West Burlington receives clean audit; council hears report on TIF receipts, debt capacity

City auditors told the West Burlington City Council that the city’s 2024 financial statements received an unmodified (clean) opinion and that staff have made progress reducing some previously reported material weaknesses to lesser control deficiencies.

Sarah Bonsack, the audit presenter, said the city remains on a cash basis and that auditors continue to identify significant deficiencies in internal control that are detailed in the audit document provided to the council. “We issued an unmodified opinion,” Bonsack said, adding that some issues from prior years have been downgraded to control deficiencies as compensating controls were added.

The audit presentation summarized governmental‑fund activity: total governmental receipts of about $4,837,000 (a roughly 3.3% decrease from the prior year), governmental disbursements of approximately $6,162,000 driven by planned capital spending of about $1.7 million (including the Gear Avenue Trail and work on Mount Pleasant Phase 2), and $697,000 paid on general obligation bond principal and interest, with an outstanding GO balance of about $2.2 million.

Separately, Maggie Berger of Spear Financial reviewed tax‑increment financing (TIF) details and the city’s debt capacity. Berger said the city’s TIF districts generate about $9 million annually in TIF receipts and that roughly $8,875,000 of growth in the TIF districts is currently “unclaimed.” She also noted a certified annual appropriated debt figure of roughly $66,872 for fiscal year 2026 and cautioned that revenue debt is paid from system revenues and does not count against general debt capacity.

Berger outlined allowable uses of TIF proceeds under state guidance and emphasized that TIF should be used for economic development and certain public infrastructure; housing projects funded with TIF can require low‑to‑moderate income set‑asides. She described rebate agreements as a common method to incentivize private development without upfront public payouts: “Rebate agreements mean you don’t have to give anything until they’ve built that new something and it’s paid new taxes,” Berger said.

Council members asked about a recent valuation change related to a hospital project; staff and Berger said the hospital valuation fell by about $40 million following litigation, which prompted adjustments in prior debt certification and TIF estimates. Staff said the county distributes TIF receipts among districts to offset such revenue changes.

The audit presenter and Spear Financial concluded by answering technical questions on receipts, bond callability and the limits on using TIF for operations rather than economic development. No formal action was required on the audit presentation itself; the council proceeded to vote on a set of TIF‑related appropriation resolutions later in the meeting.