Redevelopment Agency / Loan Committee

CHAIRMAN Felix R. Serrano COMMISSIONERS Lisa M. Cooper John E. Igneri William R. Speirs David G. Westmoreland EXECUTIVE DIRECTOR Brian T. Bidolli TO: MEMBERS, NORWALK REDEVELOPMENT AGENCY FROM: WILLIAM SPEIRS, VICE-CHAIRMAN DATE: December 4, 2020 RE: MEETING NOTICE ************************************************************************ The next Meeting of the Norwalk Redevelopment Agency will be held on Tuesday, December 8th, 2020 at 5:30 p.m. at 3 Belden Avenue, First Floor. Due to the ongoing public health situation the regular meeting will be held as a Zoom videoconference via the link provided below: December 8th, 2020 5:30 P.M. REGULAR MEETING AGENDA ZOOM Link: https://zoom.us/j/97494681719?pwd=NUxIdlNzR0hJOGRFc2VUSGZvMnBaQT09 CALL TO ORDER ROLL CALL PUBLIC PARTICIPATION I. ADMINISTRATION 1. APPROVAL OF MINUTES i. Approve Minutes of the November 3rd, 2020 Special Meeting 2. FINANCE i. Approve Norwalk Redevelopment Agency Audited Financial Statements for Fiscal Year Ended June 30, 2020. ii. Approve Norwalk Redevelopment Agency Statement of Revenues and Expenditures for Operating Fund 100 for Year-to-Date October 31, 2020. 3 BELDEN AVENUE - 2ND FLOOR, NORWALK, CT 06850 · TELEPHONE 203-854-7810 · FAX 203-854-7734  page 2 of 2 II. BUSINESS 1. CERTIFICATE OF COMPLETION – SONO COLLECTION i. Approve issuance of Certificate of Completion for SONO Collection 2. ELECTION OF OFFICERS III. NEW BUSINESS IV. OLD BUSINESS ADJOURNMENT 3 BELDEN AVENUE - 2ND FLOOR, NORWALK, CT 06850 · TELEPHONE 203-854-7810 · FAX 203-854-7734  Norwalk Redevelopment Agency ATTENDANCE: Felix Serrano, Chair; Lisa M. Cooper, John Igneri, William Speirs, David Westmoreland. OTHERS: Brian Bidolli, Executive Director; Marc Grenier, Esq.; John Kydes, Common Council; Ms. E. Lupinski, Redevelopment Agency. CALL TO ORDER Mr. Serrano called the meeting to order at 5:33 p.m. ROLL CALL A quorum was present. PUBLIC PARTICIPATION Mr. Kydes said that he knew Mr. Bidolli having worked with him extensively over the past year, and felt he was a valuable asset to the Redevelopment Agency and City of Norwalk. Mr. Kydes mentioned he was on the Common Council Planning Committee and felt Mr. Bidolli’s appointment would be a good thing. He encouraged everyone to support Mr. Bidolli. He said that the Redevelopment Agency’s independence was a strong asset and thanked the Commissioners for their time. I. ADMINISTRATION APPROVAL OF MINUTES i. Approve minutes of October 13, 2020 Regular Meeting. Page 1, HEADER, please change “RESEVELOPMENT AGENCY” to “REDEVELOPMENT AGENCY” Page 2, under FINANCE, Section ii, first line: please change “Ms. Cooper went through” to” Ms. Lupinski went through” ** MR. IGNERI MOVED TO APPROVE THE MINUTES OF OCTOBER 13, 2020 REGULAR MEETING AS AMENDED. ** MS. COOPER SECONDED. ** THE MOTION PASSED UNANIMOUSLY. FINANCE City of Norwalk Norwalk Redevelopment Agency Special Meeting November 3, 2020 Page 1  i. Approve Norwalk Redevelopment Agency Revenue and Expenditures Statements and Balance Sheets for all funds for quarter ending September 30, 2020. Ms. Lupinski presented the financial report. She noted that CDBG funding this year had been decreased. She then gave a brief overview of the funds and net assets to the Commissioners. ** MR. IGNERI MOVED TO APPROVE THE NORWALK REDEVELOPMENT AGENCY REVENUE AND EXPENDITURES STATEMENTS AND BALANCE SHEETS FOR ALL FUNDS FOR QUARTER ENDING SEPTEMBER 30, 2020. ** MR. SPEIRS SECONDED. ** THE MOTION PASSED UNANIMOUSLY. BUSINESS 1. Agency Strategic Plan i. Discussion and approval of 2020-2025 Strategic Plan. Download at: https://drive.google.com/file/d/1WnV1PrzwdiJ6Hpj3DW4iG702e99mZTgc/vi ew?usp=sharing Mr. Bidolli said that the link and the information had been sent out before and that the item was on the agenda for discussion. Mr. Serrano said that if they had their regularly scheduled meeting, comments would have been received for consideration by the 6th of the month. However, he noted some members had not yet finished reviewing the plan. Atty. Grenier recommended that the item be tabled at this time. ** MR. IGNERI MOVED TO TABLE THE APPROVAL OF 2020-2025 STRATEGIC PLAN. ** MS. COOPER SECONDED. ** THE MOTION PASSED UNANIMOUSLY. 2. CDBG Economic Development & Job Retention Program i. Approve CDBG Economic Development & Job Retention loan program guidelines. Mr. Bidolli said that there was a tremendous need for business financial assistance due to COVID and suggested creating an Economic Development and Job Retention program with CDBG funds. He gave a brief overview of the program, which would be based on need and ability to pay back the loan. City of Norwalk Norwalk Redevelopment Agency Special Meeting November 3, 2020 Page 2 Mr. Speirs noted that it was a 0% loan. Mr. Bidolli said the interest rate would be dependent on need and pay back term, and potentially structured as a forgivable loan, rather than a grant due to reporting requirements. He further indicated need for additional concurrence by the Planning Committee of the Common Council regarding the eligibility of projects and applicants. The Notice of Funding Availability (NOFA) and application for CARES Act (CDBG-CV Round 3) has been posted and funding is available. Mr. Igneri asked if there was a system to administer this. Mr. Bidolli said that they do have a system in place, but there are some Federal requirements for job retention that need to be addressed to finalize the loan guidelines. The discussion then moved to the requirements to determine need. Mr. Westmoreland said that he was fine with 0% and would support this. Mr. Serrano said that this has to be reviewed by the Planning Committee. Mr. Bidolli said that he wanted to present the term sheet to the Agency first and could bring the Planning Committee determination back to the Agency as needed. He said that he was asking the Agency to approve the guidelines based on the terms sheet so that he could get the funding out to the community as soon as possible. Mr. Westmoreland asked if this 0% rate would affect other programs. Mr. Bidolli said other programs would stay at their normal rate, with funds reallocated from Residential Rehab Program Income and the Walk Bridge Mitigation program to cover the loans, with repayment to replenish the fund for future projects. ** MR. IGNERI MOVED TO APPROVE THE CDBG ECONOMIC DEVELOPMENT & JOB RETENTION LOAN PROGRAM GUIDELINES. ** MS. COOPER SECONDED. ** THE MOTION PASSED UNANIMOUSLY. 