Troy Industrial Development Authority

Board Members Chair Josh Chiappone Jeff Betts Susan Farrell Vice Chair Elbert Watson Jim Gulli Stephanie Fitch Latasha Gardner Executive Director Sue Steele Steven Strichman AUDIT & FINANCE COMMITEE MEETING MARCH 24, 2023 10:00 a.m. I. Approval of Minutes from the October 28, 2022 committee meeting. II. 2022 Audit Presentation – Wojeski & Co., CPAs III. Adjournment City Hall – 433 River Street, Suite 5001, Troy, New York 12180 Phone: 518.279.7166  October 28, 2022 10:00 AM Audit and Finance Committee Meeting Minutes Present: Hon. Jim Gulli, Susan Farrell, Stephanie Fitch, Hon. Sue Steele, Elbert Watson, Josh Chiappone and Jeff Betts. Absent: Justin Nadeau and Latasha Gardner Also in attendance: Steven Strichman, Stephen Maier Esq., Matt Jones, Deanna Dal Pos and Denee Zeigler. I. Minutes D The board reviewed the audit and finance committee meeting minutes from April 1, 2022. Motion to approve the April 1, 2022 board meeting minutes - Josh Chiappone R Second - Sue Farrell Approved II. T 2023 Budget Discussion and Recommendations AF Mr. Strichman advised that the budget in front of them has not changed since their discussion last month. In 2023 we have $200,000 projected revenue from projects, $1,500 in investment earnings with a total revenue of $201,500. Professional services are $135,964 and includes the reimbursement to the city for staffing. The amount paid to the city is the same for this year but may go up next year. Other operating expenses include funds for ongoing projects. The end of the year total expenditure was $340,444. Mr. Strichman noted that we have a deficiency for the year in the amount of $134,944. Motion to approve the cy2023 budget as discussed by the committee - Sue Steele Second - Stephanie Fitch Approved III. Adjournment With no additional business to discuss, the IDA audit and finance committee board meeting was adjourned at 10:07 a.m. Motion to adjourn IDA audit and finance committee meeting at 10:07 - Josh Chiappone Second - Susan Farrell Approved 1  TROY INDUSTRIAL DEVELOPMENT AUTHORITY Report to the Board For the Year Ended December 31, 2022 D R T AF DATE To the Board of Troy Industrial Development Authority We have audited the financial statements of Troy Industrial Development Authority (the "Authority") for the year ended December 31, 2022. 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 17, 2023. Professional standards also require that we communicate to you the following information related to our audit. D Significant Audit Matters Qualitative Aspects of Accounting Practices R Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Authority are described in Note A to the financial statements. As described in Note A to the financial statements, the Agency adopted the following Governmental Accounting Standards Board (GASB) Statements in 2022.  T GASB Statement No. 87 - Leases (GASB 87): The standard was adopted on a retrospective basis as of the beginning of the earliest period presented. The adoption AF did not result in any reclassifications or restatements of changes in net position or net position.  GASB Statement No. 91 – Conduit Debt Obligations: The standard was adopted on a retrospective basis as of the beginning of the earliest period presented. The adoption did not result in any reclassifications or restatements of changes in net position or net position. We noted no transactions entered into by the Authority 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. The most sensitive estimate affecting the Authority’s financial statements was management’s estimate of the market value of land held for development or resale.  Management’s estimate of land held for development or resale is based on the exercise price of a land purchase option and an appraisal prepared by a third-party appraiser. 1 We evaluated the key factors and assumptions used to develop the accounting estimate in determining that it is reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. 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. The following material misstatements detected as a result of audit procedures were corrected by management.  An entry to adjust the remaining costs basis and the gain on sale of land held for development. D Disagreements with Management For the 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 R significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations T We have requested certain representations from management that are included in the AF management representation letter dated DATE. Management Consultation 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 Authority’s financial statements or a determination of the type of auditor's 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 Authority'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 Management has omitted the management’s discussion and analysis information that accounting principles generally accepted in the United States of America require to be 2 presented to supplement the basic financial statements. Such missing information, although not 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. Our opinion on the basic financial statements is not affected by this missing information. We were engaged to report on the Schedule of Indebtedness which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records