Can Triumph fund private companies?

PANAMA CITY — Whether private companies can benefit from Triumph funding remains a tricky question to answer, with new arguments emerging on both sides this week.

Private companies like Eastern Shipbuilding are eligible for oil spill funds as long as the projects have a public purpose and include public access, Northwest Florida legislators wrote in a letter to Triumph Gulf Coast, the nonprofit that has been trying to clarify the issue.

But not everyone is convinced the legal question has been sufficiently answered, and Triumph board member Allan Bense wants the subject discussed at the next board meeting, April 27 in Niceville, with input from the board's general counsel, which has been asked to study the issue in depth and report back.

“The issue of using Triumph dollars to improve private property is clearly controversial,” he said. “Very smart lawyers, analysts and elected officials have differing opinions.”

Political backing

A letter to the Triumph board, dated March 12 and signed by seven legislators, including Jay Trumbull of Panama City, states there is nothing in the law that prohibits awarding funding to a private corporation of entity, whether profit or nonprofit, “as long as the project falls within the list of priorities for awards established by the Legislature.”

Whether funds can be awarded to a private corporation or entity is a question the Triumph Board has been trying to get answered since January, when it sent a letter to Senate President Joe Negron and Speaker of the House Richard Corcoran.

Triumph board chairman Don Gaetz, who introduced the Triumph legislation when he was a state senator, said the recent letter from legislators shows that the Triumph board has the discretion to spend the funds on private projects under certain circumstances.

“In that original law, there was no distinction made between private and public recipients of funding so long as a public purpose was served,” he said. “Then, as you may remember, the legislature began taking actions to restrict what some legislators called ‘corporate welfare,’ and it was during that period of time that some additional language was added to the law.”

State Sen. George Gainer was one of three senators who signed off on a separate March 5 letter to the Triumph board that states the law “does not differentiate between funding projects on public or private land or funding public or private entities.”

Gainer said he believes projects that generate many jobs, even by private companies, should be eligible for the Triumph funds as long as they serve a public purpose.

“The intention was in the bill, and still is, that those funds can be used for anything that would improve the quality of life in Northwest Florida,” Gainer said.

Private companies

Eastern Shipbuilding is among those private companies vying for a piece of the first $300 million of $1.5 billion expected to come to eight Northwest Florida counties — Escambia, Santa Rosa, Okaloosa, Walton, Bay, Gulf, Franklin and Wakulla — through 2033 from the Triumph program, which was designed to help the region recover economically from the 2010 Deepwater Horizon oil spill.

The company in its pre-application asked for more than $20 million to help fund a manufacturing project of Coast Guard patrol cutters, but received a letter from Triumph staff stating the project appears ineligible.

Eastern is not alone. So far, pre-applications that do not involve funding public infrastructure have been determined by staff to be ineligible for the funding. Rick Harper, a former University of Northwest Florida economic professor who now serves Triumph board’s economic adviser, said he has been following the instructions of legal staff and the Triumph board by informing those pre-applicants that their projects are ineligible.

“I’m an economist and not an attorney,” Harper said. “I have not made an effort to question the intent of the statute, nor will I make such an effort, because that’s not my area of expertise. When the Triumph board instructs staff to start considering projects that provide infrastructure and could be delivered to a private entity, that’s when Triumph staff will start doing exactly that.”

The Triumph Gulf Coast law, under Chapter 288.8017, makes no mention that the money can be spent on projects for private companies, but it also makes no mention that it can’t. It states that the funds shall be spent on projects or programs “that meet the priorities for economic recovery, diversification, and enhancement of the disproportionately affected counties.”

It goes on to say that awards may go toward "public infrastructure projects for construction, expansion, or maintenance, which are shown to enhance economic recovery, diversification, and enhancement of the disproportionately affected counties.”

Eastern's pre-application states that according to Haas Center estimates, the initial Coast Guard contract will directly and indirectly support more than 10,000 full- and part-time workers in Bay County from 2016 to 2024.

Some have also questioned whether companies like Eastern, and even local governments, should be allowed to use Triumph funds when other avenues of funding are available.

For his part, Bense has said a third leg needs to be added to the local economy, broadening the base beyond the military and tourism, and Triumph funds can help that happen.

“Let’s bring in aerospace. Let's bring in new manufacturers. Let’s expand local industry,” he said. “It is one of my priorities throughout the eight counties. But we must not run afoul of Florida Statutes. With another $1.2 billion out there in Triumph funding over the next 10 years, we do not need an Auditor General report critical of how we spent our money.”