At the end of the City Council meeting this evening Mayor Nicholas Valentine revealed an update as to what has been going on with the Newburgh Industrial Development Agency Board. He stated that there have been private interviews with members of the council and staff to create a new IDA board and that there would be an announcement in June.
Unlike the other board appointments, such as the Board of Ethics, there has been absolutely no mention of the IDA decision making process through work sessions. This process has been shielded from public view.
What does the IDA do?
Lots of times we don’t see it, because it doesn’t really get major headlines.
The mayor in the video above mentions a few examples of IDA transactions, such as the parking garage deal for St. Luke’s Cornwall Hospital, or the Unitex project which has hired 160 people from the City of Newburgh. The Board is charged with promoting economic development, and can do so through real estate transactions, such as selling the vacant lot on Broadway, and offering economic incentives such as PILOTs (payments in lieu of taxes). Bonds can be generated, as in the case of St. Luke’s parking garage, to the tune of $21 Million.
What are the rules on IDA Board Membership?
The current IDA law, Article 18A Title 1 Section 856 of the General Municipal Law, states regarding board members:
2. An agency shall be a corporate governmental agency, constituting a public benefit corporation. Except as otherwise provided by special act of the legislature, an agency shall consist of not less than three nor more than seven members who shall be appointed by the governing body of each municipality and who shall serve at the pleasure of the appointing authority. Such members may include representatives of local government, school boards, organized labor and business. A member shall continue to hold office until his successor is appointed and has qualified. The governing body of each municipality shall designate the first chairman and file with the secretary of state a certificate of appointment or reappointment of any member. Such members shall receive no compensation for their services but shall be entitled to the necessary expenses, including traveling expenses, incurred in the discharge of their duties.
Currently, there is a reform bill 8703a in Albany which would transform the IDA law.
The bill had passed the Assembly and was in the Local Government Committee of the Senate when it was recalled back to the Assembly on May 20, where it sits for a third reading.
What changes does the reform bill 8703a propose?
The full text of the Bill and its status can be read here. Regarding the makeup of the board:
Such members SHALL include representatives of local government, school boards, organized labor
DESIGNATED BY THE LARGEST CENTRAL LABOR FEDERATION IN THE MUNICIPALITY, and ENVIRONMENTAL ORGANIZATIONS.
The bill also requires that individuals with IDA business ties or ownership interests are not on the board, and requires that board members attend a certain percentage of all hearings (a mere 10%) or forfeit their office.
The legislators have offered the following justification at the end of the bill:
JUSTIFICATION : There are 116 IDAs throughout the State that provide almost $400 million in net tax exemptions each year. They are an important economic development tool to promote job creation and business retention. In return for increased economic activity and job growth, IDAs provide exemptions from local, county and school taxes. IDAs also issue low-interest bonds, called industrial development revenue bonds, which allow companies to borrow money at low cost.
IDAs should be supporting responsible businesses that will deliver on their promises to provide good jobs and services to New Yorkers. Since IDAs give businesses significant local tax breaks, local communities should get the promised benefits in exchange for sacrificing this much needed revenue. This bill will greatly increase the accountability of IDAs to the taxpayers and municipalities for whose benefit they are created. It will serve to ensure a greater degree of uniformity in the application process, more careful analysis and deliberation in the decision-making process and enhanced monitoring once IDA benefits are conferred. This bill would ensure that IDAs operate efficiently and in the public interest.
