Suffolk is facing a $3 million hole in its 2013 budget after County Executive Steve Bellone decided not to make payments a police union said he was supposed to have made to a fund for member benefits.
The Suffolk Police Benevolent Association, the county's largest police union, is seeking the full year's contribution, meant to pay for benefits including dental and vision. The unbudgeted amount could be as high as $3 million, county budget director Connie Corso said.
Administration officials were trying to take advantage of what had been billed as a cost-saving provision in the new police contract, settled last year. The language states that Suffolk isn't required to contribute to the benefits fund when "fund reserves exceed 32 months."
Bellone aides say they decided not to budget any contributions based on the benefit fund's 2011 year-end financial figures, which showed more than 32 months of reserves.
Contract provisions require Suffolk to make the full payment once the benefit fund has fallen below 24 months of reserves.
Suffolk already has made $1.5 million in unbudgeted payments to the union's benefits fund.
The county held its latest payment, for the April-May period, to $500,000 -- $150,000 to $200,000 less than the full contribution -- pending a review of fund's 2012 financial statement. Bellone's budget office received the statement Monday, but neither the administration nor the union would comment on the reserve levels until a review of fund finances is complete. Corso said the review may last until mid-July.
"That section of the contract was negotiated as a concession to the county and we acknowledge that," said Noel DeGerolamo, noting that the county contribution can rise or fall based on the size of the union's membership.
Bellone spokeswoman Vanessa Baird-Streeter said the budget office and the accountant for the benefit "are currently reconciling the numbers to determine what the present reserve is and to determine if any payment needs to be made under the contract."
The issue represents the latest controversy stemming from the PBA contract, which last year went through multiple revisions after it was initially announced and before it won legislative approval. The county comptroller's office said it does not expect any immediate cash flow problems to Suffolk's $2.77 billion budget because the county in April borrowed $115 million in revenue anticipation notes to help cover short-term costs.
Bellone aides say the potential benefit problem already has been factored into the projected $250 million shortfall for this year and next.
However, Robert Lipp, director of the legislature's budget review office, said he was unaware of the problem, and that unbudgeted benefit fund payments were not included in shortfall estimates made jointly by the administration and the legislature's budget office.
Lipp said his office's review of the PBA contract did not project any savings from the disputed contract provision because legislative analysts could never determine the level of reserves. "It implied a short-term savings, but we could never quantify it," he said. "It was kind of a head-scratcher."
In disclosure statements for two recent borrowings, the county told investors that it may have to make additional payments for money not in the budget to cover the benefit fund cost.