PRESENT:

___DAVE D’AMORE, CHAIRMAN
___­­­JOE SEMIONE, VICE CHAIRMAN
___TODD RULISON, TREASURER
___JANE KELLEY, SECRETARY
___TIM MUNN, MEMBER
___JOE GILLIS, MEMBER
___MIKE FITZGERALD, MEMBER
___JAMES MRAZ, EXECUTIVE DIRECTOR
___KARA LAIS, FITZGERALD, MORRIS, BAKER, FIRTH PC
___SCOTT HENZE, PLANNING DIRECTOR
___RON PETERS, FULTON COUNTY CENTER FOR REGIONAL GROWTH
___KEN ADAMCZYK, ECONOMIC DEVELOPMENT SPECIALIST, FULTON COUNTY CENTER FOR REGIONAL GROWTH
___JOHN BLACKMON, LIAISON, ECONOMIC DEVELOPMENT AND ENVIRONMENT COMMITTEE
___MIKE ANICH, LEADER-HERALD

MOTION :
MADE BY :
SECONDED :
VOTE :

MOTION :
MADE BY :
SECONDED :
VOTE :

A. Nominating Committee

• No report.

B. Audit Committee:

• Monthly Bank Reconciliation Report: Mike Fitzgerald

C. Governance Committee:

• No report.

D. Finance Committee:

•  No report.

1. Fulton County Report: John Blackmon, Liaison
2. FCCRG Report: Ron Peters, CEO

1. Background:

• In January 2016, JR filed a Project Application with the IDA for a project in the Johnstown Industrial Park.
• JR had two (2) primary stockholders:

1) CRE Capital LLC :              70%
2) New Age Renewable Energy :    30%

• The project involved building an 11,900+/- sf building on a 5.2 acre parcel of land in which ethyl alcohol would be produced from liquid whey from the adjacent FAGE yogurt manufacturing plant.
• The project was projected to involve the investment of $16+/- million and the creation of 27 jobs.
• The IDA Board executed a 10-year Lease Agreement with JR in March 2017.
• The IDA Board executed a 10-year PILOT Agreement with JR in March 2017. Year 1 of the PILOT was 2017.
• The IDA Board approved a sales tax exemption for the JR project. This sales tax exemption was provided for the period of July 15, 2016 – December 31, 2017.

2.  Status Report:

• Construction work on the project commenced in 2017.
• On January 25, 2018, the IDA received a letter from CRE Capital, LLC advising of the passing of Christian Eisenbeiss. Eisenbeiss was the sole member of CRE Capital, LLC and the managing member of JR.
• At the February 2018 IDA meeting, the IDA Board, in Executive Session, reviewed the January 2018 letter from CRE Capital. The IDA Board authorized and directed IDA Counsel to send a letter to CRE Capital.
• In February 2018, IDA Counsel sent a letter to CRE Capital advising that JR was in default for failure to complete the project by December 31, 2017. The letter asked for a status report.
• In May 2019, IDA received a letter from JR’s law firm providing the following update on their efforts to complete the project:

1. JR was seeking to enter into a new joint venture or find another user for the facility.
2. A couple of entities have toured the facility and had expressed an interest in it.
3. The letter requested an extension until December 31, 2019 to complete the project.

• At its May 2019 meeting, the IDA Board authorized:

1. The Chairman to execute an amendment to JR’s Lease Agreement extending the project completion date to December 31, 2019.

• Kara Lais sent JR an Amendment to the Lease Agreement extending the project completion deadline until December 31, 2019.
• To date, JR has not returned the executed Amendment.

