May 8, 2015 Page 1
BROOME COUNTY INDUSTRIAL DEVELOPMENT AGENCY
BOARD MEETING
185 Court Street
Binghamton, New York13901
Friday, May 8, 2015, 12:00 pm
SYNOPSIS OF MEETING
PRESENT:J. Bernardo, J. Davis, W. Howard, T. Kane, R. Nielsen Jr., J. Smith and J. Stevens
ABSENT:J. Baumgartner and J. Rounds
GUESTS:Tim Doyle, Bonadio & Company
Alison Blessing, Bonadio & Company
Jerry Marinich, Broome County Legislature
Aaron Martin, Broome County Legislature
Mark Whalen, Broome County Legislature
Emmanuel Priest, Office of Senator Libous
Bob Murphy, City of Binghamton Economic Development
Scott Colton, Carpenters Local 277
Jeff Platsky, Press & Sun Bulletin
John Solak, City of Binghamton resident
STAFF:K. McLaughlin, S. Duncan, T. Gray, C. Campon
COUNSEL:J. Meagher
PRESIDING:T. Kane
Mr. Kane called the meeting to order at 12:00 p.m.
ITEM #1. APPROVE MINUTES FOR THE APRIL 10, 2015 BOARD MEETING: Mr. Kane requested approval of the minutes for the April 10, 2015 Board Meeting.
MOTION: To approve the April 10, 2015 Board Meeting minutes.On a MOTION by Mr. Davis, seconded by Mr. Stevens, the MOTION CARRIED UNANMIOUSLY.
ITEM #2. PUBLIC COMMENT: John Solak said with the proposed restructuring of theGood Shepherd bonds from the IDA to the LDC, the bondsremaining with theIDA will lose their collateral. Mr. Solak said he doesn’t think historic buildings being used as student housing equates economic development and such developments don’t give downtown thepresentation of a business district. Businesses won’t want to locate downtown. He asked if the IDA’s tax incentives are really an equity infusion and at what point do they end. Mr. Solak suggested starting a tech-savvy kickstarter team within the Agency to crowd-source funding for potential business ventures. Mr. Mark Whalen spoke regarding the proposed student housing project on the meeting agenda. He said the IDA does not have a policy on tax breaks for residential developments. Mr. Whalen said it seems as though every dilapidated property in Binghamton is being turned into student housing, and they’re being driven by PILOT agreements and tax breaks. He added that more than 50% of the student population in the City of Binghamton School District share in poverty, while the IDA is diverting tax revenues to well-off developers in town and downstate. He said the Agency also needs to consider what will happen to these buildings in twenty years when the tax abatements run out. Mr. Whalen asked the Board to take a serious look at developing a policy on granting PILOTs to residential developments.
MOTION: No motion necessary.
ITEM #3. EXECUTIVE DIRECTOR’S REPORT: Mr. McLaughlin thanked the Board members that attended the community breakfast unveiling The Agency’s new brand image. Mr. McLaughlin, Ms. Duncan and Mr.Frank Evangelisti from the Broome County Planning Department are putting together a draft white paper regarding the Buffalo Billion that will include Binghamton, Johnson City, Endicott and Binghamton University. They are also starting to have meetings with private industry to be included. CFA applications for individual projects are due July 21st and regional plans due in October. There will be a Regional Council meeting at the end of May to start the process. Mr. McLaughlin feels Broome County has a good head start, and he said the Upstate Revitalization Fund is the most flexible money. Non-winner funds will be available but more restrictive. He said he recently met with the Mayor of Whitney Point and Whitney Point businesses to introduce The Agency and discuss business opportunities. Work is ongoing on the Regional Farmers Market. Mr. McLaughlin explained that the Advisory Loan Committee recently modified loan terms on one loan to interest only payments for a period. The Board had previously decided to allow the loan committee to review loan modifications and then just notify the Board of a change, rather than coming to the Board for approval. Mr. McLaughlin would like to get the Board’s opinion on this process. The bylaws state that any “material modifications”should receive Board approval. There was a discussion about the clarification between material and immaterial modification. Mr. Meagher said there is not a clear definition. Mr. Nielsen suggested the loan committee define material vs. immaterial. Mr. Stevens, as the Chairman of the loan committee, will meet with Mr. McLaughlin and Mr. Grayto research best practicesamong other IDAs and private lending institutions. They willprovide a recommendation to the Board next month.
