State office cites local agencies for lack of compliance

MASSENA — Multiple north country agencies are out of compliance with state law because they are months behind in filing documentation.

And representatives from two of those agencies say the state’s rules make it difficult for smaller organizations to comply.

The New York State Authorities Budget Office was created in 2009 to make public authorities and local agencies more accountable and transparent. The ABO requires local authorities to file a budget 60 days before the start of their fiscal year and an audit and annual report within 90 days after the end of it.

The Business Development Corporation for a Greater Massena, Potsdam Community Development Corp., Canton Capital Resource Corp., Canton Local Development Corp. and Ogdensburg Growth Fund Development Corp. are the St. Lawrence County agencies in violation. In Jefferson County, the Jefferson County Agricultural Development Corp., Jefferson County Civic Facility Development Corp., Sackets Harbor Local Development Corp. and Town of Watertown Local Development Corp. failed to meet one or more of those deadlines.

The ABO issued the delinquent agency report earlier this week that said the local authorities are “out of compliance with state law” so long as the documentation isn’t submitted. More than 100 agencies statewide were cited in the report.

ABO Director David A. Kidera said the report is the first of several steps taken to ensure those agencies become compliant with the state. If they do not submit the information by April, the ABO may issue a letter of censure, which is a public rebuke and could affect the agency’s debt rating.

By summer, if the agency still hasn’t submitted the paperwork, the ABO could issue a letter recommending the removal of that organization’s board of directors.

“Hopefully they spend the next several weeks getting their act together,” Mr. Kidera said.

The ABO is willing to work with those agencies making an attempt to become compliant, Mr. Kidera said. That willingness ends with stonewalling the ABO or not making an effort.

“We might take stronger action sooner,” he said. “We expect them to do it as quickly as they can.”

Reaction from local agencies varied, from promises to comply soon to questions, confusion and doubts about the requirements. Potsdam village officials blamed the mishap on what they called a bizarre budget situation. Essentially the Community Development Corp. has no budget, they said. But the state rejected the financial form when it was submitted as zero.

The corporation will meet in the upcoming weeks to adopt a very minor budget, Potsdam Village Administrator David H. Fenton said, before resubmitting it to the state.

“We do the best we can to comply, but it’s very difficult,” Planning and Development Director Frederick J. Hanss said.

Officials from the Sackets Harbor Local Development Corp. expressed the same frustration. The organization missed the March 31, 2011, deadline to file its annual report, owing to an error in the submission process, President Donald L. DiMonda said. The report was submitted over the Internet, he said, and a wrong password inadvertently was used.

“We have a small volunteer group that performs this service, and we recently found out we used the wrong password but didn’t get a notification from the state that it was due,” he said, adding that the agency is now filing the report again.

Mr. DiMonda added that meeting the state’s guidelines, geared toward larger organizations that need more oversight, can be cumbersome for smaller organizations.

“The difficulty lies with smaller organizations in these little communities that are trying to abide by these guidelines while still providing essential services,” he said. “It would be my desire for the state to look at this issue and differentiate the big organizations from the small. We should still be required to have transparency, but not at the same level.”

The ABO determined the Massena BDC fell under its guidelines as a local development corporation last spring. The organization had not submitted an audit, annual report or budget as of earlier this week.

The BDC’s board of directors only recently approved a 2010 audit and 2012 budget and will submit those to the ABO soon, Executive Director Jason A. Clark said. The BDC board has yet to approve a report of the organization’s 2010 activities. Another report and audit for 2011 will be due to the ABO by March 31.

Mr. Clark said the BDC recently hired an administrative assistant, Linda M. Williams, in part to ensure compliance with the ABO. He has been in “reasonable” contact with the ABO on a regular basis, he said.

“They want to work with us in any way they can to help get this done,” Mr. Clark said.

Canton Supervisor David T. Button said the Canton Capital Resource Corp., which was created to bond a dormitory project at SUNY Canton, has met deadlines to file required paperwork with the state.

“We’re operating, we believe, in compliance with the letter we received,” he said.

An accountant is working on the report for the Canton LDC, a conduit for grants and their administration. The village and the town thought they might be exempt from the filing because of the LDC’s small amount of business.

“In the end, we found out we did have to file an audit, even with our limited amount of activity,” Mr. Button said. “That’s in the hands of a CPA. I thought it was going to get in by the deadline.”

The Ogdensburg Growth Fund Development Corp. was established to aid the expansion of business activity within the city, create employment opportunities for city residents and expand the city’s industrial and commercial tax base. Its primary function is the operation of the city economic development and revolving loan programs.

Interim City Manager Philip A. Cosmo said the growth fund is working to comply with newly established ABO recommendations. Its annual budget was due Nov. 1.

“We were aware of that, and there were some new changes to the laws and the growth fund board authorized the hiring of Harris Beach to make sure we’re in compliance with it,” he said.

Harris Beach, a Syracuse law firm, is also reviewing who can sit on Ogdensburg’s growth fund board of directors. Mayor William D. Nelson now chairs the board, but ABO recommendations suggest the city find someone who is not a council member to take Mr. Nelson’s place.

“We’re cleaning up the bylaws and getting into compliance with other requirements,” Mr. Cosmo said. “We hope to have that done by 2012.”

The town of Watertown’s Local Development Corp. was supposed to have its report turned in by Nov. 1. Saying it had a 90-day extension, Town Supervisor Joel R. Bartlett said Tuesday afternoon he was “working on it as we speak” and intends to have it submitted within several days. He said it was late because he had been working on other town matters instead.

“We’ve been very busy,” he said.

The Jefferson County Agriculture Development Corp., which missed its Dec. 31 deadline for both its annual and audit reports, will hold board meetings in the next two months to get up to speed, said Jay M. Matteson, coordinator.

“Because we’re a small organization, we have a hard time keeping up with the state’s deadlines,” he said. “We’ve always held our annual meeting in March, but at some point we have to consider changing our traditional system to meet the requirements the authority budget office has placed on us.”

In the case of the Jefferson County Civic Facility Development Corp., the budget report was due Oct. 1.

The agency was launched in May of last year as a way for the county to issue bonds for civic facilities but hasn’t had any formal lending activity yet, said Donald C. Alexander, chief executive officer of the Jefferson County Industrial Development Agency.

“We understand that this has to be done but just have to get around to it,” he said.

Times staff writers Martha Ellen, Craig Fox, Ted Booker, Matt Bultman and Christopher Robbins contributed to this report.