Tuesday, November 25, 2008

Water, Water Everywhere. . .

. . .And Lots Of Taxpayer Dollars, Too!

Seems that those local water districts (aren't they special?) are up to their old tricks again. This time, they're squirreling away tax money above and way beyond what is customarily considered necessary. In some cases, they have enough money on hand to run all district operations for years.

A rainy-day fund, perhaps? Well, when it rains it pours -- tax dollars, that is. Money out of YOUR pocket, right into the coffers of Long Island water districts.

According to a study conducted by the office of Nassau County Comptroller, Howard Weitzman, 19 commissioner-run water districts in Nassau County had more than $59.9 million in the bank.

If you reside in the Garden City Park Water District, there's enough taxpayer money in the district's bank account to cover 2 years of service. In the Cathedral Gardens (West Hempstead) Water District, there's enough money in the till to operate for 7 1/2 years, without taking another penny from taxpayers (but, of course, they will).

So, with all this money on hand, what are the "locally elected" water commissioners going to do?

Disney World? A new gas-guzzling SUV? Wide-screen HDTVs for every employee?

One thing is certain. The Water Districts are not likely to be refunding any part of this surplus to homeowners or businesses. Nor is a tax cut in special district taxes in the offing.

Folks, it looks like, while you weren't watching the pot, it boiled over!
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Want more information about the special taxing districts on Long Island? Click HERE to check out Residents for Efficient Special Districts (RESD).
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From the Nassau County Comptroller:

Weitzman finds many water districts squirrel away so much money they could operate for years without new revenue

Comptroller calls for money to be returned to property taxpayers and water users

A report released today by Nassau County Comptroller Howard Weitzman on the 19 commissioner-run water districts in Nassau revealed that jointly, the districts had an extra $59.9 million in the bank. The report looked at the December 31, 2007 balances.

According to the report, the Cathedral Gardens Water District in West Hempstead has accumulated enough excess funds to operate for seven and half years without collecting any more money from residents and the Garden City Park Water District could operate for two years using its $7.2 million bank account. These districts could stop charging their customers for years and still be able to deliver water to the taps of homeowners.

"In this time of extreme fiscal pressure on our local tax payers, it is more important than ever that governments limit taxes and charges to those that are absolutely necessary,” Weitzman said “Taxpayers are better stewards of their money than government. They should not be asked to prepay several years’ worth of taxes for possible future use. Instead, these districts should be offering taxpayers a substantial reduction in water charges.”

Most governments keep a small amount of excess funds from their operating budget as fund balance. For example, Nassau County aims to keep about 4-5% of its prior year budget as fund balance and school districts are authorized by the State to keep 4% of the current year’s budget as fund balance. The Government Financial Officer’s Association (GFOA) recommends a fund balance of between 5-15%. Weitzman’s report states that every one of the 19 water districts have accumulated more fund balance than the state law permits for schools, or the 5-15% standard set by the GFOA. Cathedral Gardens has 763% of its operating budget in fund balance; Garden City Park, 198% and Franklin Square, 124%.

Recently, New York State Comptroller Thomas DiNapoli has been critical of several school districts on Long island that carry a high fund balance.

"Collectively, these commissioner-run water districts should be holding no more than $3.9 million in fund balance and returning the excess $56 million to their hard-pressed tax payers,” Weitzman said. “Taxpayers could have used this money for their own benefit instead of padding the districts’ bank accounts.”

Water districts collect user charges and property taxes. At 2007 operating costs, Manhasset-Lakeville has 3 years and 4 months worth of property taxes in the bank, Garden City Park has 3 years and 3 months of property taxes in the bank and Franklin Square has 3 years and 1 month of property taxes in the bank. Bethpage, Oyster Bay, South Farmingdale and Albertson all have over two years’ worth of property tax collections in the bank. Eight districts had accumulated between one and two years’ worth of property taxes.

"Commissioner-run districts have argued that they are saving money by accumulating large fund balances to pay for future major repairs or capital projects,” Weitzman said. “In effect, they are taking money from current residents to finance future benefits instead of using long-term borrowing to spread the cost over future years. Not only is this unfair, but it can also avoid Town oversight over district borrowing."

"Vastly over collecting from tax payers is unnecessary and not in their best interest,” Weitzman added. “Tax payers have better use of their money then to send it to sit in district bank accounts.”

Click HERE for Commissioner Run Water Disticts Fund Balances

1 comment:

  1. This post mentions taxes multiple times. Are water districts funded by real estate taxes, user fees for water, or both?

    Why is spending millions of dollars on bond interest, and fees to bond-issuing houses, preferable to planning for the future and building up a reserve fund?