Niagara Gazette — The New York State Authorities Budget Office has censured the members of a local development corporation for failing to file annual and audit reports in a timely fashion as required under state law.
The chairman and chief executive officer for the entity in question — the Joseph Davis Park Local Development Corp. in Lewiston — says he's not expecting the decision to have a long-term impact on the organization as town officials have already agreed to disband the group.
"The decision was made by the supervisor and the board to dissolve the local development corporation," said LDC Chariman and CEO Louis Giardino. "We instructed the attorney for the local development corporation to do so. That process is under way."
The Town of Lewiston formed the Joseph Davis LDC to oversee park operations after budgetary constraints prompted the New York State Office of Parks, Recreation and Historic Preservation to turn oversight of the park over to the town. The LDC is overseen by a seven-member committee, which brought in Giardino, who runs the Rochester-based real estate services firm, Construction Economists of America, or CEA International, as a consultant. LDC board members had hoped to work with Giardino through the LDC to develop a hotel, conference center and other amenities at the park. The projects never moved beyond the discussion phase.
In a release issued Thursday, the authorities budget office cited the Joseph Davis Park Local Development Corp. as one of 13 such entities found to be out of compliance with state reporting requirements.
LDC officials failed to file annual and audit reports for the fiscal years ending Dec. 31, 2011 and Dec. 31, 2012, according to the state authorities budget office. The entity also failed to file a budget report for the fiscal year ending Dec. 31, 2013.
In an Oct. 1 letter delivered to Giardino and other town officials, authorities budget office Director David Kidera said his office asked LDC officials in February to "justify the authority's persistent failure" to meet the reporting requirements. According to Kidera's letter, Giardino responded on March 4, asking for guidance in filing and indicating that he would be "glad to comply." On March 5, the authorities budget office emailed Giardino instructions on how to file while offering additional assistance if needed. According to Kidera, the compliance reports have yet to be filed.
"As of Oct. 1, 2013, the Joseph Davis State Park Local Development Corporation remains out of compliance with the public disclosure, reporting and corporate governance provisions of the Public Authorities Law," Kidera wrote. "In addition, our records indicate that the board has failed to meet its statutory obligation to participate in mandatory training that focuses on the governance, accountability and ethical responsibilities of directors. Accordingly, pursuant to its powers under (state public authorities law), the ABO is sending this official letter of censure to the board of directors of the Joseph Davis State Park Local Development Corporation."
Kidera went on to describe the board's failure to "take appropriate corrective action" when they were "previously warned" of the need to comply as "unacceptable." He went on to warn that continued failure to comply could result in the authorities budget office taking "additional steps," including initiating legal action to access records, books and financial documents of the LDC.
"This behavior demonstrates the fundamental misunderstanding of your fiduciary responsibilities and is a serious violation of your duty as a director or officer of this authority," Kidera wrote.
On Thursday, Giardino insisted there will be no need for the LDC to comply as it will soon be dissolved. Giardino said LDC representatives have repeatedly informed the authorities budget office that the entity has no assets and has had no financial activity. Therefore, Giardino argued, the LDC has no information to report in audits or other disclosure documents.
"It has no financial activity," Giardino said. "It has no asses. It has nothing to report."
When asked about compensation provided to his own firm for its services related to the LDC, Giardino insisted his company worked for the town itself, not the development corporation. He said the same was true of an attorney hired to provide legal advice during the formation of the LDC. Although the board had planned to move forward with various improvements at Joe Davis, Giardino said the projects did not move forward and, ultimately, no funds were expended on them.
"The fact of the matter is, there's nothing to report because there's been no activity," Giardino said.
Reached by telephone Thursday, Kidera said any public authority operating under his office's jurisdiction, including the Joe Davis LDC, is required to comply with applicable state reporting standards whether they have had financial activity or not. He indicated that the authorities budget office's online reporting system allows for any entity to file reports even when it has had no financial activity and zero assets.
"He would have still been expected to comply," Kidera said, referring to Giardino.
If the non-compliance persists, Kidera said his office would likely recommend to the appointing authority - in this case the Lewiston Town Board - that it replace the LDC's board of directors. He said his office has the power to subpoena all records and documents held by the LDC board as well.
"Obviously, we prefer that they comply with the statute," Kidera said.
Giardino said the LDC's board is in the process of creating a formal letter in response to the authorities budget office's concerns. As to the future of Joe Davis Park, Giardino said it will be up to members of the Lewiston town board to decide if any of the earlier improvement plans are ultimately pursued.
"Just because there's no LDC doesn't mean that there won't be some improvements to the park if the town board if the town board wishes to continue down this path," he said.MARCH 5 Date from which state office has been waiting for response from LDC Chariman and CEO Louis Giardino.