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COUNTY
OF LEWIS
INDUSTRIAL DEVELOPMENT AGENCY
MANAGEMENT DISCUSSION AND ANYALYSIS
Years Ended May 31, 2005 and 2004
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INTRODUCTION
The following is the County of Lewis Industrial Development Agency’s
(LCIDA) Management Discussion and Analysis (MD&A) of financial
activities and performance for the fiscal years ended May 31, 2005 and
2004. Information contained in the MD&A has been prepared by
the LCIDA management and should be considered in conjunction with the
financial statement and the notes of the independent auditors’ report
conducted and prepared by Sovie & Bowie, C.P.A. PC.
The notes are essential to a full understanding of the data contained
in the financial statements. The goal is to provide readers an
objective and easily understood overview of the LCIDA’s financial
performance.
OPERATION HIGHLIGHTS
The LCIDA is a self-funded public benefit corporation created to
attract and enhance industrial development, help create jobs and
maintain economic stability within Lewis County. Our secondary
function is to assist other agencies with tourism, natural resources,
retail, wholesale, professional and community enhancements.
This past year the LCIDA has provided financial and technical
assistance to most of the industries in Lewis County. Major
assistance this past year was provided to AMF, Beaverite, Climax,
Farney Lumber Co., HDK, KARD enterprises, Lowville Farmers Co-Op, Marks
Farms, NGP Power, Otis Products and many others. Over the years,
the LCIDA has provided a means of financing for approximately 31 large
projects in the amount of over 250 million dollars.
The LCIDA feels it is important to support the small family business,
which may grow into larger manufacturing companies. This past
year we provided, with our economic partners, over 1000 hours of
business counseling to approximately 125 local citizens. This
resulted in packaging over 25 loans for start-up businesses.
The LCIDA feels it is important to learn more precisely the issues and
concerns of our industries and help address these issues. We have
accomplished this by:
- Over 75 on site visitations
- Sponsor surveys and studies (i.e. LFP&P reuse study)
- Marketing
- Web Site product marketing – The creation of
approximately 500 business
Web Pages. The site is visited by 10’s of thousands of hits from
over
80 Countries.
- Maple Syrup marketing initiative.
- Wood Products marketing initiative.
- LINKINGlewis – An informational e-flash on contract
bidding, success
stories, grant opportunities, and other business information.
- Natural Gas Cost Reduction initiative.
- Organization Participation – Allows the LCIDA to interact
with industry
on a regular basis to even learn more about their issues and to find
solutions. Some of the major organizations are:
- Comprehensive Economic Development Strategy Community
(CEDS)
- Industrial Council
- Empire Zone Board (EZ)
- North Country Alliance (NCA)
- Town and Village Supervisors Meetings
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- Forest Products Association
- Lewis County Maple Producer
The LCIDA is a small quiet agency with a progressive, even aggressive
posture working with their many partners to create “A Positive Economic
Attitude in Lewis County”.
FINANCIAL HIGHLIGHTS
- The assets of the LCIDA exceeded its liabilities at the
most recent fiscal year by $1,778,784 (net assets). This has
decreased from the year prior by $48,604 or 2.66%. This is not
unusual for an IDA in this size county, with only four manufacturing
plants with over 100 employees each. A major revenue project only
occurs every 5-8 years. Projects generate operating revenue for
the Agency.
- During the most recent fiscal year expenses exceed revenues
by $48,604. This compares to last year of revenues exceeding
expenses by $8,661. Again this is due to the nature of the Agency.
- Project operating and Interest Income from investments
revenue is down. In the 2005 year Agency Fees were $2,000 as
compared to 2004 of $41,760. Interest Revenue for 2005 was
$60,119 as compared to 2004 of $66,510, and in 2003 of $88,283.
- Other than PILOT and Economic Development expenses to
operate the Agency were increased by $10,349 or 10.25%. The major
reason for the increase was due to health insurance cost. All
other expenses were virtually unchanged or a very minor line item.
OVERVIEW OF FINANCIAL STATEMENTS
Net Assets serve as an indicator of the LCIDA’s financial
position. Increases or decreases in net assets may indicate over
time, if the financial position of the LCIDA is improving or
deteriorating.
