The Town of Hempstead Industrial Development Agency is ending its decades-old practice of relying on the town comptroller to forward payments in lieu of taxes to Nassau County and will now send the money directly to the county.
IDA chief executive Fred Parola said the policy change is a result of the IDA’s discovery over the summer that the town had withheld $7.6 million in payments.
“We felt that was inappropriate,” Parola said Thursday. “So this will prevent that in the future.”
A Hempstead Town spokesman declined to comment on the change.
The IDA extends the property tax abatements known as PILOTs to local property owners to promote economic development. Recipients make the PILOT payments to the town IDA. The payments may be smaller than the property tax bills would be. The IDA for decades sent the payments to the town comptroller to disburse to taxing jurisdictions such as the town, county and school districts.
The policy reversal also means the town will no longer receive the $125,000 the IDA previously paid the town annually to disburse the PILOTs, Parola said.
The missing payments were noted in a July draft of an audit of the county’s PILOT collections, by the Nassau County Comptroller. The IDA then issued a news release in August about the missing payments. The county comptroller criticized the release as an “irresponsible” disclosure of confidential information, a charge the IDA contested.
The comptroller’s office referred the case to the county Board of Ethics for review. Board representatives did not respond to a question about whether they had conducted a review.
According to the comptroller’s audit, released in October, the $7.6 million in missing payments included $5.2 million from 2017 and $2.4 million from 2018.