AIDA to reduce support to BNE
Skipped a payment due to reduced revenue
Published: November 21, 2009, 12:30 am
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The Amherst Industrial Development Agency plans to resume offering financial support to the Buffalo Niagara Enterprise business development and marketing group after belt-tightening caused it to skip its budgeted payment to the organization this year.
The IDA, which expects to finish this year with a deficit of more than $300,000 because the recession has dried up its pipeline of projects seeking tax breaks, will lose its seat on the BNE’s board of directors by reducing its contribution to the organization.
But IDA officials, while supporting the BNE’s work in trying to lure businesses to the Buffalo Niagara region, said Friday that the IDA needs to reduce its spending at a time when its revenue stream is under pressure.
Until this year, the IDA had paid the BNE $50,000 a year since the group was launched a decade ago. Contributors who pay at least $50,000 to the BNE are entitled to a seat on the organization’s board.
The IDA had included that $50,000 contribution to the BNE in this year’s budget. But the IDA skipped the payment because its administrative fees dropped sharply as the number of projects using the agency’s services fell to seven, less than half the 16 projects that it handles in a typical year.
As a result, the agency’s revenues, expected to be about $350,000 in 2009, are less than half the nearly $900,000 officials had budgeted.
“We just can’t,” said James J. Allen, the IDA’s executive director. “We don’t have the money to continue at this pace.”
Instead, the IDA is including a $20,000 payment to the BNE in its $900,000 budget for next year.
“We believe it’s important to get back in the game as an investor,” said
Fredrick A. Vilonen, the IDA’s chairman.
IDA officials had indicated in September that they were considering a cut in the agency’s funding to the BNE, but they did not disclose until Friday that the IDA had skipped the $50,000 payment that had been budgeted for the BNE’s fiscal year that ended in June. The $20,000 payment will be for the BNE’s current fiscal year, which began in July.
The reduced contribution will bring the Amherst IDA’s payments to the BNE more in line with what other similarly-sized IDAs are making, Allen said.
Paul Pfeiffer, a BNE spokesman, said the organization understands the financial pressures the Amherst IDA is feeling.
“The economy is having some ripple effects on agencies that need to generate fees to support their budgets,” he said. “We’re glad they see the benefits of continuing to invest in us going forward.”
drobinson@buffnews.com
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