Pension ruling: DiNapoli clarifies LDCs’ status

The decision by state Comptroller Thomas P. DiNapoli that 12 employees of local development corporations (LDCs) are not eligible to receive pensions from the state retirement system is correct, but tough on the people who were promised those benefits.

It is too bad that promised pensions have been denied. The employees in question contend that they are part of the Jefferson County Industrial Development Agency and thus entitled to the state benefits.

But Mr. Napoli’s office said that JCIDA official Don Alexander, currently the agency’s CEO, was told more than two decades ago that LDC employees could not enter the state retirement system.

“Our review indicated these 12 individuals were de facto employees of the LDCs, which are not-for-profit corporations, ineligible to be participating employers,” said Eric L. Sumberg, a spokesman for Mr. DiNapoli’s office.

Of course, the pressure to create LDCs to circumvent state municipal finance law was driven by the fact that the state Legislature limited the IDAs’ rights to sell tax-exempt bonds. IDAs sought and found what they hoped was a loophole.

Now those penalized are men and women who worked in good faith after their boss promised them a pension. If this happened in the private sector, the CEO of the company would end up in court.

Then the very same day, JCIDA resurrected the idea of streamlining and shutting down the Job Development Corporation. The JCJDC should be closed, but the IDA should not be exempt from scrutiny. There needs to be a thorough housecleaning to assure that illegal acts do not recur and the debacles of the last couple of years are not repeated.

Northern New York does not need another leaderless spectacle as we just witnessed over housing, or we lived through regarding Galloo Island. The time has come for the county Legislature to publicly evaluate the performance of the IDA and to make its employees whole.

Meanwhile, the leadership of the IDA must publicly explain its reasons for ignoring the law on the pension question.

The DiNapoli ruling is beneficial because it clearly points out that the LDC officials were not county employees, but worked for unregulated entities.

As for the proposed merger, the pension issue is no justification for that. What justifies the merger is efficiency and adherence to the law.