[PAGE 1] In-Person Hybrid Meetings: The IURA no longer conducts Public Meetings exclusively remotely. Meetings must be conducted in person, complying with NYS Open Meeting Law (OML), which applies to all IURA Board and Committees. Members of the public who would like to deliver VERBAL comments at a meeting (3‐min. max.) are strongly encouraged to do so using the Zoom link and log‐on credentials listed on the agenda, although they are welcome to do so in person at City Hall. WRITTEN public comments may be submitted before the meeting, using the instructions listed on the 108 E. Green St. agenda. Pls. refer to the IURA Public In‐Person/Hybrid Meetings Policy for more detailed information and further instructions. LIVE‐STREAM VIDEO: A Ithaca, NY 14850 non-interactive YouTube live‐stream of the meeting can also be viewed at: https://www.youtube.com/channel/UC7RtJN1P_RFaFW2IVCnTrDg. Because (607) 274-6565 of a slight delay in launching the live‐stream, the video may begin a few minutes before the meeting is formally convened. ITHACA URBAN RENEWAL AGENCY (IURA) AUDIT COMMITTEE AGENDA 9:00 A.M., Friday, April 25, 2025 Common Council Chambers, Third Floor 108 E. Green St., Ithaca, NY 14850 Join Zoom Meeting: https://us02web.zoom.us/j/83152691279?pwd=Nkd0SDVQUVNmT3dkNTVtVFg4UFdiQT09 Meeting ID: 831 5269 1279 Passcode: QSB86B One-Tap Mobile: +16465588656,,83152691279#,,,,*726996# US (New York) Dial by Your Location: +1 646 558 8656 US (New York) Meeting ID: 831 5269 1279 Find Your Local Number: https://us02web.zoom.us/u/kb77dN9F5t Phone Passcode: 726996 I. Call to Order (Chairperson Graham) II. Review of Audit Committee Membership & Charge Membership: Each IURA Board member is appointed to the Audit Committee (Chair: Karl Graham; Vice‐Chair: Donna Fleming) Responsibilities: 1. Oversee preparation of an annual audit of the Agency prepared by an independent accounting firm; 2. Review the results of external audits and develop recommendations to the Agency to address any issues or concerns raised by the external auditor; 3. Review and approve internal controls to safeguard its assets; and 4. Investigate problems in financial reporting, internal control or compliance as they arise. III. Additions/Deletions from Agenda PUBLIC COMMENTS: WRITTEN public comments may be e‐mailed until 3:00 p.m., the day before the meeting to: cpyott@cityofithaca.org. People who prefer to deliver IV. Public Comments (3 min. max. per person) VERBAL comments (3‐min. max.) should either appear in person or use above Zoom link/log‐in credentials (video) or dial‐in number/log‐in credentials (telephone). V. New Business A. Election of Committee Vice‐Chairperson & Nomination of Chairperson ― Resolution B. Approval of Audited 2023 IURA Financial Statements ― Resolution VI. Adjournment [PAGE 2] Approved: 5/24/24 108 E. Green St. Ithaca, NY 14850 (607) 274-6565 APPROVED MEETING MINUTES ITHACA URBAN RENEWAL AGENCY Audit Committee 8:30 A.M., Thursday, April 26th, 2024 Members: Karl Graham, Chairperson; Donna Fleming, Vice-Chairperson; Chris Proulx; Robert Cantelmo; Ducson Nguyen (Common Council Liaison) Excused: Shaianne Osterreich IURA Staff: Nels Bohn; Anisa Mendizabal [virtual]; Charles Pyott [virtual] City Staff: Lisa Nicholas, Director of Planning & Development Department Guests: None I. Call to Order Chairperson Graham called the meeting to order at 8:31 A.M. II. Review of Audit Committee Membership & Charge Membership: Each member of the IURA Board is appointed to the Audit Committee (Chair: Karl Graham; Vice-Chair: Donna Fleming). Responsibilities: 1. Oversee preparation of an annual audit of the Agency prepared by an independent accounting firm; 2. Review the results of external audits and develop recommendations to the Agency to address any issues or concerns raised by the external auditor; 3. Review and approve internal controls to safeguard its assets; and 4. Investigate problems in financial reporting, internal control or compliance as they arise. III. Additions/Deletions to/from Agenda None. IV. Public Comments (3 min. max. per person) None. V. Review of Draft Meeting Minutes: April 27, 2023 (not yet available) [PAGE 3] VI. New Business A. Election of Committee Vice-Chairperson & Nomination of Chairperson Graham asked if any other Committee members would like to serve as Chairperson or Vice-Chairperson. No Committee members responded. Proulx nominated Graham to serve as Chairperson. No objections were raised. Graham nominated Fleming to serve as Vice-Chairperson. No objections were raised. Moved by Graham, seconded by Proulx: 2024 IURA Audit Committee Election of Vice-Chairperson & Nomination of Chairperson WHEREAS, the IURA By-laws provide that the committee membership shall elect its own committee Vice-Chairperson and nominate to the Agency a member to serve as Chairperson of the Audit Committee, and WHEREAS, officers of each committee serve a one-year term, but continue to hold office until their successor is selected or appointed, and WHEREAS, the current committee officers are: Chairperson: Karl Graham Vice-Chairperson: Donna Fleming, and WHEREAS, at their April 26, 2024 meeting, the IURA Audit Committee called for nominations for Vice- Chair and Chair of the IURA Audit Committee; now, therefore be it RESOLVED, that the IURA Audit Committee hereby nominates Karl Graham as Committee Chairman, and be it further RESOLVED, that the IURA Audit Committee hereby elects Donna Fleming as Committee Vice- Chairperson. Carried Unanimously: 4-0 B. Approval of Audited 2023 IURA Financial Report Graham explained that Insero & Company’s FY2023 Financial Audit Report raised no issues, findings, recommendations, or concerns. Since the IURA is considered a blended component of the City of Ithaca, this audit only represents a small proportion of the larger City