Gaines water district users overcharged by about $175,000
Town will apply excess to reducing debt for districts
GAINES – The Town of Gaines overcharged residents in water districts by about $175,000, the Town Board announced on Wednesday after audits by two accounting firms.
The Town Board decided it will take money from the water district reserves to pay down debt in the districts. That will shorten the life of the loans and also reduce the annual payments to residents in eight water districts.
One district, No. 8, actually wasn’t paying enough and residents in that district will need to pay “a little more” to cover the district’s full expenses for debt and maintenance, said Town Supervisor Carol Culhane.
Water District No. 4 overpaid by $52,000 and that will be enough to wipe out the remaining principal, eliminating debt payments in the future for that district.
Other districts overpaid by the following amounts, according to the town:
Water District 2: $29,567
Water District 3: $29,633
Water District 5: $20,269
Water District 6: $2,617
Water District 7: $39,522
Water District 9: $2,788
Water District 10: $2,014
Culhane said she has been working with auditors for about 18 months, trying to determine if there was an overcharge and how to best solve the problem. The town also consulted the State Comptroller’s Office and reviewed New York Finance Law, she said.
She couldn’t say why the town overcharged residents. She said it goes back to at least 2006.
A resident complained about a high tax bill for water and that got Culhane, the town supervisor for about three years, to look into the issue.
The changing numbers in the districts makes it difficult to craft a solution for the excess charges. Some residents who overpaid their water district bills have sold their homes and moved out of the district.
The water districts often add users as new houses are constructed. Sometimes lots are split up, changing the numbers of users from when the districts were first formed and started collecting annual debt payments to pay off the loan for the construction.
Using the excess funds from the water district reserves will provide relief to water users in 2015 with smaller debt service charges, except for District No. 8.
“The most important thing is we came up with a fair fix,” Culhane said. “I don’t see another viable plan.”
Culhane said the Town Board is united in wanting to address the problem.
“It’s the board decision to go forward and straighten this out,” she said.