County calls for new CEDC probe, but will state oblige?

HUDSON—The county Board of Supervisors voted last week to ask the state Authorities Budget Office to “review and investigate” the lending practices of the Columbia Economic Development Corporation. But whether the state agency will be willing and able to do that remains to be seen.

As part of the July 8 resolution calling for the investigation, the supervisors agreed to rescind an earlier resolution that authorized Supervisors Art Baer (D-Hillsdale) and John Reilly (R-Gallatin) to review Columbia Economic Development Corporation (CEDC) loans made over the last five years. The two supervisors had already begun work by requesting documents from the CEDC but had not received a reply when the full Board of Supervisors met last week.

The new resolution also asks the Authorities Budget Office to “provide advice of restructuring of this agency so they may continue to provide support to those pursuing economic development growth in Columbia County, and gaining the confidence of the community… .”

In the meantime Columbia County will make no further payments to the CEDC until a contract with that agency is in place for 2015. The CEDC’s current annual budget from the county is $437,000, paid quarterly.

Reached Tuesday, July 14, Michael Farrara, acting director of the ABO, said he had not yet received a request from Columbia County for any assistance.

When the agency receives a request, he said, “our standard practice is to do a quick, high-level review to try to determine how relevant and significant is the issue involved. We do this using information we have and with Internet research.

“We make a quick determination to decide if we should act right away,” he said, “or in the future, and what our other priorities are at that time.”

Evaluating priorities is critical, he said. The ABO’s Compliance and Enforcement Unit has a staff of five, and the ABO is responsible for 573 public authorities statewide. In addition to investigations, the unit does operation reviews and some types of information studies. Currently, each of the five staff members has one or two projects, he said.

The Columbia County citizen group GhentCANN filed a complaint with the ABO October 15, 2014 regarding the CEDC’s approval of a transfer of county land to Ginsberg’s Institutional Foods for $1. The ABO investigated and issued its report about six months later, in April 2015.

The ABO found the land sale legitimate but identified potential conflicts of interest on the part of three CEDC board members and an attorney. This finding led to the call for a loan review

An earlier draft of the new resolution circulated by Supervisor Art Bassin (D-Ancram) would have kept the Baer-Reilly loan review alive unless the ABO agreed to review CEDC loans. The draft also gave the ABO a deadline of October 31 to complete its review.

Mr. Bassin was one of 11 supervisors, a bipartisan group, who voted against the resolution at the July 8 meeting. “I thought the resolution was a fine idea, stronger and more objective than having the supervisors do a loan review,” he said this week. “The only thing better would be to have the state attorney general or comptroller review the loans.”

Mr. Bassin held out for giving the ABO a deadline, and for not rescinding the Baer-Reilly resolution without a commitment from the ABO.

Mr. Reilly also voted against the resolution, in his case because it didn’t go through the usual process, he said in an email Tuesday. Ordinarily, the resolution would have gone through the Economic Development Committee, which Mr. Reilly chairs. “We were therefore not fully briefed on the legal conclusions the chairman reached with county counsel when drafting his own resolution,” he said.

Mr. Reilly thought his committee could have clarified some issues, he said, but now it was time to move forward with CEDC contract negotiations.

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