audit. The IURA audit is required to be conducted within 90 days of the end of each fiscal year. Fleming reported that the Governance Committee (GC) reviewed the audit, which was completed on time and contained no findings of particular note. There was very little discussion about it by the Committee. Proulx observed one item the report cites every year is the IURA’s overdependence on U.S. Department of Housing and Urban Development (HUD) funding for its revenue and the long-term viability of the IURA’s [PAGE 4] financial outlook; but that by no means a new concern. It is a long-standing issue the IURA Board has been aware of. “Federal budgeting for the HUD Entitlement Program does not provide CPI increases. Recent high inflation rates that peaked at 8% in 2022 increased operating expenses while core federal grant awards remained flat. A trend where expenses rise faster than revenues raises the risk for an operating deficit in future years.” “Overall, special one-time HUD awards (CDBG-CV and HOME-ARP) allowed the 2023 budget to be fully funded from projected revenues. This infusion is anticipated to provide additional administrative funding through 2026 when they will be fully expended. At that time the IURA operating budget may experience a modest operating loss if additional revenue sources are not identified and federal grant funding remains flat.” “In the longer term, the Agency will continue to work to reduce its reliance on federal funding revenues by diversifying its revenue streams to include urban renewal projects, real property sales, increased small business loans, and property leases to ensure continued financial stability and retain current staffing capacity.” Bohn explained this section of the report is actually his own written analysis of the IURA’s future financial challenges. Moved by Graham, seconded by Fleming: Approve Audited 2023 IURA Financial 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 separate from the City to have its finances audited within 90 days of the end of its fiscal year to comply with the Public Authorities Law, and WHEREAS, the IURA received an audited 2023 IURA financial report on March 27, 2024, and WHEREAS, at its April 2024 meeting, the IURA Governance Committee conducted preliminary review of the financial report and recommended approval of the financial report, and WHEREAS, at its April 2024 meeting, the IURA Audit Committee reviewed the financial report with auditor correspondence and recommends the following; now, therefore, be it RESOLVED, that the Financial Report of the Ithaca Urban Renewal Agency for the period January 1, 2023 through December 31, 2023, prepared by the accounting firm of Insero & Company, LLP, be approved. Carried Unanimously: 3-0 [PAGE 5] C. Review Internal Controls & Separation of Duties Graham walked through the following Internal Controls and Separation of Duties, which are designed to distribute fiscal responsibilities and oversight amongst staff, and which the auditors review annually. The auditors determined it meets their standards. Graham noted he was very satisfied with the internal controls the IURA has established. (continued on following page) [PAGE 6] D. Review HUD PY2022 Annual Community Assessment (ACA) Report Graham reported the IURA received HUD’s most recent Annual Community Assessment (ACA) report (excerpted below) for the City, examining the IURA’s performance in administering its Community Development Block Grant (CDBG) Program and HOME Investment Partnerships Program (HOME) grant awards. Bohn remarked the audit once again cites the City’s own late audit submissions: “Ithaca is non-compliant with Single Audit Report submission guidelines as outlined at 2 CFR 200.512(a)(1). The City did submit FY2020 during this program year on 1/30/2023, however the City’s report for FY2021 and FY2022 to the Federal Audit Clearinghouse remain due.” [PAGE 7] Proulx inquired about the concern the audit raises about the IURA’s progress in completing required HOME-assisted housing unit inspections: “Ithaca has not conducted required comprehensive inspections of HOME assisted units since 2016. The waivers cited in the report are no longer valid as they have been discontinued as of December 31, 2021. Previously, the City was noted to reconvene inspections in 2019, however the pandemic set the schedule on hold. The City now cites the pandemic and capacity challenges have hindered them from completing inspections of overdue units. Despite this, the City explained to HUD in 2021 that inspections were to reconvene by September 30, 2022. This CAPER reports that 7 of the 28 HOME units requiring inspection have been conducted. As a result, the City remains out of compliance of 24 CFR 92.504(d) and should submit an inspection schedule for PY’23 to HUD.” Bohn replied, as of this week, all delinquent housing inspections (and re-inspections) will have been conducted, with the assistance of an independent contractor, a former City housing inspector. Proulx asked how any IURA/City annual audit concerns are formally communicated to City officials. Bohn responded the audit report is submitted to the Mayor’s Office and City Manager. IURA staff also ensures the Controller’s Office is made aware of any issues. The audit report is not, however, routinely submitted to Common Council. Proulx recommended Common Council also be formally apprised of any concerns with annual audits, since it is ultimately responsible for oversight of the City. Graham agreed. VII. Adjournment The meeting was adjourned by consensus at 8:48 A.M. — END — Minutes prepared by C. Pyott, edited by N. Bohn. [PAGE 8] Proposed Resolution IURA Audit Committee April 25, 2025 2025 IURA Audit Committee Election of Vice-Chairperson and Nomination of Chairperson Whereas, the IURA By-laws provide that