3.  Sales Tax Exemptions:

• The IDA initially approved granting JR sales tax exemptions on the purchase of materials to be used in constructing the building and on the purchase of machinery and equipment to install in the building.
• These sales tax exemptions were to be available to JR through December 31, 2017.
• On January 30, 2018, JR filed an ST-340 with New York State’s Department of Taxation and Finance (T & F) stating $960,000 in sales tax exemptions were taken when the building was being constructed. The exemptions were on JR’s purchasing materials and the building and on machinery and equipment to install in the building.
• In October 2019, the IDA learned that JR was planning on auctioning off materials and equipment currently being stored at the site.
• At its October 2019 meeting, IDA Board authorized:

1. Executing an Escrow Agreement with JR whereby all proceeds from the Auction would go to an Escrow Agent and eventually paid to NYS’s Department of Taxation and Finance to repay the sales tax benefits JR received.
2. Recapturing the estimated $960,000 in sales tax benefits JR received on this project because JR had not completed the project and created the 27+/- new jobs they committed to create in their Project Application.

• Escrow Agreement has been executed.
• Johnstown Renewables filed an amended ST-340 form with NYS Department of Taxation and Finance (T & F). The amended amount was based on the estimated sales from the Auction.  The ST-340 now stated $55,355.52 in sales tax exemptions.

4.  Lease Agreement:

• JR’s Lease Agreement with the IDA stated that JR would complete their project by December 31, 2017.
• IDA Board agreed to extend completion date through December 31, 2019 to give JR more time to complete project.
• JR has not executed an Amendment to the original Lease Agreement to extend the project completion date through December 31, 2019.
• At its December 10, 2019 meeting, the IDA Board authorized:

1. Extending the completion date of the Auction through January 31, 2020.
2. Extending the Project Completion Date identified in the Lease Agreement until February 28, 2020.

5. Status Report Provided at February 11, 2020 Meeting:

• JR’s Counsel advised that the Auction was complete and final sales totals were being tabulated. Once tabulation was complete, figures would be provided to IDA.
• Funds have been placed into Escrow Account per Escrow Agreement. JR’s Counsel did not specify how much has been put into the account.
• Based on final Auction results, JR may be filing another amended ST-340 Form with T & F to revise what JR claims to be the sales tax exemptions they’ve taken.
• Kara Lais advised JR Counsel that the IDA Board will not accept the amounts in the amended ST-340 with receipt of a written confirmation from T & F that they accept and approve the amount in the amended ST-340.
• JR wants to proceed with an Early Lease Termination.
• At its February 11, 2020 meeting, the IDA Board approved an early termination of the IDA’s lease and PILOT with JR, subject to JR paying the required fees and to authorize the Chairman to execute all early lease termination documents.

6. Update:

• On February 12, 2020, JR Counsel advised Kara Lais that the Auctioneer collected $35,748 in sales taxes from New York taxable buyers and that said amount was remitted to the NYS Department of Taxation and Finance on February 6, 2020.
• On February 21, 2020, Kara Lais sent JR’s Counsel an Early Termination Agreement for JR to execute and return along with a payment to cover Fitzgerald Morris Baker & Firth fees for working on this project as well as the lease termination fee payable to the IDA.
• Upon receipt of the two (2) payments, the IDA Chairman will execute the Lease Termination Agreement.
• Kara Lais’ transmittal also requested that JR’s Counsel send the IDA the final results of the Auction, the amount placed in escrow that will be turned over to the IDA for remittance to T & F and whether JR will be filing another Amended ST-340 Form with T & F.
• On February 27, 2020, Kara Lais received, by email, a letter from JR’s Counsel stating that:

1. On February 6, 2020, $29,882.85 in sales taxes generated on the sale of equipment to be used in New York State was transmitted to T & F.
2. JR will not be submitting another amended ST-340 to T & F.
3. JR offered to pay an additional sum to satisfy what it claims to be the total sales tax benefits JR received on the sale of equipment to be used in New York State.

• The letter did not mention the sales tax benefits JR received on the goods, machinery and equipment originally purchased.

7. Recommendation:

• It is recommended that a letter be sent to T & F formally requesting an opinion/decision from T & F on what they determine to be the total sales tax benefits JR received.

