The City of Hudson has no further need for its Industrial Development Agency, according to a review and recommendations by New York State’s Authorities Budget Office (the “ABO”).
Though the report was issued three weeks ago, news of the State’s conclusion has been slow to hit the local papers, creating an impression that local officials may not be eager for word to get out. The report can be downloaded as a PDF file via this link.
Dated July 14th, 2015, the ABO report concludes that
“there is no demonstrable need for the IDA to continue in existence. The potential economic development functions provided by the IDA are being accomplished by other entities within the City of Hudson and any financial assistance benefits in the form of tax exemptions can be provided by the Columbia County IDA.”
The ABO’s main reasoning for this conclusion appears below:
“Since the IDA has only one active project, the project’s purpose is to provide low- income housing and not to create jobs, similar projects are administered directly by the City, the IDA is not actively marketing the property it owns for economic development, and other economic development entities are serving the City of Hudson, we question whether the IDA is needed.
Section 882 of General Municipal Law states that when all of the bonds or notes issued by an IDA have been redeemed or cancelled and all straight lease transactions have been terminated, the IDA ceases to exist and its rights, titles and interest and all obligations and liabilities are to vest in and be possessed by its sponsoring municipality. The IDA has no outstanding debt, and the existing lease and PILOT agreements could easily be transferred to the City, since the City already administers similar agreements.”
The report found a number of reporting and accounting errors by the agency regarding rents and tax abatements issued to various project. The agency reports only one active project, the Hudson Terrace Apartments, though the State found five other affordable housing projects on its books as of 2013, but no longer generating payments to the agency.
For as long as the IDA remains in existence, the ABO further concludes that
“it should take appropriate action to correct the PILOT allocation and lease revenue errors that occurred during 2011 through 2014 as identified in the report, and obtain and ensure that all data is accurately reported in PARIS.”
The findings likely did not come as a complete surprise to IDA members, as the ABO noted that in March 2011, the City agency’s board “considered the possible dissolution of the IDA, noting that the City could continue to administer the IDA’s PILOT agreement and that the Columbia County IDA could take over the IDA’s duties. However the board has not taken any formal action to begin the process of dissolution since.”
The current Hudson IDA members are Mayor Bill Hallenbeck, Treasurer Heather Campbell, Common Council Majority Leader Tiffany Garriga, 5th Ward Alderman Bart Delaney Jr., Planning Commission Chair (and Taghkanic resident) Cappy Pierro, and assessor Cheryl Kaszluga. There is also one vacancy on the board.
The report notes that the Hudson IDA has “no staff since all functions are performed by board members or obtained under procurement contracts.” The agency’s auditor is Shallo, Galluschio & Bianchi, whose most recent (2014) audit also can be downloaded as a PDF via this link.
