Agency official questions compliance by companies receiving tax breaks

Ulster County Industrial Development Agency officials are seeking ways to verify the number of people that companies are employing after being granted tax breaks.

The issue was raised during a meeting Wednesday and led to a heated debate between two board members over hiring an outside firm to investigate applicants.

“All the projects up to this point, we have no idea whether or not they were in compliance with using labor from Ulster or the contiguous six counties,” board member Richard Jones said. “It’s in the contract that they’re suppose to do it, but my experience with contracts is that you trust but verify, and this is the one item that was not being verified.”

The local labor requirement is included as part of a matrix of qualifications that are weighed by points when considering whether projects should be granted property tax breaks, sales tax exemptions and mortgage tax waivers.

“My research around six companies that gained three points, and in every case these companies, because of these three points, bumped into another category that gave them a higher inducement,” Jones said. “The audit process around that did not review to see whether or not they were in compliance with using labor from Ulster or the contiguous six.”

Jones has sought to have the agency hire consulting firm Loewke Brill for reviews of hiring practices by companies granted Ulster County tax breaks.

“Six people in a hotel that live someplace else. That’s wrong and we need to be able to catch that,” he said.

During a telephone interview Friday, Jones said he did not remember making the comment and did not have evidence that employees were being lodged in temporary accommodations to claim residency falsely.

Board member James Malcolm said there were requirements that could be added to applications for companies to demonstrate where employees reside. However, he contended that Jones had not provided evidence there was wrongdoing by successful applicants.

“You have no idea what you’re talking about,” he said.

Malcolm added that Jones had “far exceeded” his authority as agency Audit Committee chairman by making unsubstantiated accusations. He aid it would be more convincing if “you brought to me proof that ...(particular companies) got the incentive” improperly.

“You can’t implement things or take things out if you can’t prove them,” he said.