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CFO outlines bills to city, upcoming debt payments and staffing gaps; CliftonLarson audit still pending documents
Summary
CFO Brad Leake told the board March 5 HACM is pursuing city resolution on roughly $1.1 million in pilot payment and about $4.3 million tied to prior payroll coding via the Department of City Development. He warned of near-term pension and debt-service payments and said CliftonLarson has requested documentation to complete its audit.
Brad Leake, HACM chief financial officer, briefed commissioners March 5 on fiscal items the agency is tracking, including outstanding amounts owed to the city, near-term debt obligations, and staffing constraints in the finance function.
Leake said HACM is engaged with the city controller about a roughly $1.1 million PILOT (payment in lieu of taxes) balance and a separate $4.3 million item the agency attributes to employees whose payroll was routed through the Department of City Development. He said the agency has found checks totaling more than $2 million that the city did not deposit and that HUD has recommended HACM seek abatement or a payment plan given the agency’s troubled status. Leake said he will meet with the city controller to pursue options and that any formal request would come before the board.
Leake outlined coming cash demands: a roughly $400,000 pension payment due March 31 and a $1.2 million debt-service payment due July 1 tied to several developments. He also said CVR submitted an invoice for about $468,000 while HUD provided $447,000 in administrative fees for the period; the difference stems from a 100% file review cost of about $975,000 that the agency is absorbing this year.
On audit matters, CliftonLarsonAllen has requested documents from HACM; Leake said he will provide records the firm sought, including documentation Leake’s team compiled identifying prior receipts. He described a recent multi-party conversation (HUD QAD, HUD field office, CliftonLarsonAllen and HACM) that pressed the auditor to complete its work.
Leake also discussed internal capacity: HACM’s finance team is small and in transition. He said he is the only technical accountant currently on HACM payroll responsible for financial statements and that the agency relies on Trevaux/LLC accounting staff for entity-level books; Leake described plans to evaluate staffing and reporting structures as part of the sustainability plan.
What it means: HACM faces near-term cash obligations and unresolved accounting items with the city that could require formal negotiation. The finance office is restructuring processes (Yardi implementation, purchase-order controls) while trying to meet filing deadlines for the Financial Data Schedule (FDS) and other HUD reporting.
Next steps: Leake said he would meet with the city controller, provide CliftonLarsonAllen requested documents, finalize the 2023 FDS submission, and pursue structural staffing changes as part of the agency’s sustainability plan.
