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June 28, 2010



DiNapoli: Rotterdam IDA’s Project Approval And Monitoring Process Needs Improvement

The Rotterdam Industrial Development Agency (RIDA) failed to properly evaluate and monitor project performance to ensure that approved projects were meeting their job creation and retention goals, according to a report released today by New York State Comptroller Thomas P. DiNapoli.

“RIDA has not documented the reasons for their project approvals and has failed to monitor project work,” said DiNapoli. “When this happens, there is no way of ensuring project goals – such as job creation and retention - are being met. This isn’t fair to the community or its taxpayers. RIDA is responsible to the public. It has to be more transparent and accountable.”

DiNapoli’s auditors noted that officials did not verify information on annual surveys mailed to project owners, ensure information was complete or confirm that surveys were returned. As a result, current employment numbers were not available for three projects and another project fell short of its stated job creation/retention goals by 18 jobs.

In addition, the RIDA did not have required applications on file for two projects, and did not receive an application for another project’s payment in lieu of taxes (PILOT) revision. Because one project had a PILOT agreement that should not have been in effect, two municipalities under-billed that project by a total of $66,450 in real property taxes in 2007 and 2008. Further, RIDA’s 2008 annual financial report was not complete and accurate. The reported school tax exemption was understated for one project by more than $650,000, and overstated for another project by about $25,000; and one project’s school tax PILOT was under-reported by more than $420,000.

DiNapoli recommended that the RIDA and board:

  • Develop specific project evaluation criteria upon which to base financial assistance decisions;
  • Obtain and retain job survey forms for all approved projects, and independently verify reported employment data;
  • Determine whether sponsored projects are producing benefits as intended and whether financial assistance should be recaptured from those businesses that fall short of their job retention and creation goals; and
  • Establish and implement policies and procedures to ensure that PILOT agreements maximize the intended benefits to the affected jurisdictions.

The results and recommendations have been discussed with the RIDA.

For a copy of the audit, visit: http://www.osc.state.ny.us/localgov/audits/others/2010/rotterdam-ida.pdf

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