St. Albans City Manager, Dominic Cloud takes umbrage at the TIF audit report generated by the Office of State Auditor Doug Hoffer.

In a public letter, Mr. Cloud expresses his displeasure at great length, finding even the factual title objectionable.  The City’s website omits the actual audit report, including only Mr. Cloud’s defensive arguments. St. Albans Messenger editor Emerson Lynn piled-on in a blistering editorial that appeared in the paper before the story of the audit report was even covered. Now that’s teamwork!

For its part, the City has made the curious decision to omit Mr. Hoffer’s audit report from their website while including Mr. Cloud’s angry response to the report.

Voters in St. Albans should not be expected to be familiar with the TIF statutes.  The information we received before voting did not address the possible conflicts associated with stretching TIF debt assigned for brownfield clean-up to pay for costs associated with developing a private hotel on the site.  Apparently, those disallowed uses were not even clearly stated in the City’s application for funding.  It should have therefore come as no surprise that a state audit would call them into question.

Mr. Cloud uses interactions by the City with it’s “partner” The Vermont Economic Progress Council, mostly after-the-fact, to deflect his responsibility for mismanagement of the TIF district.  According to statute, VEPEC is not supposed to be a ‘partner’ with the City, but rather an overseer,  charged with evaluating the City’s requests to utilize TIF funding in specific ways,, and with enforcement in the case of non-compliance.

Mr. Cloud insists that it is a “moot point” if the repayment terms were not clearly communicated to voters in a timely manner, because “… the City Council has ratified any irregularities related to the call of the meeting.”  Nice for the City Council, but how does that fix the information gap?

Objections to using $1 million of TIF debt to pay debt service on TIF debt and over $4 million of costs for a private hotel are not based on “arcane, technical questions” as Mr. Cloud says, but on statutes that may be rather easily understood in terms of the overarching purpose of TIF funding.  What is “arcane” is the baroque twist to the statutes that the City has employed to defeat that purpose. 

Wrong is wrong, period.

It is quite true that the audit highlights some shortcomings in the statutes governing TIF administration, which contributed to the problems in St. Albans.  That is one of the values of audits conducted on behalf of the public interest.

But no matter how much civic leaders may wish to lean on these shortcomings as excuses for mismanagement,  the inescapable fact remains that people entrusted by the public with responsibility beyond the scope of the average citizen, knowingly skated on the edge of legitimacy in interpreting the TIF regulations to their best advantage.  

Like more than a few other city taxpayers, I attended those informational meetings at City Hall and regrettably did not have the chops to raise pertinent questions at the right times; nor to recognize when we were not provided with all the information to cast an informed vote.  I had my suspicions and so voted against the TIF expenditures, but I can’t claim that my vote was informed by more than a hunch that it was all a little too good to be true.

We have little choice but to rely on the guidance of our paid City Manager and other professionals who are entrusted with administering the city’s resources. There is a duty of service on the part of those professionals, which no amount of deflection can undo.

Defenses expressed by the City Manager in his rebuttal concentrate only on deficiencies in the codification of TIF rules, but completely ignore the issues of obvious tax diversion, financial irregularities, cost overruns, no-bid contract awards, and sweetheart deals for private profit.  The practice seems to have been “do what you will and get permission later.”

Any one of those issues could possibly be excused as an error, but surely not all of them!  And when the City Manager goes ballistic at the criticism, it sounds a little like guilt speaking.

Dominic Cloud  accuses Auditor Hoffer of bias and suggest he should mind his own business,  But this is his business; it is the whole state’s business.  When Mr. Cloud got all creative with the rules, he essentially gamed the entire state’s Education Fund.

I love my hometown as much as the next guy, but I don’t think its fair for my neighbors in St. Albans TOWN, or Swanton or elsewhere in Vermont where they don’t enjoy the largesse of TIF funding, to be cheated of the taxes that were meant to be generated by the new City Public Parking Garage.  Built with TIF dollars, the parking garage essentially double-dipped on the Education Fund when it claimed  special status as a tax-free entity.  The implicit promise of TIF is that investments made with money withheld from the Education Fund ultimately will be returned two-fold by the taxes generated from new development, such as the City Public Parking Garage.  

Contrary to Mr. Cloud’s assertions, the audit did not apply novel interpretations of long standing rules.  According to the report, the auditor’s office consulted with the AGO when it came to interpretation of the statutes, and applied that guidance.  But even without that guidance, there is evidence in the record from which one might reach the same conclusions as are contained in the St. Albans audit.   In the case of Winooski’s TIF funded parking garage, the legislature rejected two efforts by that City to have the statutes  amended to make the parking garage tax exempt.  Why would the City of St. Albans be any different?

Outrage in the face of discovery doesn’t become our City Manager.  Dominic Cloud is a sophisticated business mind who understands these principles all too well.  

The question remains:  after all the egregious mismanagement of TIF funds, including a huge sum paid to a private agent in order to facilitate the sale of property to a private entity, will there be enough left in the TIF to fund the largest component that it was intended to support, ie. the Multi-Modal Connector, which has not yet even broken ground?

I, for one, would like to thank Auditor Hoffer for bringing this mess to our attention.  For TIF funding to return full value to the state, it must be rigorously patrolled against abuse.  Otherwise it is just welfare for developers at the expense of our children’s education.