The legal shuffling to reorganize the Jefferson County Industrial Development Agency’s local development corporations to keep employees in the state retirement system is almost done.

As part of the plan, the JCIDA’s board of directors Thursday unanimously approved whittling down the agency’s staff from 12 to nine state employees when their revised contracts take effect Aug. 1.

On that day all five sub-agencies will terminate their administrative contracts with the JCIDA, and four will dissolve: the Jefferson County Job Development Corp., Jefferson County Agricultural Development Corp., Carthage Industrial Development Corp. and Watertown Industrial Center Development Corp.

The Watertown Local Development Corp., or Watertown Trust, will operate on its own.

The massive shake-up had to be in place for its employees to remain eligible for inclusion in the state retirement system. The 12 employees’ pension credits were originally revoked in a ruling by state Comptroller Thomas P. DiNapoli in February that claimed the staffers don’t work for JCIDA but for LDCs, which have the legal standing of nonprofit organizations.

That problem was partly fixed by a pension restoration bill approved by the state Legislature that allowed 12 employees to collect on their accrued state retirement benefits through next Tuesday.

While the agency’s new structure theoretically should allow its employees to stay in the system, officials have not received any feedback on its plan from the state comptroller about whether it will do that. The agency likely will be audited by the state before its employees can be put back in the retirement system.

“We would like an opinion from the comptroller’s office to make sure this is right,” said JCIDA board member W. Edward Walldroff. “But we’re in the dark because he wouldn’t get back to us. It’s a travesty.”

Since September, the agency has shelled out $107,200 in legal fees to law firm Harris Beach of Rochester to fight the comptroller’s ruling; that figure is expected to double before the restructuring process is complete.

Meanwhile, former LDC employees are preparing to have their jobs shuffled Aug. 1.

As the director of the CIDC, JCIDA employee John F. McHugh’s employment will cease July 31; he will continue to provide services for the Economic Development Corporation of Carthage in his current position as the community development coordinator.

Jay M. Matteson, agricultural coordinator for the JCADC, will continue to serve in that capacity as a JCIDA employee.

The WLDC, or Watertown Trust, will operate as its own entity under the retooled plan. Its two employees — CEO Donald W. Rutherford and executive assistant Kim S. Taylor — will be put on new retirement and payroll plans.

The process of dissolving the agencies will happen in the coming months, as each will need to have its plans approved by the state attorney general’s office and approved by a judge.

On Thursday, the JCJDC’s board of directors approved its plan to dissolve the agency, which acts as the marketing and education arm of the JCIDA by planning public workshops and advertising campaigns. To provide that same function, the JCIDA plans to form its own advisory committee that will work in a similar fashion but not have governing authority.

To dissolve, the board approved a plan in which the JCJDC will seek to return to Jefferson County grant funding that’s left over from the $100,000 it acquired this year. In return, the county would allocate that funding back to the JCIDA.

There might not be much left over, though, because the agency already has spent $77,538 from the grant through July for its fiscal year, which ends Sept. 30.

Attorney Stephen W. Gebo from Watertown law firm Conboy, McKay, Bachman & Kendall was hired by the JCJDC to facilitate the legal process.

Starting Aug. 1, JCIDA’s staff will not be allowed to render any services, such as administrative work, to sub-agencies because it no longer will have any authority to do so.

The JCIDA also will likely form a committee to replace the JCADC’s function of promoting agriculture in the region. In addition, it will take over the responsibility as landlord of the Watertown Center for Business and Industry from the WICLDC, which will dissolve soon.

Despite planned dissolution of the sub-agencies, JCIDA CEO Donald C. Alexander said he’s optimistic the agency will still be able to lead those efforts independently by establishing its own committees responsible for those functions. Members now serving on LDC boards are expected to step up and fill those roles in new committees.

“Our greatest challenge will be for us to not lose our linkages in the community because of this,” Mr. Alexander said. “We think this community needs our services to continue to develop, and I believe people will support us so we can continue to do that.”

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