(The Center Square) – The Kansas City, Missouri, Auditor’s Office released a new audit this week looking at whether or not the city submits cost reimbursements for public projects funded through Tax Increment Financing promptly.
Sometimes, the city enters an agreement with the TIF Commission to build public infrastructure as part of a TIF plan. These agreements require Kansas City to track and submit eligible project costs to the TIF Commission for reimbursement within 18 months of the cost being incurred.
However, Kansas City either has yet to request or was late to request reimbursements for 11 projects totaling almost $4.7 million in TIF project costs. These late submissions cause delayed reimbursements and increase the city’s chances of the TIF denying its reimbursement requests.
“If the city does not receive reimbursement, the city must use the capital improvement fund balance to cover the costs, potentially impacting other city projects,” the release said.
The city has not yet created a centralized process to make sure it submits TIF project cost reimbursements on time. Kansas City’s departments currently lack written TIF reimbursement policies and sometimes lack a project manager. Some departments also aren’t training their staff on the process or are not using consistent systems for documenting expenses and getting reimbursements or establishing “communication among stakeholders responsible for project administration or monitoring,” the release said.
The audit offers recommendations to ensure that the city submits its reimbursement requests promptly, that the requested reimbursement aligns with the amounts authorized in agreements, and to create a citywide system that manages the city’s TIF reimbursement process.
“After we notified departments of outstanding costs for reimbursements, they began the process to request reimbursements for three projects totaling about $638,000,” Douglas Jones, City Auditor of Kansas City, said.
One can view the Auditor’s full report here.