Recession Recovery and Beyond
Study Committee Meeting Duval County January 12, 2011
Clanzenetta “Mickee” Brown JCCI Study Planner mickee@jcci.org
In attendance: Meeting Attendees: Elaine Brown (Chair), Sarah Boren, Sandra L. Brooks, Lee Brown, Cathy Chambers, Jim Crooks, Logan Cross, Aaron Curtis, Janice Donaldson, Marilyn Feldstein, Bill Garrison, Paul R. Godfrey, Andre Higgins, David Johnson, Kellie Jo Kilberg, Bill Larson, Terry Lorince, Ashkan Najafi, Joe McClure, Julie P. McNeil, Candace Moody, Leith A. Oatman, Tom Patton, Frank Pearce, Clive Ricketts, Steve Rieck, Granville Reed, Kathy Sandusky, Michelle Tappouni, Deborah K. Thompson, and Joe Whitaker [If your name does not appear, but you were in attendance, please let us know.] Staff Members: Mickee Brown, Skip Cramer, and Demetrius Jenkins] Meeting Time: Noon – 1:30 PM Discussion: Chair Elaine Brown welcomed the study committee and reviewed the day‟s agenda. The January 5, 2011 meeting summary was distributed and the study committee was asked to review the document in preparation for its approval on January 19, 2011. The committee was also presented with the results from the previous week‟s group process check evaluation form. Elaine introduced the day‟s two resource speakers: Ron Avery, Chairman of The Ronco Group and Erika Lorenz Alba, Principal and Managing Director Multi-State Legislative and Regulatory Practice for The Fiorentino Group and former Senior Vice President and Assistant General Counsel at Fidelity National. Resource speaker questions 1. From your perspective what is working in Northeast Florida to create/retain jobs and make the region more economically competitive? What more needs to be done and by whom at the local, state, and regional levels? 2. Discuss the economic, social, and geographic forces that help and/or hinder a community‟s ability to create and retain jobs. How are we doing in Northeast Florida? 3. What are the roles of business, government, economic development organizations, and k-20 education in building an economically competitive community with sufficient jobs? Are there other categorical entities that should be involved? 4. How can public-private partnerships lead to job creation? Do you have any examples of successful partnerships in Florida or beyond? 5. Explain the differences and the relationships between economic development strategy and job creation strategy. Erika Alba’s Presentation [Staff note: Alba provided answers to the questions above in writing. The answers were distributed at the meeting and are available at http://jccirecoverystudy.blogspot.com/p/meeting-handouts.html.] When Fidelity relocated to Jacksonville the process went well. However, it was troubling when the realtors who worked with the company told company executives that they should avoid living in Jacksonville because of the poor school system. We were encouraged to live in St. Johns County. Business people can not be afraid to live in Duval County. President Foley was at the point of not coming to Jacksonville unless his children were able to get into Bolles. Business decisions can not hinge on longer-than-anticipated commutes or finding private schools. Neither realtors, nor any else
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should discount the school system; this is very harmful. We have to change the perception about the schools, focus on what is working, and fix whatever is going wrong. The State of Florida has four new cabinet members, including Governor Scott, who view government as a problem solver. He is actively recruiting businesses to Florida and is competing with Governor Rick Perry of Texas to bring more jobs to Florida. The new governor is also a metrics person, so we must be able to make a case for bringing businesses to this community. As a member of the Downtown Council, we were made aware that a downtown Jacksonville restaurant has been waiting for a year to get approval for outdoor seating and has now had to engage legal counsel for the project. Why is this more than a 10 minute conversation? To Governor Scott these types of hurdles mean that our community is unwelcoming to business and the jobs will go somewhere else. Being able to compete economically will bring jobs to the region. For example, whether you like incentives or not, it is important to offer them because our competitors offer incentives. Regulation reform is also necessary for streamlining business processes so that job creation is not slowed by costs and inefficiencies. Our community also has many assets including Jacksonvilleâ€&#x;s port, healthcare infrastructure, the river, and local colleges and universities. Public private partnerships (P3) are important because these arrangements provide businesses with needed certainty. When businesses are ready to begin investing; P3 without obstacles will provide needed assurance. Good P3 examples are Downtown venues in Orlando and Cecil Field in Jacksonville. Job creation is a short term strategy where incentives might be offered to encourage companies to hire workers. Economic development focuses on creating a strong business climate, building community assets, and targeting specific sectors. Economic development is the plan for becoming who we want to be when we grow up. Ron Avery’s Presentation The best thing that we have going is Governor Rick Scottâ€&#x;s focus on government efficiency. This should be the focus of local governments as well. Manufacturers are competing globally and regulations can slow the process. It is difficult to compete with cities in