The board of the Putnam County Industrial Development Agency (IDA) resigned en-masse on Tuesday evening, January 12, 2016, over a situation that has been building for some time. IDAs are local municipal (County, city, village) entities organized under the mandates and regulations of the State. As government entities, they differ from economic development corporations (EDCs).
The EDC operated as a marketing force, utilizing IDA resources as a “tool box” of incentives to facilitate deals. A few years ago, requirements placed on IDAs became more specific and costly to comply with, and financing capabilities such as bonding were hampered by an unattractive bond market as well as more cumbersome rules and regulations. Financing through the IDAs often requires more time and effort than a business is willing to expend, especially with commercial financial institutions aggressively seeking to fulfil their needs.
Putnam’s EDC/IDA team had personnel issues a couple of years ago and the IDA was without an Executive Director, run by a volunteer board. A 2013 audit by the New York State Comptroller found some points of non-compliance and made 11 recommendations for correction. The IDA board, under the leadership of Acting Chairman Richard Ruchala, corrected those deficiencies. Still, the IDA was not generating sufficient funding through its traditional means due to the changes in the regulatory requirements and the decline in economic activity to fulfil its operations. It requested funding from the County – administration and legislature. Such funding was not forthcoming, and the board resigned, citing “irreconcilable differences.”
New York State’s changing mandates, requirements and priorities have caused the termination of many IDAs. Perhaps it’s time for a reboot – a smaller county, such as Putnam, would probably be better served with a reconfigured team of EDC – IDA – Tourism and, perhaps the Chamber of Commerce, to market, incentivize, and facilitate the right mix of business for our unique circumstances.
– Jennifer Maher, Chairwoman, the Putnam County Chambers of Commerce