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April 13, 2010

DiNapoli: Wilton FD Unnecessarily Raised Taxes


The Wilton Fire District unnecessarily raised taxes between 2007 and 2009, according to an audit released by State Comptroller Thomas P. DiNapoli. Despite operating surpluses totaling $290,000 with no stated justification for these amounts, the board raised taxes yet again in 2009, the audit found.

"Local governments are facing very difficult financial challenges, and they face a Hobsonís choice of raising taxes or cutting services Ė or both," said DiNapoli. "In that light, the last thing any local government should do is raise taxes when itís unnecessary."

Wilton officials levied taxes based on the amount of a spending limit computation provided to them by the Saratoga County Real Property Tax Services office, rather than on actual need. For 2007, the district reported an operating surplus totaling $315,908. This surplus was primarily due to the districtís overestimating expenditures; actual expenditures in 2007 were less than budgeted by $268,110. Despite the significant operating surplus, district officials did not reduce the budget or tax levy.

Rather, officials transferred surplus moneys to its two reserve funds, even though these transfers were not included in the budget for 2007. The reserves were set up to build a new fire substation and to purchase apparatus respectively. In 2008 it transferred $300,000 to its reserves, and in 2009 it increased its budget by $174,166 Ė or 16.8 percent.

By December 31, 2008, the fire station fund had a balance of $456,054 and its apparatus fund had a balance of $614,556. District officials said they would use the apparatus fund to purchase a new $589,000 fire truck. The 2009 budget included an appropriation to transfer $200,000 to the Station II reserve; the District did not appropriate a transfer to the apparatus reserve.

Although the balances in these funds seemed reasonable for their intended purpose, the district should fund the reserves in a transparent manner through budget appropriations rather than simply transferring surpluses at the end of the year. The practice of over-budgeting for district operations put an unnecessary financial burden on district taxpayers.

DiNapoli recommended that the board of commissioners:

  • Base budget estimates on reasonable assumptions using historical trends or actual estimates; and
  • Use the correct budget formats that adequately delineate expected revenues and expenses.

The board of fire commissioners generally agreed with DiNapoliís recommendations.

Click here for a copy of the audit.


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