3. EXECUTIVE SESSION 1. Personnel matter regarding Executive Director employment agreement Possible action related to III.1. ** MS. COOPER MOVED TO ENTER INTO EXECUTIVE SESSION IN ORDER TO DISCUSS PERSONNEL MATTERS. ** MR. SPEIRS SECONDED. ** THE MOTION TO ENTER INTO EXECUTIVE SESSION PASSED UNANIMOUSLY. City of Norwalk Norwalk Redevelopment Agency Special Meeting November 3, 2020 Page 3 The Agency Board and Atty. Grenier entered into Executive Session to discuss personnel issues at 5:52 p.m. They returned to Public Session at 7:01 p.m. No actions or votes were taken during Executive Session. ** MR. SPEIRS MOVED TO AUTHORIZE THE CHAIRMAN TO EXECUTE EXECUTIVE DIRECTOR EMPLOYMENT AGREEMENT. ** MS. COOPER SECONDED. ** THE MOTION PASSED UNANIMOUSLY. Mr. Speirs thanked Mr. Serrano for his years of service. ADJOURNMENT ** MR. IGNERI MOVED TO ADJOURN. ** MS. COOPER SECONDED. Mr. Serrano thanked everyone for all their hard work and said that he would look forward to see what the Agency would do in the future. ** THE MOTION PASSED UNANIMOUSLY. The meeting adjourned at 7:04 p.m. Respectfully submitted, S. L. Soltes Telesco Secretarial Services. City of Norwalk Norwalk Redevelopment Agency Special Meeting November 3, 2020 Page 4 Government-wide Financial Statements and Single Audit Reports Year ended June 30, 2020 AF T R D  NORWALK REDEVELOPMENT AGENCY Table of Contents Year ended June 30, 2020 Index Independent Auditor’s Report Management’s Discussion and Analysis 1–6 Government-wide Financial Statements: Statement of Net Assets 7 Statement of Activities 8 Fund Financial Statements: Balance Sheet-Governmental Fund Type 9 Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds 10 Notes to the Financial Statements AF 11–20 T Supplementary InformationR D 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 21–22 Schedule of Revenues, Expenditures and Changes in Fund Balances -Budgetary Comparison 23 Federal Single Audit Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance 24–25 Schedule of Expenditures of Federal Awards and Related Notes 26 Schedule of Findings and Questioned Costs – Federal Awards 27  829 Bayshore Boulevard Tampa, FL 33606 USA www.solakiancpa.com Independent Auditor’s Report To the Board of Commissioners Norwalk Redevelopment Agency Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and major fund of Norwalk Redevelopment Agency as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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. AF Auditor’s Responsibility T Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit R in accordance with auditing standards generally accepted in the United States of America and the standards D applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the major fund of Norwalk Redevelopment Agency, as of June 30, 2020, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. THIS REPORT IS ISSUED WITH THE UNDERSTANDING THAT WHILE IT MAY BE REPRODUCED IN ITS ENTIRETY, EXTRACTS FROM IT OR REFERENCES TO IT SHALL FIRST BE SUBMITTED FOR OUR WRITTEN APPROVAL. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information on pages 1-6 and 21 be presented to supplement the basic financial statements. Such information, although not a 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. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional analysis and is not a required part of the 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 financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including AF comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in T accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole R Other Reporting Required by Government Auditing Standards D In accordance with Government Auditing Standards, we have also issued our report dated October 31, 2020, on our consideration of Norwalk Redevelopment Agency’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 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 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 Norwalk Redevelopment Agency’s internal control over financial reporting and compliance. October 31, 2020 THIS REPORT IS ISSUED WITH THE UNDERSTANDING THAT WHILE IT MAY BE REPRODUCED IN ITS ENTIRETY, EXTRACTS FROM IT OR REFERENCES TO IT SHALL FIRST BE SUBMITTED FOR OUR WRITTEN APPROVAL.  NORWALK REDEVELOPMENT AGENCY, INC. Management’s Discussion and Analysis June 30, 2020 As management of the Norwalk Redevelopment Agency, Inc. (the “Agency”), we offer readers of the Agency’s financial statements this narrative overview and analysis of the financial activities of the Agency for the fiscal year ended June 30, 2020. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in the Agency’s basic financial statements that follow this section. Financial Highlights – Norwalk Redevelopment Agency The assets of the Norwalk Redevelopment Agency exceeded its liabilities at the close of the most recent fiscal year by $4,178,323 (net assets). There was a decrease in net position of $153,331 for the fiscal year ended June 30, 2020 due to $294,000 of legal expenditures for Wall Street Litigation. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the Agency’s basic financial statements. The Agency’s financial statements are comprised of three components: 1) government- wide financial statements, 2) fund financial statements, and 3) notes to financial statements. As outlined in GASB 34, this report also contains other supplementary information in addition to the basic financial statements themselves. AF Government-Wide Financial Statements T R The government-wide financial statements are designed to provide readers with a broad overview of D the Agency’s finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the Agency’s assets and liabilities, with the difference between the two reported as net position. Over time increases or decreases in net position may serve as a useful indicator of whether the financial position of the Agency is trending up or down. The statement of activities presents information showing how the Agency’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods. Both of the government-wide financial statements distinguish functions of the Agency that are principally supported by Federal HUD Community Development Block Grant (CDBG), Connecticut (State) Department of Economic Community Development (DECD), Choice Neighborhood Initiatives (CNI), Agency and City of Norwalk (City) grants (governmental activities). Agency projects are essential to the City so that the City can maintain stable taxes, avoid stagnation, and preserve the City’s AAA bond rating. (Continued) 1  NORWALK REDEVELOPMENT AGENCY, INC. Management’s Discussion and Analysis June 30, 2020 Government-Wide Financial Statements (continued) The governmental activities of the Agency include Non-Revolving Loan Activities funded by the CDBG, Revolving Loan Activities funded by paid-off loans that are invested back into the Norwalk community as new loans, the DECD grants funded by the State, CNI, Agency and City grants which are used for Urban Renewal projects in Norwalk, and the Operating Activities which manage and perform the daily activities in the various programs and projects. In addition to the governmental funds containing special revenue, the government-wide financial statements can be found on pages 7 - 8 of this report. Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Agency, like other redevelopment agencies of local governments, uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. All of the funds of the Agency can be divided into two categories: governmental funds for special revenue, and account groups for general long-term obligations. Governmental funds AF T Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide R financial statements, governmental fund financial statements focus on near-term inflows and D outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the Agency’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the Agency's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The reconciliation usually centers on debt and fixed assets of which the Agency has none. The Agency maintains five (5) individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the governmental fund and account group for general long-term obligations. