As most of us have read, the GCEDC recently announced that it is responsible for retaining 21 jobs in the Batavia area. According to the GCEDC, this was achieved by providing two existing hotels with sales tax breaks on their project to replace windows in their buildings.
I wrote to GCEDC inquiring how we can save jobs at $429/job, and specifically, what jobs are being retained. In the email I also questioned the wisdom of granting these tax breaks for a project that will, most likely, pay for itself over time though reduced energy costs.
The following are my original e-mail, and Steve Hyde's response. I call it a response, because I certainly cannot find any answers in the verbiage.
My e-mail:
Many taxpayers would like to know exactly how $429 saves a job.
That figure is derived from your own statement that a $9,000 sales-tax break for two hotels will retain 21 jobs. I cannot, for the life of me figure how that works. Are you asserting that the two firms would not go forward with this project without this tax incentive that constitutes 4 percent of the total cost? I find that doubtful. Even if so, specifically, what jobs will be “retained”?
Please also clarify how GCEDC justifies this tax break for two existing private businesses, when they are replacing older windows with new ones that will obviously pay for themselves over time through reduced energy costs. Your prompt reply is anticipated and appreciated.
Thank you.
Bob Harker
His response:
Feb. 7, 2011
E-mail Correspondence
[ e-mail address deleted ]
Dear Mr. Harker:
Thank you for taking the time to write us with regard to the Days Inn and the Super 8 project in which the GCEDC board approved a sales-tax exemption on Feb. 3, 2011.
The GCEDC Board of Directors, by way of this project and others, is focusing on and taking action in accordance with key elements of our legal authority and with regard to our organization’s mission, which includes catalyzing community economic development success by supporting the growth, expansion and retention of Genesee County’s existing base of businesses.
The GCEDC board’s philosophy is to assist area businesses by helping to ensure that companies across Genesee County remain successful, viable, employ residents and contribute to the overall tax base of the county.
The sales-tax exemption on the renovation project at the Days Inn and Super 8 hotel is an example of a retention project by GCEDC. And through our participation, albeit in a small way (a $9,000 sales-tax exemption), we are supporting and helping retain the ongoing viability of one of our area businesses which is actively investing in our community and contributes a considerable amount to the tax base of our community by way of sales-tax generation and property-tax payments.
Given New York recently ranked number 50 in state business-tax climate as measured in October 2010 by the Tax Foundation – it is pretty clear of the importance to provide tax assistance to new and existing businesses in order to level the cost playing field and to reduce some of the tax burdens on area businesses -- especially in order to ensure their long-term viability and contributions to the community’s tax base and employment base.
Given the Tax Foundation rankings, we must continue to do what we can at the local level to ensure Genesee County is known as a “business-friendly community,” despite the high-cost structures so well known by many at the state level.
It is imperative for our long-term economic success that we continue these practices of providing tax assistance to new and existing businesses, because without viable businesses in our community – we have no economic certainty -- our employment climate would be perilous and the tax burden placed on area residents -- because of a declining business tax base -- would be far worse than it is today.
Thank you again for your correspondence and please do not hesitate to contact me if I can ever be of further assistance.
Sincerely,
Steven G. Hyde
President, GCEDC
Can anyone help me find the answers to my questions?
Can't find what isn't
Can't find what isn't there...and there are no answers there. It's kind of funny how someone can say so much, yet say nothing at all, kind of like a politician or a shifty car salesman.
Maybe Steve Hyde should be pushing used Wagon Queen Family Trucksters?
Well that certainly clears it
Well that certainly clears it all up.
I'm thinking your "lack" of
I'm thinking your "lack" of an answer to your questions is the "real" answer to your inquiry, lol!
I can't believe that the
I can't believe that the county and city have no problem with the loss of $9000.00 in sales tax revenue..The city has no problem raising all our property taxes..Hope every one makes some calls and let their elected officials know how they feel on the way the GCEDC gives away our tax dollars...
Good point, Mark. Double
Good point, Mark.
Double speak, at this juncture, only makes the situation worse.
Tomorrow, I'll be making my calls.
