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Audit: Henrietta Fire District overtaxed residents

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The Henrietta Fire District’s board did not adopt realistic budgets from 2017 to 2021, which led the agency to over-tax town residents by over $2 million, according to an audit by the state Comptroller’s Office.

The recently released report stated that from 2017 through 2020, the board appropriated $5.4 million from fund balances that were not needed to fund operations and overestimated appropriations by $8.4 million.

“As a result, more real property taxes were levied than needed,” read the audit report.

Additionally, the board unnecessarily overrode the state property tax cap in 2019 and 2020. The audit report stated that a tax cap override for 2021 will likely be unnecessary since the budget, contended the Comptroller’s Office, overestimated appropriations by $1.4 million. It added that $1 million in appropriated fund balance will likely not be used.

In 2019, the Henrietta Fire District had a tax levy limit of about $9.8 million under state law, according to the district’s financial reports. But the district’s actual levy was $10.6 million that year. In 2020, the district’s levy limit was set at $11.1 million, but officials ultimately budgeted an $11.6 million levy.

The audit report stated that the practice gave residents the impression that the district needed to raise more through taxes to avoid a budget gap. But the district closed out 2020 with a $4.4 million surplus that was put into a fund.



“Because the board did not adopt budgeting, fund balance, and reserve policies, no rationale was provided for maintaining this level of fund balance,” the audit reads. “In addition, the board’s ability to effectively monitor the district’s financial condition was hampered because the treasurer’s reports inaccurately combined the general and capital project funds and did not always reflect accurate and up-to-date prepaid expenditures.”

In the Henrietta Fire District’s response to the audit report, Board Chair William Heist pushed back against the Comptroller’s Office’s conclusions, stating that all but $2.5 million of the $4.4 million fund balance was allocated for specific uses. He added that the money was needed due to the unpredictable nature of the fire district’s responsibilities and the need to adjust for new projects.

“Historically, the fire district has taken a conservative approach to these unknowns by budgeting contingency funds as well as conservatively budgeting carry-on funding to lower the following year's tax levy,” read Heist’s response.

The Office of the State Comptroller disagreed, stating that the dynamic nature of the district’s responsibilities doesn’t justify the budget discrepancies.

“While some variance can be expected as a result of the timing of projects or adoption of the budget, this does not explain variances of the magnitude noted in our audit,” the report reads. “More effective analysis of historical data will ensure only necessary real property taxes are levied.”

The fire district’s 2021 budget appropriated $14.3 million, of which $13 million was to be raised through property taxes, according to the audit report. In 2020, the district spent $10.7 million and collected property taxes in the amount of roughly $12 million.

The audit report also said the board failed to develop a comprehensive multi-year plan, ensuring that the budgeting faults of the board would likely continue in coming years and put the district’s future in jeopardy.

“Without developing formal multi-year financial and capital plans, the Board cannot adequately plan for the future and there is a risk that the board’s intentions for the district will not be fulfilled,” the audit reads. “Further, comparing budget figures instead of actual expenditures from year-to-year only amplifies the District’s poor budgeting practices.”

In January, CITY published an investigative story exploring Monroe County’s fire districts, finding that the cost to taxpayers varies wildly from district to district, and that many districts regularly overrode their tax caps.

The Comptroller’s Office completed its audit of the Henrietta Fire District in February, and recommended that the department adopt realistic budgets; establish budgeting, fund balance, and reserve policies; and develop multi-year financial and capital plans.

Gino Fanelli is a CITY staff writer. He can be reached at (585) 775-9692 or gino@rochester-citynews.com.

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