Pension Shortfall Raises Questions About Possible Cover-up

Questions were raised last week about a nearly $1 million shortfall in the Town of Yorktown’s state pension cost projections last year.

In the 2013 budget, approximately $1.6 million was estimated by Town Comptroller Patricia Caporale and Supervisor Michael Grace, but the payment sent to the state on December 13 was more than $2.6 million. To make up the difference, the Town Board approved a transfer from general fund balance of $972,000 on April 1, nearly four months after the bill was paid, leaving councilmen Nick Bianco and Vishnu Patel to wonder why the board was not notified of the discrepancy last year.

“Right now we’re trying to figure out what occurred and who knew what and when,” Bianco said. “How did we not know that this bill went up? Why didn’t somebody say something?”

According to Bianco, the town is first notified about the projected state pension costs in June by email through a link that is sent to the Comptroller’s Office and the Supervisor’s Office. Two more emails are sent in September and October when the budget for the following year is being prepared. He said records show someone from the Comptroller’s Office accessed the information from the state in September and October.

“I’m not looking to cast dispersions on anyone. I want to make sure it doesn’t happen again,” Bianco said. “We need to tighten up how we get that information in a timely basis. If these numbers stay true then we have a problem next year.”

Patel pointed fingers at Grace, who was handily reelected to a second term in November defeating Bianco, for concealing the information from the Town Board.

“We need to find out what went wrong with the 2013 budget process and we need to know now if there’s going to be a second shortfall in the 2014 budget.  This can’t happen again,” Patel said.  “I also want to know why the supervisor tried to hide the million dollar shortfall in a long list of routine budget transfers instead of coming right out and telling the board about the problem which he knew about last December.”

The shortfall conjured up 20-year memories of the infamous $1 million mistake in the Yorktown School District in 1994 when a clerical error in the school district resulted in a tax warrant being sent out for $1 million less than what was required. The Town of Yorktown bailed out the school district by taking $1 million from its water fund that year but the mistake was not made public for several months after the fact.

Grace downplayed the state pension shortfall, explaining the town had sufficient funds in its general fund balance to make up the difference.

“There’s no monumental mistake being made here. This is the nature of the beast,” he remarked. “To try to pull out a whipping boy is utter nonsense. If my colleagues feel they have to (call) someone out and tar and feather them over this, let them be my guest. We’re very careful so we don’t get caught shorthanded on things like this. We always err on the side of caution.”

Grace attributed part of the shortfall to the settlement of a PBA contract last year that was retroactive for three years, along with fluctuating rates by the state that make it difficult for municipalities to get a true picture of their pension expenses.

He didn’t recall receiving any emails from the state but mentioned if he did he would have just forwarded them to the Comptroller’s Office.

“You’re trying to get it as right as you possibly can. They’re working on projections and we’re working on projections,” Grace said. “We always buffer for that. We rely on accurate information coming from the state Comptroller’s Office. We should be getting a credit back. The fund balance is still near $5 million. As I have been advised, we’re in very good shape.”

Bianco maintained Grace should have been up front with the board about the actual pension costs.

“If we would have known we could have dealt with it,” he said. “This surprise that your pension goes up has happened before and we dealt with it. I’m not satisfied as to how do we make sure this doesn’t happen again?”