DIVISION OF LOCAL GOVERNMENT AND SCHOOL ACCOUNTA

REPORT OF EXAMINATION

Village of Kaser
Refuse User Fees and Records
SEPTEMBER 2018

 

2018M

 Contents

Report Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Refuse User Fees and Records . . . . . . . . . . . . . . . . . . . . . 2
How Should a Village Charge and Account for Refuse User Fees?

2

The Village Is Using Refuse Fees to Subsidize the General Fund

2

What Do We Recommend?

3

Appendix A – Response From Village Officials . . . . . . . . . . . . 4
Appendix B – Audit Methodology and Standards . . . . . . . . . . . 6

 Report Highlights
Village of Kaser

Audit Objective
Determine whether the Village
imposed refuse fees in excess
related expenditures and
maintained appropriate records
refuse collection operations

Key Findings
l

The Village charged
$400,356 for refuse
which exceeded the
contracted cost of
collection without adequate
for the excess charges

l

The refuse budget does not
estimated
revenues and there was no
for the budgeted salaries
overhead of $179,648
separate from the
contracted cost

l

Revenues and
for refuse collection
are comingled with general
revenues and expenditures

Background

of

The Village of Kaser (Village) is
located in the Town of Ramapo in
Rockland County The Village
covers 2 square miles and has
approximately 400 parcels of real
property of which 103 are fully tax
exempt The Village is governed
by an elected Board of Trustees
(Board) and the Mayor The
Board has the power to levy and
collect Village taxes on real
property The Village provides the
following services to its residents:
refuse collection, general
governmental administration and
a federally funded Housing
Choice program
The Mayor is the chief executive
officer (CEO) The Clerk-Treasurer
is the chief fiscal officer (CFO) and
is responsible for billing, collecting
and recordkeeping of real property
taxes and user fees

for

residents
collection
outsourced
$215,352 for
substantiation
include
support
and

expenditures
fund

Quick Facts

Key
Recommendations
l

Ensure that fees for the
do not exceed
the expenditures

Population
2017-18 Budgeted
Appropriations
2017-18 Real Property
Taxes

5,354
$972,569
$51,229

refuse district

Audit Period

l

Ensure that the refuse
budget includes
estimated revenues and
sufficient detail for the
appropriations

l

Account for refuse revenues and expenditures so
they are separately identifiable from general fund revenues and
expenditures

June 1, 2016 - December 5, 2017

collection

Office of the New York State Comptroller

1

 Village officials agreed with our recommendations and indicated they planned to
initiate corrective action

Refuse User Fees and Records
How Should a Village Charge and Account for Refuse User Fees?
Unlike property taxes, which support general government services not related to
a separate identifiable benefit received by taxpayers, user fees are a charge for
the use of a specific service The fees charged must have a rational relationship
to the cost of the service provided to users In estimating the total service costs,
village officials should ensure that the estimates for overhead costs are
reasonable and generally should be based on prior-year actual costs User
charges for refuse collection may not be set at an amount that generates revenue
in excess of the cost of providing the service for the purpose of offsetting the cost
of general government services 1
Financial records assist in a village’s duty to be publicly accountable and enables
users to determine whether current year revenues are sufficient to pay current
year expenditures for all operations The financial records should show whether
resources were obtained and used in accordance with the village’s adopted
budget, and provide information to assist the users in assessing the cost of
village services

The Village Is Using Refuse Fees to Subsidize the General Fund

1See e.g.
Office of
the
State Comptroller
Opinion
No.
92-40
(http://www.osc.state.ny.us/legal/1992/legalop/ op9240 htm)
2

Office of the New York State Comptroller

 In 1991 the Village established a refuse collection district by local law 2 The
Village includes the annual refuse charge on the Village tax bill The refuse
collection charges are based on the number of units in a dwelling The Village
has 1,011 units in 355 dwellings using the refuse collection services
Each dwelling is charged $396 per unit, which resulted in revenues of $400,356
for refuse collection services in the 2017-18 fiscal year The Village outsourced
its refuse collection operations for the same year and contracted for this service
for $215,352 The refuse revenues were $185,004 more than the contractual
amount of the outsourced service
The Deputy Clerk provided us with the refuse budget for 2017-18 The budget did
not include an amount for revenues but it did include total budgeted
appropriations of $395,000, which included the cost of the contract ($215,352)
and administrative salaries and overhead costs of $179,6483 which would be 45

percent of the total Village costs for these categories 4 Village officials were not
able to support the salary and overhead cost allocations with documentation such
as actual time spent on administering refuse collection operations Furthermore,
because the Village outsources its refuse collection operations, expenditures for
overhead and salaries should be relatively limited Annual refuse fees are billed
and collected along with the annual Village tax bill, which would minimize, or
relatively eliminate, the cost of billing and collecting the fees

