Consolidate Inefficient Economic Development Authorities

The New York State Authorities Budget Office (ABO) today issued a report on the seven local economic
development authorities  serving Schenectady County.   The report focused on whether all of these
authorities were needed in the  County.  The seven authorities consist of the Schenectady County
Metroplex Development Authority, the Schenectady County IDA, the City of Schenectady IDA, the Town
of Rotterdam IDA, the Schenectady Local Development Corporation, the Schenectady County
Community Business Center, and the Schenectady County Community Resource Corporation.
While  the ABO found that  Schenectady County has achieved some recent economic development
success, it also concluded that seven different authorities were not necessary.  Instead, the residents of
Schenectady County could  have  been equally and more cost-effectively served by fewer authorities,
since these authorities have similar missions and provide similar financial assistance to projects.  The
report stated that it is just as probable that the County would have realized the same level of success
with a more streamlined economic development structure that relied on fewer and less redundant
organizations.
Authority officials described the seven authority structure as a unified economic development team, but
the ABO found no evidence that authorities have adopted a coordinated project application and review
process, use a common application for financial assistance,  or that  relevant  project and financial
assistance information is shared among all of the authorities involved.  The ABO also found that these
authorities neither  adopted nor annually reviewed and updated  a  comprehensive economic
development plan,  nor has Metroplex developed a five-year capital projects plan, as required by its
enabling legislation
The report provides examples of economic development funds not  being  used efficiently, including
three of the authorities providing more than $600,000 to the Community Business Center to meet its
operating costs.  Metroplex was also charging the County and City IDA’s $2,000 per month to provide
administrative services and staffing support, although contracts with those IDAs limited charges to
$1,000 and $750 per month respectively.
Finally, the ABO noted that the Rotterdam IDA has continued to operate although, pursuant to Section
882 of General Municipal Law, its corporate existence was terminated in 2010 when the IDA retired all
of its outstanding bonds and notes.  The ABO cautioned that the IDA’s continued operation could place the board of directors,  Town of Rotterdam officials, and any businesses receiving financial assistance
from the Rotterdam IDA at risk.
A copy of the report may be obtained at:  www.abo.state.ny.us.