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Blank Check: City and County Bankrolling Enterprise Flagler Without a Contract

| January 25, 2011

enterprise flagler

Enterpsie Flagler could use the lawyers' help. (© FlaglerLive)

Since 2006, Enterprise Flagler, the public-private economic development partnership, has received more than $1 million in taxpayer dollars, ostensibly to court and recruit new businesses. The Palm Coast City Council and the Flagler County Commission have allocated the money annually. Since 2006, the two governments have been making those payments without a contract with Enterprise Flagler.

The original contract between the county and the economic development agency was drafted in 1996. Several amendments were drafted until 2005. That agreement was not renewed in 2006, though payments have continued—without the accountability measures usually built into a contract. The absence of a contract is the latest in a series of concerns some city and county elected officials have raised about Enterprise Flagler in the past year, underscoring unresolved tensions and expectations between the governments and the economic development agency.

County Commissioner Milissa Holland revealed the absence of a contract during a commission meeting Monday evening. In preparation for a summit on economic development between all local governments on Jan. 31, Holland was looking to examine the contract with Enterprise Flagler, which has been weathering criticism for its checkered effectiveness over the last several years. She placed a public-record request to the clerk of court, the custodian of county contracts, and learned that there was no such document.

“We don’t have an internal economic development arm, so this is the only economic development arm in the county,” Holland said, “and without any expected outcomes, without any requirements, that’s where we run into problems, with the reporting and everything else.”

Frank Meeker, a Palm Coast City Council member, found out last week that the city had no contract. The city manager, he said, is researching why. “Clearly we don’t believe it’s a good idea to be paying money to Enterprise Flagler without a contract as well,” Meeker said this morning.

In 2008, Flagler County and Palm Coast each contributed $177,500 to Enterprise Flagler. The following year, each contributed $155,000. In 2010, each contributed $110,000. Each year Bunnell contributed $2,000 and Flagler Beach $1,000. Private companies may also be members of the organization by paying a fee. But the private aspect of Enterprise Flagler has always been minimal, even though private companies’ membership has disproportionately affected the direction and policies of the organization. Last year, year Enterprise Flagler had a $300,000 budget. Just $60,000 of that, or 20 percent, was to be contributed by private companies. The organization lists 31 such non-governmental entities on its membership roster, but it refuses to disclose who pays what.

For the current year, Palm Coast and Flagler County dropped their contribution to just under $100,000 each.

“This is $100,000 that the taxpayers pay for this organization, or close to it,” Holland said of Flagler’s share, “and I just want to make sure that there’s been a lot of discussion about what’s expected of this entity and I think it’s a perfect opportunity for us to now state kind of what we expect out of a partnership with them. I was surprised that the contract had expired five years ago.”

County Administrator Craig Coffey was not the administrator five years ago, though he made a point, when he took over the management of the county, to tidy up numerous mismanagement issues he came across. He did not alter the relationship with Enterprise Flagler, which is headed by Greg Rawls, a colleague Coffey brought in from DeSoto County, where both worked; Rawls was deputy director of tourism and economic development. Coffey defended the absence of a contract, “based on the fact that once you open into contract you make all meetings open, subject to open record law,” he said. “If there’s a way to do it, I’m OK with that. The benefit that EF does bring to the table is the fact that they can keep stuff maybe to a higher degree of confidentiality.”

As the county attorney later alluded to, Coffey was fudging the issue: A contract does not preclude confidentiality in some regards. That’s written into the contract. Enterprise Flagler from the mid-90s to the middle of the last decade had both a contract with the county and confidentiality when dealing with economic prospects. It just didn’t exercise that provision very effectively. But the absence of a contract does raise legal and accountability issues.

“I did actually work on that confidentiality provision and rewrite their agreements,” Al Hadeed, the county attorney, said. “Enterprise Flagler was using some agreements that actually  did not match state law when they were dealing with private prospects. I hope they’re using them. And I also re-wrote ours. And I’ve helped some other counties since then because it is a tricky issue. You have to use particular language to match the statue. The general rule is that the mere grant of county funds to an organization to perform a function does not automatically render that organization subject to the open-meetings law. However it will always subject that organization to the public-records law as to how, what documents have been generated that show their expenditure of the public funds. So in other words receipts, things of that sort, you can never shield from the public records law where public money is involved.”

Public-private economic development organizations are allowed to skirt Florida’s broad open record and open meetings law to some extent, but those parameters are narrow—and often misinterpreted, and mis-applied, by those organizations. Like government agencies—Palm Coast as a government, and Flagler County as a government, both may keep certain dealings with prospective new companies secret for a period of time—Enterprise Flagler may keep its negotiations with prospectors secret, including its own board’s discussions about those negotiations. But beyond such specific, prospecting-related issues, it may not extend secrecy to the rest of its operations because they are funded in part (and mostly so, in Enterprise Flagler’s case), by public money.

