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Staff flags potential audit/legislative issue over PID/RDA treatment after state auditor review
Summary
Staff warned the state auditor is interpreting PID (public infrastructure district) accounting under GASB in a way that could treat PIDs as component units of the city; staff said cities are contesting the auditor's position and may seek legislative or legal remedies.
City staff told the council that the state auditor's office is taking a position that some public infrastructure districts (PIDs) could be treated as component units under Governmental Accounting Standards Board (GASB) guidance. Presenter (S3) explained that auditors are requesting recognition of certain PIDs on city financials, a step staff and city leagues are disputing: "The state auditor position is you guys created it. It needs to be added to your financials as a component unit of the city," the transcript records.
Council members discussed the possible liability and the need to amend PID agreements to limit future exposure. Staff said bond attorneys are drafting language to revise local PID contracts and that the issue has prompted conversations with legislators and the auditor's office. The council was warned this could require future legal or legislative action to clarify the treatment of PIDs under state audit practice and GASB interpretation.