other countries where there are few regulations. Government must become more efficient and move out of the way. We are also unduly focused on quality of life issues as a way to attract firms to the community. Most manufacturers who have plants in Jacksonville do not live here. These firms are most concerned about the availability of a quality workforce, the cost to do business, and regulations. Manufacturing jobs that rely on technology do not create as many jobs as other sectors, however for every direct job created, 2.5 indirect jobs are also created. Many of the jobs that have been lost will not return because companies have become more productive through greater efficiency using a smaller workforce. Jobs will come from new companies with new processes and innovations. Jacksonville does indeed suffer from a perception problem when it comes to education and crime. We need leadership that will focus on these problems. Q. Does the education system provide the workers that are needed for the manufacturing sector? Avery: The local workforce is qualified. This is an important message for the community to hear. WorkSource is also able to train workers for companies that are relocating or expanding. 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
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Q. How do you see the Mayor of Jacksonville leading the region? Alba: The new mayor will need to develop his/her own economic platform. This should be a true plan with quantifiable action steps. With this plan the new mayor can approach the governor‟s office as a partner. If we are not ready or present obstacles as conditions to economic development, the governor‟s office will turn elsewhere. Avery: Anyone running for mayor should be able to answer the following questions. Are you serious about reforming government? Are you willing to eliminate 5% to 10% of the city‟s workforce? Do you have the courage to fire your friends and relatives? Q. Florida has had 12 years of conservative Republican leadership and nothing changed. How is this new administration going to be any different? Avery: The new governor is focused on making government more efficient, so that the state is more attractive to business. We cannot focus on the past because the economic situation is much different than it was over the past 12 years. Q. How do we align high school education with the needs of business? Alba: Students need real, practical skills. For example, after sixth grade students are using calculators for math and can not explain how they got the answer to a problem. Some of the coursework students have today will not prepare them for the workplace. This is especially true for young people who will not attend college. Q. Entrepreneurial engine is stalled, why? Avery: Government bureaucracy is the problem. If a guy wants to open a pizza shop with three employees, then he should not have to complete stacks of paperwork, deal with regulatory hurdles, or pay a lot of fees before going into business. Q. How do you change perceptions about public education in Duval County when compared to the surrounding counties? It is not possible to attract the best and the brightest teachers due to the low salaries. Alba: School funding is tied to property taxes, so if we bring good jobs to the community more people can afford the $300,000 - $400,000 homes, which increases the funding available to the school district for salaries. Jobs and education – it is a circle. [Staff note: The chart below lists the minimum and average teacher salaries in 2009-10 for Cornerstone’s regional partners according to the August 2010 Florida Department of Education, Education Information & Accountability Services Data Report.] County Average Salary Minimum Starting Salary Bachelor’s Degree
Baker $42,367 $32,010
Clay $45,733 $37,800
Duval $46,676 $37,300
Flagler $48,606 $38,213
Nassau $45,192 $36,500
Putnam $46,013 $36,251
St. Johns $46,370 $38,000
Q. To E. Brown: Could the city of Jacksonville sustain a 5 – 10% cut in personnel? Brown: Yes there is always room for making such cuts and many have always been made, however the quality of services may suffer. Q. How do we facilitate business growth locally? Alba: In San Diego, the chamber and the universities have a strong relationship with the result being innovation that has lead to job creation. Universities are also a source for workforce talent and it is important to keep that talent local. Avery: Business incubators are a possible solution. 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
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Q. How can we fix negative perceptions about the schools? Alba: We are not hearing all of the great stories that are coming from the public school system. The system does not need a public relations person as much as it needs a public relations plan to eliminate the negative perceptions. Q. Was it difficult to find a qualified workforce when your companies came to Jacksonville? Avery: When we first moved here we could not find the workforce we wanted, so we imported staff to train our new hires. This process took about two years. Alba: Fidelity did not have any problems finding qualified staff in the Human Resources, Tax, Accounting, and Legal professions. The region‟s depth in finance and insurance businesses provided a talent pool. Q. What can we do to support existing small business? Avery: An economic development team should be in place to support the needs of small businesses. Some costs are extremely high, for example health care