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Menands auditor: village general fund ran about $1.1 million deficit in 2025
Summary
Auditor Brendan told the Menands Village Board that budgeted appropriations of fund balance and unbudgeted catch‑up pension contributions drove an approximate $1.1 million general‑fund shortfall; board members were told interfund loans and short‑term notes may be needed while longer‑term fixes are developed.
Auditor Brendan presented the village’s 2025 audit to the Menands Village Board and reported the village’s general fund ran a deficit of roughly $1.1 million for the year ending May 31, 2025.
Brendan said a key cause was a mismatch between the 2024–25 budget’s use of appropriated fund balance and the village’s actual unrestricted reserves; the village budget had assumed use of a larger fund balance than was available. He also identified unanticipated retroactive contributions to the Police and Fire Retirement System (PFRS) that increased the village’s required 2025 pension contribution — the budgeted figure was cited around $360,000 while actual PFRS contributions were described at about $611,000.
Those two issues, Brendan said, combined to produce the reported shortfall and required the general fund to use interfund borrowing from the water and sewer funds for liquidity. Brendan recommended the board and staff work with bond counsel and the village’s financial advisor to develop a cash‑flow plan; options discussed included short‑term borrowing such as revenue anticipation notes or tax anticipation notes and a combination of revenue increases and spending adjustments to restore positive fund balance.
Brendan said that while some other village funds retain balances, the water and sewer funds also showed operating stress for 2025 (the auditor reported water/sewer revenues of roughly $1.4 million versus expenditures of about $1.645 million). He recommended the board do a fund‑balance projection and cash‑flow assessment as of Jan. 31, 2026, to inform budget choices for the 2026–27 cycle.
Board members asked whether prior interfund transfers had been approved and how budgeting assumptions had changed over several years. Brendan said the practice of appropriating fund balance had masked deficits in prior years and that recent retroactive pension contributions worsened the position. He told the board the final audit will be posted and that the board would vote on the final audit report at a subsequent meeting.
The auditor also said the state controller’s office receives the village’s annual financial report (AFR) based on audited numbers and that bond‑rating agencies had expressed interest in staying in touch about the village’s finances.
The board scheduled further discussion and a budget workshop to consider possible revenue increases, a 10% cut target for department budgets and other measures to return to a sustainable position.