the committee membership shall elect its own committee Vice-Chairperson and nominate to the Agency a member to serve as Chairperson of the Audit Committee, and Whereas, officers of each committee serve a one-year term, but continue to hold office until their successor is selected or appointed, and Whereas, the current committee officers are: Chairperson: Karl Graham Vice-Chairperson: Donna Fleming, and Whereas, at their April 25, 2025 meeting, the IURA Audit Committee called for nominations for Vice-Chair and Chair of the IURA Audit Committee; now, therefore be it RESOLVED, that the IURA Audit Committee hereby nominates ________________________ as Committee Chairman, and be it further RESOLVED, that the IURA Audit Committee hereby elects ____________________________ as Committee Vice-Chairperson. [PAGE 9] IURA Audit Committee Proposed April 25, 2025 Approval of 2024 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 2024 IURA financial report on March 18, 2025, and WHEREAS, at its April 18, 2025 meeting, the IURA Governance Committee reviewed the financial report and attached correspondence and recommended its approval, and WHEREAS, at its April 25, 2025 meeting, the IURA Audit Committee reviewed the financial report and attached correspondence and recommended the following action; now, therefore, be it RESOLVED, the IURA hereby approves the Financial Report of the Ithaca Urban Renewal Agency for the period January 1, 2024 through December 31, 2024, prepared by the accounting firm of Insero & Co. CPAs LLP. [PAGE 10] COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE AT THE CONCLUSION OF THE AUDIT Board of Directors Ithaca Urban Renewal Agency Ithaca, New York We have audited the financial statements of the Ithaca Urban Renewal Agency (the Agency), a blended component unit of the City of Ithaca, whose activity is reported in the Special Grant Fund, a governmental fund in the City of Ithaca’s financial statements, for the year ended December 31, 2024, and have issued our report thereon dated March 18, 2025. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated February 10, 2025. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Agency are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2024. We noted no transactions entered into by the Agency during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. There were no sensitive estimates affecting the Agency’s financial statements. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were: The disclosures related to loans receivable in Note 4 to the financial statements. The financial statement disclosures are neutral, consistent, and clear. Insero & Co. CPAs, LLP The Highest Standard | (800) 232-9547 | www.inserocpa.com [PAGE 11] Ithaca Urban Renewal Agency March 18, 2025 Page 2 Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. No such misstatements were detected as the result of audit procedures. Disagreements With Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated March 18, 2025. Management Consultations With Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Agency’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Agency’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to the Management’s Discussion and Analysis, which is required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. [PAGE 12] Ithaca Urban Renewal Agency March 18, 2025 Page 2 Restrictions on Use This information is intended solely for the information and use of the Board of Directors, and management of the Ithaca Urban Renewal Agency and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York March 18, 2025 [PAGE 13] ITHACA URBAN RENEWAL AGENCY Ithaca, Ne w York FINANCIAL REPORT For the Year Ended December 31, 2024 [PAGE 14] ITHACA URBAN RENEWAL AGENCY TABLE OF CONTENTS Independent Auditors’ Report 1-3 Required Supplementary Information Management’s Discussion and Analysis 4-4c Governmental Fund Financial Statements Balance Sheet - Special Grant Fund 5 Statement of Revenues, Expenditures, and Changes in Fund Balance - Special Grant Fund 6 Notes to Financial Statements 7-12 _________________________________________________________________________________ Report Required Under Government Auditing Standards Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 13-14 Other Reporting Required by New York State Public Law Independent Auditors’ Report on Compliance With §2925 (3)(f) of the New York State Public Authorities Law 15 [PAGE 15] INDEPENDENT AUDITORS’ REPORT Board of Directors Ithaca Urban Renewal Agency Ithaca, New York Report on the Audit of the Financial Statements Opinion We have audited the accompanying financial statements of the Ithaca Urban Renewal Agency (the Agency), a blended component unit of the City of Ithaca, whose activity is reported in the Special Grant Fund, a governmental fund in the City of Ithaca’s financial statements, as of and for the year ended December 31, 2024, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the fund information of the Ithaca Urban Renewal Agency, as of December 31, 2024, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Agency and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Note 1, the financial statements present only the Special Grant Fund and do not purport to, and do not, present fairly the financial position of the City of Ithaca, as of December 31, 2024, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Insero & Co. CPAs, LLP The Highest Standard | (800) 232-9547 | www.inserocpa.com [PAGE 16] Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Agency’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Agency’s ability to continue as a going concern for a reasonable period of time. 2 [PAGE 17] We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control- related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America requires that the Management’s Discussion and Analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 18, 2025, on our consideration of the Agency’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency’s internal control over financial reporting and compliance. Other Reporting Required by New York State Public Authorities Law We have also issued our report dated March 18, 2025 on our consideration of the Agency’s compliance with §2925(3)(f) of the New York State Public Authorities Law. The purpose of that report is to describe anything that 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, and §2925(3)(f) of the New York State Public Authorities Law. