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ABO report on GCEDC neither fair nor accurate, officials say

By Howard B. Owens

A state report critical of compensation practices of the Genesee Economic Development Center is neither fair nor accurate, county and agency officials are saying today.

"We've done nothing wrong," said Jim Vincent, vice chairman of the GCEDC board of directors. "Nobody likes to be criticized, but we stand by what we've done. We are being criticized for our success."

The Authorities Budget Office report strongly condemns how more than $344,000 in bonuses have been awarded to GCEDC staff since 2005 and also expresses concerns about the $153,000 annual base salary paid to Director Steve Hyde. (Read: Previous Story)

Vincent said everything the GCEDC has done was cleared by an attorney and performed in accordance with state law.

"This is a difference of opinion," Vincent said. "They (the ABO) thinks we did it the wrong way. We think we did it the right way. We truly feel we have a dynamic organization.

"We've done everything legally, properly and transparently, and we continue to produce results."

While referring most questions to Vincent, the director said everything about compensation is a board decision and Vincent should speak for the board. Hyde was also critical of the ABO report.

"The report is using only half-truths in a lot of ways and disregarded a lot of the facts and information we provided them," Hyde said. "But that's the regulatory environment we live in."

Hyde said the ABO disregarded performance models provided by GCEDC and a compensation survey that showed his salary was right in line with 26 other similar IDA's across the nation.

The GCEDC claims it has generated $409 million in capital improvements for Genesee County businesses (full list, PDF).

In a memo released by the GCEDC late this afternoon, GCEDC attorney Robert J. Ryan said the ADO's report is wrong in stating the board didn't have the authority to set compensation as it sees fit and issue bonuses according to its own guidelines.

Ryan:

... the ABO Report concludes that the Agency does not have the legal authority to pay incentives or additional compensation. This is the opinion of the ABO and not based in law. The General Municipal Law explicitly provides the Agency the ability to establish and pay compensation out of Agency funds. We are unaware of and the ABO has not provided any legal authority that would prohibit the Agency’s compensation package being based upon salary and a performance incentive.

ABO Director David Kidera said his agency was really trying to get across two points in its report:

  • First, that the GCEDC is really dealing in public funds, "even if they don't see it that way," and the kind of profit-sharing plan the board has been using isn't appropriate or legal.
  • Second, that while the GCEDC board says it has followed procedure and been transparent in its compensation practices, the board can't really produce any documentation to support its claims.

Because the bonus payments were not appropriate, Kidera said, the report recommends that the payments be "recovered."

That means, he said today, the board should ask employees to return the $344,000 in bonus payments they've received since 2005.

He implied he realizes that isn't necessarily a realistic expectation.

"I think we're required to say that because these bonuses were paid inappropriately, that because in the absence of any proper procedures for paying bonuses -- and these are taxpayer funds -- the board should seek to rectify that," Kidera said.

"Is that going to happen? I don't know. I realize we're talking about employees here and this might not happen in the private sector, but we would be remiss in our responsibilities if we just said, 'it's wrong,' and then let it go."

Kidera acknowledged that the ABO has no real authority to enforce its recommendations. It's up to the GCEDC board, he said, whether to implement its recommendations, or up to the legislature to replace the board if it doesn't like the board's response to the recommendations.

Otherwise the only thing the ABO can do is issue a follow-up report on the board and county's response to the initial report.

He did say a copy of the report was sent to District Attorney Lawrence Friedman with the idea that the DA's office could investigate any potential legal wrongdoing.

Friedman said that he's received the report but that it's really too soon to say if any sort of legal proceedings would follow.

Mary Pat Hancock, chairwoman of the Genesee County Legislature, said it is not the legislature's role to act in an oversight capacity of the GCEDC. She said the procedures put in place creating IDAs, put the IDAs at arm's-length from county legislatures. The legislature doesn't approve the budget or operations of the GCEDC. 

While GCEDC board members are appointed by the Genesee County Legislature, the time for dealing with issues related to any appointee are when it's time to renew a term or make new appointments.

The county just finished a budget process that required sacrifice from several departments and nearly led to the elimination of the county's nationally recognized, pioneering restorative justice program, Genesee Justice. In order to save the program, the agency's director, Ed Minardo, volunteered to resign.

Hancock said the county's share of funding for GCEDC was cut by 15 percent, reducing it to about $266,000, and Hancock said that is money well spent.

"It has been demonstrated that the magnification of each dollar we put into GCEDC, because of their success in attracting business, we've found that contribution has come back to us many times over," Hancock said.

Legislator Hollis Upson, who is also a member of the GCEDC board of directors, also defended the agency as an important engine of economic growth in Genesee County.

