Development FL Rural Summit November 6, 2014 . Alex McCoy, MBA, - PowerPoint PPT Presentation

ED 101: Understanding Organized Economic Development – FL Rural Summit November 6, 2014 . Alex McCoy, MBA, CEcD – Putnam County Chamber

Abbreviations (a.k.a. Alphabet Soup) • ED = Economic Development • EDO = Economic Development Organization • BRE = Business Retention and Expansion • SBD = Small Business Development • BA = Business Attraction • WIB = Local Workforce Investment Board • RFP = Request for Proposal

DEFINING ED

ED has Different Meanings to Different Constituents • Average citizens – Attracting/retaining jobs that pay living wages which they can perform; improve quality of life • Elected officials – Generate non-residential revenues to pay for services; jobs for constituents; political success • Existing business community – New customers; improved/new workforce skills; economies of scale; shared service burden; innovation

What is ED? Organized ED’s Working Definition: – Organized ED is a deliberate set of programs, policies, or activities intended to improve the economic well being and quality of life, and to create or retain jobs within a community over time Goals of Organized ED efforts: a) Create/Retain higher wage jobs b) Grow the community’s non -residential tax base c) Create and distribute wealth d) Help local government plan for the future

ED Is/Isn’t • Is NOT an event • Is an ongoing-process • Is about doing a lot of • Is NOT a single act little things right by performed by a various players single person • Requires a serious • Is NOT something long term view/ that can be switched commitment from the ON and OFF on a public to build the whim, with one community’s wealth year’s lost efforts taking several years to recover from

What’s in ED? • BRE • Workforce Development • SBD & Entrepreneurship • Strategic Planning / Public Policy • BA • Tech-Led Development • Tourism • Neighborhood • Real Estate Development Development & Reuse • Development Finance – Brownfields – Downtown – Projects – Infrastructure – Product – Product

The ED Process

What’s Your Version of ED? Generate Leads Marketing Relationships Competitiveness

Each of us has a position to play, and our performance affects the entire team

The County Store • Cashier Tax Collector • Security Law Enforcement • Maintenance Public Works • Interior Design Planning & Zoning • Price Marker Property Appraiser • Management Elected Officials/Manager • Landscapers Parks & Recreation • Human Resources/Training Public Education • Sales, Marketing, Business Economic Development Customer Service, Product Organization Research and Development, & Growth Strategy Advisor

Local Partners Local Govt Local EDO Development Authorities CRAs / DDAs / Main Street Airport / Port Authorities Tourism Dev State / Regional Partners Council (TDC) EFI / DEO SBDC Chambers Regional Utility Providers Partnerships (FPL, Duke) Transportation Regional Council (Rail, Port, DOT) Workforce (WIB, Prospect, Banks WF, Schools / Consultant; College) Client Others!!!!

Why is ED Important?

Successful ED Generates: Economic Security for All!!! • Average Citizens Want: – Jobs that pay living wages so citizens can have the “American Dream” • Existing Businesses Want: – New markets and customers so they can grow • Public Officials Want: – Non-residential tax revenue – People with good jobs can afford to pay their taxes – Growing businesses generate more revenue

The Tax Base Tax Base Tangible Personal Property

Located in Putnam County

What Does This Have To Do With Us? • Take ownership over their Tax Base • Many communities are passive when it comes to growing their tax base and could do a better job expanding it by: – Be proactive with infrastructure expansions, transportation enhancements, & creating product – Aggressively pursue producer projects – Engage existing stakeholders / businesses to improve the existing business climate – Assist smaller businesses – Promote leadership development throughout community

American Farmland Trust • A group that assists farmers & ranchers protect their land, produce a healthier environment, & build successful communities • Created a Cost of Community Service model to examine the cost / benefit impact of various land uses on local government • Performed more than 125 studies in: CO, CT, FL, GA, ID, KY, ME, MD, MA, MI, MN, MT, NH, NJ, NY, OH, PA, RI, TN, TX, UT, VA, WA, & WI

Study’s Limitations • Only one coastal community studied • No really large MSA’s studied • Communities provide different services depending on the desires of the public • Communities provide different levels of service depending on the desires of the pubic

Cost of Service Study Cost of Community Service Study North- Leon ampton Appling Brooks Colquitt Miller Mitchell Thomas Ratios Co., FL Co., VA Co., GA Co., GA Co., GA Co., GA Co., GA Co., GA Residential $ 1.39 $1.13 $ 2.27 $ 1.56 $ 1.28 $ 1.54 $ 1.39 $ 1.64 Com/Ind $ 0.36 $0.97 $ 0.17 $ 0.42 $ 0.45 $ 0.52 $ 0.46 $ 0.38 Ag/Open $ 0.42 $0.23 $ 0.42 $ 0.39 $ 0.80 $ 0.53 $ 0.60 $ 0.66 Producers – Commercial, Source: American Farmland Trust Industrial; Ag / Open Land Consumers – Residential

