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HomeMy WebLinkAboutMN-IURAGOV-2022-04-25 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 MEETING MINUTES ITHACA URBAN RENEWAL AGENCY GOVERNANCE COMMITTEE (GC) 9:30 A.M., Monday, April 25, 2022 Present: Eric Rosario, Chairperson; Kathy Schlather, Vice-Chairperson; Susan Cummings; David Whitmore Excused: None Vacancy: 1 Staff: Nels Bohn; Charles Pyott Guests: None I. Call to Order Chairperson Rosario called the meeting to order at 9:33 A.M. II. Agenda Additions/Deletions None. III. Verbal/Written Public Comments Rosario remarked that Bohn circulated comments from Todd and Deirdre Kurzweil (Sunny Days), who requested they be distributed to the Committee and IURA Board. The Kurzweils are inquiring about a 10/27/20 Planning and Development Board resolution, which incorporated Ithaca College’s Physician Assistant Studies Program into the 215 E. State St. development project. Bohn noted the comments also included an excerpt of a resolution, which he has not yet been able to obtain, but will forward to the Committee when he has it. The substance of the comments relate to the Kurzweils’ ongoing concerns regarding negative construction-related impacts on their business. Rosario added the Kurzweils indicated City Deputy Director for Economic Development Tom Knipe is in the process of drafting a response. IV. Review of Meeting Minutes: January 21, 2021 Schlather moved, seconded by Whitmore to approve the meeting minutes, with no modifications. Carried Unanimously: 4-0 Approved: 10/25/22 IURA GC Meeting Minutes April 25, 2022 Page 2 of 9 2 V. New Business A. 2021 Financial Audit Report Rosario explained that the Financial Audit Report did not identify any significant findings of any kind, including the following statement: “In connection with our audit, nothing came to our attention that caused us to believe the Agency failed to comply with the Agency’s Investment Guidelines, the New York State Comptroller’s Investment Guidelines, or §2925 (3) (f) of the New York State Public Authorities Law (collectively, Investment Guidelines).” The report did cite that “reliance on the HUD Entitlement Grant program for core funding remains a budgetary concern for the Agency.” Bohn added the report identified rising inflation as a concern: “The recent 8%+ annual inflation rate poses a challenge for future IURA budgeting, as IURA funding sources have not generally increased by 8% annually. Federal budgeting for the HUD Entitlement Program does not necessarily factor in CPI increases. If the inflation rate is not mitigated, the Agency will likely face expenses increasing at a rate faster than revenues.” Whitmore moved, seconded by Cummings: Approval of 2021 IURA Financial Audit Report WHEREAS, the Ithaca Urban Renewal Agency (IURA) derives the majority of its finances from grants awarded to the City of Ithaca, and WHEREAS, for financial reporting purposes, the IURA is a blended component unit of the City of Ithaca whose financial activity is reported in the Special Grant Fund, a governmental fund of the City of Ithaca financial statements, and WHEREAS, the IURA contracts separately from the City to have its finances audited within 90 days of the end of its Fiscal Year to comply with the Public Authorities Accountability Act, and WHEREAS, the IURA received an audited 2021 draft IURA financial report in March 2022, and WHEREAS, at its April 15, 2022 meeting, the IURA Governance Committee reviewed the financial report and attached correspondence; now, therefore, be it RESOLVED, the IURA hereby approves the Financial Report of the Ithaca Urban Renewal Agency for the period January 1, 2021 through December 31, 2021, prepared by the accounting firm of Insero & Company, LLP. Carried Unanimously: 4-0 B. 2021 NYS Public Authorities Accountability Act Report Bohn noted towards the back of the agenda packet are some supporting materials referred to in the report. The IURA actually did not meet the March 31st deadline, since the 2021 Financial Audit Report was not received from the auditors until the next day. The report includes a “Real Property Acquisition/Disposal List” section, which lists the IURA’s Green Street Garage Project transactions. IURA GC Meeting Minutes April 25, 2022 Page 3 of 9 3 Schlather moved, seconded by Cummings: Approval of Reports Submitted to NYS Authorities Budget Office WHEREAS, pursuant to the Public Authorities Accountability Act (PAAA), as amended, the IURA is required on an annual basis to submit reports to the New York State Authorities Budget Office (ABO), and WHEREAS, the IURA Director of Community Development is designated to certify accuracy of the reporting, and WHEREAS, the reporting is due to be submitted within 90 days of the end of the fiscal year, and WHEREAS, it is appropriate that IURA members exercise oversight over the staff reporting to the ABO, and WHEREAS, at its meeting of April 15, 2022, the IURA Governance Committee reviewed the reporting and recommends the following action; now, therefore, be it RESOLVED, that the IURA hereby approves FY2021 IURA public authority reports submitted to the New York State Authorities Budget Office, including the following: • Budget report • Annual report • Procurement report • Investment report • Certified financial audit report Carried Unanimously: 4-0 C. Policy to Prohibit Personal Loans to Members & Staff Bohn explained one of the questions in the Public Authorities Accountability Act Report asks about personal