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Long IslandColumnistsJoye Brown

Brown: Payouts rightful fodder for federal, state investigations

Nassau County Comptroller Jack Schnirman, who had resigned

Nassau County Comptroller Jack Schnirman, who had resigned as Long Beach city manager in January 2018, on Nov. 15, 2018. Credit: Danielle Silverman

When considering the brouhaha for payouts to a former Long Beach city manager and members of the independent Nassau Industrial Development Agency, it's helpful to consider two issues: Size and timing.

In Long Beach, sources tell Newsday, federal authorities have been asking questions about a termination payout to former Long Beach City Manager Jack Schnirman that compensated him for all unused sick days — when his contract and the city code capped such payments at 30 percent.

The question is whether Schnirman, relying, he would say later, on calculations made by Long Beach subordinates, received a payout larger than he was entitled to. 

If the answer is yes, Schnirman — who did not sign his termination paperwork — has said he will return the money.

As Nassau County comptroller, he has made transparency and fighting corruption a cornerstone of his administration.

Were the calculations — which ended up with Schnirman receiving a total $108,000 for unused time — correct?

On Friday, a spokesman for the city declined to comment because of state comptroller and Nassau district attorney's office investigations.

Meanwhile, Nassau District Attorney Madeline Singas also is delving into a separate set of termination payouts — in which timing turns out to be key.

In that instance, former IDA chairman Joseph Kearney and four IDA employees together received a total of $350,000 in payouts for unused sick and vacation days — even as they kept working for the IDA.

Their payouts, unlike a similar one made in the past, never were approved by the IDA board.

As strange as it seems, the IDA isn't the only entity on Long Island that has paid out unused sick and vacation time to employees before they left their jobs. In some instances, including in the City of Long Beach, employees have received payouts — and gone on to accumulate more unused time, for which they later would be compensated.

To their credit, current IDA chairman Richard Kessel and an IDA board that was reconstituted after County Executive Laura Curran took office voted to stop early termination payments.

In the future, IDA employees will get the termination payouts to which they are entitled — when they terminate employment.

In addition, the payments will be approved by the IDA board.

"Once we found out, we took action," Kessel said. "We felt that we had to."

Although the IDA is a nongovernmental agency — meaning the payouts were not made with taxpayer money — the board decided to take action, in part, to bolster taxpayer trust in the agency, Kessel said. (Listen to interview in SoundCloud to hear him explain why.) 

As it is, IDAs in Nassau and elsewhere on Long Island are coming under fire by Long Islanders for awarding tax breaks, the cost of which then must be picked up by property owners.

In Long Beach, payouts have become an economic issue as well.

In June, an independent review tied overly generous payouts to the city's worsening financial heath.

"Long Beach has borrowed $15 million since 2012 to fund high-cost separation payouts, made possible by generous time accrual policies," the State Financial Restructuring Board found.

"The board," the report went on, "has yet to encounter a municipality in the state that provides payouts of this magnitude."

Last month, the city council voted, once again, borrow to fund payouts.

The City Council also vowed to review the practice.

Three council members, in a June posting on Facebook, called for action on payouts.

As of yet, according to a town spokesman, there's been no legislation put forth for formal council action.

Were the size, and timing of the payouts proper?

Multiple investigations should help sort that out.

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