Land bank makes accounting changes
Changes to how the Kent County Land Bank Authority handles and posts its financial data are coming. The board recently contracted that service to Goodlander, Sweet & Rybicki.
Mike Rybicki, a principal in the accounting firm that does quite a bit of work with nonprofits, told board members that donated properties will be listed by the parcels’ fair market values instead of, say, the tax roll figures.
“We’d have to adjust that upward for any improvements made,” he said. “A gain or loss will only be recognized when (a property) is disposed of.”
Rybicki said the properties the land bank already has purchased and that have been adjusted to reflect market value will be unadjusted. He also said board members will see properties separately listed by whether the sites were purchased or donated.
“Basically, the January through July financials are going to be recast,” said Rybicki.
KCLBA Executive Director Dave Allen said the land bank won’t use a property’s assessment to set the market value, which today can be higher than a selling price. He explained that five donated properties were for sale at $9,000 each when the land bank acquired the parcels. At that time, though, the State Equalized Value for each was $30,000. The SEV is generally considered half of a property’s market value.
Allen also said Chase, Wells Fargo and Bank of America have agreed to donate mortgage-foreclosed properties with a value of $25,000 or less to the organization.
“We’re going to set up a physical escrow account at Huntington Bank. It’s going to be easy to follow where our money goes,” he said of the revenue the land bank receives from property sales.
The accounting changes seemed to be good news to KCLBA board members, especially Sharon Brinks. She noted a lot of money has passed through the organization and it has been a chore to keep track of all the transactions.
“I want to be able to take this (financial) document and show it to someone who may be cynical about what we do and have enough transparency to show what we do,” said Brinks, who is also a Kentwood city commissioner.
The new financial statements are expected to be in play and online in October.
“We’re obviously breaking some new ground here,” said Rybicki, “and we’re excited to be part of it.”