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What you need to know for 08/19/2017

State rebukes local development agencies

State rebukes local development agencies

A handful of local economic development groups got a public slap on the wrist this month for not fil

A handful of local economic development groups got a public slap on the wrist this month for not filing information with the state.

Thirteen authorities around the state, including the Fulton County Center for Regional Growth, Fulton County Economic Development Corp. and Mechanicville Community Development Agency, were censured Oct. 1 by the state Authorities Budget Office for repeatedly failing to report on their activities. The censure is an official rebuke that could affect the groups’ ability to conduct business like issuing debt or borrowing money and is designed to motivate compliance.

“We do not have statutory authority to close down the authority, fine the board members or directly remove the board members from office,” said state Authorities Budget Office Director David Kidera. “We’re limited to issuing this public condemnation … and hope that it is sufficient.”

The list of authorities recently censured were all repeatedly warned they weren’t in compliance with state law. Kidera said the local authorities that failed to report on their activities were failing the fiduciary obligations laid out by statute.

One major reason some local development groups say they don’t report to the state is because they believe the law doesn’t apply to them. The Fulton County Economic Development Corp. challenged the ABO’s legal authority in court, but lost that challenge last year. The Clifton Park IDA Economic Development Fund, which is in the process of dissolving and was censured in the spring, also maintains it isn’t required to follow reporting requirements.

Kidera said organizations fall under the umbrella of his office if they were started by, affiliated with or dependent on a municipality. Because the Fulton County Economic Development Corp. was created with public money and the Fulton County Center for Regional Growth has received public money and was formed with board members from county government, he said they were treated as authorities.

Michael J. Reese, president and CEO of the Fulton County Center for Regional Growth, which describes itself as the parent company of the Fulton County Economic Development Corp., did not respond to requests for comment Thursday.

The Fulton County Center for Regional Growth was formed with $75,000 from the county and later received $40,000 from the county for legal costs.

Following the censure, Mechanicville Mayor Anthony Sylvester, who is chairman and CEO of the Mechanicville Community Development Agency, said he expects that group to be in compliance soon. He added that the organization hasn’t been active for about seven years and hasn’t recently received any money from the city.

The agency filed paperwork in March with the state, but it was supposed to be filed digitally and wasn’t accepted. Kidera said they need digital filings so his office can create the databases that allow them to review whether an authority is acting appropriately.

Sylvester said it is possible the Mechanicville authority will dissolve. He said the city’s next mayor — which won’t be Sylvester because of term limits — might terminate its operations.

“It’s not being used,” he said.

Kidera said the censures get mixed results, ranging from prompt compliance to a rejection of the state’s oversight and continued non-compliance.

The ABO oversees about 580 authorities, about half of which are local development organizations.

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