Enterprise Florida Board of Director s Meeting. May 11, 2016 Naples, Florida

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1 Enterprise Florida Board of Director s Meeting May 11, 2016 Naples, Florida

2 Welcome & Roll Call Alan Becker Board of Directors Vice Chair

3 President s Update Bill Johnson

4 Chairman s Report Governor Rick Scott

7 Job Creator Awards

8 Organizational Assessment David Wilkins

9 Enterprise Florida Review Observations and Findings May 11, 2016 DTW Strategies

10 Enterprise Florida Review Approach to Review Overall Findings Rationalizing Organization Opportunities for Savings Summary Recommendations for Board 2

11 Approach to Review Interviews Enterprise Florida Board Members DEO Florida Economic Development Council Consultants Accountants Business Leaders Citizens Documentation Enterprise Florida DEO Third Party Reports Site Visits Tallahassee Orlando 3

Overall Findings Enterprise Florida Continues to be a National Leader Florida Job Growth is Significant and a National Envy The Governor s Leadership is the Number One Success Factor Stakeholders

12 Overall Findings Enterprise Florida Continues to be a National Leader Florida Job Growth is Significant and a National Envy The Governor s Leadership is the Number One Success Factor Stakeholders Value Enterprise Florida and Recognize the Unique Contributions Made to Local and Statewide Organizations Third Party Reviews Echo the Above Points Enterprise Florida is a Good Investment of State Dollars New Enterprise Florida Branding is Well-Received Public-Private Partnership Has Worked 4

Overall Findings Public-Private Entities Have Their Unique Complexities Appearance Matters Transparency and Accountability is a Must Public Trust Must be Earned and Re-earned Evolution of

13 Overall Findings Public-Private Entities Have Their Unique Complexities Appearance Matters Transparency and Accountability is a Must Public Trust Must be Earned and Re-earned Evolution of the Organization Has Occurred Over Twenty Years Are We Maximizing the Benefits of a Public-Private Partnership? Community Leadership Community Funding Private Sector Management and Efficiency 5

Overall Findings Statutory Community Funding of a 50/50 Model Has Never Been Achieved Very Active Community Leadership Board Has Been Crucial Business Development is Seen as

14 Overall Findings Statutory Community Funding of a 50/50 Model Has Never Been Achieved Very Active Community Leadership Board Has Been Crucial Business Development is Seen as Critical But Often Frustrating Financial and Operational Concerns Exist in Accounting and Contract Management Numerous Opportunities Exist to Reduce Cost and Improve Efficiencies 6

15 Rationalizing Organization Enterprise Florida Mission Business Development International Trade VISIT FLORIDA Sports Foundation Military and Defense Programs Minority Business Support Federal Loan and Capital Programs 7

Development Assistance International Trade Foreign Company Export and

16 Rationalizing Organization Core Area of Focus Business Development Marketing Florida Corporate Relocation/Expansion Local Government Economic Development Assistance International Trade Foreign Company Export and Import Assistance Florida Company Import and Export Assistance Foreign Direct Investment 8

17 Rationalizing Organization: EFI Funding by Year FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 EFI State Appropriation Operating Budget* $11.1 M $11.1 M $13.5 M $14.55 M $15.4 M $15 M EFI Payroll and Related Costs $6.63 M $6.69 M $7.2 M $7.84 M $8.2 M $8.86 M Marketing Appropriation $1.01 M $.5 M $.71 M $1.68 M $1.29 M M Closing Fund Appropriation $16 M $42 M $92.4 M $73.93 M $55.38 M $18 M *Excludes Marketing 9

18 Rationalizing Organization Business Development Performance FY12/13 FY13/14 FY14/15 FY15/16 (Projected) Corporate Decisions Made to Move to Florida Corporate Decisions Which Used Closing Fund Capital Investment from these Companies* B B B B Total Jobs Committed/Retained 25,193 36,207 33,548 25,272 Referrals to Local EDO s ROI on Business Development with QACF ROI on Business Development on QACF Deals *Approximately 50% of these investments come from companies utilizing closing funds 10

