Tavares, FL - July 3, 2012
Vance Jochim
We recently published an article on the MOEDC (Metro Orlando Economic Development Commission) receiving payments of $288,000 or more each year from Lake County, but providing 1/3 the return on investment received by the other three counties funding MOEDC. MOEDC claims Lake County received a payback of $1.38 per $1 spent with MOEDC, the same chart shows that the four county region received a payback of $4.37, much more than Lake County. The article is HERE.
Yesterday, FiscalRangers was interviewed by Orlando Channel 9's Berndt Petersen about Lake County Commissioners paying around $280,000 or more to the Metro Orlando Economic Development Commission while separately planning to RAISE taxes this coming year by RAISING property tax millage rates. At some point, they need to cut spending more by dumping the $1.5-million subsidy for Lake Express, the $288,000 for the MOEDC and get the Sheriff to reduce his budget in line with other County operations which reduced theirs over 40% while he only cut his spending by about 10-12% in the last five years. The Sheriff now gets 60% of every dollar in the County budget.
Here is yesterday's Orlando TV 9 video report: http://www.wftv.com/videos/news/lake-county-program-to-recruit-new-businesses/vccLb/
The Contract with MOEDC is VERY Embarrassing, VAGUE, IMPRECISE, and impossible to audit. The Lake County Legal Department, The Board of Commissioners, and County Manager should be embarrassed over how bad the contract is. I was a corporate and government auditor for 18 years, and audited contracts up to $600-million in size, and this type of contract would never be accepted by corporations I worked for.
The terms of the contract are so vague they cannot be audited even if MOEDC spent our money for trips to visit the set of the next BAYWATCH TV show. Only government would do this with taxpayer funds...
As a bonus, we just received a copy of the FOUR year contract ( 2009-2013) between the Lake County Commissioners and MOEDC, which is attached here:
Download 2009-2013 MOEDC contract
Our Review of the Contract:
Article 1 - Services to be Performed
- The contract cites vague, general services where nothing is specific. For instance, it says "promote the agency to the motion picture industry" but doesn't say how, or promise certain metrics for the funds received. In other words, they could stand on a corner and wave a sign saying "Please film in Lake County" and would meet the contract terms. That is ludicrous. By the way, in our prior article, we included a Powerpoint given to the BCC by the MOEDC recently, and it included a slide showing 434 film production days in the area, but they did not mention any film days for Lake County.
- The services section says MOEDC will serve as a contact point for realtors and others interested in economic development. That is a duplicate of the Lake County DEPARTMENT of Economic Development which has three regional specialists and a new website and program for working with people or firms interested in moving or starting business operations in Lake County.
- "Services to be Performed" include vague terms like report, coordinate, promote, serve, provide, monitor, without any measurable or specific performance metrics. Most contracts I have seen have specific deliverables, but Lake County doesn't specify any. So, is the Lake County legal department to blame, the County Manager, or the Commissioners for accepting such wishy washy terms???
- MOEDC promises to maintain an office and an Economic Development Director in Lake County, but where is the office? About two years ago, MOEDC switched duties of their region Directors to be industry experts, thus we may not have received much direct focus since industry emphasis was apparently in Orlando, not Lake County.
Article II - Payments
- Lake County pays MOEDC $1 per capita, which is apparently more than at least one other county that negotiated lower fees. Since we get the lowest "return", why isn't Lake County negotiating lower fees???
TERMS - Terms for each year start on Oct 1 to Sept 30 of the following year. These terms match the fiscal year of the County.
Termination: Either party can terminate the agreement with 30 days notice.
Master agreement: This is apparently a boilerplate agreement used by Lake County as supplement to vendor contracts. It provides for the ability for the Lake County "Comptroller" or designee to AUDIT the MOEDC spending to determine compliance with the contract. As a former government and corporate auditor, the terms are so vague in the main MOEDC contract that there is nothing to audit except the paragraph requiring them not to discriminate based on sex, etc. This type of vague contract would have been rejected by any professional internal audit group if asked to pre-approve it. Since there are no terms that tie performance measurements to payments, Lake County can't even audit how MOEDC spends the money to ensure the correct portion is actually spent to benefit Lake County. The Lake County legal department should have NEVER approved such a vague contract. It means that like the separate regional Workforce Development Commission, MOEDC could spend ALL our money on CAPES for kids that said "Move Your Business to Lake County" , and we could not object, since the contract is so vague.
Audits: The above master agreement says Lake County has the right to audit the programs. Has that ever been done? I haven't seen it mentioned in four years. How about a "value" or performance audit to determine if the promised jobs actually occurred and if they were at the salary level promised.
Annual MOEDC Action plan for 2009-2010 - This was part of the above contract, and we have requested the more recent annual plans. There is NO discussion explaining how any prior plan was met. Normally, in REAL business, you always have the prior year's planned budget or metrics compared to ACTUAL measurable results, then compared to the new year's plan. You also calculate the percent that each line item is out of the total for each column. That way you can see how the new plan compares both to the prior year plan and actual numbers before approving it. However, only in government would they drop all indication of RESULTS and not provide prior period plans & results. Again, this plan uses many vague terms like "Maintain our investment in Search Engine Optimization" but no specifics on what that means or specific performance targets related to Lake County. It does say they will "participate" in specific trade shows, but they do not describe the show attendance or results from prior year "participation" in trade shows. Thus there is no incentive to actually get leads or set a target to get them. Without a target lead count and conversion to actual visits, you can't tell if the trips are boondoggles or effective. Also, there are no metrics to show prior results affecting Lake County vs the spending in other Counties in the plan.
Conclusion:
The Lake County commissioners need to cancel this vague contract and either use the money to pay down debt or reduce planned millage rate hikes, or give it to the internal Economic Development Dept. to expand their much more specific programs to benefit Lake County. The Lake County legal department should be embarrassed about processing such a vague contract.
Until Lake County revises any MOEDC contracts to be more specific and measurable, I will consider any MOEDC efforts to be boondoggles.
Vance Jochim
FiscalRangers.com
PS: If the link to the Channel 9 video doesn't work, you can find our copy of it here: http://www.youtube.com/watch?v=T9mtbP-xFac&feature=youtu.be