Economic Base Theory “ Primary Employer / Job ” • Firms that “Export” their goods outside the community actually “Import” new wealth • “Export” firms tend to have higher multiplier impacts within local economies and create demand for “Secondary Employers / Jobs”

Primary Vs. Secondary Employers • Primary Employers (ex: manufacturing, distribution, high-end services, etc.) – bring cash into the community by selling their goods/services outside the community $ • Secondary Employers (ex: retail, most service based firms, etc.) – recycle cash already in the local economy – usually driven by local business conditions (ex: amount of area disposable income, number of customers, etc.)

)

A Look at Residential • Assumptions: • $24.92 Million / 5,444 Units – 1) only source of $ is taxes; • Unit owes $4,577.52 in taxes to County – 2) only homes are taxed • (Fair Market Value (FMV) – Homestead) x .0083114 Mils • Jefferson County, 2014: • $4,577.52 / .0083114 = $550,751.98 – $24.92 Million Budget • $550,751.98 + $50,000 = $600,751.98 – 5,444 Est. # Households, 2008- 2012 (U.S. Census) • Fair Market Value of each housing unit – Median Value of owner- must be $600,751.98 for COUNTY to occupied housing units = break even $113,800, 2008-2012 (U.S. Census) • Ratio: $1 received for $5.28 spent – Required FMV / Actual Value of Home

Relaxing the Model • • Assumptions: $4.59 Million / 5,444 Units – 1) taxes are 18.4% of revenue; • Unit owes $843.13 in taxes to County – 2) only homes are taxed • (Fair Market Value (FMV) – Homestead) x .0083114 Mils • Jefferson County, 2014: • $843.13 / .0083114 = $101,442.60 – $24.92 Million Budget • $101,442.60 + $50,000 = $151,442.60 – $4.59 Million in Ad Valorem • Fair Market Value of each housing unit – 5,444 Est. # Households, 2008- must be $151,442.60 for COUNTY to 2012 (U.S. Census) break even – Median Value of owner- occupied housing units = $113,800, 2008-2012 (U.S. • Ratio: $1 received for $1.33 spent Census) – Required FMV / Actual Value of Home

Putnam County Parcel Type with Tax Value Parcel Type Number % Ave Value Total Value % Total 99,098 100.0% $ 37,558 $ 3,721,874,216 100.0% Vacant Parcels 53,613 54.10% $ 2,080 $ 111,490,784 3.00% Single Family 16,611 16.76% $ 68,549 $ 1,138,670,948 30.59% Mobile Homes 15,301 15.44% $ 29,188 $ 446,610,734 12.00% Ag/Green Belt 4,113 4.15% $ 14,556 $ 59,868,067 1.61% Commerce, Ind* 1,294 1.31% $ 1,026,757 $ 1,328,623,675 35.70% Government 1,092 1.10% $ 4,215 $ 4,602,336 0.12% Institutional 451 0.46% $ 69,397 $ 31,297,848 0.84% All Others 6,623 6.68% $ 90,701 $ 600,709,646 16.14% * Includes Tangible Personal Property Property Appraiser - Parcel Count Nov 11, 2010 Property Appraiser – Tax Value Oct 18, 2010

T Taxbase without (re)investment a x b Inflation a s e Residential Growth Baseline Level of Service Tangible Asset Deprecation Today Time

Putnam Co. Top 2013 Taxpayers TOTAL TAXABLE VALUE * NAME 20-Oct-08 17-Oct-13 1. Seminole Electric $267,161,206 $305,652,382 2. Georgia Pacific Corp. $274,885,961 $303,854,430 Est. $113 MM 3. Florida Power & Light $157,885,864 $203,440,556 4. Continental / Lafarge $81,354,979 $65,102,556 5. Clay Electric Coop., Inc. $41,643,939 $45,480,880 6. Wal-Mart $13,733,574 $17,285,084 7. Putnam Community Medical Center $16,144,023 $16,256,378 8. BellSouth Telecommunications / AT&T $23,868,261 $15,758,581 9. CSX Transportation $14,738,976 $15,484,750 10. ComCast N/A $10,148,303 * Total taxable value includes real, tangible personal and centrally assessed properties. Putnam County Property Appraiser: Final Tax Roll - Oct 17, 2013