Improvements Create Private Sector Like Sales Organization Align and Allocate Dollars to

19 Options For Business Development Organization Right Size Model Or Reinvent Model Reduce Costs in Line with Performance Continue Current Operating Model Drive Step-Level Improvements Create Private Sector Like Sales Organization Align and Allocate Dollars to Business Development as Core of Mission Invest Money to Empower Results Reinvent Go to Market Approach 11

Expectations of Reinvention of Business Development

Expansion More Employee and Board Member Empowerment Seek vs

Integration Higher Compensation Potential Community

20 Expectations of Reinvention of Business Development Organization Professional Selling Regional Expertise Expansion More Employee and Board Member Empowerment Seek vs Serve International Expansion Asset Exploitation Marketing Integration Higher Compensation Potential Community Intelligence Creation Industry Expertise Focus Improved Results Job Creation Efficiency 12

21 International Office Performance Scorecard Offices Number of Years with Contracts FY16/17 Operating Budget Avg Yearly Jobs in FL* Avg Yearly Export Sales* Avg Yearly Corporate Assists Avg Yearly CAP EX Investment United Kingdom 20 $200, $20.4 M 148 $18.4 M 353 France 6 $234, $46.1 M 182 $8.9 M 262 Germany 20 $200, $137.1 M 168 $16.8 M 788 Spain 18 $210, $22.0 M 155 South Africa 15 $94,000 - $1.28 M Brazil 17 $180, $23.4 M 158 $2.9 M 150 Canada 20 $178, $1.1 M 135 $2.0 M 40 4 Year ROI * Does not address sales or job continuance in ongoing years. 13

22 Realign to Department of Economic Opportunity VISIT FLORIDA Florida Sports Foundation Minority Business Development Federal Small Business Credit Initiative Legislative Intent Savings in Administration Leadership Focus (both ways) 14

Opportunities for Savings Redesign Organization Around Business Development and International Focus Implement Private Sector Best Practices Accountability and Metrics Skill

23 Opportunities for Savings Redesign Organization Around Business Development and International Focus Implement Private Sector Best Practices Accountability and Metrics Skill Integration Talent Acquisition Simplify Cost Centers from Six to Three Reduce Office Space Costs Tighten Travel and Expense Policy Lower Professional Fees and Contractual Services 15

Entertainment Align With State Policy on Researching Low Cost

24 Opportunities For Savings Simple Travel Policy Modifications Can Save Approximately $150,000/Year Hotels Mileage Meals and Entertainment Align With State Policy on Researching Low Cost Options Align Mileage With State Policy Align Per Diem with State Policy 16

Opportunities For Savings Current Cost Structure Potential Cost Savings Payroll & Related Costs $8.9 M Payroll & Related Costs $2.725 M Operating Expenses $2.

25 Opportunities For Savings Current Cost Structure Potential Cost Savings Payroll & Related Costs $8.9 M Payroll & Related Costs $2.725 M Operating Expenses $2.5 M Operating Expenses $400 K Program Expenses & Events $3.4 M Program Expenses & Events $300 K Florida Sports Foundation $4.6 M International Offices $2.2 M International Offices $775 K Advertising and Marketing $10.3 M Advertising and Marketing $200 K Professional Fees $1.3 M Professional Fees $450 K Travel $1.0 M Travel $150 K Total $34.2 M Total $5.0 M Operating Cash $6.0 M Operating Cash $1.0 M 17

Summary $6 Million in Savings Can Be Achieved Through Effective Cost Management Reinvestment of Savings Should Feed Job Creation Agenda Business Development Direction is Critical to Future