MOTION: No motion necessary.
ITEM #4. LOAN FUNDS AVAILABILITY AS OF APRIL 30, 2015: Mr. Gray presented the Loan Funds Availability report to the Board. The balances available to lend are $69,206.72 (STEED) and $8,744.19 (BDF). Mr. Gray pointed out that STEED funds are running very low, and he has a potential borrower for the remainder of the balance. Agency staff are working with the City of Binghamton on Grow America. There is a potential borrower for the Grow America Fund consideringmoving to Binghamton. He is also waiting for a decision on the USDA fund. Mr. Kane said he assumes the STEED balance is dwindling due to the program’s success. He asked if the Agency should allocate further funds to the program. Mr. Gray said he is looking into what the Agency can access. He said the IDA may be able to access a little more, but not very much because the program is from a regional fund. Mr. Nielsen suggested contactingSenator Gillibrand’s office and Congressman Hanna for help in talking to theUSDA.
MOTION: No motion necessary.
ITEM #5. REVIEW OF THE 2014 AUDITED FINANCIAL STATEMENT: Mr. McLaughlin introducedthe Bonadio Group, who was awarded the contract to perform the audit as a result of an RFP sent out in 2013. Mr. Meagher clarified that the Board could review both the IDA and LDC financial statements in the same meeting because they were for information only and do not require a vote of approval. Ms. Alison Blessing and Mr. Tim Doyle presented the financial statements. They gave an overview of the statement and issued an unmodified opinion, the highest standard that can be given by an auditing firm. There were no findings in material weaknesses or significant deficiencies. Mr. Doyle noted that the IDA statement was in draft form because Bonadio was still waiting for information on one of the IDA projects. He said the information is only for the supplemental schedule and will not change the overall position of the Agency. Ms. Blessingsaid she has had conversations with Ms. Campon about starting the confirmation letter process before year end for future audit procedures. Ms. Blessing then made the following recommendations to consider for best practices. 1) Cost-sharing: Allocating and accounting for time spent between the different entities that are controlled by IDA staff (LDC, STEP, Land Bank, etc). 2) Separation of financial reporting: Financial software should be separated out for each separate entity. 3) Chart of accounts: Organize flow of group types of accounts (assets, liabilities, revenues, expenses,etc). 4) IT and Data Security: Adopt formal policies on internet use, online bankingand document access. 5) Loan documentation: Bank denial letters should be included in borrower records. 6) Money Market Mutual Funds. The money market mutual funds that the Agency had invested in through its financial institution are a nonallowable investment mechanism per the NYS Authority Budget Office. While Bonadio was on site for audit fieldwork, Mr. McLaughlin contacted the investment institution and they were able to convert assets to allowable investments: CD and demand deposits. The situation was noted by Bonadio, but immediately rectified. Mr. Stevens asked if The Agency should request written acknowledgement from the bank that it has the proper IDA policies on file. Ms. Blessing said that would be a good practice and she suggested meeting with them at least annually. Mr. Stevens said the Audit and Finance Committee has already agreed to meet with the bank semi-annually going forward. Mr. Nielsen asked if it would be possible for the IT department from Bonadio to provide draft policies regarding IT and data security issues. Mr. Doyle said yes,they can provide many different examples, but the decisions are ultimately those of the Board’s. Mr. Nielsen asked if there are other areas of concern that they might have advised other clients to be aware of, outside of the scope already mentioned. Mr. Doyle said the State Comptroller has been looking at public authorities more closely recently, and Bonadiomonitors what they’re looking for. Mr. Stevens asked if The Agency is in the process of rectifying the aforementioned issues and if Bonadio can help. Mr. McLaughlin said Ms. Camponis already working to remediate the chart of accounts and the separation of financial reporting within the reporting software. Ms. Blessing and Mr. Doyle also said they can provide a template.
