A troubled agency falters under a new regime

By Bill Heltzel

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public hearing is postponed. A key policy is outdated. Questions are left unanswered. Economic development projects are delayed.

That pretty much sums up the headaches that an ambitious new mayor is facing as he tries to change the culture of a troubled government agency.

The agency in question is the Mount Vernon Industrial Development Agency.

The mayor is Richard Thomas, who has sometimes taken a confrontational approach in what he has described as a “hostile takeover” of government.

He has even sued city council members and Comptroller Maureen Walker — an IDA board member — claiming they were bypassing his authority to review and sign vendor checks.

The agency’s executive director, secretary and sole employee, Margaret Finlayson, was appointed by Thomas’ rival, the previous mayor and IDA chair, Ernest Davis.

IDAs use tax incentives, property leases and financing to create jobs and promote economic development.

Thomas has a low opinion of how the agency operated under his predecessor. The board seemed to have “winged it,” he said recently, and when he tried to call a meeting earlier this year, people listed as board members denied membership.

The IDA has a reputation. Two years ago, state Comptroller Thomas DiNapoli issued a critical audit of the agency.

Tax-exempt policies were not being applied consistently. Critical paperwork was missing. Projects were inadequately monitored. A $217,366 payment in lieu of taxes had not been paid. Promises of new jobs had fallen short by 671 positions.

“As a result,” DiNapoli said, “there is limited assurance that Mount Vernon Industrial Development Agency projects have met their performance goals and benefited taxpayers.”

Thomas appointed new board members and chaired his first meeting in May.

On June 17, a public hearing was supposed to be held to discuss one of the mayor’s pet ideas, a ground-floor tax break to stimulate storefront rentals downtown.

Finlayson had not prepared materials for discussion, and the hearing was postponed.

The materials still were not ready for the June 23 meeting.

The board then turned its attention to a request for tax incentives for an industrial laundry. Board member Thomas Rajala had submitted 13 cost-benefit questions to Finlayson.

“I had no time to answer these questions,” she said. “I expected you to sit with me and go through these questions.”

She described the project information as preliminary.

“It ought to be a whole lot more than preliminary, if we already have a resolution in front of us to approve a PILOT (payment in lieu of taxes),” Rajala said.

“There is a performance issue with respect to the IDA that we are looking to address at some point very soon,” Thomas said, citing failures to answer the cost-benefit questions and provide materials on the ground-floor tax proposal.

Finlayson insisted that she had not been asked to provide information on the ground-floor tax break and that she had merely been told to put the issue on the agenda for discussion.

Thomas disagreed.

“That’s a problem,” Rajala said. “Two years ago, the office of the state comptroller came in here and he indicated that a cost-benefit analysis needed to be done for every single project.”

“It’s the applicant’s responsibility,” Finlayson said.

No, Rajala said, it is the IDA’s responsibility.

The board moved on to another application for tax incentives.

Rajala noted that the agency’s financial incentive policy seemed to have expired in April.

“Yes,” said Ronald Grosser, the IDA’s bond counsel. “Your policy was good through the end of last year and kind of rolled over a few projects through the first quarter of this year. But it is expired, and by statute you need to have a policy.”

“It’s good projects like this that get delayed because of work not getting done,” Thomas said.

He adjourned the meeting.

Afterward, Thomas said he was frustrated and embarrassed.

“We have some real good ideas coming forward,” he said, “but we need our staff to do the work so we can present the ideas.”

He said the board will probably start looking for new leadership very soon.

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About the author

Bill Heltzel
Bill Heltzel has covered criminal justice, courts, government and sports – as a beat reporter and investigative reporter – for daily newspapers in Florida, Indiana, Ohio, and Pennsylvania. He worked for Bloomberg LP in training and sales. He joined The Business Journal in 2016.

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