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Menands board approves audit after auditor flags general‑fund deficit tied to pension catch‑up and interfund borrowing
Summary
Auditor Brendan of BST told the Menands Village Board that a roughly $275,000 loss in the 2024 reporting period and an unbudgeted pension catch‑up drove a general‑fund deficit; the board approved the final audit and agreed to pursue a repayment plan and advisor input rather than deficit bonds.
The Menands Village Board voted to approve the village’s final audit after hearing that a combination of an unbudgeted pension catch‑up payment and years of relying on appropriated fund balance had left the general fund in a material deficit.
Brendan of audit firm BST told the board that fieldwork for the 2025 audit was completed in mid‑January and the report was dated Jan. 26. He said the village’s 2024 financial statements showed a loss of about $275,000 that reduced available appropriable fund balance to roughly $200,000. He cited a large ‘‘384E’’ catch‑up contribution for public safety pensions that increased the PFRS contribution on one line by about $250,000 compared with budget, and noted that the village had been treating appropriations of fund balance like a savings drawdown.
"Appropriation of fund balance is really like your savings account — you’re taking money out of savings and using that to balance your budget," Brendan said, adding that the practice was acceptable historically only because surpluses had previously replenished the balance.
The auditor told the board its water and sewer enterprise funds are in comparatively strong condition but that the general fund has been effectively borrowing cash from those utility funds to meet operations. He said the village recorded the liabilities but failed to make the cash transfers that would have kept fund balances aligned, which created a cash shortfall in the general fund.
Board members pressed on the size and timing of expected grant reimbursements, which the administration estimated at roughly $250,000 across several grant programs, and asked whether collecting those reimbursements would materially reduce the deficit. Brendan said reimbursement timing will help but that accurate, timely financial reporting and budget‑to‑actual monitoring must be improved to prevent recurrence.
The board discussed options for repaying the utility funds but were cautioned to avoid deficit bonds. Brendan and others recommended working with the village’s financial advisor and bond counsel on a multi‑year repayment schedule. He said a three‑to‑five‑year financing plan is common in these situations and emphasized documenting the obligation and setting a timetable to restore fund self‑sufficiency.
A motion to approve the audit as submitted was made and seconded and carried with no opposition recorded in the transcript. The board also approved an amendment moving one DPW labor line to the sewer budget (salary noted in the meeting as $62,256) and a related transfer to reconcile amounts already used.
The board asked administration to provide budget‑to‑actual projections for fiscal 2026 and to bring recommendations from the village’s financial advisor at the next meeting; members said they prefer a transparent, scheduled repayment plan to protect utility fund resources.
The board adjourned the audit item with the expectation of further briefings and with staff directed to coordinate with bond counsel and Municipal Solutions (financial advisor) on next steps.