loans to Board members and staff, so he drafted the proposed resolution to formally adopt a policy prohibiting the extension of credit to Board members and staff. Whitmore moved, seconded by Schlather: IURA Policy — Prohibit Extension of Credit to Board Members & Staff WHEREAS, section 2824 of Public Authorities Law establishes roles and responsibilities of Board members of public authorities, and WHEREAS, paragraph 5 of section 2824 prohibits local authorities from extending personal loans to any officer, board member or employee of an authority, and IURA GC Meeting Minutes April 25, 2022 Page 4 of 9 4 WHEREAS, the Ithaca Urban Renewal Agency (IURA) is a local public authority, and WHEREAS, the annual public authorities reporting questionnaire completed by the IURA asks if the authority has established a policy prohibiting the extension of credit to board members and staff in accordance with Section 2824 (5) of public authority law, and WHEREAS, the IURA has never extended credit to any board member or staff but has not established a specific policy in accordance with Section 2824 (5), and WHEREAS, at its April 15, 2022 meeting, the IURA Governance Committee discussed this matter and recommended the following action; now, therefore be it RESOLVED, that the IURA hereby adopts as policy that the IURA hereby prohibits extending credit, in the form of a personal loan to or for any officer, Board member, or employee of the IURA. Carried Unanimously: 4-0 D. 1st Amendment to 2022 Budget Rosario explained that the IURA is planning to incur some additional unexpected expenses, which need to be reflected in an amended 2022 budget. Bohn added the unanticipated expenses include purchasing a replacement of a 13-year old desktop computer, as well as several other one-time IT-related expenses. In 2021, the IURA did not incur any hardware expenses under the “Equipment/Furniture/Software” line-item. The anticipated extra revenue from the sale of 239 and 240 Cherry Street would more than off-set the $3,300 in expenses. Cummings asked to what extent the acquisition of security services and software is coordinated or managed by the City’s IT department. Bohn replied the IURA relies entirely on the City’s IT network for security, firewalls, daily back-up services, and software maintenance. Rosario remarked the City must maintain a schedule for replacing IT equipment. He wondered if the IURA actively works with the IT department on the IURA’s own replacement schedule. Bohn replied the IT department does track the replacement schedule, which is how it identified the IURA’s desktop needed to be replaced. Public Authorities Law PBA §2824 (5). Notwithstanding any provision of any general, special or local law, municipal charter or ordinance to the contrary, no board of a state or local authority shall, directly or indirectly, including through any subsidiary, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any officer, board member or employee (or equivalent thereof) of the authority. IURA GC Meeting Minutes April 25, 2022 Page 5 of 9 5 Schlather moved, seconded by Cummings: 1st Amendment to 2022 IURA Budget WHEREAS, the 2022 adopted IURA budget provided $1,600 for expenses included in the equipment/furniture/software budget line, and WHEREAS, in February 2022, the City instituted a heightened security protocol requiring installation of security software on all hardware, which raised compatibility issues for older hardware, and WHEREAS, due to normal obsolescence and required upgrades to install new City security software, the IURA requires replacement of two laptops, a desktop, and a printer to replace that will exceed the budgeted amount for equipment and software, and WHEREAS, the following expenses are projected in 2022 for equipment and software: $1,517 2 - laptops replacements $656 1 - desktop CPU replacement $293 1 - Accountant printer replacement $149 1 - Zoom subscription $179 1 - Adobe subscription $96 1 - Office 365 subscription $350 1 - QuickBooks subscription – desktop Pro version $60 1 - Tompkins Trust Company (TTC) electronic checks subscription $3,300 Total WHEREAS, the lessees of 239 Cherry Street and 240 Cherry Street have informed the IURA of intent to exercise their options in 2022 to acquire properties that they currently lease from the IURA, and WHEREAS, the purchase prices are $26,640 and $39,400 for the two properties, respectively, and WHEREAS, at its April 15, 2022 meeting, the IURA reviewed this matter and recommended the following action; now, therefore, be it RESOLVED, that the IURA hereby amends its 2022 budget to increase expenses in the equipment/furniture/software category from $1,600 to $3,300 and recognize a $66,040 budgeted increase in revenues from sale of property. Carried Unanimously: 4-0 E. Fiscal Position of IURA Bohn explained the IURA reviews its fiscal position every year, as illustrated in the Bank Account Analysis table below. The primary figure of interest is the “Non-CDBG (#05)” account at the bottom, which represents the IURA’s own independent funds that are not tied to Federal regulations. The IURA needs to ensure the account balance is as robust as possible, since it provides the IURA with the greatest flexibility. IURA GC Meeting Minutes April 25, 2022 Page 6 of 9 6 Bohn noted the balance in the “Non-CDBG (#05)” account has decreased slightly from prior years, although that simply in comparison to the revenue windfall the IURA received in 2020 when the Cayuga Green project’s loans