CRG scolded for not filing reports

JOHNSTOWN – The Fulton County Center for Regional Growth has again received a public scolding from the state for not filing required reports, but state and local officials say the agency is moving toward compliance.

The CRG and two subsidiaries – the Fulton County Economic Development Corp. and the Crossroads Incubator Corp. – were cited among 75 nonprofit authorities that did not file an annual report last year with the state Authorities Budget Office as required by public authorities law.

The EDC and CIC boards claimed the organizations are private, even though they received public funds. But the CRG, which was formed in 2012, last year pledged to operate as a public agency and later filed its first budget report with the state.

Center for Regional Growth Director Ronald Peters said the annual report due in 2015 included a period when the agency considered itself to not be public. The report due this year will be filed on time, he said.

“We’re catching up,” said CRG Chairman Dustin Swanger, the president of Fulton-Montgomery Community College. “We’re working toward compliance at best we can, at the rate was can.”

Swanger said the CRG also has completed board evaluations and is working with an attorney to set policies. He said the agency likely will be up to date with the state in six months.

“It’s a work in progress, but they’re starting to move in that direction – though it’s not moving as quickly as it should,” said the Authorities Budget Office’s acting director, Mike Farrar.

The three agencies combined for about $2 million in revenue in 2014, according to documents filed with the Internal Revenue Service. But most operations are being consolidated into the CRG and the board plans to phase out and then dissolve its subsidiaries, Swanger said,

The CRG is scheduled to receive up to $215,000 this year from Fulton County government; it got $25,000 in 2012, as the EDC was coming off a scandal after two former executives, Jeff Bray and Peter Sciocchetti, were found to have taken about $3 million in bonuses without board knowledge.

The increased funds are to help the CRG hire additional staff and increase its marketing of the county, including its 500-acre business park under development at the former Tryon youth detention center in Perth and the potential for turning 300 acres in Mohawk, adjacent to the Johnstown Industrial Park, into commercial space.

“Personally, I’d like to see more economic development and, hopefully, the county provided the tools to make sure they have the potential to do that,” said Board of Supervisors Chairman Charles Potter of Gloversville. “On the county level, we’d like to make sure they’re as transparent as possible.”

The Authorities Budget Office has little recourse in forcing agencies to comply with state law. It has censured some corporations and their board members – the EDC and CRG boards were censured in 2013 – but Farrar admitted there are no “true enforcement capabilities.”

He said the next step could be to seek an order to have an agency’s Board of Directors replaced. But since the board members are appointed, not elected, he said, “it’s like telling the board, ‘replace yourselves.’ So there’s limited effectiveness.”

Another CRG subsidiary, the Crossroads Incubator Corp. II, did not file state reports but escaped the state’s scrutiny. The CIC II completes Internal Revenue Service filings every year, but the agency is essentially dormant, showing the same $24,943 in assets and no expenses since 2010.

“I think many of us didn’t know it existed,” said Swanger, who added it initially was created as a holding corporation for properties the CIC owned, which would allow it to spread debt over two companies, Swanger said. Board members investigating the bonuses in 2010 discovered what seemed to be money transfers between the CIC and CIC II, he said.

Farrar said the state decided since it was already battling the other agencies, there was no need to go after the CRG’s smallest subsidiary.

“Should it be covered [by state law]? Yes, but I wouldn’t expect them to do anything,” Farrar said.

Swanger said the CIC II has voted to dissolve and submitted that information to the state. The EDC will likely dissolve by the end of the year, as it ties up loose ends with grants. The CIC, which owns buildings and lots in local industrial parks, is aiming to sell its properties so it can also dissolve, Swanger said.

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