Washingtonville trustees outline path to financial compliance as tentative 2025–26 budget raises taxes 14.93%

Brendan Kennedy, an accounting consultant supporting the village's audit work, told the Village of Washingtonville Board of Trustees and residents at a Jan. 13 public hearing that auditors have made “good progress” and "we are on the verge of being caught up," as the village works through multi-year financial reconstruction and prepares a tentative 2025–26 budget.

The tentative budget posted Jan. 8 calls for a 14.93% increase in property taxes, no increase in water and sewer rates and a $7.5 million total spending plan. Treasurer Leslie summarized revenue lines including $5,000,003.93 in property taxes and roughly $1.0 million in sales tax; she described the tax increase as lower than last year’s adopted increase of 21.14%.

Why it matters: village officials said the municipality must repair multi-year gaps in audits and financial reporting before it can refinance short-term deficit borrowing. The village issued about $4.4 million in deficit borrowing; as of the Feb. 28, 2024 accounting period, officials say roughly $2.0 million of those proceeds were used to liquidate past-due liabilities and about $2.4 million remains invested in NYCLASS. The Office of the State Comptroller (OSC) must certify the deficit financing and will review the village’s budgets and AFRs while deficits are being repaid.

Key facts and supporting details: Kennedy said the village completed financial-audit work for 2021–22 and is wrapping up reconstruction for 2023; the 2024 audit work has started and officials expect to prepare and file the Annual Financial Report (AFR) with OSC for the first time in several years if remaining audit items are closed. He said the village recovered roughly $559,000 from New York State Environmental Facilities Corporation (EFC) that had been drawn down in connection with a prior wastewater project, and received $677,000 in FEMA reimbursements that largely represented prior-period costs. Kennedy warned those are one-time receipts that should not be relied on as recurring revenue.

Officials described the deficit financing process and cash position: about $2.0 million of the $4.4 million in deficit borrowing was used to clear past-due liabilities; the unspent proceeds are invested in NYCLASS (a state-operated pooled investment vehicle). Kennedy said the deficit bonds were issued at roughly 7% interest and that the village would only borrow the amount OSC certifies—"we are only permitted to borrow what we need and not a penny," he said. The 7% interest on the full $4.4 million would have resulted in about $308,000 of interest due; Kennedy and village officials said the state provided a grant to cover that interest payment for the reporting year cited.

Budget specifics and program-level changes: Treasurer Leslie summarized that the 2025–26 tentative budget includes an increase in employee counts (one new full-time DPW hire, three new part-time village-hall hires), higher health-insurance costs and a projected $65,979 increase in principal/interest tied to deficit financing. Water and sewer fund line items and volumes were presented: the water fund shows roughly $1.0 million in revenues and comparable expenditures; the sewer fund shows roughly $1.95 million in revenues with approximately $1.71 million in operations and $486,000 in debt service (figures presented by the treasurer on-screen and discussed at the hearing).

Public questions and follow-up items: Residents asked for regular quarterly financial statements to track budget-to-actual performance; officials said historical budgets were not loaded into the prior accounting system and that since implementation of the Edmunds system the village should be able to produce timelier budget-to-actual reports. Residents also asked about Moody’s/bond ratings and OSC fiscal-stress scoring; Kennedy said the village has been noncompliant on AFR filings (no OSC fiscal-stress score currently appears on OSC’s site) but the village expects to file AFRs on time in 2025 and therefore will receive an OSC fiscal-stress score in due course. The board agreed to accept written comments for 14 days following the hearing and to consider adding quarterly reporting to the regular information the board receives.

Remaining timeline and next steps: officials said they expect the remainder of the 2023 audit items to be submitted to auditors, to file the 2024 AFR and audits, then close the 2025 fiscal year closeouts (Feb.–May 2025) and begin 2025 audit work; the village aims to be current on AFRs and audits by summer 2025. Conversion of deficit borrowing to long-term bonds was described as tentatively scheduled for June 2025, and officials said OSC will review and certify the financing and the village’s budget before adoption.

Votes at a glance: the board opened the public hearing by voice vote (motion passes 5–0) and later closed the hearing by voice vote (motion passes, unanimous). No other formal board actions (ordinance adoptions or bond authorizations) were recorded in this hearing transcript.

What officials said (selected direct quotes): Brendan Kennedy, accounting consultant: "we are on the verge of being caught up" and "we are only permitted to borrow what we need and not a penny." Treasurer Leslie (first reference): summarized that the tentative budget shows a "14.93% increase in property taxes" and indicated there is "no increase in the water and sewer rates" for 2025–26.

Background and context: officials described the 2019–21 wastewater project, the later discovery of about $1,040,000 in EFC-drawn funds that had not been received, and ongoing reconciliation work that required reconstructing missing records from prior administrations. The village also consolidated a recreation fund into the general fund and reclassified a capital-projects deficit to the sewer fund because those costs related to the wastewater plant. Officials warned that prior years of no tax or water-rate increases contributed to the current structural shortfall and said rate and levy changes will be required over time to address recurring shortfalls.

For follow-up: officials invited written questions to the mayor, board or treasurer; residents requested quarterly financial statements be posted publicly, and officials agreed to pursue that. The board will receive OSC recommendations five days before budget adoption and may incorporate OSC changes into the final adopted budget.