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The basic governmental fund financial statements can be found on pages 9 - 10 of this report. (Continued) 2  NORWALK REDEVELOPMENT AGENCY, INC. Management’s Discussion and Analysis June 30, 2020 Notes to the financial statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 11 - 20 of this report. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of an agency’s financial position. In the case of the Agency, assets exceeded liabilities by $4,178,323 at the close of the most recent fiscal year. The net position decreased $153,331 for the fiscal year ended June 30, 2020 due to $294,000 of legal expenditures for Wall Street Litigation. The largest portion of the Agency’s assets (79%) is made up of cash and investments. Interest earned on cash and investments generate a small portion of the revenue for the Agency’s operating budget. The second largest portion of the Agency’s assets (21%) is made up of accounts and loans receivable. Accounts receivable are due from government entities, and the loan portfolio consists of loans to qualified sub-prime borrowers priced in accordance with HUD guidelines. At the end of the AF current fiscal year, the Agency is able to report positive balances in net position. T Net Position June 30: R 2020 2019 Cash and investments Assets D $ 7,600,824 $ 9,103,488 Grants and accounts receivable 620,551 786,122 Loans receivable, less allowance of $2,446,045 1,374,413 723,346 Other assets 71,184 23,176 Total assets 9,666,972 10,636,132 Liabilities and Net Position Accounts payable and accrued expenses 668,140 1,026,940 Due to governmental agencies and third parties 1,919,709 2,065,037 Deferred revenues and other liabilities 2,900,800 3,212,501 Total liabilities 5,488,649 6,304,478 Net position: Restricted-urban redevelopment 4,178,323 4,331,654 Total net position $ 4,178,323 $ 4,331,654 (Continued) 3  NORWALK REDEVELOPMENT AGENCY, INC. Management’s Discussion and Analysis June 30, 2020 Governmental activities Governmental activities had a decrease in net position of $153,331 for the fiscal year ended June 30, 2020 due to $294,000 of legal expenditures for Wall Street Litigation Change in Net Position Years Ended June 30: 2020 2019 Revenues: Other government grants for City projects $ 4,034,888 $ 4,881,700 Federal grants 1,038,142 924,336 Program and other income 242,767 217,911 Investment income 21,056 36,069 Total revenues AF 5,336,853 6,059,016 Expenditures: T Project outlays R 5,490,184 6,636,217 D Change in net position (153,331) (577,201) Net position - beginning of year 4,331,654 4,908,855 Net position - end of year $ 4,178,323 $ 4,331,654 (Continued) 4  NORWALK REDEVELOPMENT AGENCY, INC. Management’s Discussion and Analysis June 30, 2020 Expenses and Program Revenues – Government-Wide Activities Revenues and expenditures had a decrease in net position of $153,331 for the fiscal year ended June 30, 2020 due to $294,000 of legal expenditures for Wall Street Litigation. Financial Analysis of the Government's Funds As noted earlier, the Agency uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the Agency’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Agency’s financing requirements. In particular, fund balances may serve as a useful measure of a government's net resources available. As of the end of the current fiscal year, the Agency’s governmental funds reported combined ending fund balances of $4,178,323. There was a decrease AF in net position of $153,331 for the fiscal year ended June 30, 2020 due to $294,000 of legal expenditures for Wall Street Litigation. Governmental Fund Budgetary Highlights T R D There was no difference between the original budget and the final budget. Factors Affecting CDBG Federal Funding The Federal HUD Community Development Block Grant (CDBG) funding has substantially decreased over the years. In the year 2001, the CDBG entitlement grant shared with non-profits was $1,209,000. In the year 2008, the grant had continued its yearly downward spiral to where the CDBG entitlement grant was only approximately $935,100. Over the 7 year period, there was an actual decrease in CDBG dollar funding of approximately $274,000, or 23%. In addition, a 3% Cost of Living increase in federal CDBG funding was never provided which resulted in an additional decrease in CDBG funding of approximately $278,000, or 23%. This resulted in a significant 46% decrease in total real CDBG dollars received over seven years of approximately $551,300. The CDBG entitlement grant of approximately $845,023 shared with non-profits for the fiscal year ending June 30, 2020 is less than the CDBG entitlement grant received in 2008. (Continued) 5  NORWALK REDEVELOPMENT AGENCY, INC. Management’s Discussion and Analysis June 30, 2020 Subsequent Events Relating to COVID-19 On January 30, 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Agency’s financial condition, liquidity, and future operations, and management is actively monitoring the global situation. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Agency is not able to estimate the effects of the outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. Requests for Information AF This financial report is designed to provide a general overview of the Agency’s finances for all T those with an interest in the finances of the Agency. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Director at the Norwalk Redevelopment Agency, 3 Belden Avenue, Norwalk, CT 06850. R D 6  NORWALK REDEVELOPMENT AGENCY Statement of Net Position June 30, 2020 Governmental Assets Activities Cash $ 1,670,797 Investments 5,930,027 Grants and accounts receivable 620,551 Loans receivable, less allowance of $2,446,045 1,374,413 Other assets 71,184 Total assets $ 9,666,972 AF T Liabilities and Net Position Accounts payable and accrued expenses R 668,140 D Due to governmental agencies and other third parties Deferred revenues 1,919,709 1,889,460 Other liabilities 1,011,340 Total liabilities 5,488,649 Restricted for Urban Redevelopment 4,178,323 Total liabilities and net position $ 9,666,972 See accompanying notes to basic financial statements. 7  NORWALK REDEVELOPMENT AGENCY Statement of Activities Year ended June 30, 2020 Net (Expense) Revenue and Changes in Net Assets Primary Government- Program Capital Grants Total Governmental Functions/Programs Expenses Revenues and Contributions Activities Primary government-governmental activities: Operating $ 1,642,403 90,417 1,377,605 (174,381) Brookfield development 119,471 119,471 - - Community Development Block Grant (CDBG)-Revolving Loan Fund (RLF) 28,670 28,670 - - CDBG-Non-RLF 1,042,353 4,209 1,038,142 (2) Other programs and City projects 2,657,287 - 2,657,283 (4) Total governmental activities $ 5,490,184 242,767 5,073,030 (174,387) T AF General revenues: R Unrestricted investment income 21,056 D Change in net position (153,331) Net position-beginning of year 4,331,654 Net position-end of year $ 4,178,323 See accompanying notes to basic financial statements. 8  NORWALK REDEVELOPMENT AGENCY Balance Sheet-Governmental Funds June 30, 2020 Assets Cash $ 1,670,797 Investments 5,930,027 Grants and accounts receivable 620,551 Loans receivable, less allowance of $2,446,045 1,374,413 Other assets 71,184 Total assets $ 9,666,972 Liabilities and Fund Balances Accounts payable and accrued expenses $ 668,140 Due to governmental agencies and third parties T 1,919,709 Deferred revenues Other liabilities AF 1,889,460 1,011,340 Total liabilities R 5,488,649 Fund balances-restricted D 4,178,323 Total liabilities and fund balances $ 9,666,972 Reconciliation of governmental fund balances: Total fund balances $ 4,178,323 Reconciling items - Net assets of governmental activities $ 4,178,323 See accompanying notes to basic financial statements. 