New Rochelle Development Commissioner Michael Freimuth sent a memo Tuesday to members of the City Council and the City Manager in response to a report by the New York State Authority Budget Office that the New Rochelle Industrial Development Agency delinquent in filing its 2011 Annual Report.
Freimuth told City officials that the IDA’s annual report could not be certified to date because not all of the data required to be provided by the project companies has been received. He said the New Rochelle IDA is still collecting IDA project information.
“The ABO has always asked public authorities to wait until they have complete information available to submit required reports,” said Freimuth. The ABO has specified it does not expect the IDA to submit the report without complete and accurate information.”
Freimuth states that the ABO asked that the IDA wait until all information is available to submit the 2011 report.
The memo goes on to explain recent actions by the IDA at their June 28, 2012 meeting:
First, the IDA board authorized the filing of its Annual Financial Statement, which was completed by an independent certified public accounting firm that found it presented fairly, in all material respects, the financial position of the Agency for 2011, according to accepted accounting principles.
Second, the IDA board authorized the utilization of a letter threatening recapture of benefits in order to follow the, auditor’s recommendation that the IDA impose actions to ensure that all required project information be submitted on a timely basis each year. This agrees with the ABO’s recommendation that in future years, the IDA require companies that receive financial assistance to submit information needed to complete the annual report in a more timely fashion.
Freimuth explained that the IDA currently requires the insertion of an annual company reporting checklist that is documented in every company’s closing binder, which is an atypical legal real estate practice, but one that dovetails with other lease agreement default provisions.
Freimuth closed by noting:
Please be advised that the ABO has said the IDA can submit this audit report along with its procurement and investment reports–both of which have zeroed accounts—even though the whole report will not be shown yet as certified. Further, the IDA will be aggressive in collecting the remaining data while directly conveying to companies that their benefits are at risk for failure to comply.
With respect to the New Rochelle Local Development Corporation (LDC), the LDC is defunct as a result of the City’s recent purchase of the bonds for the New Roc Garage which used to run with the LDC. This entity will thus be dissolved.
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