Bob, you may find the
Bob, you may find the following link interesting reading.
http://www.gcedc.com/pdf/audit/2009_OSC_Report.pdf
Within 90 days after the end of a fiscal year, the GCEDC must submit information to NYS through the Public Authorities Reporting Information System (PARIS). It lists individual project information for all ACTIVE projects (not just those approved in 2009) for that reporting year, in this case, fiscal year ending 12/31/09. Included in the report is job creation and retention figures for each project, as well as tax abatement/exemption benefits, PILOT payment schedules, etc.
My intent was to try find an answer to a simple question...How many real jobs did the GCEDC actually create in 2009?
Given the fact that they awarded themselves bonuses that year, I assumed that they must have done a heck of a job developing our local economy; even boasting about Genesee County being ranked by Site Selection Magazine as one of the top 10 Micropolitan areas in the Nation.
Page 124 of the PARIS report shows a summary of all of the projects. It lists 113 total projects, with a Net Employment Change of 415. Keep in mind, however, that these numbers do not reflect 2009 activity only, but are more like a running total. For example, if a project created 10 jobs in 2004, the jobs are still listed in the created column on the 2009 report for the purposes of calculating the Net Employment Change. Some projects on the report date back to 1999.
I went through the entire list of 113 projects to determine the totals for 2009 only. I came up with 25 projects that were approved in 2009.
The employment data is listed per project. I totaled the amounts for 2009 projects only, according to the categories listed on the report, with the following results:
# of FTEs before IDA status....522
Original estimate of jobs to be created...171
Original estimate of jobs to be retained...173
Current # of FTEs...260
# of FTE Construction jobs during fiscal year...89
Net Employment Change... -250 (note the negative symbol)
Of the 25 projects: 5 listed 0 (zero) for estimated jobs to be created with GCEDC assistance. 7 projects had a negative net employment change (loss of jobs) after GCEDC involvement in the project.
I didn't calculate the total tax exemptions given to the 25 projects to achieve these results...that would be interesting!
Another very interesting link: http://www.gcedc.com/pdf/board_meeting_agenda/Electronic_Board_Packet_1… contains a copy of the 2011 Contract between the GCEDC and the County. Note that in addition to the County's annual support to the GCEDC of $226,330 the County also has to pay the GCEDC PIF(PILOT Increment Financing) Revenue of $215,000. (The amount listed on the County's budget is actually $209,021 which represents payment toward a 10 year committment of $2,122,880.)
This post is long enough, so I won't get into PIF now.
The GCEDC didn't award bonuses for 2010 because they said they didn't meet their goals, yet their budget amount for Salaries, Wages & Benefits is increased for 2011 by $87,897....Maybe they created a job.
Thank you JoAnne....this will
Thank you JoAnne....this will information will definitely bring some comments on this site and others I hope. If an investigation isn't made into this operation....we have a real problem with our system!!!!
I find a lot of things
I find a lot of things troubling about the operations, practices and claims of the GCEDC.
During the past few weeks, I have done a lot of research and reading...trying to get a handle on the VERY complicated business of economic development agencies.
The laws that govern the GCEDC read more like a broad set of guidelines allowing them a vast amount of discretionary authority. How they have chosen to use that authority, coupled with their arrogant attitude, is in my opinion, what is fueling much of the public mistrust issues.
*Public employees vs. Private employees
They claim that they are not public employees. Yet, as noted in their 2009 audit report, the County pays their baseline wages. IMO, that makes them public employees.
http://www.gcedc.com/pdf/audit/2009_Annual_Financial_Statements.pdf
*Self Oversight
The GCEDC has a lot of committees: Governance, Ethics, Compensation etc. Yet all of the committees are made up only of Board members.
*The $100,000 rule and Public vs. Private Funds
The GCEDC is only required to hold public meetings for a project if the "public benefit" (amount of tax abatements, exemptions etc.) exceeds $100,000, therefore, a lot of projects are under the radar. The fact that it is called a PUBLIC benefit seems to indicate to me that taxpayer dollars are being used despite their claim that only private funds are used.
