Purpose of Budget Review
The purpose of our budget review was to determine whether the significant revenue and expenditure projections in the Village of Washingtonville’s (Village’s) 2025-26 tentative budget were reasonable.
Background
The Village is located in Orange County. Chapter 206 of the Laws of 2023, as amended, authorizes the Village of Washingtonville (Village), subject to the provisions of Local Finance Law (LFL) Section 10.10, to issue debt not to exceed $4.5 million to liquidate the accumulated (actual) deficits in the general fund, water fund, sewer fund and capital projects fund as of February 28, 2023, including the remaining principal amount of any budget, deficiency and/or revenue anticipation notes outstanding at the time the deficit bonds or notes are issued. Under LFL Section 10.10(d), when a village is authorized by a special or general law to incur debt to liquidate an operating deficit, it must submit to the State Comptroller each year, starting with the fiscal year during which the municipality is authorized to issue deficit obligations, and for each subsequent fiscal year during which the deficit obligations are outstanding, the Village’s tentative budget for the next succeeding fiscal years for examination and recommendations.
Key Findings
- The scope of our review was significantly limited by the lack of complete, accurate, and current accounting records maintained by the Village. For example, the Village does not maintain up-to-date budget-to-actual reports to aid in the monitoring of its fiscal performance.
- The 2025-26 tentative budget includes sewer rents revenue of $1.5 million and water rents revenue of $1.2 million. The Village could potentially face a shortfall of approximately $261,000 in sewer rents and $123,000 in water rents if revenues are not realized.
- The 2025-26 tentative budget includes appropriations for personnel services of $3.3 million for general, water and sewer funds combined. The Village could face additional expenditures in the general fund when settling the police department’s expired collective bargaining agreement. We also project the Village is underestimating personnel services by approximately $21,000 for the water and sewer funds.
- The 2025-26 tentative budget includes appropriations of approximately $243,400 for social security payments. Social Security payments are likely underestimated by approximately $21,200.
- The 2025-26 tentative budget includes an appropriation of approximately $1.4 million for health insurance payments. Although the estimate agrees with our projection, Village officials should be mindful of additional potential expenditures with new hires. The Village has underestimated health insurance payments for at least the last two fiscal years.
- The 2025-26 tentative budget includes a $75,000 general fund contingency, which is less than 1 percent of the Village’s general fund budgeted appropriations and a decrease of $25,000 from the 2024-25 adopted budget. Additionally, there is a $20,000 contingency budgeted in the water fund and no contingency for the sewer fund. Given the potential cost overruns from current economic conditions and the lack of complete, accurate, and current accounting and financial records, the Village Board needs to consider whether the contingency appropriations are adequate and appropriate for unanticipated events and uncertainties.
- During our review of the Village’s proposed 2025-26 budget, we were provided with the Village’s tentative budget 30 days before the scheduled vote, as required. However, the Village posted a conflicting budget to the Village’s website six days later. As some of the differences between budgets were significant, such as a $32,471 difference in real property taxes, we chose to rely on the proposed budget that was posted to the Village's website, as that was the version presented to the public. By not being provided accurate budgeted figures timely to perform our review, the Village hinders our ability to examine the tentative budget and make recommendations to help improve the Village’s financial condition.
- The 2025-26 tentative budget includes a tax levy of $5.4 million. Similar to the revenue and expenditure estimates, the lack of complete, accurate, and current accounting and financial records precludes us from concluding on the Village’s tax cap compliance.