Reports in the press outlined that the Town of Colonie has recently implemented a new model of management for some high-level managers. The basic theory behind the Colonie managerial compensation model is that the high level employee retires from the town and becomes a member of the New York State Employees Retirement System. The employee then receives a pension based on their retirement. The manager also receives a check from the Town of Colonie as an employee or a consultant. This model is currently being used for the supervisor, the town attorney, and the director of Human Resources. The program has essentially been endorsed by the Colonie Town Board since they have unanimously passed resolutions supporting the new managerial model. Three examples are discussed below.
The supervisor was elected for a fifth term on Nov. 7, 2015. On Dec. 31, 2015 the supervisor retired from the Town of Colonie with a pension of $83,000. On Jan. 1, 2016 the supervisor was sworn into office with a salary of $120,000. This makes the supervisor a well-paid public official earning over $200,000 yearly. According to the 2019 Colonie town budget the supervisor earns a salary of $123,006. With the additional retirement amount of $81,758, Colonie taxpayers must support payments of $204,764 to the supervisor in 2019. The additional retirement payments from 2016 through 2019 of $81,758 yearly amount to a windfall of $327,032 during the period.
The Colonie Human Resources director currently has a salary of $67,900. The same person “retired” from the town on Dec. 27, 2010. The current pension for the Human Resources director is $79,247. Colonie taxpayers are supporting payments to the Human Resources Director of $146,900 during 2019. From 2012 to 2019 the total amount of these “retiree” payments will amount to approximately $713,223. On March 7, the Town Board passed Resolution No. 158 setting the salary of the Human Resources director at $69,900 and indicated that the salary had been inflated since 2016. The salary had been set at $85,431 in the 2019 Colonie budget. This transaction could have amounted to over payments of $55,000 to the Human Resources director. It is unclear whether any of these funds were paid back to the Town of Colonie. This salary problem plus the addition of the “retiree revenue” is particularly important since the Human Resources director is responsible for cost control of the labor costs at the Town of Colonie. Labor costs amount to approximately 77 percent of all costs in the Colonie budget.
The town attorney is in a similar position having “retired” on Feb. 27 with an annual pension of $71,149. The Colonie Town Board “rehired” the Town Attorney on Feb. 28 with a salary of $80,000. The town attorney currently receives $151,149 which includes a nice pension as a retiree from the town as well as a salary from town taxpayers. Taxpayers are left paying the bill for these employees because they have to pay to support the New York State Public Employees’ Pension Fund through a surcharge from the state Comptroller yearly. For the three salaries the surcharge to the retirement system is approximately $38,000. Also, the taxpayers are charged the current salary of the “retirees.”
One of the key jobs of these high level employees is to manage the costs associated with labor and benefits for the entire class of Town of Colonie employees. According to the 2019 budget, employee costs amount to $57 million or about 77 percent of the budget. There are serious questions as to whether effective cost control is present in the Town of Colonie budget. During 2018 the Town voted to override the State of New York property tax cap. The main reason cited for the override by the management was the increase in union-related employee labor costs.
The total amount of the pensions that will be provided to these three Town of Colonie top managers from 2010 through the end of 2019 will amount to approximately $1.1 million. The town supervisor will receive approximately $327,031 while the town attorney will receive $59,054, and the Human Resources director will receive approximately $713,223 in retiree payments in addition to the salary listed in the Town of Colonie 2019 budget.
The new system operates in an environment where many legitimate New York state and local government retirees living in Colonie are paid modest pensions from the New York State Employees Retirement System. For instance, an employee who earned $50,000 per year and worked for 30 years can expect to receive a yearly pension of approximately $30,000. It is hard to make ends meet with this small pension. Numerous legitimate pensioners in this situation reside in the Town of Colonie.
Kevin Bronner, Ph.D
The author is a former member of the Town Board