9  NORWALK REDEVELOPMENT AGENCY Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Funds Year ended June 30, 2020 Revenues: Other government grants for City projects $ 4,034,888 Federal grants 1,038,142 Program and other income 242,767 Investment income 21,056 Total revenues 5,336,853 Expenditures: Project outlays 5,490,184 Net changes in fund balances AF (153,331) Fund balances - beginning of year T 4,331,654 Fund balances - end of year R $ 4,178,323 D Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balance: Total net change in fund balances-governmental funds (153,331) Reconciling items - Change in net position of governmental activities $ (153,331) See accompanying notes to basic financial statements. 10  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements June 30, 2020 (1) Summary of Significant Accounting Policies The Norwalk Redevelopment Agency (Agency), an agent of the City of Norwalk, Connecticut (City) and is defined by the City as an Administrative Department of the municipality. The Agency was established by state statute and City code to oversee the development of the City’s six project areas. The Agency functions autonomously from the City and is managed by a board of five commissioners who are appointed by the Mayor and approved by the Common Council of the City. The Agency prepares its basic financial statements in conformity with generally accepted accounting principles promulgated by the Governmental Accounting Standards Board (GASB) and other authoritative sources identified in Statement on Auditing Standards No. 69; has implemented the financial reporting model, as required by the provisions of GASB Statement No. 34, Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments; and it complies with the requirements of contracts and grants of agencies from which it receives funds. Reporting Entity AF The Board of Commissioners (Board) is appointed by the Mayor and it has the authority to make T decisions, appoint administrators and managers, and significantly influence operations. It also has the primary accountability for fiscal matters. Therefore, the Agency is a financial reporting entity as defined by GASB in its Statement No. 14, "The Financial Reporting Entity." There are R no component units included within the reporting entity. D Government-wide and Fund Financial Statements The Statement of Net Position and the Statement of Activities are government-wide financial statements. They report information on all of the Agency’s non-fiduciary activities. Governmental activities include programs supported primarily by grants and other intergovernmental revenues. Business-type activities include operations that rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates how other people or entities that participate in programs the Agency operates have shared in the payment of the direct costs. The “Capital grants and contributions" column includes amounts paid by organizations outside the Agency to help meet the operational or capital requirements of a given function. If revenue is not program revenue, it is general revenue used to support all of the Agency's functions. All interfund transactions between governmental funds are eliminated on the government-wide statements. Interfund activities between governmental funds and fiduciary funds would remain on the government-wide Statement of Activities. The fund financial statements provide reports on the financial condition and results of operations for governmental funds. (Continued) 11  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements use the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements use the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities and fund balances are included on the balance sheet. Operating statements of these funds present net increases and decreases in current assets (i.e., revenues and other financing sources and expenditures and other financing uses). The modified accrual basis of accounting recognizes revenues in the accounting period in which they become both measurable and available, and it recognizes expenditures in the accounting period in which the fund liability is incurred, if measurable. The expenditures related to certain AF compensated absences and claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. The Agency considers T all revenues available if they are collectible within 60 days after year end. R Miscellaneous revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. Investment earnings are recorded as earned, D since they are both measurable and available. Grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant. Accordingly, when such funds are received, they are recorded as deferred revenues until related and authorized expenditures have been made. If balances have not been expended by the end of the project period, grantors some times require the Agency to refund all or part of the unused amount. Fund Equity and Net Position The accounts of the Agency are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, expenditures or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The fund financial statements in this report consist only of the General Fund due to the nature of the Agency’s activities. (Continued) 12  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) Fund Equity and Net Position (continued) In the government-wide financial statements, net position is classified in the following categories:  Restricted for Urban Redevelopment– This category represents the balance reported by the Agency which is constrained for specific purposes externally imposed by the U.S. Department of Housing and Urban Development provider for urban redevelopment. When both restricted and unrestricted resources are available for certain expenses, the Agency expends restricted resources first and uses unrestricted resources when the restricted funds are depleted. The Authority adopted the provisions of Governmental Accounting Standards Board Statement #54 (GASB 54) Fund Balance Reporting and Governmental Fund Type which defines the different types of fund balances that the Authority must use for its governmental funds. GASB 54 requires the fund balances to be properly reported within one of the following categories for fund financial reporting purposes: AF  T Nonspendable – fund balance amounts associated with inventories, prepaids, and long- term receivables and payables.  R Restricted – fund balance amounts that can be spent only for the specific purposes D stipulated by external source providers or enabling legislation.  Committed – fund balance amounts that can be used only for specific purposes determined by a formal action of the highest level of decision-making authority, the Board of Directors.  Assigned – fund balance amounts intended to be used by the Authority for specific purposes but do not meet the criteria to be classified as restricted or committed fund balances.  