and other records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the Agency’s annual report that is defined by Section 2800 of the New York State Public Authorities Law, Annual Reports by Authorities. Our D responsibility under professional standards is to consider whether a material inconsistency exists between the annual report and the audited financial statements that includes our report thereon. The annual report has not been subjected to the auditing procedures applied to the audit of the basic financial statements, and accordingly, we do not express an opinion or R provide any assurance on it. Restriction on Use T This information is intended solely for the information and use of the Board of Directors and management of the Authority and is not intended to be, and should not be, used by anyone AF other than these specified parties. 3  TROY INDUSTRIAL DEVELOPMENT AUTHORITY Financial Statements, Supplementary Information, and T Independent Auditors Report December 31, 2022 and 2021 AF R D TROY INDUSTRIAL DEVELOPMENT AUTHORITY December 31, 2022 and 2021 Financial Statements Independent Auditor’s Report .............................................................................. 1 Statements of Net Position .................................................................................. 4 Statements of Revenues, Expenses and Change in Net Position ................................ 5 Statements of Cash Flows ................................................................................... 6 Notes to Financial Statements .............................................................................. 7 Compliance Report Independent Auditor’s Report on Internal Control Over Financial T Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ....................................................................... 13 Supplementary Information AF Schedule I – Schedule of Supplemental Information – Straight Leases ..................... 15 R D  INDEPENDENT AUDITOR’S REPORT To the Board of Directors Troy Industrial Development Authority Troy, New York Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of Troy Industrial Development Authority (the "Authority") as of and for the years ending December 31, 2022 and 2021, and T the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. AF In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of December 31, 2022 and 2021, and the changes in financial position and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions R We conducted our audits in accordance with auditing standards generally accepted in the D United States of America (GAAS) and the standards applicable to financial audits contained in Governmental Auditing Standards issued by the Controller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter – Change in Accounting Principle As discussed in Note B to the financial statements, during the year ended December 31, 2022, the Authority adopted new accounting principle guidance, Government Accounting Standards Board (GASB) Statement No. 87 – Leases and GASB Statement No.91 – Conduit Debt Obligations. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the 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. 1 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 Authority’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. Auditor’s 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 auditor’s report that includes our opinion. 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 Governmental 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. T In performing an audit in accordance with GAAS and Governmental Auditing Standards, we:   AF Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, R 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.  D 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 Authority’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 Authority’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, amount 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 Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not part of the 2 basic financial statements, is required by the Government 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. Our opinion on the basic financial statements is not affected by this missing information. Supplementary Information Our audit was conducted for the purpose of forming an opinion on the basic financial statements as a whole. The supplementary information listed in the table of contents is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information T AF Management is responsible for the other information included in the annual report. The other information comprises the Annual Report of the Authority as defined by Section 2800 of the New York State Public Authorities Law, Annual Reports by Authorities, but does not include the basic financial statements and our auditor’s report thereon. Our opinion on the basic financial statements do not cover the other information, and we do not express an opinion or R any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the D other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated DATE on our consideration of the Authority'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 solely 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 the effectiveness of the Authority’s 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 Authority's internal control over financial reporting and compliance. Albany, New York DATE 3 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Statements of Net Position December 31, 2022 2021 ASSETS CURRENT ASSETS Cash and cash equivalents $ 736,009 $ 130,601 Accounts receivable 16,664 2,422 Prepaid expenses 1,812 1,151 TOTAL CURRENT ASSETS 754,485 134,174 NONCURRENT ASSETS Land held for sale or development T TOTAL ASSETS 80,000 834,485 287,000 421,174 LIABILITIES CURRENT LIABILITIES Accounts payable AF - 2,193 R Due to other governments TOTAL CURRENT LIABILITIES 16,664 16,664 2,422 4,615 D LONG-TERM LIABILITIES Land purchase option NET POSITION - 117,301 Unrestricted 817,821 299,258 TOTAL NET POSITION $ 817,821 $ 299,258 See accompanying notes to financial statements. 