Bank of America incentives deal delayed

News

An incentives proposal providing Bank of America $1.04 million in City and state funding was deferred by a City Council committee Tuesday after members questioned job-creation language and analysis by the Council Auditor’s Office.

The Council Finance Committee will again take up the measure in a special meeting before Tuesday’s full Council meeting.

The company has proposed creating 200 jobs and funding $13 million in capital investment in expanding its two Southside campuses to accommodate Bank of America and Merrill Lynch lines of business, including global technology and operations, consumer banking, home loans, legacy assets servicing and Merrill Edge.

The City’s contribution would not exceed $558,422, which comprises $120,000 in a Qualified Target Industry Tax Refund and $438,422 in a Recapture Enhanced Value grant. The state would pay $480,000 for the remaining portion of the Qualified Target Industry incentive.

The state also could provide up to $5.9 million in its Quick Action Closing Fund and up to $1.5 million from its Quick Response Training program, neither of which are part of the City legislation.

Yet, the agreement “was in no way standard” to others that have come before Council as fast-track legislation and members were not informed of the changes, Assistant Council Auditor Janice Billy told the committee.

Council approved the fast-track process for economic development legislation to be approved in as little as a week if it falls within certain parameters.

The Bank of America incentives legislation was introduced May 5 and could be approved Tuesday.

Chief among the auditor’s office concerns was an alteration to the “full-time equivalent job” definition in the development agreement.

Typical language in the past fast-track deals have defined it as “a job, or combination of jobs, in which the employee or combination of employees works for the Company at least 35 hours per week.”

The Bank of America legislation features that definition plus employees of contractors; joint venture partners; licensees operating under agreement with the company performing functions at the company’s facilities or telecommuting from locations in the Metropolitan Statistical Area; and personnel directly engaged as independent contractors that perform functions that might otherwise be performed by traditional employees.

The metro area is defined as Baker, Clay, Duval, Nassau and St. Johns counties.

Edward Randolph with the City Office of Economic Development said the City tried to synchronize its language with the state’s language. Finance Chair John Crescimbeni questioned why the language had not been adopted with past deals.

Rob Sitterley of Enterprise Florida told the committee the state is supportive of the project and was not sure why the language was in the City portion of the contract. He said the employees would work within the metro area and the state ensures compliance before reimbursing a company the incentives.

Asked by Finance Committee member Stephen Joost whether the jobs all stay in Duval County, Sitterley said they are tracked in the county and the metro area.

Finance Committee member Lori Boyer asked Sitterley whether telecommuters who live out-of-state are counted as new jobs, but Sitterley said that also is verified.

It later was clarified the jobs are in Duval County, but employees are able to live within the metro area.

Another auditor’s office issue was the lack of detail about Bank of America’s pre-existing jobs, information needed for the City to independently verify new jobs have been created and usually included in such legislation.

A note of “will not provide” is listed on the auditor’s office review of the legislation for current jobs, with later information indicating the number has been provided to the state.

Tom Scott, a Bank of America vice president who has worked on the deal, told the committee the company has 6,000-8,000 employees within the metro area but did not specifically know Duval County’s numbers.

Of those employees, he said about 25 percent are part-time, which prompted Crescimbeni to question the Qualified Target Industry Tax Refund program and its intent for full-time jobs, though the language has been in past deals.

Discussion then evolved into a conversation about the City’s incentives policy and a need for potential reform, specifically to include telecommuting language as Joost mentioned and the full-time job language as several others mentioned.

In many instances, City officials told Council members, the City deferred to the state on qualifying individuals, which led to criticism from one Council member.

“I have no confidence in your office’s ability to track records,” Crescimbeni told Sitterley.

Also referenced was a 2011 audit critical of the Jacksonville Economic Development Commission that found the department lacked oversight. The commission preceded the Office of Economic Development.

“There’s a reason we are asking these questions,” Joost said.

Other members expressed concern about the part-time versus full-time issue and location of employees in providing incentives.

“We want that person in our local economy” and not just as payroll a company issues, Boyer said, referring to the part-time issue as “a real concern.”

Incoming Council President Bill Gulliford encouraged incoming Finance Committee Chair Greg Anderson to form a subcommittee and examine the incentives issue “for everyone’s benefit” with results to have a “smoother, more reasonable” incentives and review process.

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2013-14 City Council committees

Incoming City Council President Bill Gulliford has made his standing committee assignments for the 2013-14 Council year that begins July 1.

The standing committees comprise the Finance; Rules; Transportation, Energy and Utilities; Recreation and Community Development; Public Health and Safety; and Land Use and Zoning committees.

According to the memo issued Monday to Council members, the committees consist of:

Finance

Greg Anderson (chair)

Stephen Joost (vice chair)

Richard Clark

John Crescimbeni

Matt Schellenberg

Robin Lumb

Johnny Gaffney

Clay Yarborough

Reggie Brown

Time and date: 9 a.m. the first and third Tuesday of every month. The agenda meeting is 8:30 a.m.