Unassigned – fund balance amounts remaining for the General Fund that are spendable. The Authority’s committed fund balance reporting is required when funds have been committed at an Authority board meeting. The Authority’s assigned fund balance reporting is required when funds have been assigned by their nature (due to the FAA or for unidentified future capital projects). The Authority’s general policy is to apply expenditures against the applicable fund balances in the following order: nonspendable, assigned, committed, restricted, and unassigned. (Continued) 13  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) Cash Equivalents and Concentration of Risk The Agency considers cash equivalents to be those investments with original maturities of three months or less. The Agency also maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Agency has not experienced any losses in such accounts, and does not believe it is exposed to any significant credit risk on cash and cash equivalents. Investments Investments, which consist of money market funds, are presented at fair value. Grants and Accounts Receivable and Payable All receivables and payables are reported at their gross value. Receivables are reduced by the estimated portion that is expected to be uncollectible. The Authority establishes an allowance for estimated uncollectible accounts when appropriate. There was no allowance for uncollectible accounts as of June 30, 2020. AF Loans Receivable T Loans receivable, representing the outstanding balance of amounts advanced to individuals or R businesses from federal community development grants, are recorded as assets when the D advances are disbursed and are reflected net of any applicable uncollectible amounts. Interfund Receivables and Payables Outstanding balances between funds are presented as either due from or due to other funds and are not eliminated in the accompanying financial statements. Program Funds All funds received by the Agency are generally designated for use in the operation of its urban renewal and community development programs. Compensated Absences and Post-Employment Benefits Employees are permitted to accumulate a specified amount of earned but unused sick leave and vacation time, which will be paid to them upon separation from the Agency. These expenditures are recognized in the governmental funds in the current year to the extent they are paid during the year or the vested amount is expected to be paid with available resources. The liability for compensated absences at June 30, 2020 was approximately $112,000. The Agency does not provide any post-employment benefits. (Continued) 14  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (1) Summary of Significant Accounting Policies (continued) Budgetary Information Based upon the nature of the operation of the Agency, the Agency is not legally required to adopt a budget. Accordingly, comparative budget analysis has not been presented in these financial statements. Date through Which Subsequent Events Have Been Evaluated Subsequent events have been evaluated through October 31, 2020, which is the date the financial statements were available to be issued. (2) Reconciliation of Government-wide and Fund Financial Statements The Combined Balance Sheet-Governmental Fund Type provides the reconciliation between the fund balance for total governmental funds on the governmental fund balance sheet and the net assets for governmental activities as reported in the government-wide statement of net assets. There were no major reconciling items for 2020. The Combined Statement of Revenues, Expenditures and Changes in Fund Balance- AF Governmental Funds provides a reconciliation between the net changes in fund balance as shown T on the governmental fund statement of revenues, expenditures, and changes in fund balances and the changes in net assets of governmental activities as reported on the government-wide statement of activities. There were no major reconciling items for 2020. R (3) Deposits and Investments D At June 30, 2020, the carrying amount of the Agency's deposits was approximately $1,671,000, and their bank balances totaled approximately $2,449,000. The majority of the cash was on deposit with private financial institutions. As of June 30, 2020, the Agency’s deposits with financial institutions were in excess of federal depository insurance limits by approximately $1,949,000. The Agency’s cash consists of the following amounts at June 30, 2020: Petty cash $ 150 Cash in bank 1,670,647 Total cash $ 1,670,797 Custodial credit risk for deposits is the risk that in the event of a bank failure, the Agency’s deposits may not be returned to it, or it will not be able to recover collateral securities that are in the possession of an outside party. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Agency will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Agency does not have a deposit policy for custodial credit risk. (Continued) 15  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (3) Deposits and Investments (continued) The Agency's investments in money market accounts at June 30, 2020 totaled approximately $5,930,000 (of which $250,000 was insured). In the event that a financial institution becomes insolvent and is placed under Federal Deposit Insurance Corporation (FDIC) receivership, this collateral is subject to the FDIC requirements for perfecting security interest under Federal law. In the opinion of the Connecticut State Attorney General, these requirements are met. (4) Receivables, Payables and Deferred Revenue Grants and accounts receivables consist of the following at June 30, 2020: City and federal agencies $ 577,995 Other 42,556 Total grants and accounts receivable $ 620,551 Due to governmental agencies and other third parties consists of the following at June 30, 2020: Due to developer AF $ 488,554 T Due to Community Development Block Grant (CDBG) City and other projects 583,701 847,454 R Total due to governmental agencies $ 1,919,709 D Deferred revenues totaled approximately $1,889,500 as of June 30, 2020. Grant revenues are considered earned when expenditures are incurred and until then are considered deferred revenues. (5) City of Norwalk and Program Funding The Agency receives funding through the City of Norwalk as the City’s administrator of the CDBG program. The City’s operating budget also provides funding for salary and benefits of certain Agency staff that perform services directly for the City. The CDBG funding is distributed to Housing and Urban Development qualified programs and services within the City which are recognized as community needs within the City’s Consolidated Plan and are awarded by the Common Council. For the year ended June 30, 2020, the Agency recognized the following revenue: CDBG – Sub Grantee allocation $ 856,941 CDBG - Administration 181,201 Other Government Grants for City Projects 4,034,888 Total Non-Agency/CDBG/Sub Grantee Allocations $ 5,073,030 (Continued) 16  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (6) Employee Benefit Plan The Agency sponsors a defined contribution pension plan covering substantially all of its employees. The benefits are based on years of service and the accumulation of employer's contribution during years of employment. Contributions and cost are determined at an average of 12 percent of each employee's salary and totaled approximately $90,000 for the fiscal year ended June 30, 2020. (7) Due