Links Roundup: Inside New York State Edition
ABO sends censure letters to Cap Region LDCs
Posted on October 10, 2012 at 3:54 pm by Casey Seiler, Capitol bureau chief
The state Authorities Budget Office is done making nice with three local development corporations that have failed to file necessary reports for multiple years. In the Capital Region, they went out to LDCs in Waterford and Valatie.
Here are excerpts from the letters sent, respectively, to Waterford LDC Chair and Mayor J. Bert Mahoney and Valatie LDC Chair Guy Gamello.
- “The Village of Waterford Local Development Corporation failed to file Audit Reports for the fiscal years ending 5/31/2010, 5/31/2011, and 5/31/2012 and Annual Reports for the fiscal years ending 5/31/2011 and 5/31/2012. … On August 10, 2012, the ABO sent a letter compelling the board of directors and chief executive officer to justify the authority’s persistent failure to meet the reporting requirements of sections 2800, 2801, and 2802 of Public Authorities Law. In a September 4, 2012 response, you stated that your authority had ‘submitted the required reports.’ The ABO responded, in a letter dated September 10, 2012 that the authority had not, in fact, submitted the required reports and asked that this be corrected by October 1, 2012.”
- “The Village of Valatie Local Development Corporation failed to file a Budget Report for the fiscal year ending 6/30/2013 and Annual and Audit Reports for the fiscal years ending 6/30/2011 and 6/30/2012. … On August 10, 2012, the ABO sent a letter compelling the board of directors and chief executive officer to justify the authority’s persistent failure to meet the reporting requirements of sections 2800, 2801, and 2802 of Public Authorities Law. In telephone conversations and emails with this Office, a representative of your authority, Steven Kirk, indicated that the corporation would submit the required reports. As of October 1, 2012 the Village of Valatie Local Development Corporation remains out of compliance with the public disclosure, reporting and corporate governance provisions of Public Authorities Law. Accordingly, pursuant to its powers under Section 6(2)(f) of Public Authorities Law, the ABO is sending this official letter of censure to the board of directors of the Village of Valatie Local Development Corporation.”
The ABO decided to move to sending censure letters after no action was taken by Oct. 1. Also censured in this round was the Town of DeWitt LDC in Onondaga County.
David Kidera, the ABO director who signed the letters, said in a statement that “the three authorities were given every opportunity to comply with state law. We were compelled to take this enforcement action because of the boards of directors’ neglect of their legal responsibilities over several years and their failure to respond to previous warnings issued by our office.”
Links Roundup – Inside New York State Edition
State regulators on the Westchester LDC spat
Posted by: egarcia – Posted in Westchester County on Sep 28, 2012
The Westchester County Local Development Corporation met Thursday to approve the issuance of bonds for the Field Home in Yorktown.
The LDC’s latest meeting happened amid a dispute between the county Board of Legislators and the county executive over the LDC and who should have control over it. The dispute has the Board of Legislators refusing to ratify any of the bond issues the LDC has emitted since its formation.
County Executive Rob Astorino formed the LDC earlier this year to help non-profit organizations get tax-exempt bonds, something the Westchester County Industrial Development Agency can’t do for nonprofits.
After yesterday’s LDC meeting The Journal News called the Authorities Budget Office, the state agency that regulates LDCs, to ask if the Westchester County LDC’s bond issues are legal without the legislators’ endorsement. The verbal response was that the LDC can issue taxable bonds without the legislators’ consent. Their response on tax-exempt bonds arrived this morning:
“It is our understanding that in order for an LDC to issue tax-exempt bonds on behalf of a municipality, certain criteria established by the IRS must be met. The IRS rulings appear to require that the municipality must be the sole controlling member of the corporation. In addition, it is our understanding that the governing body of the municipality must approve individual bond issuances of the LDC, since the LDC can only issue tax-exempt debt if it is “on behalf” of the municipality. Please see as an example, IRS Ruling 200936012 http://www.irs.gov/pub/irs-wd/0936012.pdf
A not-for-profit local development corporation can be formed by anyone who is 18 years of age or older. Accordingly, the County Executive could form an LDC by filing the necessary certificate of incorporation with the Department of State. That act alone does not address the issue of whether bonds issued by the LDC are tax exempt. It is unclear if the incorporation of an LDC by a County Executive, acting alone without the concurrence of the County Legislature, meets the IRS criteria that such formation was done “on behalf of” the county. Also, it is uncertain, based on the IRS criteria, whether the LDC could issue tax-exempt debt without its formation being authorized by the County Legislature. You may wish to seek further clarification from the IRS.
We hope this addresses your question. Please let us know if we can be of additional assistance.”
Links Roundup – Inside New York State Edition
Do Politics & Community Development Work?
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FOR THE RECORD
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14 Lender: TD Bank Borrower: NYBDC Local Development Corporation … Buyer: County of Albany New York Amount: $22800000 Property: Parcel on Clinton Avenue, …
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Links Roundup – Beyond New York State Edition
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For well over 100 years, most public authorities in Ohio – unlike most other states – have been required to use one delivery method to build construction projects: the multiple-prime contractor method. In Ohio, the multi-prime statutes required most …
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Links Roundup: Inside New York State Edition
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Links Roundup: Inside NYS Edition
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ABO 2012 Annual Report
Earlier this morning the Authority Budget Office released its 2012 Annual Report. The Report does a deep dive into the economics of authorities and their corresponding benefits, particularly as pertains to IDAs and LDCs. Unsettled by the size, scope and increasing number of local authorities, the ABO suggests the Legislature consider requiring consolidation and greater transparency. The report is available at: www.abo.ny.gov.
Amy Lavine
Patricia Salkin
Scott Fein
