Village of Washingtonville – Budget Review (B24-6-1)

Issued Date
January 22, 2024

[read complete report – pdf]

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) 2024-25 tentative budget were reasonable.

Background

The Village is located in Orange County. Chapter 206 of the Laws of 2023 (the “Village of Washingtonville Deficit Financing Act”) authorizes the Village, subject to the provisions of Local Finance Law (LFL) Section10.10, 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 May 31, 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. During the time that LFL Section 10.10 is in effect, the Village’s tentative annual budgets must be submitted to the Office of the New York State Comptroller 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. Specifically, the Village does not maintain up-to-date budget-to-actual reports to aid in the monitoring of its fiscal performance. The Village also does not maintain an up-to-date debt schedule.
  • The 2024-25 tentative budget includes sewer meter rents revenue of $1.6 million, Orange County sales tax revenue of $1.2 million, and water meter rents revenue of $1.1 million. We were unable to project the amount the Village will receive in the 2024-25 fiscal year as most of revenue has not been posted in the financial software for 2022-23 or 2023-24.
  • The 2024-25 tentative budget includes personal services of $3.4 million, employee benefits of $1.8 million, retirement expenditures of $675,000 and debt service of $542,000. We were unable to project the amount the Village may expend, as the Village did not provide salary schedules and most of the expenditures have not been posted in the financial software for 2022-23 or 2023-24.
  • The 2024-25 tentative budget includes a $100,000 general fund contingency and a $20,000 water fund contingency. There is 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 Board needs to consider whether the contingency appropriations are adequate and appropriate for unanticipated events and uncertainties.
  • The 2024-25 tentative budget includes a tax levy of $4.7 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.

Key Recommendations

  • Adopt a budget that includes a tax levy no greater than the tax levy limit (tax cap) unless a local law is adopted to override the limit.
  • Review the estimates for sewer meter rents, Orange County sales tax and water meter rents and amend as necessary.
  • Review the estimate for personal services, employee benefits, retirement and debt service and amend as necessary.
  • Review the estimate for contingency and adjust it to an appropriate level if needed.