"Arguably, Steve Hyde brings something of value to Genesee County," Upson said. "The compensation and bonuses came strictly from performance and results. (Staff) compensation came out of generated income"

Pointing to a previous post on The Batavian listing the salaries of the top 25 public officials in Genesee County, Upson noted 20 of the top 25 were education executives.

"The superintendents and officials at BOCES work a lot fewer hours, I would suggest, and they don't generate income," Upson said. "We are helping them (school officials) by generating a tax base.

"So while the perception would be that (Hyde makes a lot more money than other officials in the county), someone who would look at it from only that standpoint, well there's a lot more to it."

Dave Olsen

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Jan 20, 2011, 5:05pm Permalink
Chris Charvella

"The superintendents and officials at BOCES work a lot fewer hours, I would suggest, and they don't generate income," Upson said.

No, Hollis, they don't generate income, they generate educated children.

...and where to begin with the rest of those squirming, self-serving comments?

The reality of the ABO report is simple: The GCEDC has been operating using whatever methods they felt like using for years. They pretend that they are a private institution and make up their own rules while ignoring the fact that they are a PUBLIC institution with rules already set in place.

The legislature appoints board members but refuses to take responsibility when those board members act in direct opposition to the rules.

Any attempt to shirk oversight responsibility is a cop-out, a brutal indicator of the weak willed, weak-minded manner in which we are governed.

Jan 20, 2011, 4:55pm Permalink
Chris Charvella

By the way, Steve Hyde rises right to the top of that list when you include his $10,800/ year car allowance, his country club membership, his life insurance policy and whatever the hell his 'deferred compensation plan' is.

For what? 50 jobs over three years? Empty shell 'developments'? That shiny new office he built himself in the Med-Tech Center?

Get real people.

Jan 20, 2011, 5:03pm Permalink
Dave Olsen

A. "Arguably, Steve Hyde brings something of value to Genesee County," Upson said." From the Free Dictionary:

ar·gu·a·ble (ärgy--bl)
adj.
1. Open to argument: an arguable question, still unresolved.

B."Upson noted 20 of the top 25 were education executives."

It's safe to say that a lot of us peon commoners think they're overpaid as well.

Jan 20, 2011, 5:21pm Permalink
Mark Potwora

Chris are you serious he gets a country club membership and 900 a month for a car..that is crazy.. and Mr.Upson and Ms.Hancock think that is normal to receive that type of pay for a measly 50 jobs created in 3 years..It should be investigated by the new york atty general not Mr.Friedman..This sound like what happened in that small town in Califonia this past summer ..Were they all paid them selfs huge salary's ..
Hancock said the county's share of funding for GCEDC was cut by 15 percent, reducing it to about $266,000, and Hancock said that is money well spent.On what a country club membership..What country club is it...

Jan 20, 2011, 6:01pm Permalink
Laurie Nanni

Mr Upson refers to the previous report of the salaries of the Top 25 Public Official of Genesee County noting that 20 of the 25 were education executives.......... Mr Upson we are not talking about THAT article we are talking about the article regarding the ABO report that says

CEO/PRESIDENT $153,000.00
GENESEE CO DIST. ATTORNEY $118,187.00
V. PRES. FOR FINANCE & OPERATIONS,
GCC $110,430.00
COUNTY ATTORNEY $100,275.00
COUNTY MANAGER $99,712.00
MEDICAL DIRECTOR, GEN. CO NURSING
HOME $99,604.00
SENIOR ASSISTANT DISTRICT ATTORNEY $91,629.00

There are not 20 educators in this report!

If you want to be a PRIVATE organization fine. THEN RAISE PRIVATE FUNDING! Stop using public money.

Jan 20, 2011, 6:02pm Permalink
Howard B. Owens

Laurie, Hollis was specifically referring to our previous post on top 25 salaries and not at all referring to the list in the report. Most definitely.

Jan 20, 2011, 6:24pm Permalink
Laurie Nanni

Yes Howard I understand that. I was trying to clarify the report as I think HE is trying to CONFUSE readers. My fear is not everyone read the whole report from the ABO link in your article! Regardless, if they "can do what they want because they are PRIVATE" they can stop using OUR money. Many people in Genesee County have not had a RAISE let alone a BONUS!

Jan 20, 2011, 10:19pm Permalink
Michele Sformo

One side says one thing, the other side says another, who are the common taxpayers supposed to believe? I just hope this is not swept under the carpet but is really looked at because as a Town of Pembroke resident, I do not want MY tax dollars wasted!