*Project Decision Criteria
http://www.gcedc.com/pdf/minutes/05_14_08_gcedc_minutes.pdf
The introduction of their Economic Impact Analysis Model seemed to signal a shift in their decision making philosophy. This mysteriously magical formula spits out a ratio that is used to justify projects with zero job creation and also justify projects where conflict of interest issues are present.
*Additional Compensation Policy/Performance Matrix
http://www.gcedc.com/pdf/minutes/05_14_08_gcedc_minutes.pdf
So how do we hold the GCEDC accountable?
As Lorie Longhany stated in a previous post..."we all want a robust and aggressive job-creating engine in Genesee County".
I think what we have ended up with is a robust and aggressive revenue generating and spending engine that is more self serving than public serving.
They have the authority to divert and appropriate vast sums of taxpayer dollars...they can remove real estate from the property tax rolls...yet they are not elected and therefore don't have to answer to the voters of Genesee County.
Until the powers that be (Genesee County Legislature) INSIST that ACTUAL job creation be made a priority by the GCEDC as stipulated in their contract (item # 3) and provide proper oversight to ensure that they are meeting the terms of their contract and producing real measurable results, the GCEDC will continue to spend mega amounts of taxpayer money on projects that fit their bonus criteria rather than create jobs and boost the economy of Genesee County for the simple reason.....because they can!
This will be a good year to
This will be a good year to clean house in the County legislature. That's the only way the GCEDC will get reformed, Mr. Hyde will not do it.
The time has come for a
The time has come for a batavian.com summit on a day and time that is convenient for most. This is an issue where we can all come together.
Anyone have an idea on when and where? Weekday morning summits are okay for some, but excludes those who work.
JoAnne, you have brought us research that should be discussed. We need to hear more.
JoAnne, well researched, well
JoAnne, well researched, well stated, well done.
John, you're damn right it is.
Thank You, Joanne for all
Thank You, Joanne for all your research, I like probably most folks don't have the time or the patience to wade through all that. John, I couldn't agree more. Thursday, Feb 10 there will be a public meeting regarding their biggest project yet, The STAMP project in Alabama, at the Alabama Fire Hall Judge Rd, (route 63). Millions of taxpayer dollars are being proposed
Bea, this only scratches the
Bea, this only scratches the surface. The issue that concerns me the most is the PILOT Increment Financing (PIF). It is by far the biggest revenue generating tool in the economic development toolbox.
It is also the most difficult to understand. I am a cook, not an economist; luckily I found a website that explains it so a 6-year old can understand it.
If you are concerned about the GCEDC, you need to understand what PIF is, how it works and what the risks and long term ramifications may be.
I will post about PIF soon. Thanks everyone for reading.
JoAnne i hope those on the
JoAnne i hope those on the Batavia city council are following these actions at the GCEDC..They want to create a mini GCEDC here with the creation of a Economic Development Coordinator.They will also be able to cut deals and taxes ..With no real job creation..Great work on this subject..I'm with John as far as voting out those on the Genesee County Legislature..Since they don't see a problem with how the GCEDC is run..Also why doesn't any one from city council have a seat on the GCEDC board.After all the tax give aways effect the city too...
Am I reading this right? The
Am I reading this right?
The participation of the taxing jurisdictions (our City, Towns and County) If this is the case, then they all agree to these PIF windfalls for industrial development at the expense of tax payers.
In some cases isn't the GCEDC the developer? Double dipping?
JoAnne is right, it is difficult to understand.
Simply put, a PIF structure allows for the diversion of monies which are otherwise payable to a taxing jurisdiction into a fund that is used either to offset the developer's project costs or to repay project financing. The arrangement requires the participation and cooperation of the taxing jurisdictions, an entity which can provide a real property tax exemption such as an industrial development agency (IDA), and the lender. When all of the parties have the shared goal of moving the project forward, a PIF can help turn a seemingly infeasible project into one which is economically viable and successful.
