Five months after a forensic investigation by Ernst and Young raised questions about financial practices tied to Centerra’s urban renewal plan, the Loveland Urban Renewal Authority board is facing a decision about how much further they want the investigation to go and how much they are willing to spend to get there.
On Tuesday, members will receive an update on staff actions taken following the release of the national accounting firm’s review of Centerra and its network of related entities and discuss a proposal for an additional $655,000 in forensic analysis services.
If approved, the additional work would bring the total cost of the Ernst and Young review to approximately $905,000, including $249,000 already spent on the first phase.
Ernst and Young was commissioned by LURA to conduct the examination in late 2024, after questions emerged about Centerra’s compliance with its 20-year-old master financing agreement with the city of Loveland. The firm completed its final report late last year, presenting its findings publicly to the LURA board in December.
Though Ernst and Young’s final report did not allege fraud or misuse of funds, it identified multiple instances in which bidding, accounting and conflict disclosure practices appeared to deviate from requirements in the agreement, prompting board members to order additional oversight measures and explore expanding the investigation.
According to documents in the agenda packet, five of the six motions approved by the board in December have been completed, while one — directing staff to issue a request for proposals for additional audit services — remains pending further board feedback.
Rather than pursuing a competitive RFP process, city staff are recommending that LURA enter into a sole-source agreement with Ernst and Young, as the firm’s familiarity with the complex Centerra financing structure would avoid redundant work and create a faster, less expensive process.
The proposed next phase would include expanded review of procurements, reimbursements and governance issues involving multiple entities connected to the urban renewal structure, including Centerra Metro District No. 1, the Public Improvement Collection Corp., or PIC, and Centerra Properties West.
Among the proposed work items are an analysis of reimbursements made by the PIC to Centerra Properties West, expanded examination of 37 remaining bid awards not reviewed during the first phase and additional testing of non-vendor cash flows such as debt service and tax inflows.
At the same time, city staff say they have already begun implementing additional oversight measures in response to the audit findings, including increased city participation at Metro District and PIC meetings, expanded annual review of PIC transactions and additional expense testing as part of annual LURA reporting.
Staff also plan to add explanatory material to annual reports to better outline how the interconnected urban renewal entities operate financially.
In several responses included in the agenda packet, staff suggested many of the procurement concerns identified in the Ernst and Young report are less likely to recur because the original Centerra project is nearing completion and Centerra South, approved by Loveland City Council in 2023, operates under newer state law and is not subject to the same requirements as the original finance agreement.
How to participate
The Loveland Urban Renewal Authority Board will meet at 6 p.m. Tuesday in the City Council chambers at the Municipal Building, 500 E. Third St.
Comments from members of the public will be accepted in person as well as over Zoom.
Those wishing to join by Zoom can use the ID 975 3779 6504 with a passcode of 829866, according to the meeting agenda.
The meeting will be broadcast on Comcast Channel 16/880, Pulse TV channel 16 and streamed through the city’s website at lovgov.org/tv.
Tuesday’s agenda packet can be found through the Loveland Urban Renewal Authority website at lovgov.org/LURA or at cilovelandco.civicweb.net.
