Water District Surplus

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 $56 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 pay inflated taxes and user’s fees for possible future capital projects. 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 maximum15% 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.”

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