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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) 2026-27 tentative budget were reasonable.

Background

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 Village’s 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.

Key Findings

• The scope of our review was significantly limited by the lack of complete, accurate and current accounting records maintained by the Village. Further, Village officials have not complied with some of the requirements of Chapter 206.
• Certain significant revenue and expenditure projections in the proposed budget appear unreasonable. In addition, the Village fully implemented only one of the seven recommendations from our January 2025 budget review letter.
• The 2026-27 tentative budget (budget) includes sewer charges – facility fees – deficit bonds revenue of $179,071, which is a new revenue in the 2026-27 budget to cover the portion of the deficit bonds related to the sewer fund. We were unable to project the amount the Village will receive in the 2026-27 fiscal year as Village officials did not provide documentation to demonstrate that Board action has been taken to implement the charge. If the required Board action is not taken when the budget is adopted, the Village could potentially face a shortfall of approximately $179,071 if revenues are not realized.
• The budget includes water rents revenue of $986,000 and State Aid – Mortgage Tax revenue of $160,000. The Village could potentially face a shortfall of approximately $93,400 in water rents and approximately $65,300 State Aid – Mortgage Tax if revenues are not realized.
• The budget includes personal services of $3.9 million (41 percent of the Village’s general fund appropriations budget). The Village did not provide detailed salary schedules including the calculations used to project personal services. The lack of support for this estimate could significantly impact the Village’s 2026-27 operating results if this estimate is not reasonable.
• Police overtime appropriations totaling $215,000 could be underestimated by $73,100.
• We were unable to determine whether the appropriation for sewer operations contractual expenditures of $306,800 was reasonable.
• The appropriation of approximately $139,600 for payments due to the New York State Local Retirement System is underestimated by approximately $40,000.
• The budget includes an $80,000 general fund contingency; this amount is 1 percent of the Village’s general fund budgeted appropriations and an increase of $5,000 from the 2025-26 adopted budget. Additionally, there is a $20,000 contingency budgeted in the water fund and no contingency for the sewer fund.
• The Village will need $1.1 million to service its debt obligations during 2026-27. This amount represents about 10 percent of the Village’s annual budget.
• The budget includes a tax levy of $5.6 million. It appears the Village may be over the tax cap by as much as $60,300. However, Village officials provided a proposed local law to override the limit.

Key Recommendations

1. 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.
2. Review the proposed estimates for revenues and expenditures and amend as necessary.