Condensed
Comparative Financial Statements
The following provides an overview of the LCIDA assets, liabilities,
and net assets at the close of fiscal years 2005 & 2004:
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2005
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2004
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ASSETS
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Current & Other Assets
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$1,901,104
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$2,293,537
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Capital Assets
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19,477
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20,212
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Total
Assets
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1,920,581
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2,313,749
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LIABILITIES
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Current Liabilities
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141,797
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486,361
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Long-Term Liabilities
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------------
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----------
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Total
Liabilities
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141,797
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486,361
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NET
ASSETS
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Invested in Capital Assts,
net of related debt
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19,477
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20,212
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Unrestricted
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1,759,307
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1,807,176
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Total
Net Assets
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$1,778,784
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$1,827,388
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Analysis
of Financial Position and Results of Operations
The statement of revenues, expenses, and changes in net assets show how
the LCIDA net assets changed during the most recent year.
Business type activities decreased the LCIDA’s net assets by
$48,604. Key elements of this decrease are as follows:
CHANGES IN NET ASSETS
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As Stated
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Without
PILOT & Ec. Dev.
Activity
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2005
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2004
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2005
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2004
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OPERATING
REVENUES
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Agency Fees
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$2,000
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$41,760
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$2,000
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41,760
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4
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Payment in Lieu of Taxes
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656,006
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99,500
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---------
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---------
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Grant Revenue
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----------
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17,600
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---------
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---------
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Economic Development Revenue
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---------
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850,000
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---------
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---------
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Miscellaneous
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513
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1,278
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513
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1,278
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Total
Revenues
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658,519
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1,510,138
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2,513
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43,038
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OPERATING
EXPENSES
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Payment in Lieu of Taxes
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656,006
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599,500
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---------
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--------
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Economic Development
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--------
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850,000
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---------
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--------
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General Operations
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106,403
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96,134
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106,403
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96,134
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Professional Fees
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3,500
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21,065
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3,500
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3,465
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Depreciation
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1,274
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1,172
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1,274
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1,172
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Property Taxes
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6
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6
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6
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6
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Miscellaneous
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53
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110
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53
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110
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Total
Operating Expenses
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767,242
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1,567,987
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111,236
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100,887
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Operating Income (Loss)
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(108,723)
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(57,849)
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(108,723)
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(57,849)
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NON-OPERATING
REVENUES
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Interest
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60,119
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66,510
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60,119
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66,510
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Net Income (Loss)
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(48,604)
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8,661
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(48,604)
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8,661
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Net
assets at beginning of year
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$1,827,388
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$1,818,727
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$1,827,388
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$1,818,727
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PILOTs and Economic Development Activities were separated out to show
the true cost of operations. Generally, those two items cancel
each other out in revenues and expenses.
Analysis
of Transaction of Individual Funds
The PILOTS are the monies received from the companies in lieu of taxes
and are disbursed to the various taxing jurisdictions.
The monies received from various sources for Economic Development is
paid out under expenses for economic development purposes.
Operating expenses without Economic Development and PILOTs increased by
$10,349 or 10.25%. This increase was largely due to health
insurance cost that was not funded by the County of Lewis.
The grant revenue was received for a study on the abandoned Lyons Falls
Pulp & Paper Plant and was paid out in funding the expenses under
professional fees.
The Agency does not depend on any tax payers dollars to fund this
Agency. This has caused some operational issues.
BUDGET HIGHLIGHTS
Each year the LCIDA board approves an operating expense budget and it
is reviewed each meeting along with financials of the LCIDA Board. This
is an internal operating budget. The management of the LCIDA is
expected to inform the board of possible variances. The following
provides a budgetary financial comparison:
OPERATING EXPENSE BUDGET
SUMMARY
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04-05 Budget
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04-05 Actual (adj.)
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Variance
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05-06 Draft
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General
Operations
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$119,063
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$106,403
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$12,660
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$120,146
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Professional
Fees
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3,600
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3,500
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100
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3,600
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Depreciation
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1,274
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1,274
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0
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1,274
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Property
Taxes
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10
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6
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4
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10
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Miscellaneous
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53
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53
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0
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0
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Sub Total
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124,000
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111,236
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12,764
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125,030
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Large
Equipment
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1,200
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539
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661
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1,200
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Total Operating Expense Budget
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$125,200
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$111,775
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$13,425
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$126,230
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CAPITAL ASSETS & LONG TERM
DEBT ACTIVITY
Capital Assets
The LCIDA investment in capital assets for its business activities as
of May 31, 2005, amounted to $19,477 (net of depreciation). The
LCIDA’s investment in capital assets includes Land, Leasehold
Improvements, Furniture & Fixtures, and Equipment. The amount
invested in capital assets remains virtually the same.
