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Washingtonville Tackles Inherited Financial Mess with A Skoufis-Maher Deficit Funding Act

Updated: Jun 2, 2023

When the Village of Washingtonville's newly elected Mayor, Tom DeVinko, and Trustees Donna Jacaruso and Susan Walski, sat down and looked at the Village's financial status documents they found a big hole where numerous big ticket items should have had funding. The first gap in 2023 funding occurred when they determined that the former Mayor Joseph Bucco had paid several big bills, totalling approximately $1.9 Million dollars that was pulled out of the 2023 budget instead of the 2022 budget. That leaves a $1.9 Million deficit where funds were supposed to pay for other 2023 expenses. $1.29M of it was withdrawn via checks from the General Fund. When they tried to research the financials they foud that the computer financial record-keeping program had been scrapped several years ago, and all that still exists is a pile of invoices and bills. Meanwhile income was overestimated and bills were underestimated. These first months have since included untold hours of sorting , verifying status of existing and anticipated and paid bills, often by calling vendors, and properly filing them in such a way that they will eventually be entered into their new computer financial program , have it officially audited and produce the Village's first State Financial Report (the first state audit since 2018-19). It will also create a draft of regular expenses for future budgeting.

Straightening out the financials includes additional issues, such as $450,000 ARPA COVID Relief Funds which went into the General Fund. They can find no record of where it went, along with some significant FEMA storm relief funding. Additionally there was no treasurer to help or oversee the bill paying process and no board members regularly reviewed or co-signed resolutions for bill payments. Finally, after several warning letters, Moody removed the Village from its credit ratings entirely. Additionally, they are having to determine other line item income that was just co-mingled in the General Fund and should have been accounted for in a separate category.

To make the transition from what would become a deficit operating fund before the year is done, DeVinko met with the State Comptroller's Office, Senator James Skoufis and Assemblyman Brian Maher. A Deficit Funding Act was crafted that would give the Village a number of temporary short-term bands that will convert to bonds, allowing them to fill the current gap in their budget and handle any additional unanticipated large bills in a timely manner. The amount being requested is capped at $4.5 M. The board assured residents at Wednesday night's Special Meeting that the available funds will only be accessed to pay absolutely necessary bills. They further reassured those attending that that the ongoing process will always be handled in a transparent manner, including regular meetings such as this one to update the progress on restoring computerized finance records, audits, and required reports and getting back to financial stability.

The Board reeived a generous round of applause and verbal thanks, but there was also anger that residents would apparently be having to "pay the bills" for the former administration's "fiscal ineptitude' via an anticipated tax hike of 4 to 5 percent.

Attendees spoke at length about wanting the former mayor to be held accountable. DeVinko said that nothing can be done until the auditing has been completed. But he added that the State does not ignore this kind of negligene, and they will be the one to act if they feel it was at a chargeable level, adding that he has seen a number of officials go out in handcuffs for financial improprieties, and that while he didn't want to make a judgement about it, they will answer questions honestly if asked. On the plus side, a bond for construction and renovation of the building that became the new Village Hall when the former one was destroyed by flood will be fully paid in a couple of months, opening a big monthly payment that can cover some other incoming bill(s), and possibly take the bite out of the likely increase in property taxes.

DeVinko says he feels positive about the Skoufis-Maher bill's passage, saying it has already been presented. There are only 2 weeks remaining in the legislative session so this process has been done on high speed. He added that after asking the likelihood of its passage he was told that "There has never been an instance when a community in thiis kind of situation has been denied financial relief."

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