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York March 18, 2025 3 [PAGE 18] ITHACA URBAN RENEWAL AGENCY MANAGEMENT’S DISCUSSION AND ANALYSIS DECEMBER 31, 2024 The following is a discussion and analysis of the Ithaca Urban Renewal Agency’s (the Agency) financial performance for the fiscal year ended December 31, 2024. The Agency is a blended component unit reported in the Special Grant Fund, a special revenue fund of the City of Ithaca. This section is a summary of the Agency’s financial activities based on currently known facts, decisions, or conditions. The Management’s Discussion and Analysis (MD&A) section is only an introduction and should be read in conjunction with the Agency’s financial statements, which immediately follow this section. The Ithaca Urban Renewal Agency is a public benefit corporation established in 1965 as an urban renewal agency. The Agency has a corporate identity separate from the City and works in close conjunction with the City to revitalize urban neighborhoods and strengthen the local economy. The Agency is composed of the Mayor and four members appointed by the Mayor with the concurring approval of the Common Council. The Director of Planning and Development for the City of Ithaca serves as the Executive Director of the Agency. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of two parts: MD&A (this section) and the financial statements of the Special Grant Fund. The financial statements also include notes that explain some of the information in the statements and provide more detailed data. Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance The Agency’s financial statements include the Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance, and they are reported using the modified accrual basis of accounting. Under this basis of accounting, revenues are recorded when measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Material revenues that are accrued include state and federal aid. Revenues deemed collectible within one year after year end are recognized as revenues in the current year. If expenditures are the prime factor for determining eligibility, revenues from federal and state grants are accrued when the expenditure is made. Expenditures are recorded when incurred. The cost of capital assets is recognized as an expenditure when received. Exceptions to this general rule are that 1) principal and interest on indebtedness are not recognized as an expenditure until due; and 2) compensated absences, such as vacation and sick leave, which vest or accumulate, are charged as an expenditure when paid. 4 [PAGE 19] ITHACA URBAN RENEWAL AGENCY MANAGEMENT’S DISCUSSION AND ANALYSIS DECEMBER 31, 2024 FINANCIAL ANALYSIS The Agency’s fund balance increased by $94,123 for the year ended December 31, 2024, compared to a $19,266 decrease in 2023. Fund balance grew due to the decrease in expenditures, offset somewhat by lower revenues. Our analysis below focuses on the fund balance (Figure 1) and changes in fund balance (Figure 2) of the Agency’s fund. Figure 1 Total Balance Sheet 2024 2023 Dollar Change Cash and Cash Equivalents $ 1,914,578 $ 1,791,629 $ 1 22,949 Other Receivables 14,492 60,172 ( 45,680) Loans Receivable 6,084,101 6,402,613 ( 318,512) Total Assets 8,013,171 8,254,414 ( 241,243) Accounts Payable 124,385 141,239 ( 16,854) Total Liabilities 124,385 141,239 ( 16,854) Unavailable Revenue 6,084,101 6,402,613 ( 318,512) Total Deferred Inflows of Resources 6,084,101 6,402,613 ( 318,512) Restricted Fund Balance 1 ,804,685 1 ,710,562 9 4,123 Total Fund Balance $ 1,804,685 $ 1,710,562 $ 9 4,123 Figure 2 Total Changes in Fund Balance 2024 2023 Dollar Change Revenues: Use of Money and Property $ 4,579 $ 1,305 $ 3 ,274 Departmental Income 562,508 565,149 ( 2,641) Federal Sources 1,181,594 1,300,324 ( 118,730) Total Revenues 1,748,681 1,866,778 ( 118,097) Expenditures: Home and Community Services 1,654,558 1,886,044 ( 231,486) Total Expenditures 1,654,558 1,886,044 ( 231,486) CHANGE IN FUND BALANCE $ 9 4,123 $ ( 19,266) $ 1 13,389 4a [PAGE 20] ITHACA URBAN RENEWAL AGENCY MANAGEMENT’S DISCUSSION AND ANALYSIS DECEMBER 31, 2024 Grant income from the City of Ithaca is determined by the level of funding of the City’s HOME and CDBG programs by HUD. The Agency continues to create program income from federal funds that no longer have ongoing federal compliance requirements and uses these funds to further economic development in the City. Departmental income was down because there were less payments of principal and interest on loans receivable. Home and community service expenditures decreased overall due to decreased federal activity. FACTORS BEARING ON THE AGENCY’S FUTURE The Agency is facing a period of continued erosion and volatility of core federal funding support while facing steady annual inflationary increases in operating expenses. For the past 20 years the Agency has followed prudent budgeting practices resulting in modest annual budget surpluses helping to create an approximately $1.8 million fund balance, of which over $500,000 unrestricted assets are available to support the