Comptroller sites Fleischmanns for lack of water system oversight
By Jay Braman Jr.
According to New York State Comptroller Thomas DiNapoli, the Fleischmanns Water Department bank account will run bone dry in a couple of years unless drastic measures are taken. So says an audit by the comptroller’s office released late last month.
According to Ann Singer, the comptroller’s chief examiner, the objective of the audit was to assess the financial management of the village’s water fund and address the following related question.
Did the village board of trustees adequately manage the water fund’s financial operations? The report says no.
“The board did not adequately manage the water fund’s financial operations,” the 11-page report states. “The board consistently overestimated expenditures and revenues, which initially resulted in an excessive fund balance, but has since caused the fund balance to significantly decrease over the past two years. Although capital expenditures were made to repair infrastructure and decrease water loss, no long-term capital plan has been put into place to address financial needs and further capital improvements. Without proper budgeting and capital planning, this resulting decrease in fund balance may lead to fiscal stress in the water fund.”
The audit report goes on to say that in 2008 there was an $80,000 fund balance, but over the next three years the trustees overestimated revenues by $47,000. But thanks to yet another snafu in which the village spent $78,000 less on the department than planned, the surplus did not completely disappear.
Expenses on the rise
But then expenditures began to outpace revenue and eventually exceed revenues during 2012 and 2013, as the water fund spent approximately $55,250 more than it received in revenues.
“While the balance in the water fund was more than sufficient to absorb these deficits, the balance is estimated to decrease to about $56,300 at the close of fiscal year 2012-’13,” the report concludes. “This may not be sufficient to address the water operation’s current and future infrastructure needs.”
Furthermore, the comptroller’s office could not find evidence of billing for massive amounts of water used between June 2013 and February 2013.
“The village water commissioner stated that part of this unaccounted-for water could be due to leakage, but is also inclusive of various municipal usages including fire hydrants and flushing of the water system,” the report states. “While the water system’s efficiency has improved since 2006, 35 percent of unaccounted for water is still excessive when compared with the industry standard.”
Other oddities have surfaced as well, such as the fact that, according to the comptroller, the water system is still producing 25 percent more water than the village needs. This happened despite $1 million worth of capitol projects since 2006 that included line upgrades and replacements.
“While we commend the board for addressing infrastructure needs and reducing water loss, as the board continues to address these needs and pay off current and future loans, the water fund’s ability to finance operations and maintenance will become increasingly difficult without sufficient revenues,” the report warns. “At this rate of decline, the water fund will have no residual fund balance in two to three years.”
Fleischmanns Village Mayor Todd Pascarella has read the report and informed the comptroller that an action plan is being prepared. “The village board is currently reviewing the report and its recommendations and looking at options for strengthening the water fund moving forward,” he said.