2 The Village’s 1991 local law is ambiguous as to whether
the charge imposed for refuse collection is intended tobe
an
assessment on
benefited
properties,
or
a
contractual
fee
imposed
on
users of
the
refuse
collection
service The local law refers to a
“service charge,” which could be a reference to a fee
imposed on users, but also states that the charge is “levied
against all properties” using the service, suggesting the levy
of an assessment For purposes of this report, we have
assumed that the charge is a user fee, not an assessment,
which is how the Village treats the charge for purposes of the
statutory tax levy limit It is our understanding that properties
which do not use the service are not charged the fee, which
is consistent with treatment as a user fee
3 Five employees with salaries totaling $119,619 and
overhead of approximately $60,000
4 Of the Village’s total payroll, 39 percent was charged to the
refuse collection function
Office of the New York State Comptroller

3

 Because the revenues and expenditures for refuse collection are comingled with
general fund revenues and expenditures, there was no comparison of revenues
to expenditures to determine any amount that should be used to reduce future
refuse costs and to improve budget estimates going forward Instead, excess
refuse collection revenues were combined with other general fund revenues and
used for general fund operations
As a rule, the general fund should be supported through real property taxes and
other Village-wide revenues The Village’s real property tax collections are
relatively low at $51,229 for the 2017-18 fiscal year Tax collections increased
1.03percent from the
previous
year of
$49,895
and
were within the
New York State property tax cap limits Because the
refuse function is subsidizing the general fund, the Village is artificially staying
within the tax cap and indirectly charging some residents who are not taxpayers
(due to real property tax-exempt status) for general government services
Charging in excess of the actual costs for the refuse collection function increases
the service costs resulting in a subsidy to the general fund

What Do We Recommend?
The Board should:
1

Budget for the refuse collection service based on prior actual costs of the
service and establish user fees accordingly

2

Ensure that the refuse budget includes estimated revenues and a
sufficient amount of detail for all appropriations

The Clerk-Treasurer should:
3

4

Account for the refuse collection operations so the revenues and
expenditures are separately identifiable from the general fund operations

Office of the New York State Comptroller

  

Villa
5WetWam 

   

BERNARD ROSENFELD
Mayor

EUGENE D. NEIMAN September 13, 2018
LIPOT I. MULLER

ISRAEL ROSENBERG
SHULEM FLIEGMAN Ms. Telmeh Blamah, CPA

??3895 Chief Examiner of Local Government and School Accountability
ALUE PINKASOVITS Of?ce of the State Comptroller
Village Clerir/Trmsurcor 33 All'pOl'l Center Suite 103

New Windsor, New York 12553
ALLAN M. SIMON
Attorney

Re: Report of Examination 2018M-97 Village of
Kaser Refuse User Fees and Records

Dear Chief Examiner Blamah,

We are pleased to have this opportunity to respond to the preliminary draft repmt of
examination conducted by the Of?ce of the State Comptroller on refuse user fees and
records for the period of June 1, 2016 December 5, 20W.

On behalf of Village of?cials, i would like to take this opportunity to thank the Office of
the State Comptroller (OSC) for their efforts to evaluate and report on the Village
operations. We welcome the State Comptroller?s objective to identify opportunities for
improving operations and governance.

Although the Village of Kaser is small in gcographical area, it is one of the fastest growing
areas in the New York State. With a population of more than 5,000 residents, it is
important for the Village to ensure that the Village remains nice and clean and a safe place
where people can live in a healthy environment. In our ongoing effort to make the most
ef?cient use of public resources, the Village keeps the tax rate very low and provides
many services to its residents by our in?house staff with different ideas without the need to
raise taxes, so the budget can remain affordable, being that a majority of the Village
residents are low income.