26 Summary $6 Million in Savings Can Be Achieved Through Effective Cost Management Reinvestment of Savings Should Feed Job Creation Agenda Business Development Direction is Critical to Future International Trade and Foreign Direct Investment Needs More Focus Marketing 2.0 Must be Measured for Success Financial Management Improvements Needed Immediately Private Financing of Incentives Should be Explored and Pursued Locally Legislature and Stakeholder Engagement and Sponsorship is New Norm 18

27 Summary Areas For Investment International Business Development/Foreign Direct Investment Business Development Reinvention Community Intelligence Financial and Organization Management 19

Summary Implementation Plan ----Q1---- ----Q2---- ----Q3---- ----Q4---- Right Size EFI Reinvent

28 Summary Implementation Plan ----Q Q Q Q4---- Right Size EFI Reinvent Business Development Realign International Integrate Marketing Work with Legislature Improve Operations 20

Recommendations For Board 1. Consolidate and Redesign EFI Organization 2. Reduce Operating Expenses by Approximately $400,000 3. Reduce Program Expenses and Events by $500,000 4.

29 Recommendations For Board 1. Consolidate and Redesign EFI Organization 2. Reduce Operating Expenses by Approximately $400, Reduce Program Expenses and Events by $500, Reduce Professional Fees by $450,000 Immediate Action Items 5. Reduce Travel Expenses by $150,000 Per Year 6. Free up Available Cash on Hand for Reuse in Future Years 7. Hire an Independent Accounting Firm to Conduct an Internal Controls Review and Recommend a Corrective Action Plan 8. Transition the Management of the State Small Business Credit Initiative to DEO 9. Prepare Legislative Proposal to Move VISIT FLORIDA, Florida Sports, and Minority Business to DEO 21

30 Recommendations For Board Actions For Future Board Meetings 10. Eliminate 27 FTE Positions Throughout the Organization (June Meeting) 11. Conduct an Evaluation of International Office Expenditures (June Meeting) 12. Redesign the Business Development Organization (September Meeting) 13. Redesign the Business Performance Bonus System (September Meeting) 14. Redesign the Business Flow And Review/Approval Processes between EFI and DEO (September Meeting) 15. Prepare an Investment Strategy for the $6M in Identified Savings (June Meeting) 22

31 BREAKOUT SESSIONS Time Limit: 45 minutes RIVER OF GRASS Business Development MANGROVE B International MANGROVE C Marketing

32 BREAKOUT SESSION REPORTS Business Development International Marketing

33 Governor s Remarks Governor Rick Scott

34 DEO Update Cissy Proctor

35 Economic Update Cissy Proctor, Executive Director May 11, 2016

36 Released April 15,

37 Released April 15,

38 Released April 15,

39 Registered Nurses Retail Salespersons First-Line Supervisors of Retail Sales Workers Heavy and Tractor-Trailer Truck Drivers First-Line Supervisors of Food Preparation and Serving Workers Customer Service Representatives First-Line Supervisors of Office and Administrative Support Workers Maintenance and Repair Workers Computer User Support Specialists Combined Food Preparation and Serving Workers Accountants Sales Representatives, Wholesale and Manufacturing Computer Systems Analysts Network and Computer Systems Administrators Medical and Health Services Managers Released March 30,

40 Released April 15,

41 Real Wages Increase In Past Year 2.7% Private Sector Jobs Created In industries with average annual wage > $40,000 Since December 2010 Private Sector Jobs Created In industries with average annual wage > $45,000 Since December % 45.1% Released April 15,

Florida Job Growth Since 2010 17.4% U.S. Job Growth Since 2010 12.

