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Fulton County EDC seeks disclosure exclusion

Fulton County EDC seeks disclosure exclusion

The Fulton County Economic Development Corp. has asked the state to exclude it from new disclosure r

The Fulton County Economic Development Corp. has asked the state to exclude it from new disclosure requirements under the 2005 Public Authorities Accountability Act.

Jeffrey Gordon, a spokesman for the state Division of the Budget, said the state Authority Budget Office sent out letters to local development corporations in 2008 explaining that they would be subject to the same disclosure requirements as public authorities starting in 2009. He said the ABO is reviewing arguments from the Fulton County EDC but hasn’t yet found any justification for revising their original conclusion that the EDC is a local public authority subject to their oversight and reporting rules.

“They believe they’re not covered [by the law],” Gordon said.

If the ABO rules against it, the EDC would be required to file a multiyear budget report; an annual budget report including information like employee salaries and benefits and benefits paid to board members; details of loans made by the EDC from its revolving loan fund; a copy of its annual financial audit; a procurement report detailing any contracts it enters into; and a report on its investments.

EDC Attorney Paul Kolodziej said he submitted letters to the ABO arguing that the EDC should not be considered in the same category as local development corporations because it is a private nonprofit corporation with a self-appointed board of directors not controlled or financed by any municipal government. He said the EDC isn’t asking for an exemption from the regulations — it’s arguing that it’s not a public authority at all and therefore not subject to the regulations.

“This kind of came out of the blue and was a surprise to us because when the list first came out of [entities regulated by] the public accountability act [in 2006] the EDC was not on the list at that time,” he said.

Fulton County EDC Chief Operating Officer Mike Reese said his organization has three annual contracts for economic development services, one each with Fulton County, the city of Johnstown and New York state. He said the contracts add up to only about $100,000. He said the EDC pays for its employees and other expenses mainly through interest and administrative fees charged to companies loaned money from the approximately $5 million revolving loan fund the EDC administers. He said the money for the fund originally came from large grants to Fulton County and the city of Johnstown from the U.S. Department of Housing and Urban Development.

“We were incorporated back in 1955 as a community development corporation. In 1986 we were re-incorporated as the Fulton County Economic Development Corporation ... this was done through private sector people setting up a nonprofit corporation,” Reese said. “We are not tied to the county of Fulton. They don’t appoint members to our board; they don’t approve our budget. The survivability of our corporation is not dependent on any actions of a municipal government.”

Kolodziej said years ago the EDC reincorporated again so it could serve as a conduit for Job Development Authority grants, which no longer exist. He said the EDC might consider revising its certificate of incorporation to remove the JDA language, which the ABO has cited as one of the reasons it falls under the public authority category. He said the ABO is also mistaken in believing the EDC receives funding from the Fulton County Industrial Development Agency.

“The EDC has a marketing contract to market the industrial parks that are owned by the IDA, so there is no contribution to the funding. This is again just a fee for services,” he said.

EDC officials said they don’t know when the ABO will rule on their objections.

Kolodziej said if the ABO rules against them, the EDC’s 15-member board of directors, including chairman Brian Hannafin, the former owner of McDonald’s franchises in Fulton County, would be subjected to increased scrutiny and training requirements, which would place another burden on their volunteerism.

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