we’re still able to deliver on what I call the value proposition for county government. And that is, the residents of this community expect very high quality services. We’re going to try to deliver on those and still keep the budget in check.
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Lytle: So there won’t be any new user fees?
Ochs: No new user fees. No beach parking sticker fees. No other new user fees in 2011.
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Lytle: And the layoff situation, as you said, that’s stable.
Ochs: It’s stable, but it’s come at a price of several years of cutting personnel, cutting positions, eliminating positions that had been funded but unfilled moving forward.
We have about 360 fewer positions than we had in fiscal 2009. It’s about an 18 percent reduction in our overall workforce in the county manager’s agency.
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Lytle: Wow. What’s new with development services or what people refer to as the building department? What’s going on there?
Ochs: And that’s one example of how we’ve tried to get more efficient as we face the financial difficulties of the times.
Back in January I got together with some of our administrators and we worked up a plan to consolidate the former transportation services division and the Community Development & Environmental Services division into a single division called the Growth Management Division. The idea there was to get more efficient; find a way to deliver services more timely to our customers, and I think we’ve succeeded in that.
We brought that concept to the board; they endorsed it earlier this year. When it’s fully implemented in fiscal year 2011, we expect to save approximately $2.5 million annually in recurring operating expenses.
We also streamlined our top management staff in that area. There are four fewer directors than there were in the separate divisions. And of course, instead of two division administrators, now we have one.
So that’s an example of the kinds of things we’re doing internally to try to maintain our cost structure and still provide the services our customers expect.
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Lytle: What are you hearing about commercial real estate? Specifically, there’s a lot of talk on the street about, well, hold on, there’s a second wave of foreclosures coming, and it’s going to impact commercial properties.
Are you hearing that or are you seeing it?
Ochs: It’s a mixed bag. I just talked to a real estate developer the other day. I bumped into somebody, and they were telling me that business is surprisingly good this year, better than the year before. Sales are up, and not only in short sales and in foreclosures, but beginning to see an upward trend in sales of single family product.
Of course, they have others in the commercial real estate industry that say that the industry obviously is struggling and continues to struggle — high vacancy rates.
There is a concern about another wave of foreclosures, particularly now that some of the federal incentives for homebuying are phasing out.
So, we’re watching that closely. As you know, we’ve had a very aggressive blight prevention program. Our Code Enforcement Department, under the direction of Diane Flagg, has been very active in working with banks and lenders to make sure that they are helping to pay for abating any of the nuisances and violations of our codes that typically incur when homes are abandoned or foreclosures and short sales occur.
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Lytle: Red-light cameras — we still can’t get away from those. The question is, will the contractor be able to continue to provide service at a profit? Or will the cameras go away, since we’ve eliminated the right turn on red?
Ochs: Let me tell you what the board has done.
As most people may have read, the state of Florida essentially took over control at a statewide level for the camera enforcement at these intersections on July 1. That legislation caused our board to make several changes in the existing contract with our vendor.
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Lytle: And they got rid of the moving right turns.
Ochs: The new state law essentially eliminates right-turn-on-red violations.
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Lytle: That’s where the money was.
Ochs: Eight-five percent of our citations were for those kinds of infractions. So the staff at the board direction went back and sat down with the vendor. We’ve negotiated an extension to their contract, modified the contract through the end of this year.
The state is also, supposedly by the end of this calendar year, promulgate some new regulations about equipment standards for all these intersections. We’ll take a look at those when they come and look at our contract at that point and move forward.
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Lytle: So you’re still not sure whether red-light cameras will remain.
Ochs: I think the majority of the board would like them to remain, and we’ve got a contract extension now in place that allows us to continue that program at a break-even proposition for the county, and the vendor can tell us that they can still make enough money to stay in the business.
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Lytle: The vendor can still make a profit?
Ochs: Well, yes. They’ve signed on to the contract, so I’m assuming they can.