City hall didn’t monitor impact of tax dollars paid to developers and private industry through two incentive programs, audit reveals

An audit has revealed there was no follow-up on incentive programs that allocated tax dollars towards land development projects. Daryl Newcombe explains.

A pair of municipal incentive programs that flowed millions of dollars to developers and private industry were not being monitored to determine if their longer-term objectives were being achieved.

On Wednesday, the Audit Committee received a report from audit firm MNP about two community improvement plans (CIPs) intended to spur construction in downtown London and on industrial lands by reimbursing the project’s development charges (DCs).

The auditor found that the downtown CIP still references objectives dating back to 1996, “goals include cultural development and heritage preservation, yet current programs focus primarily on building rehabilitation and residential conversions.”

And whether there’s progress being made on the longer-term goals of the CIP isn’t being monitored or evaluated.

“There is no systematic post funding process to assess whether projects deliver longer-term CIP outcomes such as economic revitalization, or sustained improvements in building conditions,” the report reads.

Coun. Susan Stevenson told colleagues on the Audit Committee, “To just say we did a bunch of stuff, without tracking whether it’s actually making a meaningful impact in our city, it’s frustrating.”

The auditor’s review of the industrial land CIP determined, “Instances exist where projects stalled or were canceled after receiving incentives. Refunds occur only if permits are canceled early.”

And similar to the other downtown CIP, “There is no mechanism to assess whether funded projects deliver intended economic benefits.”

City Staff acknowledged the shortfalls in the audit report and proposed an action plan.

“Looking at maybe two, five, 10 years later to see whether more jobs have come forward or whether there’s been any other changes on the site,” said Deputy City Manager of Planning and Economic Development Scott Mathers.

Mathers told the committee that the team at city hall in charge of CIPs has the equivalent of just three-and-a-half full-time employees.

“We can do this, just that would take a lot of additional staff time that we don’t have at this point,” he explained. “So, if [adding staff is] something council would like to do in the future, we would suggest that be a multi-year budget discussion.”

A series of actions to address the auditor’s findings are scheduled for completion between September 2026 and June 2027.

The Audit Committee unanimously recommended receiving the audit report.

After the meeting, Stevenson suggested better monitoring of outcomes will require political commitment.

“That’s up to council. If we want to see outcomes and we want our programs and services evaluated, then we get to ask for that,” she said.

Committee Chair Coun. Elizabeth Peloza described information she’d find useful in the future.

“We put the investment in; did have the impact we hoped? Were the jobs actually fully created or [do] they get scaled back? And whether we helped these businesses five to 10 years down the road,” she asked.

Council will consider the audit report on March 3, 2026.