- Land – in the Commercial Park on the #4 Rd.
between Sherwin Williams and the Credit Union.
- Leasehold Improvements - improvements made
to the office LCIDA is renting at 7642 State St.
- Furniture & Fixtures, and Equipment -
assets used for the LCIDA general operations.
A summary of Capital Assets is:
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2005
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2004
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Land
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$16,210
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$16,210
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Leasehold
Improvements
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5,264
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5,264
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Furniture
& Fixtures
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1,236
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5,110
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Equipment
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4,126
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18,017
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26,836
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44,601
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Less Accumulated Depreciation
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(7,359)
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(24,389)
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Net
Capital Assets
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19,477
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20,212
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Long-Term Debt
The Agency has no long-term debt.
ECONOMIC OUTLOOK AND THE LCIDA
The County of Lewis has a very bright outlook for the year to
come. During the 2004-2005 year, several projects have been
started which will enhance the economy for 2005-2006. They are:
- Otis Products – this will add to the much
needed employment picture for the southern part of the County. They
have constructed a new manufacturing facility, which should employ
approximately an additional 50 employees.
- HDK – this is in the northern part of the
County. They are also a growth company, which expects to employ
approximately 50. They are constructing a major sawmill. In
addition to the 50 employees, this expansion will help stabilize the
Wood Products economy with additional loggers, truckers, etc. jobs for
that area
- Wind Mills – approximately 200 windmills are
being constructed. This will add to the economy in jobs, tax
revenue, and income to the landowners.
- Wal-Mart – will create jobs, but in addition
make Lewis County a shopping destination instead of a shopping
exit. This may affect some family businesses adversely, but
others will greatly benefit.
- Many other small businesses are
expanding. If each small business in the County expanded by one
employee, there will be an employment demand. The LCIDA has
assisted many of these small businesses by direct consulting, creating
a Web presence for their small business, and providing information via
LINKINGlewis.
- Existing larger industry, other than above,
appear to remain stable this coming year.
LCIDA Outlook
The 2004-2005 year has been a very active year for the LCIDA. We
partnered with organizations, which can assist us in meeting the many
economic challenges. With the involvement of the LCIDA many
challenges have been and are being addressed.
In the coming year, the LCIDA will continue:
- An aggressive call (visitation) program to
business and industry identifying issues and assistance in finding
solutions.
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- Work on developing ways to lower energy cost
to industry.
- Identify and cultivate leads and prospects
for industrial development.
- Identify and cultivate leads and prospects
for industrial development.
- Assist project owners/developers/prospects
with technical and financial support.
- Work with local governments, when
appropriate, in developing economic development in their areas.
- Work as a catalyst with the various economic
development agencies to develop a systematic approach in attacking
economic issues of a prospective or existing company, municipality, or
the public.
- To assist small “Made in Lewis County”
businesses to stabilize and grow. Assist them in their marketing
efforts via the LCIDA Web Site, information by direct consulting, and
LINKINGlewis.
LCIDA Finances
The LCIDA’s future is very positive. Our operating statements will be
improved by:
- Increased investment interest rates.
- Improving project income. With
new regulations in the Empire Zone Program, this should create more
projects for the LCIDA.
- Other income:
- The implementation of a volunteer monetary
contribution program from the business owners for creating and
maintaining business Web pages.
- We are offering advertising space on the Web Site.
The Agency expects to remain strong to be able to assist in the
County’s economic development.
CONTACT THE LCIDA FINANCIAL
MANAGEMENT
This financial report is designed to provide the public with a general
overview of the LCIDA finances and to show the LCIDA accountability for
the money it manages. If you have any questions concerning any
information provided in this report or need additional financial
information contact:
Ned E. Cole, Executive Director
County of Lewis Industrial
Development Agency
7642 N. State St., PO Box 106
Lowville, NY 13367
Phone: (315) 376-3014
Email: lcida@lcida.org
Web Address: www.lcida.org
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