Alesi Legislation To Bring Local Development Corporations Into The Sunshine

James S. Alesi

March 19, 2008

Senator Jim Alesi (R- Perinton) today announced that he has introduced legislation (S.7186) which would extend the application of the accountability standards, open meetings law and freedom of information (FOIL) requirements to Local Development Corporations (LDC's) so that there is full and public disclosure of LDC activities.

"Local Development Corporations enable counties, cities, towns and villages to play a vital role in economic development," said Senator Alesi, Chairman of the Senate Committee on Commerce, Economic Development and Small Business. "These LDCs allow local governments to assist businesses with specific types of loans and grants, play a more flexible role in public-private partnerships, and even structure arrangements to purchase and develop real estate. Under the current public authorities law, it is not clear if LDCs are required to comply with the open meetings law and freedom of information requirements. This legislation clarifies the law and prevents LDCs from operating under a veil of secrecy."

Currently, LDCs have unique powers in statute that allow them to receive public property from local governments while avoiding any competitive process for awarding contracts, as LDCs do not have to comply with public procurement laws. LDCs are also free to award contracts at will, which potentially allows local government officials (who often appoint LDC board members) to reward friends and political allies with these lucrative contracts. Thus, left unchecked, these powers are open for potential abuse.

The sunshine requirements pertaining to LDCs are currently inadequate. Due to ambiguity in drafting the law, the wording has been interpreted to mean that LDC's do not have to comply with the open meetings law and freedom of information requests. The incomplete language of the public authorities law as it relates to the accountability standards for local authorities, warrants action.

Full and public disclosure of LDC activities would prohibit government officials from abusing powers associated with Local Development Corporations. Because LDCs are directly involved in the acquisition of public property, a greater level of transparency must exist in order to keep the public informed on the actions of their local government and government created LDCs.

Said Senator Alesi, "This legislation must be enacted so that both LDCs and local governments are held responsible for their decisions and actions surrounding local development projects."