As mentioned above, Village Of?cials prioritize the garbage collection in the Village
above all other services, we put a lot of effo? to ensure the Village remains clean, The
Village outsources its garbage collection performed twice a week and recycling pickup
once a week. The Village also has a Department of Public Works (DPW) worker that
collects garbage daily from the front of each property as needed. Inspections are
performed daily around the Village to enforce garbage maintenance rules. The of?ce staff
is necessary to answer garbage complaints and to communicate with both the outside
contractor and the Village DPW worker about regular or special garbage pickups, thereby
ensuring that each of the Village residents are being is being serviced as they expect. Also
in need, is of?ce staff to assist with the enforcement by sending letters and following up
with property owners and tenants. The refuse fees collection process which is during a 2-3
month period and in some cases all year round for new construction etc. requires staf?ng
as well. During the Spring and Fall seasons the Village performs special clean ups, out of
the contract costs, which includes the outside vendor, and all the above mentioned Village
staff. All the above creates a need for 3-4 staffers to do this work, aside of the outside
contract.

Village of Kaser 15 Elycn 391 Kaser, NY. 10952 PH: 845-352-2932 FAX 845?352-5254 EMAIL: kaser@ksrnet.com

Office of the New York State Comptroller

Appendix B: Audit Methodology
and Standards
We conducted this audit pursuant to Article V, Section 1 of the State Constitution
and
the
State Comptroller’s authority
as
set
forth in
Article 3
of
the
New York State General Municipal Law To
achieve the audit objective and obtain valid audit evidence, our audit procedures
included the following:  We obtained the local law and minutes establishing the
“special district” and authorizing the collection of the special assessments
l

6

We reviewed the special assessment budget and the detail refuse budget
for reasonableness, calculated the percent of the allocated salaries to total
Office of the New York State Comptroller

 budgeted Village salaries for the year, reviewed the overhead charges and
calculated the percentage of overhead charged to refuse operations less the
contracted amount to the comparable charges in the Village budget
l

We reviewed the accounting in the general fund for the special assessments
and user fees, and compared the tax rolls, tax warrant and the total detail
charged reports to determine if the amounts for special assessments were in
agreement

l

We performed the tax cap calculation to ensure the Village stayed within the
limit

We conducted this performance audit in accordance with GAGAS (generally
accepted government auditing standards) Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objective
We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objective
A written corrective action plan (CAP) that addresses the findings and
recommendations in this report should be prepared and provided to our office
within 90 days, pursuant to Section 35 of General Municipal Law For more
information on preparing and filing your CAP, please refer to our brochure,
Responding to an OSC Audit Report, which you received with the draft audit
report We encourage the Board to make the CAP available for public review in
the Clerk’s office

Appendix C: Resources and
Services
Regional Office Directory
www.osc.state.ny.us/localgov/regional_directory.pdf
Cost-Saving Ideas – Resources, advice and assistance on cost-saving ideas
www.osc.state.ny.us/localgov/costsavings/index.htm
Fiscal Stress Monitoring – Resources for local government officials
experiencing fiscal problems
www.osc.state.ny.us/localgov/fiscalmonitoring/index.htm
Local Government Management Guides – Series of publications that include
technical information and suggested practices for local government management
www.osc.state.ny.us/localgov/pubs/listacctg.htm#lgmg
Planning and Budgeting Guides – Resources for developing multiyear
financial, capital, strategic and other plans
www.osc.state.ny.us/localgov/planbudget/index.htm

Office of the New York State Comptroller

7

 Protecting Sensitive Data and Other Local Government Assets – A
nontechnical cybersecurity guide for local government leaders
www.osc.state.ny.us/localgov/lgli/pdf/cybersecurityguide.pdf
Required Reporting – Information and resources for reports and forms that are
filed with the Office of the State Comptroller
www.osc.state.ny.us/localgov/finreporting/index.htm
Research Reports/Publications – Reports on major policy issues facing local
governments and State policy-makers
www.osc.state.ny.us/localgov/researchpubs/index.htm
Training – Resources for local government officials on in-person and online
training opportunities on a wide range of topics
www.osc.state.ny.us/localgov/academy/index.htm

8

Office of the New York State Comptroller

 Contact
Office of
the
New York State Comptroller
Division of Local Government and School Accountability
110
State Street, 12th Floor, Albany,New York

12236

Tel: (518) 474-4037 • Fax: (518) 486-6479 • Email: localgov@osc ny gov
www.osc.state.ny.us/localgov/index.htm
Local Government and School Accountability Help Line: (866) 321-8503

NEWBURGH REGIONAL OFFICE – Tenneh Blamah, Chief Examiner
33
York

Airport Center Drive, Suite 103
12553-4725

Tel
(845) 567-0858
•
Fax
Email: Muni-Newburgh@osc.ny.gov

•

New

Windsor,

(845) 567-0080

New

•

Serving: Columbia, Dutchess, Greene, Orange, Putnam, Rockland, Ulster, Westchester
counties

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