to/from Related Parties Other assets include net advances due to North Walke Housing Corporation (North Walke) in the amount of approximately $3,900 as of June 30, 2020. North Walke is a separate nonprofit organization, but they are related parties since certain officers and directors of the Agency also serve in the same capacity with North Walke. (8) Federal and State of CT Grants The City awards a portion of its annual CDBG allocation as grants to local organizations through AF a competitive process and recommended applicants provide various matching funds. T Organizations in receipt of these grants received support from an array of public and private sources to provide high quality and innovative programming in service of the community. The Agency worked strategically so that federal funds can attract additional funding and spur private R development to meet the needs of the community. A total of approximately $1,042,400 was D expended by the Agency during the year ended June 30, 2020. The Agency also received a CT Department of Economic and Community Development (DECD) Brownfields grant of $2,000,000 in 2017 to assist in the remediation of Ryan Park, a community park adjacent to the Washington Village Choice Neighborhoods Initiative project. The environmental remediation has been completed and Ryan Park has been redesigned to be more responsive to the community’s needs. Ryan Park reopened to the public in 2020. (9) Risk Management The Agency is exposed to various risks of loss related to torts; theft or damage to, and destruction of assets; errors and omissions for public officials; injuries to employees; and natural disasters. The Agency has obtained insurance coverage to guard against these events which will provide minimum exposure to the Agency should they occur. The Agency continues to carry commercial insurance for all other risks of loss, including business liability coverage. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three years. (Continued) 17  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (10) Commitments and Contingencies Amounts received or receivable from grantor agencies are subject to audit and adjustment by the grantor agencies. Any disallowed costs or claims, including amounts already received by the Agency, could become a liability. In recognition of reasonable cost standards, the Board recently took action to limit the amount of funding and implement cost containment protocols for legal expenses for ongoing litigation matters. The Agency and the City are Defendants in an action by John Dias (Plaintiff) pending in Connecticut Superior Court (John Dias v. City of Norwalk). On October 1, 2019, the City and the Agency filed a joint Motion for Summary Judgment (Motion), arguing that there is no genuine issue of material fact that the Defendants did not inversely condemn the Property and that the Defendants are entitled to judgment as a matter of law. The Plaintiff filed an opposition to the Motion, and based on the removal of the Property from the Land Disposition Agreement and the recent sale for $1.5 million, an amended complaint was filed in October 2020. In response to this amended complaint, the Defendants drafted a new Motion which was submitted November 30, 2020. The Plaintiff’s objection is due at the end of January 2021, and oral arguments will be scheduled prior to February 15, 2021. Management and counsel cannot provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss at this point in the litigation. It is AF likely that the Court will decline to grant the Defendants’ Motion on the basis that there are genuine issues of material fact. A court-side trial is scheduled to commence on July 14, 2021 T should the Agency and City be unable to settle these claims through mediation. R The Agency is involved in various other litigation matters. Management and counsel are either unable to determine the effect on the financial statements of these matters as their outcomes are D undeterminable as of this report, or the effects are not considered to be material. (11) Implementation of Future GASB Pronouncements The GASB has issued several pronouncements that have effective dates that may impact future financial presentations. Management has not currently determined what, if any, impact implementation of the following statements may have on the financial statements:  Statement No. 87, Leases. The requirements of this statement are effective for fiscal years beginning after June 15, 2021, and all reporting periods thereafter.  Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. The requirements of this statement are effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged.  Statement No. 90, Majority Equity Interests—an amendment of GASB Statements No. 14 and No. 61. The requirements of this statement are effective for reporting periods beginning after December 15, 2019.  Statement No. 91, Conduit Debt Obligations. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021. Earlier application is encouraged. (Continued) 18  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (11) Implementation of Future GASB Pronouncements (continued)  Statement No. 92, Omnibus 2020. The requirements of this Statement are effective as follows: o The requirements related to the effective date of Statement 87 and Implementation Guide 2019-3, reinsurance recoveries, and terminology used to refer to derivative instruments are effective upon issuance. o The requirements related to intra-entity transfers of assets and those related to the applicability of Statements 73 and 74 are effective for fiscal years beginning after June 15, 2021. o The requirements related to application of Statement 84 to postemployment benefit arrangements and those related to nonrecurring fair value measurements of assets or liabilities are effective for reporting periods beginning after June 15, 2021. o The requirements related to the measurement of liabilities (and assets, if any) associated with asset retirement obligations in a government acquisition are effective for government acquisitions occurring in reporting periods beginning after June 15, 2021. Earlier application is encouraged and is permitted by topic.  Statement No. 93, Replacement of Interbank Offered Rates. The requirements of this Statement, except for paragraphs 11b, 13, and 14 are effective for reporting periods beginning AF after June 15, 2020. The requirement in paragraph 11b is effective for reporting periods ending T after December 31, 2021. The requirements in paragraphs 13 and 14 are effective for fiscal years periods beginning after June 15, 2021, and all reporting periods thereafter. Earlier application is encouraged. R D  Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.  Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance. The requirements of this Statement are effective immediately.  Statement No. 96, Subscription-Based Information Technology Arrangements. The requirements of this Statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.  Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. The requirements of this Statement are effective as follows: o The requirements in (1) paragraph 4 of this Statement as it applies to defined contribution pension plans, defined contribution OPEB plans, and other employee benefit plans and (2) paragraph 5 of this Statement are effective immediately. (Continued) 19  NORWALK REDEVELOPMENT AGENCY Notes to Financial Statements (11) Implementation of Future GASB Pronouncements (continued) o The requirements in paragraphs 6–9 of this Statement are effective for fiscal years beginning after June 15, 2021. o All other requirements of this Statement are effective for reporting periods beginning after June 15, 2021. Earlier application is encouraged and is permitted by specific requirement as follows: Paragraph 4 of this Statement as it applies to arrangements other than defined contribution pension plans, defined contribution OPEB plans, or other employee benefit plans. Paragraphs 6–9 of this Statement and the supersession of the remaining requirements of Statement 32 (as detailed in paragraph 3 of this Statement). Questions 4.3 and 4.5 of Implementation Guide 2019-2, as amended, are effective for reporting periods beginning after December 15, 2019. Earlier application is encouraged if Statement 84, as amended, has been implemented. (12) Subsequent Events relating to COVID-19 AF T On January 30, 2020, the World Health Organization (WHO) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) R and the risks to the international community as the virus spreads globally beyond its point of origin. D In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Agency’s financial condition, liquidity, and future operations, and management is actively monitoring the global situation. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Agency is not able to estimate the effects of the outbreak on its results of operations, financial condition, or liquidity for fiscal year 2021. The Agency’s operations are heavily dependent on the ability to access grants and contracts from federal, state and local governments, which may decrease or may not be available depending on appropriations. The outbreak may have a continued material adverse impact on economic and market conditions, triggering a period of global economic slowdown. This situation is expected to depress the tax bases and other areas in which the Agency received revenue during fiscal year 2020. As such, this may hinder its ability to meet the needs of its constituents. As such, the Agency’s financial condition and liquidity may be negatively impacted for the fiscal year 2021. 20  829 Bayshore Boulevard Tampa, FL 33606 USA www.solakiancpa.com Independent Auditor’s 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 Commissioners Norwalk Redevelopment Agency We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States the financial statements the governmental activities, each major fund, and the aggregate remaining fund information of Norwalk Redevelopment Agency (“Agency”) as of and for the year then ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements, and have issued our report thereon dated October 31, 2020. Internal Control over Financial Reporting AF T In planning and performing our audit of the financial statements, we considered the Agency’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are R appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, D but not for the purpose of expressing an opinion on the effectiveness of the Agency’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Agency’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 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 over financial reporting 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 may exist that have not been identified. (Continued) 21 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Agency's financial statements are free of 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 result of that testing, and not to provide an opinion on the effectiveness of the Agency’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 Agency’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. October 31, 2020 AF T R D 22  NORWALK REDEVELOPMENT AGENCY Schedule of Revenues, Expenditures and Changes in Fund Balance-Budgetary Comparison Year ended June 30, 2020 Actual-Budgetary Basis Budgeted Amounts CDBG Improvement Total Original Final Revenues: Other government grants for City projects $ - 4,034,888 4,034,888 4,034,888 4,034,888 Federal grants 1,038,142 - 1,038,142 1,038,142 1,038,142 Program income 32,879 209,888 242,767 242,767 242,767 Investment income 2 21,054 21,056 21,056 21,056 Total revenues 1,071,023 4,265,830 5,336,853 5,336,853 5,336,853 Expenditures: T Project outlays 1,071,023 AF 4,419,161 5,490,184 5,490,184 5,490,184 Revenues greater (less) than expenditures R - (153,331) (153,331) (153,331) (153,331) Fund balance - beginning of year D669,877 3,661,777 4,331,654 4,331,654 4,331,654 Fund balances - end of year $ 669,877 3,508,446 4,178,323 4,178,323 4,178,323 See accompanying notes to basic financial statements. 23  829 Bayshore Boulevard Tampa, FL 33606 USA www.solakiancpa.com Independent Auditor’s Report On Compliance For Each Major Program And On Internal Control Over Compliance Required By The Uniform Guidance To the Board of Commissioners Norwalk Redevelopment Agency Report on Compliance for Each Major Federal Program We have audited Norwalk Redevelopment Agency’s (“Agency”) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the Agency’s major federal programs for the year ended June 30, 2020. The Agency’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility AF Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor’s Responsibility T R D Our responsibility is to express an opinion on compliance for each of the Agency’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Agency’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Agency’s compliance. Opinion on Each Major Federal Program In our opinion, the Agency complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020. (Continued) 24 Report on Internal Control Over Compliance Management of the Agency is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Agency’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Agency’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. AF Our consideration of internal control over compliance was for the limited purpose described in the first T paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, R material weaknesses may exist that have not been identified. D The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. October 31, 2020 25  NORWALK REDEVELOPMENT AGENCY Schedule of Expenditures of Federal Awards Year ended June 30, 2020 Pass-Through Agency CFDA Program Title Number Expenditures U.S. Department of Housing and Urban Development (HUD): Community Development Block Grants- Passed through the City of Norwalk 14.218 $ 1,100,786 Total expenditures of federal awards $ 1,100,786 Notes to the Schedule of Expenditures of Federal Awards Note 1 – Basis of Accounting This schedule is prepared on the same basis of accounting as Norwalk Redevelopment Agency’s (Organization) financial statements. The Organization uses the accrual basis of accounting. Note 2 – Program Costs AF T The amounts shown as current year expenditures represent only the federal grant portion of the R program costs. Entire program costs, including the Organization’s portion, may be more than shown. Such expenditures are recognized following the cost principles contained in Title 2 U.S. D Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Because the schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Organization. Subrecipients