IDA Slammed on Ethics

New York State Comptroller Thomas DiNapoli has issued a report criticizing the Sullivan County Industrial Development Corporation (IDA) saying that it needs improved ethics disclosure and better reporting on disclosing conflicts.

The IDA which has continually been raked over the coals by critics upset over tax abatements they award has passed the grade by state auditors in overseeing projects and penalizing companies failing to meet employment benchmarks.

Whether popular or not, IDA attorney Walter Garigliano is brilliant and he fully understands the law.

On the negative side, the comptroller’s report said the IDA is vulnerable in determining if its board members have financial interests in projects they have granted tax abatements. The review of the IDA’s payments in lieu of taxes program found one project was approved even though an IDA board member was the spouse of one of the two partners in the potential project.

The application was signed by the IDA Board member’s spouse who is a 50 percent owner in the project that was granted abatements.

Although the board member was absent for the vote, state auditors claimed the board was hampered in its ability to determine conflicts partly because the financial disclosure forms IDA members file with the county are sealed and not reviewed by the agency’s board.

I am told the company did not get any breaks that they did not deserve, and saved 40 jobs from leaving Monticello and maybe Sullivan County, and a decrepit building was rebuilt beautifully and can most likely serve as a cornerstone for more redevelopment on Broadway.

State Comptroller officials said that IDA officials told them “the reliance on these financial disclosures filed with the County is the only method in place, aside from Board members volunteering such information, to determine if any officials have an interest in potential projects.”

According to comments made at last Tuesday’s Economic Development Committee meeting of the Sullivan County Legislature one would have thought the report from Comptroller Thomas DiNapoli’s office on the Sullivan County IDA was a glowing role model and example for all the other plagued IDA’s throughout New York State.

Jennifer Berlinsky, never mentioning the portion of the report involving ethics, told legislators that one of the things “I wanted to do was acknowledge the outstanding report the IDA received from the Comptroller’s Office. As you know they were in our office for over five weeks and they looked at our budget, they looked at our minutes, they looked at our files, they looked at our procedures – they looked at our processes.”

Berlinsky added, “In the end they came up with a few recommendations which we can easily meet.”

She claimed that one of the “outstanding things” was when the Comptroller’s Office was there they liked so many of “our things” that they went into depth because they saw how good they did things and they wanted to bring that to the attention of other IDA’s.

She also acknowledged the hard work of the IDA Board and their policies and their staff.

Samuelson congratulated Berlinsky with going into the state audit with such “ease.”

Berlinsky claimed with all the problems Orange and Ulster County has with their IDA’s, the Comptroller’s Office came in and “were like wow – You’re doing a good job.”

She added that the recommendations from DiNapoli’s Office were very simple and that they sent in a few things they are going to do “to resolve those issues, and they accepted it. and it’s a non issue now.”

To view the Economic Development Committee Meeting please visit
http://www.youtube.com/watch?v=1sOLYC9jTuA&feature=c4-overview&list=UU8f-H_JgMtNFXexNHqFVKpQ

Sullivan County legislator Ira Steingart who also serves as the Chairman of the IDA and Chairman of The Economic Development Committee,responded in writing to State Comptroller Thomas DiNapoli by stating that the IDA accepts their recommendations.

Steingart said the IDA will “engage outside counsel to prepare a memorandum of the law on the numerous ethical rules applicable to volunteer IDA board members, which will include an executive summary presenting key provisions.”

Steingart said the summary will include the newly enacted Sullivan County Ethics code. And, he said all board members will participate in mandatorily training focused solely on ethical rules and consideration.

The IDA also claims that it will revise its application to include a more accurate and detailed ethics disclosure statement.

“The application will be required to certify that they have read, understood, and inquired into any ethical conflicts and certify they have done none.”

According to Comptroller DiNapoli The purpose of the audit was to review the Sullivan County Industrial Development Agency (SCIDA) Payment in Lieu of Taxes (PILOT) Program for the period January 1, 2012, to April 10, 2013.

The overall goal of IDAs is to advance the job opportunities, health, general prosperity, and economic welfare of the people of the State. The SCIDA was established in 1970 and is governed by a Board comprising nine members appointed by the Sullivan County Legislature.

The SCIDA extended benefits totaling approximately $7.1 million for 58 projects during the state’s audit period.

Here are the Key Findings:

• The Sullivan County IDA (SCIDA) has established a Uniform Tax Exempt Policy for both general and specific-purpose projects. The policies are specific and clearly articulate project goals and abatement schedules. The project approval process includes in-depth cost-benefit analyses based on reasonable assumptions. However, there is no effective mechanism in place to identify agency members’ financial interests in potential projects during the selection process. SCIDA officials submit a financial disclosure form to the County Clerk of the Legislature, detailing any business interests; however, the County does not unseal and review the financial disclosure forms or provide them to the SCIDA for review.

One of the projects in our review was approved for a PILOT agreement even though a SCIDA Board member was the spouse of one of the two partners in the potential project.

• Projects are monitored and performance goals are tracked. PILOT amounts are adjusted annually based on performance. Key Recommendation

• Improve the current process for identifying SCIDA officials’ potential financial interests in projects seeking SCIDA assistance.

The Comptroller Thomas DiNapoli’s report on the Sullivan County IDA can be found at:

http://www.osc.state.ny.us/localgov/audits/ida/2013/sullivancoida.pdf

Bill Liblick has made a name for himself on National TV Talk Shows where he spouted his outspoken views from the front row. Now he offers you his opinion every week in the “MOUTH THAT ROARS” Column in THE SULLIVAN COUNTY POST.