Ms. Blessing and Mr. Doyle then provided a review of the LDC audited financial statement. Bonadio issued an unmodified opinion finding no material weaknesses or significant deficiencies. Ms. Blessing noted that the cash position is unique in that the LDC has no liabilities, just cash assets. Mr. Doyle said the management letter includes two new comments and two prior year comments still outstanding. 1) Bank reconciliations should be reviewed by a second person in the office. Mr. Stevens noted this procedure has already begun being implemented by staff. 2) Cost/time-sharing as previously discussed with the IDA’s review. 3) A separate and distinct website for the LDC. Mr. McLaughlin said The Agency’s new website includes separate pages within it for the IDA and the LDC. He asked if LDC will receive the same opinion next year if the website is not changed. Mr. Doyle said he will make note of the question and get back to Mr. McLaughlin with opinion. 4) Separate financial reporting software for each entity. As stated with the IDA’s review, this issue is in the process of being rectified.
ITEM #6: RESOLUTION AUTHORIZING THE ASSIGNMENT OF THE VESTAL PARK, LLC PILOT AGREEMENT FROM VESTAL PARK, LLC TO BE NAMED: Mr. Meagher explained these are housekeeping resolutions, and he is only asking for formal resolutions in anticipation that the bank will require them. All resolutions have been approved by the Town of Vestal, and the PILOT payments will stay the same.
MOTION: To approve the Resolution. On a MOTION by Mr.Nielsen, seconded by Mr.Stevens, THE MOTION CARRIED UNANIMOUSLY.
ITEM #7. RESOLUTION AUTHORIZING AN AMENDMENT OF THE VESTAL PARK, LLC PILOT AGREEMENT MODIFYING THE LEGAL DESCRIPTION ANDNARRATIVE DESCRIPTION OF THE UP-2 PORTION OF THE PROJECT TO REFLECT CHANGES IN THE COMPANY'S BUILDING PLANS:
MOTION: To approve the Resolution. On a MOTION by Mr.Nielsen, seconded by Mr.Stevens, THE MOTION CARRIED UNANIMOUSLY.
ITEM #8. RESOLUTION AUTHORIZING CHANGING THE UP-1 PORTION OF THE VESTAL PARK, LLC PROJECT FROM A SALE/LEASEBACK TRANSACTION TO A LEASE/LEASEBACK TRANSACTION:
MOTION: To approve the Resolution. On a MOTION by Mr.Nielsen, seconded by Mr.Stevens, THE MOTION CARRIED UNANIMOUSLY.
ITEM #9. EXECUTIVE SESSION: Mr. Kane asked for a motion to enter Executive Session to discuss the acquisition and sale of real property for the BCIDA.
MOTION: To convene to Executive Session at 1:20 PM. On a MOTION by Mr.Nielsen, seconded by Mr.Stevens, the MOTION CARRIED UNANIMOUSLY.
ITEM #10. RECONVENE TO PUBLIC SESSION: Mr. Kane asked for a motion to reconvene to public session.
MOTION: To reconvene to public session. On a MOTION by Mr.Stevens, seconded by Mr. Howard, the MOTION CARRIED UNANIMOUSLY.
ITEM #11. ADJOURNMENT: Mr. Kane requested a motion for adjournment.
MOTION: To adjourn the meeting. On a MOTION by Mr. Nielsen, seconded by Mr. Davis, the MOTION CARRIED UNANIMOUSLY, and the meeting was adjourned at 1:53 pm.
The next meeting of the BCIDA Board of Directors is scheduled for June 12, 2015 at 12:00 p.m. at the Broome County Public Library, 185 Court Street, Binghamton, NY.