Mismanagement leaves Wappingers Falls with budget trouble. Here are the key takeaways

When Lori Jiava decided to take on the position as village of Wappingers Falls treasurer, she knew the challenge that awaited her.

Jiava had been consulting for the village when the State Comptroller's Office conducted its audit of the village's finances. She was asked to sit in on some of those discussions, and when the results came out, she ended up being responsible for creating a plan to correct the mismanagement.

The village had gone through four treasurers the year before Jiava was appointed in 2023. That first year, entrusted with the village's finances, she had a little over two weeks to create the budget.

Jiava started working on the 2025 budget earlier this month, and decided to post a letter to the village's website describing the the grim status of the village's finances and stating "it's critical to confront the significant financial challenges and obligations confronting the Village."

The village is only allowed to increase its property taxes by $138,460, according to Jiava. However, salary raises alone would increase the budget by $126,000 and ambulance costs were expected to increase by $110,000 in January 2025. The village was also looking at a deficit of $775,000 due to "financial management challenges."

Though a proposed budget has been posted to the village's website, Jiava continues to work with departments on streamlining more of the finances. A final public hearing is scheduled for Wednesday.

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The proposed budget expects to raise $4.96 million in property taxes by increasing the tax levy 9.69%, while still providing residents with improvements such as park benches, a summer camp and outdoor recreation. The amount raised last year in property taxes was $4.5 million. Total expenditures are $6.6 million, up from $5.7 million the year before.

"Let's address (the village's) shortfalls. Let's just put it all on the table. We're not pointing fingers at anybody. It is nobody's fault," Jiava said, who is hopeful that all of the concerns can be resolved with consistent, transparent management and board oversight over the next few years. She explained that the issues raised are due to changes within the treasurer's seat over the past couple of years and the lack of oversight by the board, whose members have also changed.

Financial challenges in Wappingers Falls

Jiava's letter noted items such as raises in salaries and ambulatory care may cause the budget to surpass the village's allowed tax cap. Next year, if the village chooses to sign its contract with Empress Emergency Medical Services, the cost could come to $147,600. In order to mitigate the ambulance cost, Jiava is looking at other ambulance providers and is working with the administration to look into creating an ambulance district.

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In addition, "the burden of health insurance costs, which is particularly noteworthy due to minimal employee contributions and the absence of contributions from retirees, is unsustainable," Jiava wrote. The village covers health care costs for 42 individuals, of which half are retired, some still with families, totaling roughly $1.2 million max annual expenses.

"My goal is to help create definitive parameters and contracts for retirees," Jiava said, looking to future solutions regarding the non-negotiable cost. This may include an age requirement.

Jiava has been able to negotiate down fees and penalties generated from "unreported and miscalculated federal and state tax obligations" accumulated over the past years. The village also had to pay Dutchess County $90,000 in 2023 when it was found that a previous treasurer had not accounted for some of the checks sent in 2022. The amount was then deducted from the budget this year.

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The village owes $123,000 to the village's utility provider and is still waiting to hear from Central Hudson regarding the gas line explosion last year for which the city had to pay for services that could come to $77,000, according to Jiava.

"The Public Service Commission is conducting the investigation on the incident in Wappingers Falls. We continue to cooperate with them, but have no updates or timeline for conclusion at this time," stated a spokesperson from Central Hudson.

The letter also pointed to project funds and grants, some of which required the village to provide matching funds, that were not budgeted for projects such as "the boathouse, Clinton Dam, Franny Reese Park, and the water quality project." Some of the project funds were found to be misappropriated, "not fully spent for their intended purpose and were diverted to cover everyday obligations."

Jiava said the village is capable of paying off its debts, and eventually creating a fund for contingencies, with a system in place that provides the board with regularly scheduled finance reports, detailed explanations regarding how funds are being spent and organized accounts management.

"I cannot stress enough that the Board of Trustees must prioritize essential services and explore other ways to fund necessary services for cost-saving measures and revenue generation," Jiava said in the letter.

The corrective plan

Jiava's letter came three months after the New York State Comptroller released its findings in December of an audit that was conducted in 2020 and 2021 showing that "the Board was unaware of the Village’s financial position and that financial records were disorderly and incomplete."

Mayor Kevin Huber responded to the state's findings in a Dec. 7 letter, saying the findings reflect the actions of the past administration and that it is not "a true representation of the current administration's focus and fiscal oversight."

In a separate letter signed by both Huber and Jiava, they state "It is clear that stronger oversight mechanisms are crucial for ensuring the efficient and effective management of Village resources and for upholding the trust placed in us by our community members."

As of two months ago, Jiava has provided the board and mayor with monthly financial reports. She is also providing the mayor with debt payment records and has set up an approval system for all fund transfers to accounts, along with other changes.

She hopes to work with the administration to implement the following corrective measures:

• Annual workshops with the treasurer and board of trustees; establishing reporting guidelines and providing staff with training on the financial reporting process.

• Establish a process for the board or a designated committee to do a monthly review of bank reconciliations

• Board to conduct an annual audit of the treasurer's records.

• Create a multi-year plan for capital projects, along with establishing a system to document and manage funding for projects.

Saba Ali: Sali1@poughkeepsiejournal.com: 845-451-4518

This article originally appeared on Poughkeepsie Journal: Village of Wappingers facing 'financial challenges.' How we got here