Hadeed said he, too, was unaware of the absence of a contract. “That occurred during a  time that I wasn’t serving as county attorney, so I don’t know why it wasn’t renewed. It was renewed annually every year. Actually I wrote the original agreement in 1996 and I wrote the template for the amendments. But apparently they stopped doing that.”

Contract or no contract, Flagler County—like Palm Coast—have been making payments to Enterprise Flagler, and those payments bear the signature of each government’s financial administrator: city and county were signing off on hundreds of thousands of dollars every year without a proper agreement either government’s elected officials had approved. That’s still the case: Flagler County just made a payment.

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19 Responses for “Blank Check: City and County Bankrolling Enterprise Flagler Without a Contract”

  1. lawabidingcitizen says:

    At last. Real, “just the facts, ma’am,” reporting.

    Mazel tov!

    Perhaps a post on costs to taxayers justaposed against accomplishments for all economic development giveways, not only Enterprise Flagler, would be a good piece of information for all involved before the economic summit next week. Please if you do it, include salary packages for city and county employees involved in economic planning and development.

    … and Mr. Meeker, you should have ended the following statement after the word, “Flagler,” “Clearly we don’t believe it’s a good idea to be paying money to Enterprise Flagler without a contract as well,”.

  2. Jim Guines says:

    I am having a very hard time understanding how this could happen, It does not seem possible with so many people who have sworn to uphold the laws of the state. How legally can you pay for services without a contract?

  3. wsh302@msn says:

    there will always be dishonest people. i cannot believe that no one in that entity did not know that there was no contract until it was discovered by holland, good job melissa.

  4. DLF says:

    Good informative article. Why should the local goverment be any different than the USA goverment?

  5. She's Good says:

    Good job melissa???? – give me a break – how no one can see this as a powerplay by Holland, to create and chair her own thing is beyond me. Come on people are you that stupid? She was on the Enterprise Flagler Executive Board during the time they didn’t have a contract. Give me a break – she’s good though – I gotta give it to her. Now, everyone just fall in line please. WOW, wake up!

  6. PC MAN says:

    I hate when someone tells me to “wake up”, I see it a lot in letters to the editor. Just because aliens have beamed a conspiracy into your tinfoil hat does not make everyone asleep to a problem.
    DLF, is every article a chance to bad mouth the government ? The common theme is a compliment followed by a slam. Let me try, DLF thats a good response, for an a$$hole. Oh I think I got it.

  7. palmcoaster says:

    Kudos to Commissioner Holland for her request. Increasing our sales tax to promote economic development is one more way to punish the already depleted pockets of our local residents. Have our officials forgotten that we still have over 16% unemployment in this county? My suggestion to our County Commissioners and Cities Councilmen and School Superintendent is to request the list of purchases funded with our tax dollars to their “chief buyers” and to your dismay will find out how many millions in contracts are assigned to suppliers out of this County and Cities under bogus excuses like saving few hundreds dollars in hundreds thousands in contracts outsourced. Those few hundreds saved do not create jobs, or pay taxes, or rent commercial space in Flagler County. That outsourcing generates wealth elsewhere.

    If our elected officials are serious about creating jobs here, then assign our government contracts to our local businesses and suppliers that do not need half a million grant like Cakes Across, or a mammoth Ginn fancy aircraft hangar that we are all still forced to foot in monthly mortgage payments, or give away at a bargain price of our City Hall to Palm Coast Data just to see the current lay off’s other that hiring as promised, or the loss of 300 jobs at the Harborside Hotel former Sheraton ITT, instrumented by Developer Centex and their cheering misguided crowd fueled by local government and chamber. I still have the free T-shirt handed out to reaffirm the inconsistencies flagged to all.

    The unfounded information presented to our tax payers regarding the fact that if our tax generated contracts will be assigned locally will be outrageously more costly and will increase our taxes is just an unfounded lie that only contributes to generate proposals to increase our current (sales) tax to help bring more blunders like the ones named above.

    Our local suppliers don’t ask for hand outs or tax breaks or grants, or relocation free money as they are already here…just want to share the fair piece of the pie that our taxes generate. Outsourcing kills our jobs and bankrupts our businesses. Also when our local governments roll the red carpet to developers and businesses arriving to operate here, have the clause that they hire and contract local first, as well.

    All these years we see all developers bringing man and machine outsourced faraway from our area while ours seat idle. The one big and positive exception not outsourcing and seriously appreciated, is Cline Construction. Lets do not increase our county sales tax to create one more layer of useless to be, economic development committee. Don’t we have enough with Enterprise? I just happen to learn here that Rawls was brought in by Coffey …. Once records will be provided, if so, maybe we will all marvel at the pay rates to the few in this entity with no achievements. How come Mayor Netts being in the Enterprise Board did not already ask for those financial records long ago?

