Determine whether the Utica Harbor Point Development Corporation (Corporation) Board of Directors (Board) and officials established realistic budgets and adequately monitored financial activity.
The Board and officials did not establish realistic budgets. Also, the Board did not review periodic financial reports to monitor the budget and finances and did not establish a comprehensive written multiyear financial plan.
- The Board adopted budgets that did not include realistic revenue and expense estimates, which caused funding gaps. As of December 9, 2021, the Corporation’s projected costs exceeded revenues by about $2.3 million.
- While the Corporation received grant funds for two projects, officials relied on lines of credit (LOCs) to provide cash flow for several years. The Corporation’s ability to pay off the LOCs is contingent on the sale of three properties, which officials plan to sell in 2022. However, the Board has not developed alternative plans to satisfy the debt should the properties not sell.
- Adopt realistic budgets and routinely monitor the budget and financial activity by reviewing periodic financial reports.
- Establish a comprehensive written multiyear financial plan.
Corporation officials disagreed with some of our findings but indicated they plan to take certain corrective action. Appendix B includes our comments on issues raised in the Corporation’s response letter.