The Saratoga County Prosperity Partnership (SCPP) has had a checkered history and now finds itself in financial trouble.
Prior to the creation of the SCPP, the Saratoga Economic Development Corporation (SEDC) had been set up by the Saratoga County Board of Supervisors to attract businesses to the county and create jobs. Supervisor John Lawler (Waterford) had tried to require the SEDC to add members of the Saratoga County Board of Supervisors to their board. SEDC declined to accept the appointments presumably because they didn’t want to become politicized and get sucked into the minefield that is the Saratoga County Board of Supervisors. Lawler and the usual suspects then created the SCPP and funded it using moneys from the county’s bed tax (a tax levied on hotels/motels).
Things did not go well with SCPP which produced very little in the way of economic development. There was a kind of shotgun marriage between SCPP and SEDC which has been rocky. That sordid story will be left for another time.
Our story is about the debacle in the SCPP funding this year.
The bed tax in Saratoga County has historically produced about $900,000.00 yearly in revenue for the county. The county designated half of that money to annually fund SCPP.
The problem is that COVID has devastated the hospitality industry and the income from the bed tax has plummeted this year
So now we are coming to the end of 2020. Based on the usual $900,000 income the county has paid SCPP $375,000.00 so far with the final payment to be provided in January for another $125,000.00. The problem is that the income from the bed tax is down 67% so SCPP will have spent approximately $300,00.00 more than the actual revenue that has been generated by the bed tax to fund them this year.
So, one might ask, how is it that no one noticed that this was a developing funding problem until this, the final month of 2020? Was no one in the county administration monitoring this? Did the SCPP alert anyone that there was a looming problem? Apparently not.
As if this were not bad enough, next year’s budget crafted by County Administrator Spencer Hellwig continues the magical thinking by projecting another $900,000.00 from the bed tax for next year to fund SCPP.
The minutes from the November 16, 2020 “2021 Budget Workshop” are instructive. Supervisor Phil Barret (Clifton Park) questions County Administrator Spencer Hellwig how the anticipated bed tax figure in the budget for 2021 was arrived at. Hellwig’s utter indifference to the fact that the number he submitted to the Board bore no relationship to reality is shameless.
He [Phil Barret] asked where that number was for next year. Mr. Hellwig said the number is $900,000. Mr. Barrett said it appears for 2020 bed tax is going to be down 67% that’s the estimate from the Treasurer. What was it before Covid, $1.1M?
Mr. Hellwig said the budget was $1.1M.
Mr. Barrett said that was pre-Covid. He said a 67% drop is a significant amount of money. We heard from the Chamber at the Economic Development meeting this month that first quarter will be very difficult with the loss of conventions, weddings and going into the winter which is always the worst quarter of the year anyway. He said the 2021 projection is rather rosy to say the least. Based on everything we have heard he doesn’t know how we would think we would receive $900,000 or anywhere near that. He asked Mr. Hellwig if he was sticking to that projection.
Mr. Hellwig said he put the tentative budget together and this Board makes the final decision. If there is a feeling that it is rosy or that number should be changed, that’s up to this Board to decide.
Mr. Barrett said he thinks there should be a realistic number and a transparent process. If the Board decides to spend $900,000 in the budget which would be all of his [Spencer Hellwig] estimate, he thinks there needs to be a realistic bed tax estimate. Then be honest everything over that amount is Fund Balance [JK: in simple terms the money tucked away in savings.] It’s not going to be bed tax, it will be fund balance if indeed we do indeed decide to spend over a certain amount.Budget Work Shop Minutes
Supervisor Theodore Kusnierz (Moreau) then pressed Hellwig about the overspending this year. How was it that the county issued a contract for more than the moneys that were approved?
We have heard that the projected bed tax for 2020 is going to be down about 67% and by his calculations that is about $300,000 and the County provided $500,000. He said someone exceeded their authority, he believes. He wants to know how we got to something that was legislatively approved by this body to being more than what we approved. He doesn’t understand this.
Mr. Hellwig said he doesn’t know what else to say. The contract authorized the payments. The payments were made in accordance with the contract.
Mr. Kusnierz said he understands the payments were made in accordance with the contract. The contract doesn’t mirror what the Board approved.Minutes of 2021 Budget Workshop
Hellwig again simply shrugs off the fact that the contract authorized money that the county tax would not cover.
Supervisor Lawler (one of the usual suspects) appears to be unconcerned that the horse has left the proverbial barn and that the SSPC does not have the money to pay back the county:
There is no way to know what the bed tax will total before the year is over. We have a very unusual year here due to the circumstances. He said what he believes the Administrator did was to follow past practice, to advance funds of $125,000 quarterly, no money has been advanced this quarter as Supervisor Kusnierz has stated it does not appear the sales tax is going to be sufficient to cover the allocations already made.Minutes of 2021 Workshop
Granted there is no way of knowing precisely how much bed tax will come in by the end of the year, but it begs credibility that in March when the shutdowns in New York began, that the county and SCPP were unaware that they were facing a potential shortfall.
The Saratoga Springs Supervisors
I have written to the Saratoga Springs Supervisors, Matt Veitch and Tara Gaston, asking them to address this mess:
“I am writing both of you regarding recent developments that raise serious concerns over the county’s management:
It is my understanding that the Prosperity Partnership was to be funded from the income collected from the County’s bed tax in 2020. This year the County had anticipated paying the Partnership $450,000. It appears now that as a result of the pandemic that is approximately $300,000 more than the bed tax is producing. To cover this deficit the Partnership potentially will not receive a fourth quarter payment from the County and be required to reimburse the County for the balance due. Not surprisingly the Partnership is now hoping the County will cover this deficit.
In light of the scale of the loss, my question is why wasn’t this problem brought up months ago? Was this a failure by the County administration to monitor the declining revenue? What responsibility did Prosperity Partnership have in this matter? They had to be aware of the precipitous decline in the bed tax moneys. Did they contact the County about the crisis or did they simply keep spending the money knowing the source of their funding was falling short?
As the taxpayers are being asked to bail out the Prosperity Partnership, we deserve to know how all of this happened.
According to two news reports on WNYT there have been serious problems in Saratoga County regarding the effective contact tracing of infected COVID-19 persons. Their stories documented that a number of people infected with COVID including a nurse and a WNYT reporter were never contacted for tracing even thought the County had been made aware of their infection.
WNYT reported that the standard model for determining how many contact tracers are needed is thirty per one hundred thousand. As the most recent numbers I have been able to find for the Saratoga County population is 229,863, we should have sixty-nine tracers. According to the Daily Gazette as of last week the County had only twenty-three.
I have also been told that the County budgeted for fifty. If this number is correct and in light of the many warnings of a spike in infections coming after Thanksgiving, why did the County wait until December 2, 2020 to post these jobs?
As COVID-19 is a deadly disease, the failure to properly trace is not some bureaucratic, technical oversight but represents the potential death of people in our county. People in Saratoga Springs deserve to know how this apparent failure occurred. Who was responsible for determining when and how many people to hire as tracers and why did they fail to act in a timely manner? How many tracers is the county planning to hire and what is the plan and timing for making them operational?
As advocates for our city, I hope you will pursue these issues at the budget meeting this coming week and then respond to this email.