were repaid. The IURA has since made new loans using those funds: (1) Ithaca Neighborhood Housing Services (INHS) Sunflower House at 107-109 S. Titus Ave.; and (2) INHS acquisition of 324 W. Buffalo St. (Catholic Charities building). The only restriction to the “Non-CDBG (#05)” account is that the IURA cannot issue loans or award grants with those funds: “A state and local authority (other than an industrial development agency) formed as public benefit corporation may not award grants or issue loans of its own funds unless such power is expressly permitted in its enabling statute. The authority to make grants and execute loans is not an implied power of a public benefit corporation.” “Non-CDBG (#05)” funds can, however, be used for administrative costs, contract agreements, and real estate investments. Bohn noted the HODAG (Housing Development Action Grant) account must be used for low- and moderate-income (LMI) rental housing projects. The “CD-RLF (#02)” account (Community Development-Revolving Loan Fund) can be used for issuing loans to businesses. The IURA earns approximately $11,000 per month from its loans. F. Annual Evaluation of IURA Board Performance Rosario explained that an aggregated summary table of four of five IURA Board members’ anonymous annual evaluation of the Board’s performance can be found on the next page. While most Board members agree with each other regarding most of the listed criteria, there are a few criteria where there is less agreement. He cannot recall if the results are similar to prior years. IURA GC Meeting Minutes April 25, 2022 Page 7 of 9 7 Bohn noted one Board member identified a couple of issues under “Somewhat Disagree,” some of which he believes were also identified in prior years, like: “The Board exercises appropriate oversight of the CEO and other executive staff, including setting performance expectations and reviewing performance annually;” and “The Board has identified the areas of most risk to the Authority and works with management to implement risk mitigation strategies before problems occur.” He remarked it might be helpful to share the evaluations with IURA staff to see if they have any insights. IURA GC Meeting Minutes April 25, 2022 Page 8 of 9 8 Cummings noted that two IURA Board members have historically served on the Governance Committee, while there is currently only one. The Governance Committee plays an important role relating to one of the criteria in particular: “The Board exercises appropriate oversight of the CEO and other executive staff, including setting performance expectations and reviewing performance annually.” If someone on the Board feels disconnected from those aspects of the IURA’s operations, perhaps that could be constructively addressed in some way. She wondered if promoting greater awareness of each Committee’s objectives could help (e.g., distributing all Committee meeting agendas to Board members). Rosario responded he could suggest that to the Board. Schlather remarked that some Board members are generally quite satisfied, while a few are not. It seems as though it should be a discussion that takes place at the Board level and could be easily resolved, especially since the overall evaluation results are positive. Cummings and Whitmore agreed. Rosario suggested there should be a space on the form to add a comment, so people have the opportunity to provide more detail and clarity. Bohn replied that could certainly be added to the form. Cummings also recommended numbering the questions. (Rosario departed at 10:30 a.m.) VI. Other Business A. Review of IURA Financials: February 2022 Bohn explained that HUD requires that CDBG-funded activities be carried out and spent down in a timely manner, which is achieved if 60 days prior to the end of the IURA’s Program Year, the amount of all CDBG funds available to the IURA, but undisbursed by HUD, is less than 1.5 times the entitlement grant amount for the current Program Year. For a variety of reasons, the IURA will not be able to meet the threshold this year. Bohn noted HUD waived the requirement this year for the IURA, since the IURA met the requirement over the past 3 years; however, HUD expects the IURA to comply next year. Bohn reported all loan and lease payments are now current (with one minor technical exception). IURA GC Meeting Minutes April 25, 2022 Page 9 of 9 9 B. IURA & Common Council Actions of Interest to Committee ― Report Bohn reported the Planning & Economic Development Committee (PEDC) reviewed a “TIDES” proposal to initiate a partnership between the City, County, and partner organizations to build kitchen, shower, and bathroom facilities in the Southwest, as well as 25 cabins or structures that would serve up to 50 people. It would also include 24/7 on-site management and professional support. Schlather asked how it would be funded. Bohn replied the City would donate the site and lease it to a non-profit organization, including utilities and site preparation, while the County would fund operating expenses and provide volunteers. Two organizations have expressed strong interest: Second Wind Cottages and St. John’s Community Services (SJCS). C. Staff Report Bohn reported the Northside Apartments project (Ithaca Housing Authority/Cayuga Housing Development Corporation) is moving forward, including $202,200 from the Community Housing Development Fund (CHDF). VII. Adjournment The meeting was adjourned by consensus at 10:51 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn.