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Coffee Talk (Sara/Mana edition)
Still ginned up at CEDC
Sarasota-based Central European Distribution Corp., Poland's largest distributor of booze and beer, has released its latest proxy statement. There's nothing startling in the annual disclosure document, except perhaps the chart showing the cumulative stockholder return vis-a-vis that of Nasdaq and the Nasdaq Non-Financial Stocks Index (see accompanying table). Wow.
As noted in the proxy, total stockholder return is measured by dividing total dividends (assuming dividend reinvestment) plus share price change by the share price at the beginning of the measurement period. For CEDC, the total return is based on a $100 investment starting on Dec. 31, 1998, through Dec. 31, 2003 - an increase of about 680%.
Now, here's where it gets interesting. Look at CEDC's financial performance in 2003 vs. 2002 and what it pays its chief executive officer and compare that to the performance and CEO compensation of another Sarasota-based public company, Teltronics Inc.
This is worth noting, too. Carey owns 17% of CEDC's outstanding shares, while Cameron owns 5% of Teltronics' shares.
A picture is worth a 1,000 words. You decide which stock you'd buy.
Argus gets it
The March newsletter of the Argus Foundation, one of Sarasota's business-oriented government watchdogs, chides the Sarasota County Commission and School Board for their newest method of social engineering - the adoption of new school impact fees. Noting the new fees will exempt homes built at $145,000 or less, Argus points out that, as a result of that subsidy, the school board "will be required to shift money" from some other account to pay for affordable housing. "Is it appropriate to take funds earmarked for student education and use those funds for subsidizing affordable housing? Is it the role of the Sarasota County School Board to take money from the education of our children to be used for a general government purpose?" Says Argus: no way.
Meanwhile, Lee County's on the impact-fee hot seat
A potentially ground-breaking class action lawsuit is being fought in Lee County over school impact fees. Plaintiff Tina Brown, First Home Builders of Florida and Lee Building Industry Association Inc. have sued Lee County, charging that its impact fees, created in November 2001, are unnecessary to sustain school growth and that the calculations used to create the fees were flawed.
Both parties in the suit concede that for impact fees to be legally defensible the fees must pass the rational nexus test. The two prongs of that test are: a rational connection between the need for additional capital facilities and the growth created by new development; and a rational connection between the expenditure of the funds collected and the benefits accruing to the new development.
The suit charges that a study, performed by Lee County itself, showed "'there are more than enough permanent student stations in regular facilities to accommodate current enrollment, without even counting permanent stations in special facilities." In addition, the building industry charges, additional students are being generated more by existing structures than new residential development.
The plaintiffs further say Lee County's calculations have made the fees significantly higher than they should be. Their suit says, "The Impact Fee Study overstates the total cost and understates the credits. The result is an impact fee which greatly exceeds the fee payer's fair share of the cost of new school facilities."
This suit currently is being tried in Lee County Circuit Court. If the plaintiffs win, watch for their approach to be duplicated in more anti-impact fee lawsuits throughout Florida.
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