January 27, 2016
State: Cortland IDA ‘sound’
Bob Ellis/staff photographer
The Byrne Dairy plant on Route 13 is shown July 30, 2015, with newly installed windmills.
When the state comptroller complained last year about Industrial Development Agencies in New York failing to hold companies accountable for the tax breaks they receive, a new report makes it clear he was not referring to the Cortland County IDA.
The office of state Comptroller Thomas DiNapoli released a glowing audit report last week of the Cortland County IDA’s projects from January 2007 throughNovember 2015.
“Sound practices and procedures, along with a knowledgeable staff and a well-informed board, have led to CCIDA’s sound and transparent processes,” the report reads. “As a result of their effective project management and monitoring ... officials ensure that the community is receiving an appropriate return on its investment.”
In December, Gov. Andrew Cuomo signed into law a new list of requirements IDAs must implement to create uniform criteria for applicants while providing more information on tax exemptions for companies and procedures to follow if goals are not met.
Last month, IDA Executive Director Garry VanGorder said those were steps his agency already takes and on Tuesday, he said he thinks the the audit shows it is using the proper discretion.
“We have an obligation to do good projects and to protect the taxpayers and we do both,” he said. “It’s validation for our approach to things.”
When it comes to the 11 projects the Cortland IDA selected as of June 2015, the report applauded the agency’s “comprehensive cost-benefit analysis” to make sure tax breaks are in the best interest of residents and that steps are taken to recover taxes and make adjustments when obligations are not met.
Typically, an IDA exempts property from property taxes and grants other exemptions for companies in exchange for creating jobs and increasing the property tax base. The property owners make annual payments to taxing authorities. While job creation is part of the agreements, IDA Chief Financial Officer Karen Niday said this morning, even a reduced tax payment can bring in more tax revenue than what a property would have generated without the deal.
The Payment in Lieu of Taxes, PILOT, revenues are expected to generate$11.8 million in payments to municipalities, Niday said, and the report singled out four in particular expected to generate more than $377,000 alone:
• The clock tower building at Main and Tompkins streets in Cortland, which is expected to net $102,852 in payments from the PILOT agreement.
• The PILOT agreement linked to renovations at the former SmithCorona plant in South Cortland are expected to net $87,878.
• The Byrne Dairy production facility on Route 13, expected to net $160,903.
• The Best Western Finger Lakes Inn and Suites project in South Cortland will add $25,842.
IDA Chairman Mike McMahon said this morning that the agency denied a year’s worth of tax break to Sky Hospitality, developers of the Best Western, for failing to meet employment goals in 2014, an example of the type of accountability that brought the favorable audit.
“That’s the kind of thing they (the state) were looking for –– are we sticking to the rules,” he said. “I was very pleased with the results of the audit. I thought it spoke to the level of professionalism from the staff.”
The comptroller recommends local agencies have a Uniform Tax Exempt Policy as a guideline to monitor companies receiving PILOT agreements.
The Cortland IDA’s guidelines, “are specific and clearly articulate project goals and abatement schedules,” the report states, recognizing how it receives legally binding affidavits from companies, ensuring they are doing what they promised.
The report also noted that board members file financial disclosures when they join to “certify the absence of financial interest” when projects are selected and keeps accurate records on projects.
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