administrative budget as needed. The adopted FY2025 administrative budget projects expenses will exceed revenues resulting in a small $2,000 operating deficit. Expenses Trends 86% of the Agency’s operating budget is allocated to salaries and employee benefits for the 3.6 full- time equivalent Agency staff. To remain competitive to retain and attract talent, the Agency has incrementally increased salaries toward matching inflation. Health insurance increases continue to exceed inflation and now consume 13% of the annual budget. Salary and benefits are anticipated to grow incrementally near the rate of inflation in future years. The current staffing level is necessary to carry out the Agency’s obligations to properly monitor and administer federal grants, comply with public authority law, meet local expectations for public participation and transparency, and be responsive to subgrantee and community needs. As such, staffing is largely a fixed expense to complete the Agency’s current scope of work. Revenue Trends Projected 2025 revenues available to support operating expenses are derived from the following categories: Annual Federal Formula Grants: 34% Limited Duration Federal Grants: 11% Local Loan/Lease Payments: 36% Local Urban Renewal Projects: 18% Miscellaneous/Fund Balance: 1% 100% The Agency currently derives approximately $155,000 of its annual revenues to support operations from the annual formula HUD Entitlement Grant award to the City of Ithaca, which includes the Community Development Block Grant (CDBG) and Home Investment Partnership Program (HOME). The Agency contracts with the City to administer and monitor its HUD Entitlement Grant. 4b [PAGE 21] ITHACA URBAN RENEWAL AGENCY MANAGEMENT’S DISCUSSION AND ANALYSIS DECEMBER 31, 2024 Ten years ago, HUD Entitlement Grant funding provided over 50% of the Agency’s operating expenses. This federal funding has declined in both inflation-adjusted and nominal terms. HUD Entitlement funding now covers only 34% of operating costs. Although the CDBG program enjoys bipartisan support in the US House and Senate, the current Administration’s cost-cutting initiatives and budgetary priorities raise concerns about future funding for the CDBG and HOME programs. Reliance on the HUD Entitlement Grant program for future core funding is a major budgetary concern for the Agency. Fortunately, Special COVID-19-related HUD CDBG-CV and HOME-ARP funding allocated to the City of Ithaca provided additional one-time administrative funding in prior years with some revenues expected to continue through 2027. The CDBG-CV award is now fully disbursed. The HOME-ARP award allocated a total of $180,000 in administrative funding available over an approximately 5-year period through 2027. Going forward, approximately $121,000 from this funding source remains available as of 12/31/24. Loan repayments and property leases generate over $168,000 of annual operating revenues. These revenue sources are expected to remain stable or increase in future years as new loans are issued. Revenues from local urban renewal projects involve sale or lease of land for redevelopment. The IURA earns revenue by having expenses reimbursed from proceeds of property sales and leases or reimbursed from the City of Ithaca. Vacant Agency properties with a total assessed value exceeding $2 million situated at Inlet Island and Cherry Street are ripe for redevelopment, but major revenues are not realized until an urban renewal project advances to conveyance and construction. An exclusive negotiation agreement with a preferred developer for the Inlet Island urban renewal project did not proceed to a disposition agreement, so project revenues from that project will be deferred. Increasingly, the Agency has been providing professional services to the City for a variety of projects and programs, including but not limited to: • City response to homeless encampments on City property • Acquisition and disposition of City property related to the City facility master planning process • Support for the Community Housing Development Fund • RestoreNY grant applications and administration • Financial Oversight Committee for the Downtown Conference Center • City representative on the Ithaca/Tompkins County Continuum of Care The IURA is reimbursed for expenses incurred by several, but not all, of the services provided to the City. 4c [PAGE 22] ITHACA URBAN RENEWAL AGENCY MANAGEMENT’S DISCUSSION AND ANALYSIS DECEMBER 31, 2024 Summary Overall, ongoing revenues from loan repayments and leases are anticipated to keep pace with inflation going forward. Federal grant revenue is anticipated to continue to decline, though existing grant awards provide significant budgetary support through 2027 when the one-time HOME-ARP grant is anticipated to be expended. The Agency budget will increasingly need to rely on revenues derived from urban renewal projects involving the disposition of real property and reimbursed fees for services rendered to the City of Ithaca. Should there be a shortfall in future years, funds can be drawn from the existing unrestricted cash accounts exceeding $500,000 to balance the budget for several years. In the longer term, the Agency will continue to work to reduce its reliance on federal funding revenues by diversifying its revenue streams to include urban renewal projects, real property sales, increased small business loans, and seek reimbursements for services rendered to the City to ensure continued financial stability and retain current staffing capacity. CONTACTING THE AGENCY’S FINANCIAL MANAGEMENT This financial report is designed to provide a general overview of the Ithaca Urban Renewal Agency’s finances and to show the Agency’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Agency’s Director, City Hall, 108 E. Green Street, 3rd Floor, Ithaca, New York 14850. 