Resignations from Canton Capital Resource Corporation board raises concerns for council
By ADAM ATKINSON
CANTON -- Recent resignations from the Canton Capital Resource Corporation board of directors have prompted questions from Canton’s town board.
The group normally would have five members on its board of directors, however, recent resignations have left just one remaining member. Town board members at their recent reorganizational meeting on Jan. 3 expressed concern over the board and supervisor’s role in appointing members to that corporate board and what responsibilities the town may or may not have regarding the corporation’s endeavors.According to an audit of the CCRC done in March 2017 by Larry C. Reece, CPA, P.C. of Potsdam, found on the Canton town website, the corporation made payments of $90,000 in 2010 and $70,000 in 2016 to the Town of Canton associated with the corporation’s bonding endeavors.
Town board members were concerned with what liability the municipality may be responsible for in connection with the corporation and the payments the town has received.
The board plans to meet with attorney Roger Linden Jan. 23 to discuss the town’s obligation, responsibility and possible liability regarding the corporation.
The corporation is a not-for-profit, tax-exempt organization incorporated on May 5, 2010 as a Type C Corporation to pursue economic development bond and loan activities. The primary endeavor of the CCRC is to provide bonds to help with the construction of the $30 million dormitory complex at SUNY Canton. The CCRC received its federal tax-exempt status from the federal government's Department of the Treasury on August 8, 2012. Linden is the attorney who initially set up the structure of the CCRC.
At the reorganization meeting on Jan. 3 town attorney Charles Nash said the town is not liable for the bonds obtained for the dormitory construction, but he was unsure what happens if the bonds were not paid for some reason.
“But we are not on the hook for anything,” said Nash.
Town board member Bob Washo said the board didn’t really know much about the corporation and its set up.
“And it’s not because we haven’t asked questions,” added town board member Phil LaMarche.
Washo said he was concerned with the two cash windfalls the town has received from the arrangement with the corporation.
“Was it accepted in the proper manner? Was it applied in a proper manner?” said Washo.
Newly elected town supervisor Mary Ann Ashley expressed concern over the three recent resignations. “We just want to cover ourselves legally,” Ashley said.
“I don’t think we as the town have any liability,” said Nash.
The recent resignations of David Button, vice chairman; Edward Fay, secretary; and Shelia Harrington, treasurer; and of chairman Thomas Coakley several months ago, have left Paul Backus as the sole member of the CCRC board. Button is the former town supervisor who lost his election bid in November 2017 to Ashley. Backus was a long-time town board member who also lost his November election bid to Tim Danehy.
According to the audit, the corporation’s sole member is the Town of Canton and its revenues are primarily derived from fees for issuing bonds. The only revenue of the Corporation occurred in 2010 from the issuance of housing bonds, the proceeds of which went exclusively to Grasse River, LLC, the audit said.
An earlier audit of the corporation also found on the town website, explains further.
“Grasse River, LLC is a New York limited liability company, whose sole member is the Canton College Foundation, Inc., a not-for-profit corporation organized under the laws of the State of New York. Bond proceeds were to be used for the purchase of land, construction thereon, and acquisition and installation therein and thereon of certain machinery and equipment for a suite style student housing complex. The complex would contain approximately 83 student suites for a total of 304 rental housing units, all of which would serve the needs of the students of the State University of New York at Canton. Grasse River, LLC would own the complex and the State University of New York at Canton would be the operator. The Corporation served only as a conduit for the issuance of the bonds,” the audit said.
In December of 2016, the CCRC had net assets of $28,103 at the close of the year, the 2017 audit says. The audit indicates they had received support and revenues of $100,000, which covered total operating expenses of $71,897, of which $1,897 was considered management and general.
The corporation’s 2018 budget (also found on the Canton town website) accounts for $2,200 in expenditures, which is $2,000 for accounting fees and $200 for postage. The corporation proposes using $2,200 of unexpended fund balance to cover the expenditures.