Jan 21, 2011, 8:07am Permalink
Bea McManis

I would like to know how the board of directors were named to their posts and what qualifications were needed to work at IDA.
If a membership to a country club of choice was a perk, was there a qualification that the executive director have a good handicap?
The salary and bonus' received by these people should have a return for the investment made by the taxpayers. It shouldn't be a cash cow to line the pockets of cronies.
Do we need an executive director with a proven track record of recruiting and bringing in GOOD PAYING jobs to our area? Yes, we do.
The return on our investment, so far, is dismal.
Using our tax money to pay bonus packages that are more than the average income in this area may sit well with those who will support the "good ol' boys" no matter what. It is that support that keeps the status quo in Genesee Co.

Jan 21, 2011, 8:30am Permalink
Peter O'Brien

No what keeps the status quo going in Genesse county is the people who have lived here forever and don't listen when good new ideas come around.

Jan 21, 2011, 8:32am Permalink
Timothy Scheuerlein

Being that we live in a capitalistic society I believe that every person should be able to earn what their profession pays. We look at Steve Hyde’s wage and are amazed at the amount that he makes but that probably could be said about every person down the line of the wage scale from the kid serving burgers at a fast food place looking at a person who makes $ 40,000 a year. What I have a problem with are the fringe benefits a person in Mr. Hyde’s income bracket inevitably always gets a person who makes a six figure salary can certainly afford a country club membership or their own car payment and if they can’t seem to swing it financially then by all means go back to your employer or Board members and ask for a raise or simply do what the rest of us do and play a public course and drive a more economical vehicle.

Jan 21, 2011, 9:14am Permalink
Marie Smith

I agree Timothy, with a salary of $153,000 you would think that Mr. Hyde could afford his own car payment and country club membership. My question is, people say that Mr. Hyde is bringing in "Millions" of dollars to Genesee County.....can you show me where, and how? I don't see thousands or hundreds of new jobs within the last few years. And why exactly did Mr. Hyde present a survey of salaries from IDA's accross the Nation, shouldn't we be looking at our neighboring Counties, he is making more than the Erie County IDA President and correct me if I am wrong Genesee County has a "slightly" smaller population than erie county. I guess I don't understand the justification for this salary and the absolutely ubsurd fringe benefits. I am sure there are more that we don't even know about!!

Jan 21, 2011, 9:45am Permalink
Bea McManis

I would imagine that the membership to the country club was tied to the wining and dining he would do to entice companies to come to Genesee Co.
Our golf courses are covered in snow for four or five months, ergo, useless in having a friendly game while extoling the virtues of this area.
There are many places to take visitors, and impress them with our culinary offerings, other than the country club.

Jan 21, 2011, 10:22am Permalink
Bob Harker

Two of the many "what's wrong with this picture" observations:

1.) According to Ms. Hancock, the legislature interviews and appoints members to the GCEDC. After being appointed, those folks have free reign over spending our tax dollars - including salary and bonuses - with no oversight by our "representatives". That's just awesome.

2.) Since nobody will admit to being responsible for overseeing how OUR money is spent, GCEDC members award their "boss" a bonus equivalent to 40% of his already outta the park salary. Said boss says his salary in line with 26 other IDA's in the country. Which ones? I'm willing to bet they are all in over taxed states that are as broke as NY.

All members of GCEDC, should do the right thing and resign immediately. I am hoping Friedman does his homework and appropriate charges are brought.

I'd like to give out a special "atta boy" to the head of the legislature. Nice attempt at CYA, but please tell us exactly who is responsible for for holding YOUR appointees accountable? How often are they required to apply for reappointment? There are no policies in effect for corrective action in the meantime?

Jan 21, 2011, 10:49am Permalink
Howard B. Owens

Marie, not that I'm per se endorsing the idea (I'm not taking a position at all) -- just to clarify, I believe Mr. Vincent's position is that it is unfair to compare salaries with the surrounding IDAs because they are not as "dynamic" (his word) as GCEDC. They don't get as much done, so the comparison was with 26 "dynamic" IDAs.

Jan 21, 2011, 10:50am Permalink
bud prevost

If Genesee County is one of the top 27 most dynamic areas in the nation, we're screwed as a republic. JMO, what they did was wrong, but probably not illegal. Shame on the party responsible for policing this authority.

Jan 21, 2011, 11:17am Permalink
Bea McManis

Wouldn't Hollis, as the legislator's representative on this board be responsible for watching how our tax money was spent?
Are the members of the "good Old boy" club saying that he wasn't doing his job?
As an afterthought.....
The current legislators will run again and will be voted in again because they carry the credentials required in Genesee County.
None of this will make a difference to the voters.
Sad, isn't it?

Jan 21, 2011, 11:44am Permalink
John Roach

Chris,
You would have won the bet. Mr. Andrews, the CPA and President of the Board of Directors, did not address the issue. Mr. Vincent, the #2, did.

Jan 21, 2011, 3:00pm Permalink

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