ROTTERDAM Holiday shoppers might be worried about how much they’re borrowing for presents, but state officials are chiding the Rotterdam Industrial Development Agency for carrying no debt.
The New York State Authorities Budget Office is seeking to terminate the Rotterdam IDA because it fails to comply with a provision of the General Municipal Law requiring any IDA to hold outstanding bonds or notes. Local officials aren’t disagreeing the IDA doesn’t hold any debt, but contend the requirement is an arcane provision. IDA Chairman Robert Mallozzi questioned why the state is now choosing to aggressively enforce the statute.
David Kidera, director of the state ABO, sent a letter to Mallozzi mid-October, in which Kidera requested an explanation of why the law wouldn’t immediately apply to the local agency. The law states once debt is cleared, the agency is required to terminate all obligations and liability is passed on to the town.
“Please provide us with any compelling justification why this language would not apply automatically and under what legal authority the Rotterdam Industrial Development Agency continues to act,” Kidera wrote in his letter.
Kidera contests it’s simply a “matter of law” for the agency to stop operations. Also, he said there were several IDAs reporting no outstanding debt to the state, which is leading to similar pushes for dissolution statewide.
“What is apparent to us and I think others that we have spoken with, is that this section of law is pretty clear and pretty explicit,” Kidera said. “I think they are placing themselves and the Town of Rotterdam and any company that does any business with them in some type of risk.”
According to Kidera, the requirement of holding debt was the original purpose of IDAs and the agencies weren’t meant to be permanent bodies, but rather tied to specific projects. Requiring debt allowed the agencies to avoid a sense of permanency.