For the first element, a developer must apply and qualify for a real property tax exemption through an entity such as an IDA. As part of such an exemption, the developer would be required to enter into a payment in lieu of tax (PILOT) agreement with the IDA, which would typically allow for reduced payments in lieu of taxes. The second element requires that the developer's project be eligible for tax credits through a program such as the New York Brownfield Cleanup Program or the New York Empire Zone Program. With the tax credits under such programs, the developer could obtain partial or even full reimbursement from NYS for the PILOT payments made by the developer.
http://www.nyrej.com/29482
JoAnne, excellent research.
JoAnne, excellent research. I admit to being ignorant of the GCEDC and how they operate, but the recent articles and your posts have really been enlightening. Judging by the comments, this is truly a bi-partisan wave of tax payer interest in seeing some financial justice.
Mark, to answer your question
Mark, to answer your question as to why there is no one from City Council on the GCEDC Board, an excerpt from the 2/29/08 minutes of the GCEDC:
Mary Pat Hancock: County response to the letter from the City of Batavia – Mary Pat Hancock replied to a letter received form the City of Batavia Council asking for additional representation on the GCEDC board by the City of Batavia. She informed the Council that there are
representatives from the City of Batavia currently on the board and that given the activity and effectiveness of the board, she has no intention of
changing the make-up of the current members.
Re: PIFs
If anyone is interested in learning more about PIFs, I suggest reading an excellent but lengthy (33pages) article on the topic found at the link below:
http://findarticles.com/p/articles/mi_hb6562/is_5_32/ai_n29235656/?tag=…
Does anyone find it odd the
Does anyone find it odd the the county law makers are backing the GCEDC . I do and so should you as tax payers . There needs to be more pressure put on the law makers to make this right or get out of office . The other odd thing is , Mr. Hyde who also sits on the city school board voted yes to the VanDetta stadium project that is also not needed . Boy , this guy knows how to spend tax payer money and we are letting him do this . The stadium project is also saying it is not going to cost taxpayers money .Um , who do you think the state grant money comes from ----Your taxes once again . GCEDC needs to go away along with Mr. Hyde .
Thomas, I agree with you on
Thomas, I agree with you on everything but the idea that the GCEDC itself needs to go.
An IDA can be a real force for good in a community. They can create jobs and help prop up a local economy. The trick is ensuring that the thing is being run properly by people who have the right goals in mind.
Many of us here who have been
Many of us here who have been paying attention to this and posting comments have called for some kind of intervention from the County Legislature. What have we heard back from them? There's been no announcement made for oversight, no call for accountability. To the contrary we only hear there is no need to "micro manage" and an overall attitude of "nothing to see here.......move along". Pretty much a unanimous juxtaposition with the GCEDC and their policies.
Other than Ray Cianfrini, the rest are firmly in the "don't rock the boat" camp. Mr Grasso doesn't count (even if he sticks his hand up in the air to see which way the public opinion wind is blowing). We have him on the public record countless times singing the praises of the local IDA and criticizing any candidate that dared to ask a single question. And isn't that part of the reason that we're engaging in this discussion in the first place? We, as Genesee County residents, have the right to ask the questions and our elected officials have an obligation to answer them. We still live in a democracy even if incumbents have an easy time in the opposition department and their re-elections take little to no effort.
Obviously they're taking a chance thinking that not enough of the public is paying attention. Thank you to Bob and JoAnne and the rest of the poster's here on The Batavian for doing a tremendous job of citizen oversight and research. JoAnne, you have brilliantly broken this down so all of us can understand. You are the ones that are keeping this story in the news.
And yes there's an opportunity to replace (at least some on this Legislature)with fresh faces that will dare to kick the tires and look under the hood. There might be a real opportunity for some bipartisan support with this issue.
Lorie & all, I'm so impressed
Lorie & all,
I'm so impressed with this group. We, like many families, have their squabbles, but can rally together when needed.
This isn't a idealogical discussion, it is a real and pressing issue that needs bi-partisan support to keep the public informed.
I'm guessing that those sitting on the legislature are counting on it all be swept under the rug long before election day. I'm guessing they are secure in the knowledge that the status quo will remain the same because the voters in Genesee Co. won't let them down.
