Task force calls for compliance officer
Mayor Alvin Brown’s economic-development task force recommends that the City create a compliance officer to monitor incentives deals.
The suggestion was one of several in a 10-page draft report to Brown. At Brown’s request, the task force reviewed problems identified by the City Council Auditor in a study of incentives deals made and monitored by the Jacksonville Economic Development Commission.
The group met Monday.
The Incentive Monitoring and Compliance Task Force recommended the compliance officer be housed in the City’s Finance Department. Its responsibilities would include designing internal control standards for economic development deals that involve taxpayer money.
Brown has proposed legislation to revamp the City’s economic development structure, dissolving the Jacksonville Economic Development Commission in favor of a Downtown Investment Authority and a City Office of Economic Development.
The task force recommended that the compliance officer would report to the new nine-member Downtown authority about deals under its review and would report other findings to the City’s chief financial officer.
Legislation is pending to create the authority and the new economic development office.
Brown created the eight-member task force following the critical audit of the JEDC. The task force has met several times since February and plans to meet May 16 to vote on a final draft of suggestions for Brown.
The 10-page draft includes more suggestions:
• Increase the extent of the details in each summary of an incentives project to increase compliance efforts, including expenditures, benchmarks, milestones and job creation plans.
• Shift the responsibility of information-gathering to the developer and require that the CEO or COO of the assisted company certify, under oath, that the information provided is correct. In large transactions or deals, a third-party certification could be used.
• Provide clearer timelines for contract compliance.
The draft also criticizes an apparent lack of understanding for the segregation of duties and keeping the “sales” side of a deal separate from the “underwriting” side.
It also criticizes the JEDC’s compliance efforts, specifically its structure and culture.
“While the Task Force might be tempted to blame the lack of compliance on JEDC’s reduced workforce, it appears the JEDC did the same degree of compliance with seven people as with one,” the draft stated.
In addition, “the JEDC is not experienced enough in the field of development to understand the interplay of production, underwriting approval and compliance,” it said.
“The JEDC does not need significant additional staffing to accomplish its mission. Rather, it needs employees who are more experienced and trained in analyzing developments,” it said.
The task force recommended in the draft that the successor organization to the JEDC should be led and staffed by experienced developers and analysts who would have “full appreciation for all aspects of the investment process and experience to execute those aspects properly.”