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WATERLOO — Mayor Jack O'Connor wants the village to be exempt from paying property taxes on the water treatment plant on Kime Road in Fayette.

He argues that the village could better use the tax payments to upgrade the plant to meet new drinking water standards.

After reading the most recent state audit of the Waterloo Central School District for the past three years, O'Connor said he felt compelled to respond. The audit was critical of the district for overestimating budget appropriations and for having too much money in reserve funds.

He sent a letter Monday to school Superintendent Terri Bavis and a copy to school board President Ellen Hughes.

After reading the audit, O'Connor felt that "as mayor, I had no choice but to respond to you with a mutually beneficial request."

He noted how the State Comptroller's Office had cited deficiencies in the audit, including how reserve funds have been excessively accumulated over the past five years.

"The Waterloo central school district overestimated its appropriations and would then transfer these over budgeted amounts into reserve funds," O'Connor wrote. "I believe the school district has now accumulated in the neighborhood of $20 million in its six reserve funds."

O'Connor told Bavis that the village is paying property taxes to the district on its water treatment plant and related water infrastructure in the town of Fayette. In 2019, the village paid $85,543 in school taxes on the water plant and related property. It also paid $15,000 in Fayette town taxes and $21,000 in Seneca County taxes.

"As you may already know, the village is trying to redirect those property taxes currently being paid on its municipally-owned water treatment plant to allow it to purchase additional equipment ... along with continued vigilance against Harmful Algal Blooms," O'Connor said.

"I believe that as one of the largest users of the village-provided water supply, it is a fair request to have the Waterloo Central School District provide the village of Waterloo with a property tax exemption for its water treatment plant and related equipment," he wrote. "The basis for this request is that such a property tax exemption would not adversely affect the Waterloo school district budget or the educational services provided and enable the village to purchase additional water treatment plant equipment that will only help ensure quality water being supplied to the school district."

O'Connor asked to formally present his request to the school board at its next meeting, which is Tuesday night.

Bavis did not respond to a request for a comment.