    End outsourcing, support our local suppliers and businesses in a fair manner and jobs will be created.
    I hope now commissioners, Holland, Revels and McLauhing unite to end outsourcing and our cities elected ones hopefully will follow suit given the elections will be around soon.

  8. DLF says:

    PC Man: you have shown your IQ by your name calling, maybe you should get a new line. I only pointed out that the goverment is a make up of a lot of crooks, looking to proteact their own little turf, even you with your IQ should beable to figure that out…..may be.

  9. palmcoaster says:

    DFL, very sorry for PC Man undeserving insult. You brought up a good point regarding Milissa. If she was in the Enterprise Board and then did not request these records was bad judgement, but at least does it now, better later than never. I believe that Pierre kindly let us here pour our thoughts and enlighten each other about more happenings, that otherwise we may have not being aware before. Other than name calling we should all pull the cart towards the same goal of keeping and eye in our government doings that affect ever increasing taxes. Unless that some here are part of the problem and “they don’t really get it”.

  10. palmcoaster says:

    Also could be wise to notice that out of 67 total counties in Florida only 5 of the them levy the highest sales tax of 7.50 all the others are 7, 6.5, 6.25 and 6, only. When we are the second highest unemployment county in Florida (first Hendry Cty) , looks that we are lobbying to death to be the number six now for the highest sales tax also. Something do not do not make sense here. http://miami.about.com/od/governmentcityservices/a/salestax.htm
    With across the line Volusia at 6.5 and St. John at 6 do we really believe that our middle class buyers will make significant purchases like cars in Flagler when we hit the sales tax hike being proposed?
    Sure if this proposal pass, I doubt will help our local business much less the county residents, wether alien or not.

  11. John Ell says:

    Now we know how these folks manage to retire early, believe it or not. With all the complaints no one asked for an audit, a financial statement or a statement on expenditures. These folks on Enterprise Flagler must have been laughing their heads off and enjoying their power play while all of us dutifully kept paying our taxes to supply their funding ignorant of what was going on.

    Sounds a lot like Lang-Lang the pianist from China at the recent Obama function, who played the China victory song which depicted American troops as jackals during the Korean war. The dum-dums in Washington smiled and surely applauded, completely unaware as to what was going on.

  12. Captain says:

    Hysterical considering Commissioner Holland was on the Enterprise Flagler Board when all this was taking place AND on the County Commission too making her accountable x 2 for our cash. Nice of her to thrown her running buddies under the bus though. Bet she won’t be getting a campaign check from Culis, DeVore, Guimenta, Page etc. Whoops!

    So here is the real question – why is the County handing out $100,000 every year without seeing if there is anyone out there doing a better job? Isn’t that the point of even bothering to seek services? And in another twist…according to sunbiz.org, Enterprise Flagler wasn’t even eligible to do business in Florida in 2007.

    And who was the only one on both the Board that ask for the money and on the Board that gave the money? You guessed it….

  13. PC MAN says:

    The problem with teabaggers is selective memory and rage. From 1992 to 2000 it was, the country’s going to hell, new world order, impeach the president. 2000 to 2008 God bless America, wave the flag, how dare you question the president in time of war, is Lee Greenwood around to sing God bless the USA, wheres your flag pin. 2008 to present, the country’s going to hell, the president is an Islamic terrorist born in Kenya, 2nd amendment remedies, don’t tread on me. See the pattern ? I know you don’t but most do.

  14. dumb founded says:

    dumb founded

    Melissa is the most divisive person in this town, if it is not her way then it is the highway. As many people pointed out, Melissa has been on Enterprise Flagler Board during this time without a contract. I am so tired of hearing government officials “we don’t know what Enterprise Flagler does”. YOU ARE ON THE STUPID BOARD and you all meet every two weeks! The government knows where every time is spend and every activity they do. My god, what are you during these meetings, sleeping?

    We need to take the politics out of economic development, we need to “promote” Melissa to State office before she turns us into a Volusia County; where all they do is in-fight .

  15. Jack says:

    @DLF: You conservatives are always touting how the private sector can do better than the over-bloated ‘gubmint’, you should be creaming your panties over Enterprise Flagler’s involvement in Economic Development, they are a private sector organization that receives a portion of their funding from taxpayer dollars. I guess it’s okay when the private sector wastes taxpayer dollars.

  16. Yap-Yap-Yap says:

    Why does it always seem as though Commissioner Holland is tooting her own horn, and not being truthful with those that elected her, and those who did not?