4d [PAGE 23] ITHACA URBAN RENEWAL AGENCY BALANCE SHEET SPECIAL GRANT FUND DECEMBER 31, 2024 ASSETS Cash and Cash Equivalents - Unrestricted $ 1 09,893 Cash and Cash Equivalents - Restricted 1 ,804,685 Other Receivables 1 4,492 Loans Receivable 6 ,084,101 Total Assets $ 8 ,013,171 LIABILITIES Accounts Payable $ 1 24,385 Total Liabilities 1 24,385 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue - Loans Receivable 6 ,084,101 Total Deferred Inflows of Resources 6 ,084,101 FUND BALANCE Restricted 1 ,804,685 Total Fund Balance 1 ,804,685 Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 8 ,013,171 See Notes to Financial Statements 5 [PAGE 24] ITHACA URBAN RENEWAL AGENCY STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE SPECIAL GRANT FUND FOR THE YEAR ENDED DECEMBER 31, 2024 REVENUES Use of Money and Property $ 4 ,579 Departmental Income 5 62,508 Federal Sources 1 ,181,594 Total Revenues 1 ,748,681 EXPENDITURES Home and Community Services 1 ,654,558 Total Expenditures 1 ,654,558 Net Change in Fund Balance 9 4,123 Fund Balance, Beginning of Year 1 ,710,562 Fund Balance, End of Year $ 1 ,804,685 See Notes to Financial Statements 6 [PAGE 25] ITHACA URBAN RENEWAL AGENCY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 Note 1 Summary of Significant Accounting Policies The financial statements of the Ithaca Urban Renewal Agency (the Agency), a blended component unit of the City of Ithaca (the City) have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the government's accounting policies are described below. Financial Reporting Entity The Ithaca Urban Renewal Agency is a public benefit corporation established in 1965 as an urban renewal agency. The Agency has a corporate identity separate from the City and works in close conjunction with the City to revitalize urban neighborhoods and strengthen the local economy. The Agency is composed of the Mayor and four members appointed by the Mayor with the concurring approval of the Common Council. The Director of Planning and Development for the City of Ithaca serves as the Executive Director of the Agency. Through a variety of means, including site acquisition and disposition, the Agency works to implement the Urban Renewal Plan that seeks to stabilize neighborhoods and enhance the vitality of the downtown and community. Through the City, the Agency applies for and receives various grants to address community development needs. On an annual basis, the Agency manages the City’s HUD Entitlement Grant award of Community Development Block Grant (CDBG) and Home Investment Partnerships Program (HOME) funds to undertake activities in the areas of housing, community facilities, public services, and economic development that benefit Ithaca’s low- and moderate-income neighborhoods and households or eliminate blighting conditions. In addition, the Agency administers various economic development loan programs, the Cherry Street Industrial Park, and leases to facilitate private/public real estate projects. The City is ultimately responsible for the proper disposition of grant funds and any debt incurred by the Agency. Because of the close governing, administrative, and financial relationship with the City, the Agency is considered to be a component unit of the City for financial reporting purposes, and the Agency’s financial information presented here is to be presented within the City’s financial statements as the Special Grant Fund as of December 31, 2024 and for the year then ended. Basic Financial Statements The Agency’s basic financial statements include governmental fund financial statements. The financial transactions of the Agency are reported as a Special Revenue Fund in the governmental fund financial statements of the City. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. 7 [PAGE 26] ITHACA URBAN RENEWAL AGENCY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 Note 1 Summary of Significant Accounting Policies - Continued Basis of Accounting/Measurement Focus Basis of accounting refers to when revenues and expenditures and the related assets and liabilities are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus. Measurement focus is the determination of what is measured, such as expenditures or expenses. The Agency reports on the modified accrual basis of accounting. Modified Accrual Basis - Under this basis of accounting, revenues are recorded when measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Material revenues that are accrued include state and federal aid. Revenues deemed collectible within one year after year end are recognized as revenues in the current year. If expenditures are the prime factor for determining eligibility, revenues from federal and state grants are accrued when the expenditure is made. Expenditures are recorded when incurred. The cost of capital assets is recognized as an expenditure when received. Exceptions to this general rule are that 1) principal and interest on indebtedness are not recognized as an expenditure until due; and 2) compensated absences, such as vacation and sick leave, which vest or accumulate, are charged as an expenditure when paid. Budgetary Compliance An annual legal budget is not adopted for the Special Grant Fund. Budgetary controls for the Special Grant Fund are established in accordance with applicable grant agreements. Deferred Inflows of Resources In addition to liabilities, the Balance Sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported in the governmental fund balance sheet. The Governmental Fund reports unavailable revenues from loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. 