WHEELING - The West Virginia Auditor's Office suggests the Ohio County Development Authority improve its bookkeeping and pay its debts on time.
Those suggestions were made in an audit report of the authority's finances for the fiscal year ending June 30, 2010.
According to the report, the authority for the past three years has borrowed a total of $817,000 from the Ohio County Commission to cover OCDA employee payroll costs. And it states the authority hasn't reimbursed the county for the payroll expenses.
Because of this lack of reimbursement, the audit recommends the authority "develop a long and short term cash forecast to meet operating needs."
However, David Sims, OCDA member and county commissioner, said, "The OCDA has not borrowed money from the OCC to make payroll." He noted the OCDA doesn't actually have employees of its own, rather they are county commission workers.
"When county employees perform work at The Highlands, an accounting is made of the time they work and the OCDA will reimburse the OCC as excess funds become available," he said. "Rather than having two different payrolls, they are all county commission employees."
He estimated there are 10 commission employees who work for the development authority, including about five people who take care of maintenance at the site. A few other maintenance employees, who primarily care for the City-County Building, also periodically help with snow removal at the retail site. And two other office personnel work on the authority's finances.
"There haven't been excess funds to reimburse at this point," Sims said of the sum.
He noted all Ohio County Commission money eventually will be repaid by the OCDA.
"There's a lot of work. This is a significant project and it's had its ups and downs," Sims said.
He added the annual audit actually is helpful to the authority.
"It points out what we need to do better. We usually have a pretty clean audit," Sims said. "It makes sure the accounting is correct. ... It's not always perfect, but you try to make it as good as you can."
Sims noted, however, the state makes the authority record its debt as also being the debt of Ohio County, even though it's really not, he said. Sims said he did not know why the state required this, referring the question to the auditor's office.
"None of the debt of The Highlands is debt of the county or Ohio County residents," Sims said.
For example, if the OCDA defaulted on a loan used to construct a Highlands building, the bank would simply repossess the structure, he said.
"They would not come after Ohio County and the taxpayers," Sims said.
Other highlights of the audit report:
In response to the audit's suggestion, according to the report, the authority said because of the economic downturn "the retail market slowed and the OCDA's cash flows were hampered."
"During fiscal years 2009 and 2010, the OCDA was not in compliance with Real Estate Purchase No. 1 - $894,329 - and Real Estate Purchase No. 2 - $2,393,396. In March 2010, the OCDA re-negotiated the two real estate agreements into a consolidated note in the amount of $2.7 million. The note requires quarterly interest payments only through March 2012 when the entire principle is due," the authority said in its reply to auditors.
Sims noted the Ohio County Commission purchased land at The Highlands from the OCDA to help free up some cash for the development authority to use at the site.
Sims said CAM fee bills are now being sent in a more timely manner, resulting in increased collections of those fees. CAM fees cover maintenance of areas outside buildings, such as snow removal during winter months.
There also is some discussion about various lawsuits the OCDA is involved with:
In regard to this suit, Sims said he believed it was a pending legal matter with Savage Construction Co.