is 38 percent higher in Florida than Pennsylvania for the same coverage. Alba: Businesses are scared. Access to capital is unavailable especially for “mom and pop” businesses and there is uncertainty with regard to health care reform and what that means to the cost to conduct business. Q. What can we do as a region to approach Rick Scott? Alba: Governor Scott is familiar with and fond of Northeast Florida. He won the primary because of Duval County. The region must present make the case that starting and growing businesses here is quick and inexpensive. Avery: Whether we agree or disagree with Scott‟s proposals we have to get on board. Q. Which cities are doing a good job with economic development? Avery: Manufacturing plants are being built in North Carolina, South Carolina, Georgia, and Alabama instead of Florida. Q. To R. Avery: Why did you move your company to Jacksonville? Avery: The snow in Pennsylvania was one reason. Jacksonville‟s close proximity to South America was the other. Travelling from Pennsylvania to South America was costly in dollars and time. Study committee discussion comments It was mentioned that quality of life is not an issue for business prospects; however Avery mentioned that one of the reasons he came here was because of the weather. Banks are not lending to small companies, even the most established firms. The negative perception of the schools impacts students the most. High school graduates leave Jacksonville as a result. I have been at schools where children were embarrassed to attend or felt the need to apologize for being a student (i.e. „I am still going to college, even though I attend this school…‟). The perception of what is happening in business and education are very negative. Who can do a better job of disseminating the good news in these areas? How can we sell the virtues of our community to outsiders when the internal perceptions are so poor? What impact does this have on existing businesses staying in Northeast Florida? Realtors should stop bad-mouthing Duval county‟s schools. Every school should have the same success as the magnet schools that have consistently high ratings. A Duval County School system representative needs to participate. We are not hearing the school district‟s perspective. 2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org
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Students may want to go to a technical school, but their parents will not permit this because they believe these jobs to be less desirable. We heard that students have a poor work ethic, perhaps businesses should offer internships. Business incubators can be a solution for growth. Incubators can be supported through public, private partnerships and focus in specific areas like empowering businesses owners or technology. The focus should be on small businesses. What is the character of these businesses? What is needed to encourage growth? Evaluate the following: How many dollars come into the community? How many dollars are recirculated? How many dollars are leaking out of the regional economy? It seems that there should be one person or one office that leads businesses through regulatory processes. For building contractors, local permitting is not the issue, it is state permits that take the most time and effort. Manufacturing businesses are different than many other businesses because of their impact on the environment, transportation systems, public safety, and health. The regulatory gauntlet for these types of businesses can be significant. However, there are reasons the regulations and processes are in place – to protect our health, the environment, public safety, and more. What is our comparative advantage or disadvantage in taxation in Florida? [Staff note: According to the Tax Foundation’s “2011 State Business Tax Climate Index”, Florida has ranked 5th most favorable among the 50 states for the past six years. Filling out the top 5 for 2011 were South Dakota (1); Alaska (2); Wyoming (3); and Nevada (4). The bottom 5: Ohio (46); Connecticut (47); New Jersey (48); California (49); and New York (50). Other states of interest: Texas (13); Alabama (28); Georgia (25); South Carolina (24); Mississippi (21); and North Carolina (41).] The Tax Climate Index is a composite of five different aspects of state tax systems. With Florida’s 2011 indexes in parentheses, those aspects are: Corporate Tax (15); Individual Income Tax (1); Sales Tax (30); Property Tax (28); and Unemployment Insurance (3).] There are 35,000 businesses in Northeast Florida. We are a small market. Will Governor Scott lose interest in us? We must keep the new governor‟s leadership style in mind. Are we back to a focus on manufacturing when most of these jobs have been lost, sent overseas, and are considered low-skill? o Local economies should be diverse. Manufacturing makes-up about 7 percent of jobs, which pay better than average wages and require skilled workers. Businesses need certainty when decisions are being made about relocation and expansion. o The comment that businesses need certainty is ironic, when people who work in businesses face so much uncertainty We need to hear from a banker regarding lending and access to capital. There is a great deal of local government bashing taking place and it is disconcerting.
Elaine asked the group to complete the group process check forms and reminded the committee of next week‟s meeting. The meeting was adjourned at 1:32 PM.
2434 Atlantic Boulevard
Jacksonville, Florida 32207 904-396-3052 Fax: 904-398-1469
www.jcci.org