Of the federal expenditures presented in the schedule, Norwalk Redevelopment Agency provided federal awards to subrecipients as follows: Catalog of Amount Federal Domestic Provided to Program Title Assistance Number Subrecipients Public Facilities 14.218 $ 197,576 Public Services 14.218 $ 154,684 Housing 14.218 $ 99,013 26  NORWALK REDEVELOPMENT AGENCY Schedule of Findings and Questioned Costs - Federal Awards Year ended June 30, 2020 Section I – Summary of Auditor’s Results Financial Statements Type of auditor's report issued: Unmodified Internal control over financial reporting: • Material weakness(es) identified? ______ yes X no • Significant deficiency(ies) identified? ______ yes X none reported Noncompliance material to financial statements noted? ______ yes X no Federal Awards Internal control over major programs: • Material weakness(es) identified? ______ yes X no • Significant deficiency(ies) identified? AF ______ yes X none reported Type of auditor's report issued on compliance for major programs: T R Any audit findings disclosed that are required D to be reported in accordance with Section 200.516 of the Uniform Guidance? ______ yes X no Identification of major programs: CFDA Number(s): 14.218 - HUD Community Development Block Grant Dollar threshold used to distinguish between type A and type B programs: $ 750,000 Auditee qualified as low-risk auditee? __X___ yes no Section II – Financial Statement Findings No findings or questioned costs are reported relating to financial statements audit. Section III– Federal Award Findings and Questioned Costs No findings or questioned costs are reported relating to Federal award programs. 27 Record and Return to: Carmody Torrance Sandak & Hennessey LLP 707 Summer Street, Third Floor Stamford, CT 06901 Attn: William J. Hennessey, Esq. CERTIFICATE OF COMPLETION THE NORWALK REDEVELOPMENT AGENCY, a redevelopment Agency created by the Common Council of the City of Norwalk, Connecticut pursuant to Chapter 130 of the General Statutes of the State of Connecticut (the “Agency”), hereby certifies as follows: 1. Pursuant to the terms of that certain Land Disposition & Development Agreement ("LDA"), executed May 7, 2001, and dated as of December 15, 2000, by and among the City of Norwalk, the Norwalk Redevelopment Agency and French Norwalk LLC, recorded on May 18, 2001, in Volume 4111 at Page 1, as amended by that certain Amendment #1 to Land Disposition & Development Agreement dated December 31, 2001 and recorded on September 9, 2005 in Volume 5958 at Page 175 of the Norwalk Land Records, as amended by that certain Amendment #2 to Land Disposition and Development Agreement dated October 6, 2005 and recorded in Volume 5992 at Page 4 of the Norwalk Land Records, as amended by that certain Amendment #3 to Land Disposition and Development Agreement dated October 11, 2007 and recorded in Volume 6662 at Page 96 of the Norwalk Land Records, as amended by that certain Amendment #4 to Land Disposition and Development Agreement by and between City of Norwalk, the Norwalk Redevelopment Agency, and Norwalk Land Development, LLC, as successor redeveloper (“Redeveloper”) dated February 11, 2016 and recorded in Volume 8302 at Page 61 of the Norwalk Land Records (“Amendment #4 to LDA”), as amended by that certain Amendment #5 to Land Disposition and Development Agreement by and between City of Norwalk, the Norwalk Redevelopment Agency, and Redeveloper” dated July 20, 2017 and recorded in Volume 8563 at Page 14 of the Norwalk Land Records (“Amendment #5 to LDA”) (collectively referred to herein as “LDA”), Redeveloper, or its authorized designee, as indicated, undertook construction of those certain improvements described in the following Building Permits: a. North Block Foundation Permit dated May 10, 2017; b. South Block Foundation Permit dated May 10, 2017; c. Permit No.: B17-0648 (Superstructure, North Parcel), dated June 30, 2017); d. Permit No.: B17-0649 (Superstructure, South Parcel), dated June 30, 2017); e. Permit No.: B17-1084 (Superstructure core & shell – less Nordstrom & Bloomingdales), dated October 20, 2017; f. Permit No.: B17-1083 (Shell only “Bloomingdales”), dated October 20, 2017; {S7270113} 1  g. Permit No.: B18-0220 (Nordstrom Shell), dated March 14, 2018 (by Redeveloper’s authorized designee); all issued by the Norwalk Building Official comprising the Improvements, as defined in the LDA, as modified, to be constructed by the Redeveloper pursuant to the LDA. 2. As of October 9, 2019, the Redeveloper has completed construction of the Improvements, as such term is defined in Section 13.1 of the LDA for purposes of issuing this Certificate of Completion, and in accordance with the requirements of the LDA, which completion is evidenced by a Conditional Certificate of Occupancy (“CCO”) issued by the Norwalk Chief Building Official on October 9, 2019 (Building Permit Number B17-1084) (which date is hereby acknowledged to be the “Improvements Completion Date” as defined in the LDA). 3. Except as otherwise set forth herein, this Certificate of Completion constitutes a conclusive determination by the Agency that the Redeveloper has satisfied all of its obligations under the LDA with respect to such Improvements. 4. All agreements and covenants of the Redeveloper set forth in the LDA with respect to the construction of the Improvements, including the dates for commencement and/or completion thereof, as well as any agreements or restrictions set forth in the LDA with respect to all or any portion of the real property on which the Improvements are erected, have been completed, except for “The SoNo Collection Remaining Site Work as of November 4, 2019”, which work is secured to be completed via a Surety Bond to the City of Norwalk by The Norwalk Land Development, LLC. 5. The Building Official of the City of Norwalk hereby is authorized to rely upon this Certificate of Completion and, if all other conditions to the issuance of a final certificate of occupancy have been satisfied or waived, to issue said final certificate of occupancy with respect to the Improvements. 6. Notwithstanding the foregoing, the Redeveloper’s obligations and/or rights pursuant to Sections 5, 8, and 9 of Amendment #5 to LDA and Sections 13, 23, and 24 of Amendment #4 to LDA not affected by this Certificate of Completion, shall survive this Certificate of Completion. 7. This Certificate of Completion may be recorded on the Land Records of the City of Norwalk. [signature page follows] {S7270113} 2  IN WITNESS WHEREOF, the undersigned has hereunto set its hand and seal this ______ day of December, 2020. WITNESSES: The Norwalk Redevelopment Agency __________________________ Name: __________________________________ By: Duly Authorized __________________________ Name: STATE OF CONNECTICUT ) ) ss. Norwalk COUNTY OF FAIRFIELD ) On this the ___ day of December, 2020, before me, the undersigned officer, personally appeared _____________, who acknowledged himself/herself to be the Chairperson of the Norwalk Redevelopment Agency, a municipal agency, and that he/she as such Chairperson, being authorized so to do, executed the foregoing instrument as his/her free act and deed for the purposes therein contained, by signing the name of the municipal agency by himself/herself as Chairperson thereof. Commissioner of the Superior Court Marc J. Grenier 3