IDA DISCUSSION:

IDA ACTION:

MOTION:
MADE BY:
SECONDED:
VOTE:

1. Background:

• At its November 12, 2019 meeting, IDA Board hired Emery Designs to update IDA’s website.
• Executive Director has been participating in weekly Conference Calls with Emery Designs to discuss various issues.
• At its January 14, 2020 meeting, the IDA Board agreed to consolidate the information on the Tryon Technology Park website (tryontechnologypark.com) into the IDA’s website (fcida.org) but to retain the domain name Tryon Technology Park.
• Betsy Emery spoke with several Site Selectors from Site Selectors Guild regarding what Site Selectors want to see on EDO’s websites. Key feedback received:

– Site Selectors use a variety of data sources to collect information on an area/region/community.
– EDO websites must be data rich.
– EDO website should have a list of major employers in region: how many, what industries, unionized, etc.
– Wages and benefits.
– Detailed information on workforce: skills, age, occupations, education, etc.
– Workforce training:

o Identify all workforce training programs available to train workers: FMCC, HFM-BOCES, P-TECH

• Local colleges and universities
• Testimonials from employers and
• Buildings and sites: Information must be up to date.
• 1 page on targeted industries with unique and compelling information in 100 words or less.
• Contact information.
• Must be able to print or download information.

2. Status Report:

• Drafted reports on active IDA projects: See attached.
• Drafted list of top employers to post on IDA website: see attached.
• White pages for sites have been drafted.

3. Activity Report of IDA Website:

• See attached.

IDA DISCUSSION:

IDA ACTION:

MOTION:
MADE BY:
SECONDED:
VOTE:

1. Background:

• On January 31, 2008, the provisions of the New York State General Municipal Law that authorized IDA’s to issue tax-exempt revenue bonds for charitable entities expired.
• Historically, the ability of IDA’s to provide tax exempt revenue bond financing to charitable entities has been an important economic development tool.
• Not-for-profit entities in Fulton County that have benefitted from the Agency’s tax-exempt financing include Nathan Littauer Hospital and Fulton County YMCA.

2. Capital Resources Corporation:

1. An alternative now exists to allow not-for-profit entities to access to tax-exempt revenue bond financing.
2. This involves the formation of a Capital Resource Corporation (CRC) under New York State’s Not-For-Profit Corporation Law.
3. A CRC would generally exist for the same public purposes as the IDA but have the power to issue tax-exempt bonds for the benefit of not-for-profit borrowers.
4. The IRS has ruled that CRC’s can issue tax exempt financing for not-for-profit entities.

3. Formation of a Capital Resource Corporation:

a. Three (3) steps would need to be taken to form a Fulton County Capital Resource Corporation:

1. Agency Resolution. The IDA Board would adopt a resolution approving a proposed Certificate of Incorporation and authorize the Chairman or Executive Director to approach the Board of Supervisors regarding the formation of a CRC.
2. Board of Supervisors’ Resolution. The IDA would present the proposed Certificate of Incorporation, along with the resolution approving such proposed Certificate of Incorporation, to the Board of Supervisors and request that the Board of Supervisors approve the proposed Certificate of Incorporation and the formation of a CRC.  The Board would have to approve this request.
3. Filing of the Certificate of Incorporation. Once approved by the Board of Supervisors, the IDA would file the Certificate of Incorporation and the CRC would begin its existence.

4. Key Terms of the Certificate of Incorporation:

a. The purpose of the CRC would be to promote community and economic development and creation of jobs in the non-profit and for-profit sectors.

b. The CRC would be subject to the provisions of the Public Authorities Accountability Act of 2005 and 2009.

c. The CRC would be authorized to issue bonds.

d. The CRC’s operations would be limited to Fulton County.

e. The CRC would be managed by a Board of Directors. The Board of Directors would be appointed by and serve at the pleasure of the Board of Supervisors.  The CRC’s Board of Directors would consist of the members of the IDA.  The members of the Board of Directors shall not be entitled to compensation.

f. The County shall receive an annual financial report from the CRC. The CRC shall be subject to audit by the County, the Authority Budget Office and the Office of the State Comptroller.

g. The CRC would be a “public body” for purposes of the Open Meetings Law.

h. The CRC must hold a public hearing with respect to proposed projects with the same notice as required under Section 859-a of the General Municipal Law.

i. Any amendment of the Certificate of Incorporation or by-laws of the CRC would be subject to approval by the Chairman of the Board of Supervisors.

