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Oyster Bay Town Board votes to partially restore union workers' 'lag pay'

Town of Oyster Bay Supervisor Joseph Saladino in

Town of Oyster Bay Supervisor Joseph Saladino in September. Credit: Howard Schnapp

Oyster Bay town employees will receive some deferred income next year under a resolution adopted by the town board to partially restore “lag pay.”

The board, at its Dec. 11 meeting, voted to fund half of the deferred pay that the Civil Service Employee Association Local 881 agreed to in 2012 to avert layoffs. Under that agreement, union workers deferred one paycheck in 2013 and another in 2014.

Since then, employees have received their deferred pay when they left town employment.

The resolution to restore the lag pay was “walked on” to the town board meeting without prior notice and without taking public comment.

After Town Supervisor Joseph Saladino called for a vote, Town Clerk James Altadonna Jr. questioned the lack of public comment. Town Attorney Joseph Nocella said public comment wasn't necessary. Board members unanimously approved restoring the lag pay.

Under the resolution, town employees are to be paid for the 2013 lag at their current salary by March 31. 

The 2019 adopted budget includes $83.3 million for salaries, slightly less than $83.4 million in the amended 2018 budget. Councilman Anthony Macagnone cast the lone vote against the 2019 budget on Oct. 30, citing the lag pay owed to town employees.

It’s unclear how the town will fund the payments but a recent borrowing prospectus shows the town expects to have an extra $8 million that was not included in the budget. 

Oyster Bay's public information office issued a statement on Dec. 17 saying, “There is no impact on the 2019 Budget (no amendments).” The statement pegged the cost of restoring the lag pay at $3.5 million but did not provide additional details. Town financial records put the value of each payroll lag at “nearly $4 million.”

This month the town borrowed $10 million to bridge a cash flow deficit. Without the borrowing, the town’s general fund would not have had enough money to cover its payroll on Dec. 21, according to a projected cash flow included in the borrowing prospectus.

The town’s general fund — its main fund for town operations — ended 2017 with a cumulative operating deficit of $22 million, according to audited financial statements.

The town told investors in its borrowing prospectus that it had deliberately underestimated its revenue for mortgage recording taxes and other state and federal aid by $8 million in the 2019 budget. The money is expected to be used to reduce the operating deficit, according to the prospectus.

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