ALBANY – The Saratoga Economic Development Corp. won a historic victory in its longstanding assertion that it is not subject to the state surveillance afforded to public authorities.
Unless the state authorities’ budget office successfully appeals Tuesday’s ruling by a state Supreme Court judge, it must give up what it has been seeking to achieve since the mid-1990s. 2000s: Oversight of SEDC, a private nonprofit organization that Saratoga County pays to provide economic development services. .
SEDC chairman Dennis Brobston said on Thursday he was pleased with the decision, which could end a dispute that began in 2005.
“They always felt they could intimidate us and that’s how they approached it, all the time,” he said. “We felt that the work we were doing was very important to doing the way we do.”
The ABO was created to make public authorities more accountable and transparent and to help ensure that they act in the public interest for the purposes for which they were created. He did not respond to a phone call and email request for comment for this story.
The SEDC offers some transparency, although it stops short of a cost-benefit analysis.
As a 501(c)(3) tax-exempt, he must file a Form 990 with the IRS, and several groups aggregate these filings online for public scrutiny. Additionally, as part of his contract, he provides the county with his salary schedule, tax return, budget and details of how he spends the money the county pays him – which was $225,000. this year, less than a quarter of its budget.
ABO issued a preliminary ruling in October 2008 that SEDC qualified as a public authority under the State Public Authorities Act, which caused years of back-and-forth between the two. ABO did not definitively determine that SEDC was a public authority until October 2020; SEDC challenged this in court in February 2021.
In its response to the challenge, ABO stated that it had been monitoring SEDC’s activities since 2005 and determined that it not only meets the statutory definition of a local authority, but acts as such, and ABO considers the arrangement funding is a direct credit for SEDC to serve as the county’s primary economic development agency.
ABO claimed that the relationship between the SEDC and the county is structured to escape the Public Authorities and Accountability Act 2005 and the Public Authorities Reform Act 2009, and that ABO considers it as a public-private partnership.
In his ruling this week, Acting Supreme Court Justice Richard M. Koweek dismissed ABO’s case point-by-point, citing legal precedent and citing flaws in ABO’s own arguments.
ABO did not dispute SEDC’s assertion that it was created by the private sector for the private sector, with no county involvement and no obligation to work with the county, Koweek wrote. He also noted that SEDC is entirely owned and operated by private sector personnel.
The relationship, he wrote, is an arm’s length contract for fee-for-service. Nothing in the record shows that SEDC is affiliated with or sponsored by the local government.
Koweek also responded to an affidavit submitted by Acting ABO Director Ann Maloney, claiming that she had wrongly attempted to add new facts to an existing case opened under her predecessor. But he decided to consider her claims nonetheless, he wrote, and they did not change his decision.
“We were surprised he did it like that,” Brobston said.
Not mentioned in the decision was a seemingly glaring indicator that SEDC is not a public entity: the county essentially fired SEDC from 2014 to 2019 after SEDC did not allow the county board of supervisors to place its own members on the SEDC Board of Directors to provide oversight.
The majority of the county council elected in 2014 to create a new economic development agency, the Saratoga County Prosperity Partnership, which was controlled by the county and received the majority of its funding from the county.
The county paid the partnership much more than it had paid the SEDC, but never saw the results it hoped for, only minimal business development and job creation. SEDC, meanwhile, continued to operate on its own, with more success.
In 2019, the county brought SEDC back under contract to work side-by-side with the Partnership. In early 2022, the county essentially shut down the Partnership.
Stillwater supervisor Ed Kinowski was one of only two supervisors to vote against SEDC’s return in 2019 because he refused to submit to the ABO oversight he felt he should have.
He said Thursday he still believed in it and was surprised by the decision.
“I think this will negatively impact other cases that will come before the state,” he said.
But the decision is the law, Kinowski said. “It was a nice break for SEDC, it’s no longer weighing on the head of the county, it’s resolved. That’s how I see it. »
Clifton Park supervisor Phil Barrett was opposed to the termination of SEDC in 2014, was in favor of its return in 2019 and in favor of closing the partnership in March 2022.
“It is very important that the SEDC remains separate and distinct from the county,” he said. “It has been very beneficial for the county and we are very happy with the performance and the relationship over the past few years.”
Barrett said the county contracts with other organizations, including chambers of commerce and the Cornell Cooperative Extension, and does not seek to place supervisors on their boards.
The experiment with an economic development agency run by county supervisors – the Partnership for Prosperity – was a colossal and costly failure, he added.
Barrett is very comfortable with the level of transparency provided by SEDC under his contract and sees no need for additional oversight by the ABO. He expects SEDC’s relationship with the county to expand now that the partnership is off the table. The county has allocated $350,000 to the Partnership this year.
Brobston said there is a built-in accountability to the county-SEDC relationship in that it continues in one-year increments. If SEDC doesn’t produce results, the county doesn’t have to rehire him.
But SEDC claims results, and massive results – over 400 companies helped, over $18 billion in investments, over 18,000 jobs created, thousands more jobs retained since its inception in 1978.
Some of those victories have come solo, others as a team, including the GlobalFoundries computer chip factory in Malta, the largest project in upstate New York in generations – an investment of more than 15 billion dollars, not to mention $1 billion. value of the expansion efforts currently underway.
More from The Daily Gazette:
Categories: Business, Clifton Park and Halfmoon, News, Saratoga County