5. Counties and Municipalities that currently have CRC’s:

1. Counties: (26)

Albany County Capital Resource Corporation
Allegany County Capital Resource Corporation
Canton Capital Resource Corporation
Cattaraugus County Capital Resource Corporation
Chautauqua County Capital Resource Corporation
Chemung County Capital Resource Corporation
Clinton County Capital Resource Corporation
Columbia County Capital Resource Corporation
Cortland County Development Corporation
Essex County Capital Resource Corporation
Jefferson County Civic Facility Development Corporation
Livingston County Capital Resource Corporation
Madison County Capital Resource Corporation
Montgomery County Capital Resource Corporation
Oswego County Civic Facilities Corporation
Otsego County Capital Resource Corporation
Rensselaer County Capital Resource Corporation
Saratoga County Capital Resource Corporation
Schenectady County Capital Resource Corporation
Schoharie County Capital Resource Corporation
St. Lawrence County Industrial Development Agency Civic Development Corp.
Ulster County Capital Resource Corporation
Warren and Washington (Counties of) Civic Development Corporation
Wayne County Civic Facility Development Corporation
Yates County Capital Resource Corporation

2. Municipalities: (7)

Albany (City of) Capital Resource Corporation
Build NYC Resource Corporation
Montgomery (Town of) Capital Resource Corporation
Peekskill Facilities Development Corporation
Troy (City of) Capital Resource Corporation
Waterford (Town of) Capital Resource Corporation
Glens Falls Capital Resources Corporation

6. Questions and Answers:

Q. What risks would there be to the IDA if a CRC was created and then deemed by New York State to no longer be eligible to issue tax exempt financing?

A. No risk to the IDA. There is a risk that NYS Law could be changed to eliminate the CRC’s power to issue bonds. Any such change would be prospective.

Q. Would there need to be an Executive Director type position for a CRC similar to an IDA?

A. Yes. The structure of the CRC would parallel the structure of the IDA.

Q. Can some other entity other than a CRC issue tax exempt financing?

A. No local entity in Fulton County. The State Dormitory Authority has power to issue bonds for NFP corporations.

Q. Is there any chance that the NYS Legislature will re-establish the authority of an IDA to issue tax-exempt financing?

A. Possible but no such action has taken place in 10+ years.

Q. What would happen if a CRC was created and then the State abolished them?

A. The financing issued by the CRC would be valid. Any abolishment would be prospective and not retrospective.

Q. What can the CRC spend its funding on?

A. The CRC has the same authority as an IDA for spending funds.

Q. How would the CRC generate revenues?

A. By establishing a fee schedule similar to what an IDA does. The CRC would generate an administrative fee from the issuance of its bonds.

Q. Would the CRC be a public entity?

A. Yes. The CRC would be subject to all the requirements of the Public Authorities Accountability Act just like IDA’s are.

Q. What would be the annual costs for operating a CRC?

A. There would be two (2) typical cost centers:

1. Annual audit.
2. Staff time to complete the reporting requirements under PARIS.

7. Previous Attempt to Create a CRC:

• In 2016, the IDA discussed creating a CRC for a potential project at FMCC.
• The IDA Board recommended to the Board of Supervisors that a CRC be created.
• The Board of Supervisors did not agree to create a CRC. There was a concern raised by the County Attorney that the debt of a CRC could become the responsibility of the County.
• Hodgson Russ had advised that there was minimal chance this could happen.

