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Audit: KCMO not properly evaluating, holding CIDs accountable

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Posted at 10:15 AM, May 13, 2021
and last updated 2021-05-13 11:15:17-04

KANSAS CITY, Mo. — The Kansas City, Missouri, City Auditor's Office released a report Thursday with a conclusion that the city does not properly evaluate proposed Community Improvement Districts (CIDs).

A CID is a special zone of businesses that collects extra sales tax on money spent at those businesses to go toward the improvement of that zone.

The City Council has the power to approve proposed CIDs, and the Auditor's Office showed findings that that approval process may not be carried out efficiently.

The report found that from 2002 to May of 2020, 77 CIDs were approved within the city and 74 of those are still active.

Auditors found that almost 60% of those CIDs benefit just one business and almost half of the CIDs overlap with one or more other existing districts.

The report reads that "the city’s current review process does not critically evaluate public benefit, purpose and plan of the proposed district, sales tax burden impact, overlaps with other economic incentives, and alignment with city goals."

Findings show that over a third of the CIDs did not submit a proposed budget and more than a quarter did not submit the annual report that is required by state statutes, according to the Auditor's Office. It was also found that the city did not monitor the reporting status as required.

Recommendations include improving the city's CID policy to include an evaluation process, to shorten CID lifespans, to rescind automatic CID renewals, to outline required reporting and to include fines for non-compliance.

The finding will be reported to the city at the Council Business Session at 2 p.m. Thursday.