The New York State Comptroller’s Office conducted an audit of the Utica Harbor Point Development Corporation in July and found that the board of directors and officials did not establish realistic budgets and failed to review reports to monitor finances.
The corporation was created to manage development projects and other improvements at Utica’s Harbor Point.
The auditors found that the corporation’s costs exceeded its revenues by about $2.3 million due to unrealistic revenue and expense estimates made by the board.
Board President Vincent Gilroy Jr. disputed the finding saying, “Given the reliance that the board had (and still has) on state grants and the uncertainty which comes with the grant process by its very nature, who is the judge of what is realistic or not?? And what other choice does the board have if progress is to be made?? The UHPDC did indeed have an operating budget, but the revenues associated with the sale and development of the land have evolved over several years.”
The comptroller's office says the the report provides sufficient background and context given it's objective.
The report also shows that the corporation received grant funding for two projects, however, lines of credit were instead used to provide cash flow for several years. The corporation plans to sell three properties this year to pay off that debt but has not made an alternative plan in case the sales fall through.
Gilroy responded saying, in part, “The UHPDC did indeed utilize bank lines of credit that was always planned and approved by the UHPDC board. This is a normal financing mechanism for the development of real estate. Further, without that financing, the UHPDC would never have been granted the $16 million in funding from New York State agencies.”
The comptroller's office says the budget appeared to be fully funded because the board factored the line of credit in as revenue when in reality, the corporation did not have sufficient revenues to cover its expenses.
Regarding the pending property sales, Gilroy says, “All three parcels have committed buyers in which they are ready to close once environmental deed restrictions are adjusted by several New York State agencies.”
The comptroller’s office recommends that moving forward, the board adopt more realistic budgets and monitor financial activity by reviewing periodic reports. They also suggest the board make a written financial plan for the next few years.
The audit period was April of 2018 to December of 2021.