BCC / CCAA Meeting

Immokalee Regional Airport

USDA Grant /Powder Coating System

February 25, 2014

Dwight E. Brock 1

2

Overview2013

Immokalee Regional Airport – 2013Collier County Property Appraiser – Aerial Image

Manufacturing Incubator II

Incubator II

• Between 1999 - 2002, the Collier County Airport Authority(CCAA) was awarded a Community Development Block Grant(CDBG) for $750,000 and a United States Department ofAgriculture (USDA) grant for $250,000 requiring a match of$639,000 for the Immokalee Regional Airport to construct anincubator facility and a powder coating system.

• The USDA grant application indicated the powder coatingfacility would consist of primary equipment including: firebatch oven, conveyor belts / overhead electric hoist gantrysystem, rinse / dip tanks, transfer booms, hand push conveyorsystem, powder-cartridge booth, and powder guns withhopper.

3

Background

• Global Manufacturing Technology, Inc., was responsible for thepurchase of the secondary equipment (approximately$100,000) including: outside propane storage tanks, holdingtanks, and evaporator system.

• On June 24, 2003, the BCC declared Global ManufacturingTechnology, Inc. in default for not being able to perform theterms of the Participating Agreement.

– The powder coating system was incomplete with secondaryequipment not provided.

• In February / March 2004, the BCC approved two budgetamendments for $21,000 and $16,000, a total of $37,000,for the conversion of the powder coating system into a wetsystem. 4

Continued…

5

Immokalee Regional AirportField Work Photographs - Powder Coating Equipment (in use)

Batch Oven

6

Immokalee Regional AirportField Work Photographs - Powder Coating Equipment (in storage)

7

Immokalee Regional AirportField Work Photographs - Powder Coating Equipment (in storage)

Unused equipment inboxes in storage

• Approximately $163,000 was spent for a powdercoating system that was never completed and wasnot put to the intended use, which violates grantassurances.

– Grantor agency approval was not obtained for the changeof use.

• The current tenant is using a portion of the equipment.

– A portion of the equipment was relocated to storage andsome equipment could not be located by Airport staff.

• The County has not complied with FloridaAdministrative Codes (FAC’s) for asset records. 8

Summary of Findings

• Manufacturing incubator lease concerns:

– The lease expired on April 13, 2007 and no new leasewas executed.

– The lease appears to have been continued on a monthto month basis, but the initial contract andamendments did not provide a term for month tomonth continuation.

– Rent is not being charged at fair market value.

– Late payments and terms of payments were notapproved by the BCC / CCAA.

– Interest and late payment fees do not appear to havebeen charged.

9

Continued…

10

The CCAA should:

• Notify the USDA of violations for the $250,000 grantand work with the USDA for resolution.

• Provide Clerk’s Finance with appropriate paperworkto accurately reflect the asset records and value.

• Review the $750,000 CDBG grant for compliancespecifically job creation requirements and programincome.

• Verify all tenants have leases and insurance.

• Resolve the Manufacturing Incubator II leaseconcerns.

Overall Recommendations

11

In the future, the CCAA and County should:

• Comply with the Code of Federal Regulations(CFR’s), grant agreements, and grant assurances.

• Obtain grantor approval prior to using grantassets for other activities.

• Monitor assets and capital projects to ensureassets are appropriately recorded and complywith federal requirements.

• Continually monitor and review leases to ensuretenants are compliant and maintain properinsurance.

Continued…

12

• The powder coating system was never completed.

• Secondary equipment was required to have afunctioning powder coating system. This equipmentwas not provided by Global ManufacturingTechnology, Inc.

• Once the powder coating equipment was installed,the equipment was partially dismantled and aportion of the equipment moved to storage.

• Grant funds were used to purchase and install thepowder coating system. The grantor has notprovided written approval for the change of use, asrequired by the grant conditions.

Conclusion

13

Thank you

14