8 [PAGE 27] ITHACA URBAN RENEWAL AGENCY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 Note 1 Summary of Significant Accounting Policies - Continued Loans Receivable Loans receivable represent amounts owed to the Agency for rehabilitation and economic development loans. Loans receivable are offset by unavailable revenue in the same amount. Because the loans are offset by unavailable revenue, no provision has been made for uncollectible accounts reported as loans receivable. Cash and Cash Equivalents For financial statement purposes, all highly liquid investments with initial maturities of three months or less are considered cash equivalents. Insurance The City assumes the liability for most risk including, but not limited to, property damage and personal injury liability. Judgments and claims are recorded when it is probable that an asset has been impaired, or a liability has been incurred, and the amount of loss can be reasonably estimated. Use of Estimates Management uses estimates and assumptions in preparing financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Restricted Resources When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, it is the Agency’s policy to apply restricted funds before unrestricted funds, unless otherwise prohibited by legal requirements. Equity Classifications Constraints are broken into five classifications: nonspendable, restricted, committed, assigned, and unassigned. These classifications serve to inform readers of the financial statements of the extent to which the government is bound to honor any constraints on specific purposes for which resources in a fund can be spent. • Nonspendable: Consists of assets inherently nonspendable in the current period either because of their form or because they must be maintained intact; including prepaid items, inventories, long-term portions of loans receivable, financial assets held for resale, and endowments principal. • Restricted: Consists of amounts subject to legal purpose restrictions imposed by creditors, grantors, contributors, or laws and regulations of other governments and enforced externally or through constitutional provisions or enabling legislation. 9 [PAGE 28] ITHACA URBAN RENEWAL AGENCY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 Note 1 Summary of Significant Accounting Policies – Continued Equity Classifications - Continued • Committed: Consists of amounts subject to a purpose constraint imposed by formal action of the government’s highest level of decision-making authority prior to the end of the fiscal year and requires the same level of formal action to remove said constraint. • Assigned: Consists of amounts subject to a purpose constraint representing an intended use established by the government’s highest level of decision-making authority, or their designated body or official. The purpose of the assignment must be narrower than the purpose of the General Fund. In funds other than the General Fund, assigned fund balance represents the residual amount of fund balance. • Unassigned: Represents the residual classification of the government’s General Fund and could report a surplus or deficit. In funds other than the General Fund, the unassigned classification should only be used to report a deficit balance resulting from overspending amounts restricted, committed, or assigned for specific purposes. The Agency has not adopted any resolutions to commit fund balance. The Agency’s policy is to apply expenditures against nonspendable fund balance, restricted fund balance, committed fund balance, and assigned fund balance. Because the Agency’s activities are restricted to economic development, remaining fund balance is reported as restricted. New Accounting Standards The Agency adopted and implemented the following current Statements of the GASB effective for the year ended December 31, 2024. • GASB Statement No. 100, “Accounting Changes and Error Corrections,” was effective for the year ended December 31, 2024. There was no material effect on the financial statements. • GASB Statement No. 101, “Compensated Absences,” was effective for the year ended December 31, 2024. There was no material effect on the financial statements. Future Changes in Accounting Standards • GASB has issued Statement No. 102, “Certain Risk Disclosures,” effective for the year ending December 31, 2025. Agency management will evaluate the impact future pronouncements may have on its financial statements and will implement as applicable when material. 10 [PAGE 29] ITHACA URBAN RENEWAL AGENCY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 Note 2 Cash and Investments The Agency’s investment policies are governed by State statutes. In addition, the Agency has its own written investment policy. Agency monies must be deposited in Federal Deposit Insurance Corporation (FDIC) insured commercial banks, trust companies, or credit unions located within the State, preferably located within the City of Ithaca and the urban renewal project boundary area. The Agency is authorized to use demand accounts and certificates of deposit. Permissible investments include obligations of the U.S. Treasury. Collateral is required for demand and time deposits and certificates of deposit not covered by federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the State and its municipalities and school districts. Deposits and investments are valued at cost or cost plus interest. Total financial institution (bank) balances at December 31, 2024 were $1,921,844, which were insured, and collateral, when required, was held by the Agency’s agent in the Agency’s name. Cash in the amount of $1,804,685 is reported as restricted and represents the amount of restricted fund balance. Note 3 Other Receivables Other receivables at December 31, 2024 are as follows: Reimbursements $ 1 4,492 Total $ 1 4,492 Note 4 Loans Receivable Loans receivable consist of various economic development loans with ranging terms and interest