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ABO report: Seven development agencies in SchenCo? Really?
Posted on December 22, 2011 at 10:34 am by Casey Seiler, Capitol bureau chief      in Economic development

The state Authorities Budget Office just issued a report examining whether Schenectady County needs the seven — count ‘em — seven local economic development authorities serving it: the Schenectady County Metroplex Development Authority, the Schenectady County IDA, the City of Schenectady IDA, the Town of Rotterdam IDA, the Schenectady Local Development Corporation, the Schenectady County Community Business Center and, last but certainly not least, the Schenectady County Community Resource Corporation.

The report concludes that the county would be at least as well and probably better served by fewer authorities, and expressed skepticism at officials’ insistence that the seven entities operate as “a unified economic development team.”

Instead, the ABO found “no evidence that authorities have adopted a coordinated project application and review process, use a common application for financial assistance, or that relevant project and financial assistance information is shared among all of the authorities involved.”

What’s more, the report notes, the Rotterdam IDA no longer has outstanding bonds, “and therefore has ceased to exist under Section 882 of General Municipal Law.” The ABO warned that the IDA’s continued operation “could place the board of directors, Town of Rotterdam officials, and any businesses receiving financial assistance from the Rotterdam IDA at risk.”

More from the release:

The ABO also found that these authorities neither adopted nor annually reviewed and updated a comprehensive economic development plan, nor has Metroplex developed a five-year capital projects plan, as required by its enabling legislation

The report provides examples of economic development funds not being used efficiently, including three of the authorities providing more than $600,000 to the Community Business Center to meet its operating costs. Metroplex was also charging the County and City IDA’s $2,000 per month to provide administrative services and staffing support, although contracts with those IDAs limited charges to $1,000 and $750 per month respectively.

Here’s the full report:http://www.scribd.com/doc/76312703/SchenectadyCountyEconomicDevelopmentFinalReport

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Recommendations

1. Reduce the number of authorities involved in economic development in the County to eliminate the authorities providing redundant and duplicative types of financial assistance.

2. Counsels to the Rotterdam IDA and the Town of Rotterdam should determine how to effect the provisions of Section 882 of General Municipal Law and advise the entities on the appropriate actions to take in complying with the provisions in this section of law.

3. All participating authorities should agree on and implement a truly unified approach to economic development that utilizes a streamlined application process, ensures that all relevant information is shared among all authorities, fully identifies all financial assistance being provided, and relies on fewer and less redundant authorities to execute.

4. The existing authorities should develop a comprehensive multi-year plan that coordinates economic development throughout the county, fosters a full understanding of the role and purpose of all involved authorities, and is updated annually.

5. Consistent with this plan, Metroplex should develop and update annually its five-year capital plan, as required by Section 2655-c of Public Authorities Law.

6. Discontinue the practice of using economic development funds to pay for administrative and operating costs of the economic development authorities.

7. Metroplex, as the central administrative support agency, should provide such services directly to the other authorities, without charging fees.

8. Reconsider the practice of providing economic development funds to other organizations to allocate, since the use of these funds for administrativeand support activities reduces the funds spent on economic development.

9. Metroplex should discontinue the practice of subsidizing Business Improvement Districts with proceeds from the County sales tax to offset special assessments charged to businesses located within the District.

10. Neither the County nor the City should not assign municipal employees to work for public authorities during the municipal work day or provide additional compensation for this work without a determination from the Office of the State Comptroller.  

11. The Rotterdam IDA or Town of Rotterdam should recover the stipends paid to past board members, since they were to serve without compensation as stipulated in Article 18-A of General Municipal Law.

12. Each authority should restrict the financial assistance it provides to projects to those enumerated in its enabling legislation.

13. Each authority should establish and adhere to appropriate procedures andc ontrols to ensure that all economic development records are accurate, complete, and maintained appropriately.

14. Authorities should only make payments for contractual services that are inaccordance with the terms of a contract. No payments should exceed those amounts unless the contract has been properly amended andadopted.

15. Authority boards should ensure that all financial and operating information is correctly and accurately reported in PARIS by Metroplex, since it is the authority that is legally obligated to be in compliance with all reporting requirements. This includes ensuring that all projects and contracts areproperly reported, and that property reports accurately describe theproperty owned.

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11. The Rotterdam IDA or Town of Rotterdam should recover the stipends paid to past board members, since they were to serve without compensation as stipulated in Article 18-A of General Municipal Law.