    Commissioner Holland was on the Enterprise Flagler Board when all this was taking place AND on the County Commission too making her accountable x 2 for our cash. Nice of Holland to thrown her running buddies under the bus though.

    Commissioner Holland too is guilty of giving away our tax dollars as she has been a commissioner for more than 4 years herself. Commissioners Peterson and Revels are to blame as well as they have been giving tax payers money away, and have never asked for contract information either. Why has the County Administrator, Craig Coffey not questioned this in meetings—because he is holding hands with his friend from De Soto County who is running Enterprise Flagler? What is Coffey getting out of the deal? If I am not mistaken, Commissioner Revels is a member of Flagler Enterprise too, why has she not been asking questions?

    Another blunder of Coffey’s—How many does it take before the Board of County Commissioners take action and get rid of him? Has he not proven he is not qualified to be Flagler County Administrator? What does it take for the board to comprehend?

    Let’s not think county attorney is innocent here either. He has been out county attorney for how many years? Why has a contract not been developed since he came BACK on board? Has anyone ever wonder why he came back on board when HOLLAND was elected?

    This is how many hundreds of thousands of dollars over the last several years???????? Yes, a whole lot of finger pointing going on here, but when they have one pointing at someone else, they have four other fingers pointing right back at themselves.

  17. jimmythebull says:

    F.B.I. WHERE ARE YOU?

  18. FlaglerResident says:

    Enterprise Flagler is primarily funded by public dollars. Hence, how can it be held to any standards other than a public entity. Why would it be allowed to operate beyond the standards of a public entity. If our tax dollars are the difference whether Enterprise Flagler makes it or fails then it needs to treat everyone with equal access and transparency not just its private members. This should not be some elite club but a public tool to entice business development and economic growth, after all we are told it is for the good of the community. Enterprise Flagler you can’t have it both ways. Either be for the good of the community, or the good of your members. Either take public money and become the peoples (government) entity you are or revert back to the old days where you had a back bone utilizing private funds to seek out credible business and government concerns. Don’t advocate to raise our taxes for economic growth but demand a responsible government seeking other means to finance your mission. Or, would this upset the public funding and jeopardize your cause. Which is it? Maybe the TDC model is a better plan. It seems as though the City of Palm Coast is paving its own responsible economic development mission diverting valuable economic dollars in house rather than to Enterprise Flagler. Is it a better business model to take economic development in house for each city/county thus having 5 times the exposure? I think there is a REAL conflict with the Enterprise Flagler’s business model. Let’s hope that the restructuring is a credible plan in the best interest of the people who fund the operation, you and me. Let’s hope the Enterprise Flagler board understands its mission.

    Concerned Business Thinker

  19. FlaglerResident says:

    P.S. History Lesson

    When EDC (Flagler County’s economic development committee) was sunset several years ago (ceased operation) it was because the other municipalities were rightfully concerned that the Flagler County BOCC (board of county commissioners) had control over the deciding vote as to the mission that EDC represented. Thus, EDC was making decisions for the entire county for recommendation to the County BOCC. EDC was closed and Enterprise Flagler was then restructured to become a more transparent organization to include city and county officials and administrators, thus becoming the NEW EDC represented by all. When this restructuring occurred, we then became in my mind a true public entity for public interest in economic development. Look at the board make up and you will see the public interest in this board. If we look public, smell public, then let’s be public. If public dollars are the backbone of this organization then let it stand out as a united effort of the people and the cities/county. Let the public embrace its investment in this organization and its management.

    United we stand, divided we fall, well that may seem a little deep. However, there is a continual conflict within the Enterprise Flagler organization and it seems to stem from its resources of funding, public funding vs private decision making. I know this organization has great intentions but, can it really represent the entire community without bias? Can the leadership of all the cities/county really unite into one organization for the good of all, or is this just a continual struggle amongst the difference in the make up of each community and therefore the thought of one organization to properly manage the interest of all is wishful thinking? Should each entity City/County take responsibility for whom it represents? Could this give us 5 times the exposure?

    For consideration, if each municipality had its own economic development representative and the five of these representatives met every two weeks to discuss cooperative efforts, would it not be more productive? How many times can we reorganize Enterprise Flagler. We need to be a public entity of some sort. I’d like to know how many other Enterprise organizations under the wing of Enterprise Florida are Public/Private, what their financial make up is and how the are administered. Looking at other success stories could be a step in the right direction for our floundering Enterprise Flagler.

    The leadership of the Enterprise Flagler organization rest on the shoulders of its executive board and it is the responsibility of this executive board to take accountable measures to set sails in a new and positive direction. Don’t reinvent the wheel, again. Look at other successful programs in our state for your consideration.

    Concerned Business Thinker

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