rates. $832,869 of the loans at December 31, 2024 will be forgiven over time as long as certain conditions are met by the loan recipient. Activity in loans receivable during the year follows: Balance December 31, 2023 $ 6,402,613 Interest Accrued 47,642 Loans Issued 50,000 Loans Written Off/Forgiven ( 150,000) Loan Payments ( 266,154) Balance December 31, 2024 $ 6,084,101 11 [PAGE 30] ITHACA URBAN RENEWAL AGENCY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2024 Note 5 Simplified Employee Pension Plan The Agency sponsors a Simplified Employee Pension Plan which covers all full-time and part-time employees. Contributions to the Plan are determined annually by the Board of Directors. For the year ended December 31, 2024, the amount of pension expense was $29,980, 11.0% of total gross payroll. Note 6 Concentrations - Significant Sources of Revenues During the year ended December 31, 2024, the Agency received $1,181,594, or 67.6% of its total revenue, from U.S. Department of Housing and Urban Development grants. Note 7 Summary of Significant Commitments and Contingencies General Information The Agency is exposed to various risks of loss related to, but not limited to, torts, theft of, damage to, and destruction of assets, injuries to employees, errors and omissions, and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. Settled claims from these risks have not exceeded commercial insurance coverage for the past three years. State and Federally Assisted Programs The Agency receives state and federal grants through the City. These grants are generally conditioned on compliance with certain statutory, regulatory, and/or contractual requirements. The Agency makes every effort to comply with all applicable requirements. However, because these grants are audited from time to time, it is possible that the Agency or the City will be required, upon audit, to repay portions of the grant monies received and recorded as revenue in a prior year. Agency and City officials do not anticipate material grant-in-aid disallowances, and no provision, therefore, is reflected in the basic financial statements. Note 8 Related Party Transactions The City is reimbursed for projects funded through federal grants administered by the Agency. At December 31, 2024, the Agency owed the City $124,155 in reimbursements. 12 [PAGE 31] INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Ithaca Urban Renewal Agency Ithaca, New York We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Ithaca Urban Renewal Agency (the Agency), a blended component unit of the City of Ithaca, whose activity is reported in the Special Grant Fund, a governmental fund in the City of Ithaca’s financial statements, as of and for the year ended December 31, 2024, and related notes to the basic financial statements, and have issued our report thereon dated March 18, 2025. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Agency’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Agency’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Insero & Co. CPAs, LLP The Highest Standard | (800) 232-9547 | www.inserocpa.com [PAGE 32] Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Agency’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Agency’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Agency’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York March 18, 2025 14 [PAGE 33] INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH §2925(3)(f) OF THE NEW YORK STATE PUBLIC AUTHORITIES LAW Board of Directors Ithaca Urban Renewal Agency Ithaca, New York We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Ithaca Urban Renewal Agency (the Agency), a blended component unit of the City of Ithaca, as of and for the year ended December 31, 2024, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements, and have issued our opinion thereon dated March 18, 2025. 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), which are the responsibility of the Agency’s management, insofar as they relate to the financial accounting knowledge of noncompliance with such Investment Guidelines. This communication is intended solely for the information and use of the Board of Directors and management of the Ithaca Urban Renewal Agency, and the Office of the Comptroller of the State of New York and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York March 18, 2025 Insero & Co. CPAs, LLP The Highest Standard | (800) 232-9547 | www.inserocpa.com [PAGE 34] MANAGEMENT COMMENT LETTER Board of Directors Ithaca Urban Renewal Agency Ithaca, New York In planning and performing our audit of the financial statements of the Ithaca Urban Renewal Agency (the Agency), a blended component unit of the City of Ithaca, as of and for the year ended December 31, 2024, in accordance with auditing standards generally accepted in the United States of America, we considered the internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Agency’s financial statements will not be prevented, or detected and corrected, on a timely basis. Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. We would like to thank you and your staff for the cooperation and support given to us during the course of the audit. We appreciate the opportunity to be of service to you and look forward to our continued involvement. Insero & Co. CPAs, LLP The Highest Standard | (800) 232-9547 | www.inserocpa.com [PAGE 35] Ithaca Urban Renewal Agency March 18, 2025 Page 2 This communication is intended solely for the information and use of management, the Board of Directors, others within the Agency and other regulatory agencies and is not intended to be, and should not be, used by anyone other than these specified parties. Respectfully submitted, Insero & Co. CPAs, LLP Certified Public Accountants Ithaca, New York March 18, 2025