4 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Statements of Revenues, Expenses and Change in Net Position For the Year Ended December 31, 2022 2021 OPERATING REVENUES Administrative fees $ 457,536 $ 30,622 Rental income 25,000 - TOTAL OPERATING REVENUES 482,536 30,622 OPERATING EXPENSES Professional fees 144,308 64,886 Administrative support 100,000 100,000 Insurance 2,463 2,289 Dues and memberships 2,050 2,522 Other expenses 2,973 257 T TOTAL OPERATING EXPENSES 251,794 169,954 NON-OPERATING INCOME Gain on sale of asset Interest income AF OPERATING INCOME (LOSS) TOTAL NON-OPERATING INCOME 230,742 285,301 2,520 287,821 (139,332) - 310 310 R CHANGE IN NET POSITION 518,563 (139,022) D NET POSITION, beginning of year NET POSITION, end of year $ 299,258 817,821 $ 438,280 299,258 See accompanying notes to financial statements. 5 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Statements of Cash Flows For the Year Ended December 31, 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from administrative fees $ 468,294 $ 127,736 Payments to vendors (240,406) (275,438) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 227,888 (147,702) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from sale of land held for development 375,000 - NET CASH PROVIDED BY CAPITAL AND T RELATED FINANCING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES 375,000 - AF Proceeds from interest income NET CASH PROVIDED BY INVESTING ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,520 2,520 605,408 310 310 (147,392) R Cash and cash equivalents at beginning of year CASH AND CASH EQUIVALENTS AT END OF YEAR $ 130,601 736,009 $ 277,993 130,601 D RECONCILIATION OF OPERATING LOSS TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss) $ 230,742 $ (139,332) Changes in operating assets and liabilities: Accounts receivable (14,242) 97,114 Prepaid expenses (661) (13) Accounts payable (2,193) (7,851) Due to other governments 14,242 (97,620) NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $ 227,888 $ (147,702) See accompanying notes to financial statements. 6 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements December 31, 2022 and 2021 NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Troy Industrial Development Authority (the "Authority") was created in 1967 by the New York State Legislature under the provisions of Chapter 759 of the 1967 Laws of New York State for the purpose of encouraging economic growth in the City of Troy, New York (the “City”). The Authority, although established by the State Legislature, is a separate public benefit authority and operates independently of the City. The Authority’s function is to authorize the issuance of industrial revenue bonds for industrial development projects and to assist businesses in acquiring or constructing various facilities in order to provide job opportunities and increase economic welfare. In return for its efforts, T the Authority receives application and closing fees related to this business financing. Basis of Presentation AF The Authority’s financial statements are prepared using the accrual basis in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. R The accounting and financial reporting treatment applied to the Authority is determined by its measurement focus. The transactions of the Authority are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities D associated with the operations are included on the statement of net position with revenues recorded when earned and expenses recorded when incurred. Net position is classified into three components – net investment in capital assets; restricted and unrestricted. These classifications are defined as follows: Net investment in capital assets: This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of bonds, notes, and other borrowings that are attributable to the acquisition, construction, or improvement of those assets. If there are unspent debt proceeds at year end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of investment in capital assets, net of related debt. Rather that portion of the debt is included in restricted net position. Restricted net position: This component of net position represents external restrictions on net position imposed by creditors, grantors, contributors, laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted net position: This component represents net position that does not meet the definition of "restricted". 