42 Florida Job Growth Since % U.S. Job Growth Since % Labor Force Since % Labor Force Since % GDP Growth 2.7% GDP Growth 2.4% April 15,

43 ACTION ITEMS

44 APPROVAL OF MINUTES

45 CONSENT AGENDA

46 Board Membership Renewals Luis Orbegoso President, ADT Business Susan Connelly Senior Vice President, Communications & Public Affairs Joe York President -Florida, Puerto Rico & US Virgin Island Alex Glenn State President - Florida Blake Gable President, Real Estate Gary Spulak President Tom McCormick President & Co-Chief Executive Officer Kent Ellert President & CEO Brian Curtin President Andy Corty President & Publisher

47 Board Membership Renewals Stan Connally President & CEO Jeff Chamberlain VP, Real Estate Sheldon Fox SVP, Integration & Engineering Brett Couch East Regional President Jon Rambeau Vice President & General Manager Tom Pennekamp Government Relations Manager Harvey Massey Chairman & CEO Gordon Gillette President Paul F. Browning President & CEO Kelly Madden President

48 New At-Large Members Christopher Moya Director of Government Relations Jones Walker LLC Andy Wike President & CEO Fleetwing Corp.

49 New Company Representatives Paul F. Browning President & CEO Mitsubishi Hitachi Power Systems Americas, Inc. Alessandro Diaz Gomes President & CEO Odebrecht Construction, Inc. Marva Johnson Corporate Vice President, Government and Industry Affairs Bright House Networks, LLC

50 3 RD QUARTER INTERIM FINANCIAL STATEMENTS ENDING MARCH 31, 2016

51 CARRY FORWARD AUTHORIZATION

52 VISIT FLORIDA Board Recommendations Scott Rose Chief Operating Officer The Florida Aquarium Simone Champagnie Executive Director, Development Chaplin School of Hospitality & Tourism Management Florida International University

53 VISIT FLORIDA Board Recommendations Regional seat re-appointments: Patrick Murphy, St. Joe Company (Seat 1) through 6/30/2020 Sharon Siskie, Disney Destinations (Seat 5) through 6/30/2020 Association/DMO/statewide industry seat re-appointments: Roy Ritenour, The Hertz Corporation (Seat 17) through 6/30/2018 Bobby Cornwell, Florida Association of RV Parks & Campgrounds (Seat 19) through 6/30/2018 Malinda Horton, Florida Association of Museums (Seat 21) through 6/30/2018 Samantha Padgett, Florida Retail Federation (Seat 23) through 6/30/2018 Virginia Haley, Visit Sarasota County (Seat 25) through 6/30/2018 Bill Talbert, Greater Miami Convention & Visitors Bureau (Seat 27) through 6/30/2018 John Tomlin, The Auto Club Group (Seat 29) through 6/30/2018 Therrin Protze, Kennedy Space Center Visitor Complex (Seat 31) through 6/30/2018

54 CEO DEPARTURE AGREEMENT

55 Public Comment

56 VOTE ON CONSENT AGENDA

57 ACKNOWLEDGEMENTS

58 New Board Appointment House of Representatives Mori Hosseini Chairman & CEO ICI Homes

59 Special thank you: Robert Coker Senior Vice President, Public Affairs

60 Special thanks to our sponsors:

61 Enterprise Florida Investors

62 CLOSING REMARKS & ADJOURNMENT

63 SAVE THE DATES September 28 29, 2016 Orlando This EFI Board of Directors & Stakeholder Council Meetings will take place in conjunction with the Florida Chamber Foundation s Future of Florida Forum in Orlando at the Hyatt Regency Grand Cyprus. November 29-30, 2016 SanDestin

64 EnterpriseFlorida.com

Tuesday, September 9, :30 A.M. 10:30 A.M. CALL-IN NUMBER: (800) ACCESS CODE: # Enterprise Florida Executive Committee Meeting

Tuesday, September 9, :30 A.M. 10:30 A.M. CALL-IN NUMBER: (800) ACCESS CODE: # Enterprise Florida Executive Committee Meeting Tuesday, September 9, 2014 9:30 A.M. 10:30 A.M. CALL-IN NUMBER: (800) 501-8979 ACCESS CODE: 8344260# Enterprise Florida Executive Committee Meeting Tuesday, September 9, 2014 9:30 a.m. 10:30 a.m. E.S.T.