Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance topic
No spam. Unsubscribe anytime.
Auditor flags potential interest deductions from school sublease; council to seek legal review
Summary
Auditors found language in the school district sublease that may allow the district to deduct investment earnings (PTIF interest) from periodic sublease payments; staff estimated a multi‑year shortfall and the council directed staff to send documents to the attorney who prepared the agreement for clarification and possible correction.
During a budget review, staff and the auditor identified wording in the local building authority sublease with the school district that appears to allow the district to reduce sublease rental payments by earnings on the investment of the final bond (PTIF interest). Staff reported that auditors believe the practice may have reduced town receipts and recommended legal review.
"The school district has decided that they want a copy of our PTIF every time because that's where they transfer the money in," Staff member (S6) said, describing the district’s request for account statements and apparent deductions. Staff and the auditor estimated the town could be short by an amount they discussed in the meeting (a working estimate mentioned in the discussion was about $25,000), and described the issue as spanning multiple years.
Council directed staff to package the sublease documents and audit findings and ask the attorney who drafted the agreement to review and advise on corrections or rewording. Staff said they will ask the attorney to estimate fees for that legal work and return with options. No legal action was initiated at the meeting; the council approved proceeding with attorney review.