7 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- Continued When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as needed. The Authority distinguishes operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the Authority's principal on-going operations. All revenues and expenses that do not meet this definition are reported as non-operating revenues and expenses. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management T to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents AF The Authority considers as cash all demand deposits and all highly liquid investments which are readily convertible to cash. Accounts Receivable R Accounts receivable are non-interest bearing and are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability based on a review of outstanding receivables, historical collection information and current economic conditions. D In the opinion of Authority management, all receivable balances are considered collectible; accordingly, no allowance for doubtful accounts has been recorded. Capital Assets Acquisitions of property and equipment and expenditures which materially change the capacities or extend the useful lives are capitalized and recorded at historical cost. Routine maintenance and repairs and minor replacement costs are charged to expense as incurred. When an asset is sold, or retired, the cost and accumulated depreciation are removed from their respective accounts and the resulting gain or loss is included in the change in net position. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the related assets, generally ranging from 5 to 40 years. Land Held for Sale or Development Land held for sale or development is recorded at cost and is carried at the lower of cost or fair value. Major additions, renewals, and betterments are capitalized, whereas remediation, maintenance, and repair costs are expensed as incurred. When land held for development or resale is sold or otherwise disposed of, the appropriate accounts are relieved of costs and any resultant gain or loss is credited or charged to the change in net position. 8 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- Continued Land Held for Development and Resale--Continued Recognition of impairment of land held for development and resale is required when events and circumstances indicate that an entity will not be able to recover the carrying amount of these assets. The Authority recognizes an impairment loss, equal to the amount by which the carrying amount of an asset exceeds its fair value, if the carrying amount of the asset is not recoverable. Conduit Debt Obligations To further economic development in the county, the Authority has issued bonds that provide capital financing to private-sector entities for the acquisition and construction of facilities. The T properties financed are pledged as collateral and the bonds are payable solely form payments from the private sector entities. In addition, no commitments beyond the collateral, the payments from the private sector entities, and maintenance of tax-exempt status of the AF conduit debt obligation were extended by the Authority. The bonds are not obligations of the Authority or the State of New York. Accordingly, the Authority does not record the assets or liabilities resulting from completed bond transactions in its accounts since its primary function is to arrange financing between borrowing companies and bond holders, and funds arising from those transactions are controlled by trustees or banks acting as fiscal agents. For R providing this service, the Authority receives project administration fees from the borrowing companies. Such administrative fee income is recognized immediately upon issuance of bonds. The outstanding balance on the bonds issued totaled $0 for each of the years ended D December 31, 2022 and 2021. Payment in Lieu of Taxes (PILOT) The Authority enters into and administers PILOT agreements for various unrelated business entities located in the City. Under the terms of the PILOT agreements, title to property owned by the unrelated business entity is transferred to the Authority for a certain period of time. During the period in which the Authority holds title, the business entity pays a PILOT to the Authority based on a calculation defined by the specific agreement. The PILOTs allow the companies to make payments that are less than the property taxes that would be paid on the related property’s assessed value. Once the PILOT is received, the Authority remits the PILOT to the respective taxing authorities. Certain requirements, as defined by each agreement, are to be met by the company to be able to maintain its PILOT. These requirements, as stated in the PILOT agreement, can be comprised of reaching and maintaining certain employment goals and paying its PILOT in a timely fashion. At the completion of the PILOT, title to the property is transferred back to the third-party business owner, and the property goes back on the tax rolls. PILOT receipts and PILOT payments are accounted for as pass- through transactions and are not included in the revenues or expenses of the Authority. The Authority is responsible for collecting and remitting the funds. However, the taxing authorities bear the risk of loss if the PILOT payments are not paid to the Authority by the respective companies. Total pass-through PILOT payments were approximately $2,175,000 and $2,262,000 for the years ended December 31, 2022 and 2021, respectively. 