That said, how many of you can make it for a coffee meeting on Saturday at 3pm at the coffee house across from the county building on Court St?
Joanne, you may not have been
Joanne, you may not have been educated as an economist, but your determination and common sense, in my eyes, makes you a great candidate for Steve Hyde's job OR (preferably) public office.
I think a hearty round of applause is also due Howard and Billie who make this forum possible - without censorship in the interest of political correctness seen in other publications/web sites.
With all the fuss being made
With all the fuss being made about the cost of the windows and the jobs that would or would not be saved, has anyone on this committee you're apparently forming asked the owners of the Days Inn for their input on the matter? They have always been very straight-forward with me and based on the conversations we've had, they are trying very hard to bring more tourism dollars to the area. They're in the middle of a large-scale renovation of the Days Inn property for that very reason.
I agree, Bob. She has done a
I agree, Bob. She has done a mountain of work and sifted it down to us in language we can understand. Great work.
Hollis ran, in part, on his
Hollis ran, in part, on his association with the GCEDC.
When asked, "Why are you running?", he replied:
"It sounds like a cliche, there's some things I'd like to see finished up. A couple local projects, particularly ones that the GCEDC (Genesee County Economic Development Center), works on that are important to the community in terms of job development. That's one of the primary things I'd like to see finished up."
Can we ask him, now, how those projects are coming along and how many jobs were developed?
He was asked to give some examples?
"We've started a number of shovel-ready (industrial) parks. Right down here on East Main, between here and (Route) 63 is the Ag Park, which, I believe, it is a good fit for Genesee County.".
He mentioned that, "Our first potential client is an organization that wants to grow mushrooms."
Did you notice that he never indicated that he was the watchdog for the people in his position with GCEDC?
We read his recent response when asked about the GCEDC.
I wonder, if he runs again, if he will drag out the same bits and pieces of GCEDC fluff?
I can't help but wonder how many people, today, are rethinking their vote on that election day? The status quo isn't always best.
http://thedailynewsonline.com/news/article_08911aba-1760-5a23-8365-b9a2…
Kevin, In my opinion,
Kevin, In my opinion, admittedly having no direct knowledge of any GCEDC projects or the Days Inn; The GCEDC is throwing them (Days Inn & Super 8 owners) a bone because they are screwing them on gifting the Holiday inn Express
Thanks for all the kind
Thanks for all the kind words!
I have to work on Saturday Bea, so I can't make your coffee summit.
JoAnne - Excellent work
JoAnne - Excellent work here.
I propose Saturday at 12:00 at the Daily Grind?
Noon sounds good, but The
Noon sounds good, but The Daily Grind is too small if more than five people show up. Currently, there are only three that are interested.
JoAnne, what would be a good time and day for you?
The Daily Grind can
The Daily Grind can accommodate more than five people, for sure.
Gotcha Howard. Daily Grind
Gotcha Howard.
Daily Grind it is at noon on Sat.
I won't be able to join you
I won't be able to join you all. My son bowls on saturday afternoons. Next time for sure
Bea, my schedule is different
Bea, my schedule is different from week to week. I work every other weekend...this just happens to be my weekend on.
I have Friday off this week.
I typically work on
I typically work on Saturdays, so most likely, I'm a no. So you can stop practicing the "Rock The Boat" dance, Bea & John
I am absolutely amazed to see
I am absolutely amazed to see you people getting along, and uniting behind this farce and rape of our county!
Excellent research, excellent commentary.
Please remember that the largest employer in Genesee County is Genesee County. It will be very hard to change that. So many folks have gotten jobs or have been "provided" a job in the Government and have planned their lives around having a job for life. That they will fight changes every step of the way.
New blood is needed in the legislature. Hopefully it won't be spilt. I would consider a run at office. I would be up against Annie Lawrence. She is very entrenched in that job and would be hard to unseat. With my arrest record.
Let me know if you want me to give it a go.
Sen. Timothy Kennedy is
Sen. Timothy Kennedy is forming a small business advisory group open to all small business owners in Western New York.
http://bataviablogmistress.blogspot.com/2011/02/kennedy-lays-groundwork…