State, Varick town officials agree to disagree on water, sewer finance management after audit

A recent audit by the state Comptroller’s Office was critical of the Town of Varick for the way it manages water and sewer finances.

Town officials did not effectively manage most aspects of the water and sewer districts’ financial operations, according to the report, which was published on February 4, 2022.

Varick is located in Seneca County and governed by a Town Board, which includes a town supervisor and four council members. The Board is responsible for general oversight and operations including finances.

The Town of Varick provides water and sewer services to customers located within its four water and two sewer districts. Costs for those districts are raised through assessments against benefited properties in the districts, as well as user fees.

The Village of Waterloo (Village) provides billing and collection services for the Town’s water and sewer districts through various intermunicipal agreements.

According to state auditors the town did not effectively manage most aspects of water and sewer districts’ operations by the following:

  • Adopt realistic budgets over the last three years.
  • Adopt fund balance and reserve policies, formal multiyear financial and capital plans or written billing and collection policies and procedures.
  • Ensure customers were uniformly and accurately billed or that operating and administrative costs were equitably allocated among property owners.
  • Establish adequate intermunicipal agreements and vendor contracts.

The state issued the following recommendations:

  • Develop and adopt realistic budgets, fund balance and reserve policies and long-term financial and capital plans.
  • Negotiate adequate written intermunicipal agreements and vendor contracts.
  • Develop a fair and equitable method for allocating costs among the districts.
  • Develop and adopt comprehensive billing and collection policies and procedures and ensure customers are correctly billed.

According to auditors, Town officials generated disagreed with the findings.

Reading the Town’s response to criticism in the audit, as well as state auditors secondary responses showcases the split in philosophy. For example, while the state says the Town of Varick did not effectively manage the districts’ financial condition- officials in Varick say they chose to underestimate revenue to be conservative because water revenue fluctuates.

In a response to that, state auditors called the Town’s current process “not realistic or transparent.” Instead, auditors suggested that revenues should be estimated using historical data for a three-to-five year period.

Read the full-audit here.

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