9 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- Continued Income Taxes The Authority is exempt from Federal, State and Local income taxes. New Accounting Standards Adopted During the year ended December 31, 2022, the Authority implemented Government Accounting Standards Board (GASB) No. 87, Leases (GASB 87). GASB 87 enhances the relevance and consistency of information related to a government’s leasing activities. The requirements of GASB 87 are based on the principle that leases represent the financing of the right to use and underlying nonfinancial asset. A lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a T lease receivable and deferred inflows of resources. The adoption of GASB 87 did not have a material impact on the Authority’s financial statements and did not result in any reclassifications or restatements of net position or changes in net position. AF During the year ended December 31, 2022, the Authority implemented GASB No. 91, Conduit Debt Obligations (GASB 91). GASB 91 defines conduit debt obligations and establishes standards for the recognition, measurement, and disclosures for issuers and is expected to improve financial reporting by ending significant diversity in reporting practices. The adoption R of the new standard did not have a material effect on the Authority’s financial statements and did not result in any reclassifications or restatements of net position or changes in net position. D Subsequent Events The Authority evaluates transactions that occur subsequent to year end for potential recognition or disclosure in the financial statements through the date on which the financial statements are available to be issued. The financial statements were available to be issued on DATE. NOTE B--CASH AND CASH EQUIVALENTS The Authority’s investment policies are governed by New York State statutes and its own written investment policy. The Authority is authorized to use demand deposit accounts, money market accounts, and certificates of deposit. Permissible investments include obligations of the U.S. Treasury and those of New York State and its municipalities and school districts. All cash of the Authority is maintained in accounts covered by the Federal Deposit Insurance Corporation (FDIC). In accordance with state law, collateral is required for demand deposits and certificates of deposit not covered by FDIC insurance. The Authority’s uninsured deposits are collateralized by accounts held by the pledging financial institution agent in the Authority’s name. There were approximately $479,000 in uninsured deposits for the year ended December 31, 2022. 10 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE C--LAND HELD FOR SALE OR DEVELOPMENT In January 2015, the Authority entered into a series of agreements related to a proposed park improvement project. The agreements allowed the Authority to undertake development activities and included a two-year option to purchase a parcel of land to support the same project. During 2017, the Authority exercised the option and purchased the land. As of December 31, 2022 management does not consider the land to be impaired, and accordingly, the Authority has not recorded an impairment loss for the years ended December 31, 2022 and 2021. Land held for resale or development activity is as follows for the period January 1, 2022 through December 31, 2022: $ Beginning Balance 287,000 $ T Additions - Subtractions $ (207,000) $ Ending Balance 80,000 AF NOTE D--LAND PURCHASE OPTION In April 2017, the Authority entered into an exclusive option agreement to sell a 1.4-acre R parcel of land to a developer of an IDA project for an exercise price of $100,000. The option agreement has a 7-year term and requires annual lease payments of $10,000 to be paid to the Authority by the developer during the option term. In exchange for the option the D developer paid the Authority $107,000 during the year ended December 31, 2017. The total purchase price of the land under this agreement was $207,000. In August 2020, the Authority amended this agreement. Under the amended agreement, the Authority agreed to provide the developer assistance for qualified project expenditures in an amount of up to $250,000. In exchange for this assistance, the purchase price of the land was increased to $457,000. In addition, the option date was amended to be the earlier of the developer’s closing date on permanent financing or April 28, 2024. In 2022, the developer exercised the option. The Authority recognized a gain on sale of the land of approximately $285,000. NOTE E--BOARD DESGINATED NET POSITION During 2018, the Board approved and designated funds up to $61,700 for design services related to the Troy Wayfinding System project that will help assist with parking, visitors and overall connectivity in the City of Troy. As of December 31, 2022, these funds have not been expended. 