A state audit found the Weedsport Village Board did not effectively manage its fund balance, resulting in higher property taxes than necessary and weaknesses in long-term financial planning, according to a report released in December by the Office of the New York State Comptroller.
The audit, which covered the period from March 1, 2022, through June 6, 2025, examined whether the board effectively managed the village’s fund balance — a key measure of financial condition. Auditors concluded the board lacked transparency with taxpayers and residents and levied more real property taxes than needed to fund operations.
As of Feb. 28, 2025, the village held $3.1 million in reserve funds and unrestricted fund balances. Auditors reported that unrestricted fund balance totaled $696,548 in the general fund and $336,015 in the sewer fund at the end of the 2024-25 fiscal year, amounts equal to 44 percent and 94 percent, respectively, of the upcoming year’s budgets.
Unbalanced approach across funds
While the general and sewer funds accumulated significant unrestricted balances, auditors found the opposite condition in the water fund. Total water fund balance declined from $355,279 to $277,074 over three fiscal years, and unrestricted fund balance showed a deficit of $55,387 as of Feb. 28, 2025.
The report said the board appropriated more fund balance than was available in the water fund in both the 2024-25 and 2025-26 budgets. Auditors attributed the imbalance across funds in part to the absence of specific thresholds in the village’s written fund balance policy and the lack of comprehensive, written multiyear financial and capital plans.
Budgeting practices led to tax increases
According to the audit, the board adopted budgets for the last three completed fiscal years and the current year that planned for operating deficits in all three operating funds — general, water and sewer. To finance those budgets, the board appropriated fund balance, increased the general fund tax levy by nearly 8 percent from 2022-23 through 2024-25 and by another 3 percent for 2025-26, and raised water rates in January 2023.
Despite those actions, auditors found the general and sewer funds posted operating surpluses because revenues were underestimated and appropriations were overestimated. For example, general fund revenues were underestimated by 21 to 26 percent, while sewer fund appropriations were overestimated by 10 to 18 percent. The general fund’s 2024-25 year-end results showed a budget-to-actual variance of $487,128.
Auditors reported that these trends continued in the adopted 2025-26 budget and are likely to further increase fund balance in the general and sewer funds while continuing to erode the water fund balance.
Reserves and future capital needs
The village maintained 15 reserve funds totaling about $2 million, including 10 general fund capital reserves, two sewer fund capital reserves and one water fund capital reserve. However, auditors said village officials could not demonstrate whether the reserve balances were reasonable or sufficient to meet future infrastructure needs.
The report noted that village officials estimated a planned water project at approximately $20 million and said about $13 million in debt would be needed. According to the village’s engineer, that debt could cost customers about $450 annually per equivalent dwelling unit.
Auditors concluded that without written fund balance and reserve policies, realistic and structurally balanced budgets, and formal multiyear financial and capital plans, the board could not ensure taxes were limited to what was necessary or that future water and sewer needs would be financed without significantly burdening customers.
Recommendations and village response
The audit issued eight recommendations, including reducing excess unrestricted fund balance to benefit taxpayers, developing a written plan to address the water fund deficit, amending the fund balance policy to set clear targets, adopting multiyear financial and capital plans, and reviewing reserve balances for reasonableness.
In a written response included in the report, village officials said they agreed with the findings and were working on a multiyear plan and an updated fund balance policy. Mayor Chad Platten wrote that the board and treasurer had begun properly allocating unrestricted fund balance and were committed to strengthening financial practices.
The board is required to prepare a written corrective action plan within 90 days addressing the audit’s findings and recommendations, the comptroller’s office said.
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