8. Questions:

• At the February 11, 2020 IDA Board meeting, IDA Board members identified several questions about creating a CRC.
• Following that meeting, Jim Mraz contacted Joe Scott, Hodgson Russ and requested responses to their questions.
• The questions and responses are as follows:

Question: What are the costs involved with creating a CRC and who typically pays for those costs?

Response: We typically charge $5 – $9,500 for setting up a CRC.  If there is a project that the IDA is setting the CRC up for, we would consider no charge or rolling any setup charge into the fees to do the financing for the project. 

Question:  If a CRC has no projects, do they still have to have an audit conducted?

Response:  Yes.

Question:  If a CRC has not generated any revenues from projects, where do the funds come from to pay for operating costs like audits and staff time for preparing PARIS Reports?

Response:  Funding from the County or from the IDA.  We also have several CRC’s that have an annual funding arrangement with the entities that they have done projects for (i.e., an annual fee).  The annual fee funds the current operation costs of the CRC.

IDA DISCUSSION:

IDA ACTION:

MOTION:
MADE BY:
SECONDED:
VOTE:

1. Background:

• In 2019, the IDA authorized sales tax exemptions be provided to the proposed Century Linen Project.
• Century Linen was authorized to receive up to $348,000 in sales tax benefits.

2. ST-340:

• Any company receiving sales tax benefits is required to file an ST-340 Form with the NYS Department of Taxation and Finance.
• ST-340’s must be filed by the end of February for the previous year.
• Century Linen has filed their ST-340 with T & F.
• ABO wants IDA’s to review these forms to verify that the project met or exceeded its total project cost.

IDA DISCUSSION:

IDA ACTION:

MOTION:
MADE BY:
SECONDED:
VOTE:

1. Key Finding:

• Based upon West & Company’s review of the IDA’s 2019 financial records, West & Company has issued an “unmodified opinion.”
• This is the best opinion the IDA can receive.
• The IDA has consistently received unmodified opinions on its audits.

2. Presentation by West & Company:

IDA DISCUSSION:

IDA ACTION:

MOTION:                   To approve the Audit as submitted by the West & Company and authorize West & Company and the Executive Director to file the Audit in PARIS and Fulton County Treasurer.

MADE BY:
SECONDED:
VOTE:

• IDA’s 2019 Annual Report has been prepared in accordance with the new requirements recently enacted.
• Report was e-mailed to IDA Board members on February 25, 2020.

IDA DISCUSSION:

IDA ACTION:

MOTION:                   To approve the 2019 Annual Report and authorize and direct the Executive Director to file the Annual Report under PARIS and with the Board of Supervisors.

MADE BY:
SECONDED:
VOTE:

1. Background:

a. In 2019, the IDA Board identified one (1) project to work on:

1. Tryon Development Area:

a) Perform Desktop Environmental Assessment
b) Prepare Base Map
c) Perform Limited Phase I Environmental Site Assessment
d) Project Traffic Volume from buildout of Development Area
e) Attend Developers Forum

b. IDA Board hired Environmental Design Partnership at cost to not exceed $6,000 to perform that work. Items a-d above were completed.

c. IDA Board also authorized spending up to $1,000 to have a 1-page sell sheet for the Tryon Development Area prepared to be distributed at the Developers Forum.

d. The Developers Forum was cancelled so this sell sheet was not prepared.

2. 2020 Projects and Initiatives:

a. The IDA Board has already started work on certain projects including:

1. Updating IDA website.
2. Updating Tryon Technology Park Site Plan.
3. Updating Tryon Technology Park Brochure.
4. Initiate discussion about creating a Capital Resource Corporation.

b. Other Projects and Initiatives:

1. Are there other projects and initiatives the IDA Board would like to undertake in 2020?

IDA DISCUSSION:

1. Background:

• Current maturity date for 6-month CD at NBT Bank is March 21, 2020.
• Interest rate on current CD is 1.65% with an Annual Percentage Yield of 1.67%.

