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Health & Fitness

Yorktown's $972,000 Pension Shortfall

Yorktown under budgeted its 2013 pension obligation by $972,000 despite the availability of a more accurate estimated payment amount that was available from the state retirement system when the budget was being prepared.

Yorktown’s $972,000 Pension Shortfall

Why did Supervisor Grace miscalculate the town’s 2013 pension obligation —to the tune of $972,000 —when he prepared his 2013 budget?

The short answer is that in October, 2012, when he was preparing his 2013 budget, Supervisor Grace failed to incorporate the September estimated payment amount that was available from the state retirement system. And in November, he failed to incorporate the retirement system’s final invoice amount in the revised budget that was adopted in December.

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Which leads to the question: Why weren’t the estimated or final payment amounts factored into the 2013 budget?

And that, in, turn, leads to other questions.

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  • Why wasn’t anyone checking emails from the retirement system?
  • Why didn’t town staff access the estimated and final payment information that was available on the retirement system’s web site?

Both the Examiner and Yorktown News report that Supervisor Grace is down playing the significance of the shortfall on the grounds that the town was able to take the missing $972,000 from its fund balance, aka, its rainy day fund.

But that response begs the question of why the budget was so far off the mark to begin with.  

After salaries, retirement payments and medical benefits probably represent the biggest expenses in the town budget, expenses over which the town has no control.  Getting those numbers correct is critical when it comes to preparing an honest and realistic budget.  That’s why, every September, past supervisors have made sure they plugged in the state retirement system’s estimated payment numbers into their budgets.  It’s basic budgeting 101; predictable expenses are budgeted for; the fund balance is reserved for unanticipated expenses like storm clean ups and emergency repairs.

 

More information about what apparently went wrong in 2013 is available at www.yorktownbettergovernment.org/pension-shortfall.htm





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