11 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE F--RELATED PARTY TRANSACTIONS City of Troy In accordance with an agreement between the Authority and the City, the Authority reimburses the City annually for services and support personnel provided to the Authority during the year. The annual charge for these services was $100,000 for the years ended December 31, 2022 and 2021. Troy Capital Resource Corporation The Authority’s current Board of Directors is the same as that of the Troy Capital Resource Corporation (Troy CRC). Troy Local Development Corporation T The Authority and the Troy Local Development Corporation (TLDC) have entered into a fee sharing agreement. Under the agreement, the IDA will provide TLDC a portion of the administration fee for board approved projects that include TLDC involvement. There were AF no administration fees paid to TLDC pursuant to this agreement during the years ended December 31, 2022 and 2021. R D 12  COMPLIANCE REPORT T AF R D  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 To the Board of Directors Troy Industrial Development Authority Troy, New York T 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 AF Auditing Standards issued by the Comptroller General of the United States, the financial statements of Troy Industrial Development Authority (the "Authority"), which comprise the statement of net position as of December 31, 2022, and the related statements of revenues, expenses, and changes in net position and cash flows for the year ended, and the related notes to the financial statements, and have issued our report thereon dated DATE. R Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the D Authority'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 opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority'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 entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or 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. 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 or significant deficiencies may exist that were not identified. 13 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority's financial statements are free from 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 Authority’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 Authority's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Albany, New York DATE T AF R D 14 SUPPLEMENTARY INFORMATION T AF R D TROY INDUSTRIAL DEVELOPMENT AUTHORITY Schedule I - Schedule of Supplemental Information - Straight Leases December 31, 2022 FTE Jobs Original Original FTE Construction Project Total Payments in Prior to Estimate Estimate Current Jobs Created Purpose Lease Not for Total lieu of Taxes IDA of Jobs to be of Jobs to be FTE During the Project Code Amount Profit Exemptions (PILOTS) Status Created Retained Employees Fiscal Year 10 River Street, LLC Construction $ 13,508,827 N $ 256,816 $ 38,433 - 2 - 1 - 25 Morrison Ave. Assoc., LLC Construction 4,600,000 N 160,901 86,708 - 2 - 2 - 2920 Fifth Ave. Assoc., LLC Construction 1,891,000 N 67,042 9,800 - 2 - 1 - 33 Second Street LLC Construction 2,195,000 N 62,573 16,625 6 27 6 - - 444 River Street Redevelopment Project Construction 17,950,000 N 184,799 47,063 - 3 - 3 - 701 River Street, LLC Construction 10,585,000 N 214,847 32,785 - 17 - - - Chestnut Bur, LLC Construction 2,300,000 N 62,349 39,062 1 28 1 10 - City Station Eaast Other Categories 14,418,000 N 326,271 109,094 - 9 - 2 - City Station South Other Categories 7,600,000 N 328,059 40,237 - 5 - 2 - CityStation West, LLC Services 12,835,000 N 184,142 107,797 - 44 - 2 - Columbia Chasan MT LLC Other Categories 5,400,000 N 129,615 46,574 - - - 36 - Columbia Proctors Realty, LLC Construction 7,200,000 N 53,634 28,088 - 40 - 39 - Cookie Factory LLC with Fratellos Holdings LLC Dauchy/River Triangle LLC - Dauchy Building Dauchy/River Triangle LLC - River Triangle Building Dinosaur Restaurants LLC First Columbia 433 River Street, LLC Manufacturing Construction Construction Retail Trade Construction 561,500 5,600,000 2,300,000 2,900,000 9,740,634 T N N N N N 39,108 125,145 80,450 102,798 721,373 15,461 19,649 17,878 74,864 424,695 24 8 19 - 930 4 9 6 80 - 24 8 19 - 930 - - - - 844 - - - - - Fitzgerald OZ, LLC Five One Five River Street Fourth Street Troy, LLC HV Housing, LLC Hoosick Hospitality, LLC Industrial Park Cold Storage, LLC Irving Ave 158 LLC Kings Commons, LLC Lion Factory Building LLC Martin Luther King Revitalization Construction Construction Construction Construction Services Retail Trade Other Categories Construction Construction Construction AF 13,131,974 18,662,615 18,682,288 21,400,000 23,000,000 4,700,000 4,490,000 12,862,462 54,569,101 13,486,000 N N N N N N N N N N 204,333 491,642 516,439 238,670 377,670 62,573 145,705 205,596 - 147,493 27,708 54,573 21,065 38,968 200,000 43,130 46,737 13,834 - 19,526 1 - - - - 52 2 - - 16 2 15 1 5 65 22 2 3 - - 1 - - - - 52 2 - - 16 1 23 3 5 50 - 10 3 - - 23 - 61 - - - - - - - Montroy Management L.P. Monument Square I Limited Partnership O'Neil Park Place at Brook's Edge, LLC R&M Holdings of Troy LLC Tapestry on the Hudson R Construction Other Categories Other Categories Construction Construction Construction 4,061,000 16,930,328 10,595,444 7,495,000 1,996,000 22,278,400 N N N N N N 64,213 166,264 181,014 116,206 11,174 161,795 22,574 88,674 78,540 25,366 5,632 # 44,384 - 3 3 - 4 - 3 - 3 3 33 3 - 3 3 - 4 - - 2 4 4 - 2 6 - - - - - The Hendrick Hudson Troy LDC Main Street Troy Red Tail LLC Troy_LDC_Water Street Vecino Group New York, LLC - Hudson Art House D Construction Other Categories Construction Other Categories Construction 5,508,251 - 5,506,960 - 19,245,923 N Y N Y N 160,007 49,611 38,720 37,991 187,718 58,076 8,113 - 56,522 35,822 88 - - 50 - - - 3 - 4 80 - - - - - - - 10 4 - - - 2 - See independent auditor's report 15