2. Options to Renew CD:

• CFO has contacted the banks the IDA has authorized as depositories of IDA funds and their current interest rate on CD’s. The following are their CD interest rates:

*Key Bank would only do a CD if IDA has a $10,000 minimum checking account.

IDA DISCUSSION:

IDA ACTION:

MOTION:

MADE BY:
SECONDED:
VOTE:

1. Background:

• ABO requires IDA’s to annually file an ST-62 Form titled “IDA Annual Compliance Report State Sales Tax Recapture.”
• The ST-62 asks if an IDA:

1. Granted any sales tax exemption in the previous calendar year.
2. Moved to recapture sales tax benefits given to a company.

• In 2019, the IDA:

1. Granted tax exemptions for the Century Linen Project.
2. Authorized recapturing sales tax exemptions on the Johnstown Renewables Project.

• IDA Chairman needs to be authorized to sign and submit this ST-62 for the fiscal year ending December 31, 2019.
• ST-62 must be filed by March 31, 2020.

IDA DISCUSSION:

IDA ACTION:

MOTION:                   To authorize the Chairman to sign and submit Form ST-62 for fiscal year ending December 31, 2019.

MADE BY:
SECONDED:
VOTE:

1. Background

• NYS Economic Development Council will be conducting its annual IDA Academy on Tuesday, April 21, 2020 at SUNY New Paltz
• Topic to be discussed include:

1. ABO Compliance
2. IDA Best Practices
3. Labor Policies
4. Clean energy policies, programs and projects
5. Office of State Comptroller Oversight

• Registration Fee hasn’t been announced. Last year it was $75
• Planning Director would like to attend if schedule allows
• IDA Board members may also attend

 IDA DISCUSSION:

IDA ACTION:

MOTION:

MADE BY:
SECONDED:
VOTE:

1. Background

• An SSL Certificate is a text file with encrypted data installed on a server that allows information to be encrypted and secured when being transmitted electronically.
• SSL Certificates are designed to make users feel secure while using the Internet.
• Without them, one could be jeopardizing your business, as well as your customer’s sensitive data.

2. Google:

• For several years now, Google has been forcing websites to implement SSL Certificates.
• Currently, over two-thirds of all websites are unencrypted, and Google is taking the next steps to change that.
• Google SSL requirements are now being enforced by flagging sites without SSL as “unsafe” in Chrome.

3. SSL Certificates:

• Hosting4Less currently hosts the IDA’s website.
• Annual cost to purchase an SSL Certificate from Hosting4Less is $99.
• It is recommended that this Certificate be purchased for the IDA’s website.

IDA DISCUSSION:

IDA ACTION:

MOTION:                   To authorize purchasing an SSL Certificate for the IDA Website at an annual cost of approximately $99.

MADE BY:
SECONDED:
VOTE:

1. Upon a majority vote of its total membership, taken in an open meeting pursuant to a motion identifying the general area or areas of the subject or subjects to be considered, a public body may conduct an executive session for the below enumerated purposes only, provided, however, that no action by formal vote shall be taken to appropriate public moneys:

i. matters which will imperil the public safety if disclosed;
ii. any matter which may disclose the identity of a law enforcement agent or informer;
iii. information relating to current or future investigation or prosecution of a criminal offense which would imperil effective law enforcement if disclosed;
iv. discussions regarding proposed, pending or current litigation;
v. collective negotiations pursuant to article fourteen of the civil service law;
vi. the medical, financial, credit or employment history of a particular person or corporation, or matters leading to the appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation;
vii. the preparation, grading or administration of examinations;
viii. the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof.

MOTION:                   To go into Executive Session to discuss the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof.

MADE BY      :
SECOND        :
VOTE              :
TIME              :

MOTION        :           To go out of Executive Session.

MADE BY      :
SECOND        :
VOTE              :
TIME              :

Tuesday
April 14, 2020
8:00 a.m.

MOTION        :

MADE BY      :
SECONDED   :
VOTE              :
TIME              :