County drafts limits on CEDC

Supervisors’ committee plans to suspend agency payments

HUDSON–The Economic Development Committee of the county Board of Supervisors drafted measures this week that would temporarily suspend payments to the county’s troubled economic development agency and give the supervisors a say in it restructuring plan.

The changes at the agency, the Columbia Economic Development Corporation (CEDC), and the response by the Board of Supervisors follow the release of a state investigation of the CEDC in April, which identified four CEDC board members as having potential conflicts concerning the Ginsberg’s food warehouse project on Route 66.

At its meeting Monday, June 22 the committee drafted a resolution for the full Board of Supervisors that would withhold the county’s quarterly payments to the Columbia Economic Development Corporation (CEDC), beginning with the April 2015 payment, which has not been made. Payments would not be resumed until the county has a contract with the CEDC for the 2015–16 fiscal year. The contract would be negotiated by the committee and county legal department and would require approval by the Board of Supervisors.

Payments also would depend on completion of a review of recent loans made by the CEDC. The Board of Supervisors approved the review at its June 10 meeting, and Supervisors Art Baer (D-Hillsdale) and John Reilly (R-Gallatin) are conducting the review.

In a final condition, any restructuring plan that the CEDC proposed for itself would have to be approved by the supervisors before a 2015-16 contract could be implemented.

The language of the committee’s resolution has to be tweaked, re-circulated to the committee and voted on at a special committee meeting, which has not yet been announced. Then the resolution would be have to be considered in a special meeting of the county government Finance Committee before it could be placed on the agenda for a vote at the July 8 meeting of the full Board of Supervisors.

The possible suspension of payments comes as no surprise to the CEDC board, which discussed that idea at its June 11 retreat. In a June 19 letter to Supervisor Reilly, David Crawford, president of the CEDC board, wrote, “It will be my suggestion . . . that CEDC forego two quarterly payments from the County of Columbia while we are in the process of reorganizing . . ..”

The CEDC board discussed three options for the future at its meeting. Four of the 11 directors present could support the option of privatizing CEDC completely, accepting no county funding. Nine directors could support revised funding, with fees for support of administrative costs. Eight directors could support the status quo, with the county covering the CEDC’s operating expenses, which currently run over $400,000 annually.

At this week’s county Economic Development Committee meeting the committee also discussed a draft of the request for data that supervisors Baer and Reilly will send to the CEDC to begin their review. One goal of the review is to identify any possible conflicts of interest involving loans of $25,000 or more made by the CEDC between January 1, 2010 and June 1, 2015.

The two supervisors have listed items they would like to see, including loan files and related correspondence, business affiliations of CEDC board members, notes from the loan and executive committee meetings, and invoices from attorneys, engineers, architects, bank officers and others who provided services.

Ken Flood, who was CEDC executive director until the CEDC board terminated his employment June 11, attended the county Economic Development Committee meeting as he has previously, as the liaison between the CEDC and the county. Mr. Flood expressed some concern that information requested by the committee would not be available.

“It should be available somewhere,” Supervisor Art Bassin (D-Ancram) said Tuesday. “Hopefully, this will help us clear the air and identify additional problems [with conflicts of interest], or establish that there are none.”

Mr. Flood had prepared a project status report for the CEDC. Of his 21 current development projects he suggested that the county keep three, including the development of a dairy goat industry, expansion of rail trails and state Consolidated Funding Applications for the goat project and upstate revitalization.

In addition he said the county was technically the applicant for a grant for Ginsberg’s Institutional Foods—“it has to be run through a municipality,” Mr. Flood said.

Sarah Sterling (D-Hudson First Ward) attended the meeting as a committee member and also a member of the CEDC board and its new Management Committee. When Mr. Bassin asked her if she was “comfortable” with Mr. Flood’s proposal for the county to assume responsibility for some CEDC projects, she said she was, adding that the CEDC Management Committee had discussed the projects with Mr. Flood that morning.

But Bruce Bohnsack, another CEDC board member, was not comfortable with the proposed change. When Mr. Reilly opened the floor to the audience, Mr. Bohnsack said, “Why do you have the right to take back CEDC initiatives?”

He acknowledged that the CEDC has problems “and we will correct those problems, but I thought the CEDC was for economic development, not the county. There isn’t much collaboration going on.”

“Yes, we need to collaborate better,” said Mr. Bassin. “But you decided to terminate Ken. You’re not in a position to complain.”

Mr. Bohnsack pointed out that 11 of 19 CEDC board members had attended the meeting that terminated Mr. Flood’s employment, and “we spent the day making decisions,” he said.

“Some of those decisions were not yours to make,” said Mr. Bassin.

“That’s your opinion,” said Mr. Bohnsack.

“Yes,” said Mr. Bassin. He then referred to the agenda for the June 23 meeting of the Industrial Development Agency (IDA), which Mr. Bohnsack chairs. “Talk about ‘executive director,’” said Mr. Bassin. “Is the IDA planning to terminate Ken?”

Mr. Bohnsack explained that Mr. Flood’s IDA contract was through CEDC, so he is no longer administrator of the IDA.

The IDA is not a private corporation, like the CEDC. IDAs are created by the state legislature, and then counties appoint the board members that oversee them.

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