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  #721  
Old 05-20-2017, 08:45 PM
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WARMINSTER, PENNSYLVNIA

http://www.montgomerynews.com/public...ab0f187dd.html

Quote:
Centennial School District faces 3.09 percent tax hike
Proposed final budget calls for increase above Act I index for fourth consecutive year


WARMINSTER >> The Centennial School Board approved its proposed final budget at its May 2 meeting.

The action is the last board step before the final budget approval for 2017-18 school year, which will take place June 13.

The budget features $115.2 million in proposed expenditures, a $3.9 million increase from the current school year. Most of the increase, 80 percent, comes from employee salary and benefit increases as well as the district’s contributions to its pension fund, according to district information.
.....
The 3.09 percent tax increase goes over the 2.5 percent allowed by Pennsylvania’s Act I index. The state sets the limit annually; the index is the maximum amount school districts are allowed to raise the property taxes for its homeowners without a voter referendum. School districts are allowed to apply for exceptions with the state every year to surpass the increase for reasons that include special education costs and pension contribution costs.

Centennial School District has used the exceptions for the last three years, when its taxes went up by 4.47, 3.76 and 3.5 percent, respectively.

Centennial School Board members have called for pension reform from the state over the years to no avail. The state legislature has not come up with a reform that would relieve the school districts throughout the state from contributing as much as 35 percent of their employee payroll to cover employee pensions. The contribution percentage is scheduled to rise annually under current state law.

“There needs to be comprehensive pension reform done immediately,” board member Michael Hartline said. “The accumulative effect of the increase is crippling our district and just about every district in the area.”

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Old 05-20-2017, 08:46 PM
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LINCOLN, NEBRASKA

http://journalstar.com/news/local/go...60b4bc4dd.html

Quote:
Pension ordinance makes funding police and fire pension top budget priority


The city’s pension plan for firefighters and police will be a top funding priority in the future no matter the economic climate, based on an ordinance passed by the Lincoln City Council on a 5-2 vote Monday.

The city must follow the recommendations of the actuarial firm hired to monitor the pension plan, paying the highest amount recommended until the plan reaches at least 115 percent of funded ratio, according to the ordinance.

Currently, the city must contribute what it costs to operate the plan for a year, plus administrative costs. But it doesn’t have to contribute more, even if the pension plan is in a funding hole, as it has been for the past eight years.

Though the city has been working to make up the losses created by the stock market crash in 2008, the ordinance will make that mandatory.
The two council members who voted against the funding mandate, Jon Camp and Cyndi Lamm, worried that the ordinance eliminated any flexibility for the mayor and council and could lead to tax increases during economic downturns.

If the city had budget problems, the council would have to fully fund the police and fire pension plan — or repeal the ordinance. A repeal would be unlikely because of its political ramifications, Camp said.

Though he has historically supported fully funding the pension plan, Camp said he would prefer making the requirement a resolution, which can be ignored.

Lamm said future councils will need to balance taxpayers' concerns with the pension plan's needs. “I can’t support boxing in future councils and the administration,” she said.

Past councils have not been able to prioritize the pension plan, even though paying those retirement benefits is a legal obligation of the city, said Councilman Roy Christensen.

They had the flexibility to do the wrong thing, he said.

The pension plan is already on the back of taxpayers, he said.

Taxpayers eventually have to pay the benefits, and when adequate funding is not maintained, future taxpayers have to make up that funding and the lost interest that would have been earned, council members pointed out.

The funding requirement was a recommendation from a pension review committee. Former Councilman Trent Fellers, who helped form the committee and served on it, said this practice stood out when the committee looked at best practices in other cities and states.

States that had this requirement in place were 80 to 90 percent funded, not 60 to 70 percent funded, Fellers said.

“It is a lot easier to pay the pension plan at 100 percent than to play catch-up like we have been doing.”


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Old 05-20-2017, 09:27 PM
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DALLAS POLICE AND FIRE
TEXAS

http://dfw.cbslocal.com/2017/05/18/s...-pension-deal/

Quote:
Senator West On Negotiating Pension Deal: “Have You Ever Had Gumbo?”


AUSTIN (CBS11) – Handshakes and smiles took center stage at a celebratory news conference at the State Capitol after a deal was finally reached Thursday afternoon to save the troubled Dallas Police and Fire Pension Fund.

It came after intense, last-minute negotiations that began 10 days ago and continued through the early afternoon.

State Senator Royce West, D-Dallas, who helped oversee the negotiations, compared it to a popular dish. “Have you ever had gumbo? We’re putting a little bit of this in there a little bit of that in there. We’re trying to come up with the best Gumbo we possibly could.”

He and other lawmakers, Dallas Mayor Mike Rawlings, and most of the police and fire associations called the compromise a victory.

.....
The news conference took place shortly after the Senate’s State Affairs Committee voted unanimously, 8-0 to back the pension bill.

Under the deal struck, the pension fund will now be fully funded within 46 years and won’t run out of money.

But the fund must still be monitored closely.

.....
Mayor Rawlings says it will give city taxpayers flexibility to pay into the system.

Sen. West urged the associations to convince their members the agreement is a good one. “It’s important to note that these organizations here today will take an active role making certain we communicate the message. How important this particular legislation was and how well negotiated this was to the very end.”

.....
The Dallas Police Retired Officers Association opposes the pension bill.

The President of the group, Pete Bailey said, “We represent the group most negatively affected I think in this deal. We’re going to go back and explain to them there was a ton of hard work done. There was a lot of good will put forward to try and create a situation where their futures would be secured.”

Bailey says his group opposed the deal because some retirees may be forced to give back thousands of dollars they already received.

It’s a provision called “clawback.”

But two-thirds of the new pension board members would have to approve that provision.

James Freeman, who spent 36 years with the Dallas Police Department, went to the Capitol Thursday.

He opposes “clawback.”

Freeman said, “A lot of money has been spent. I don’t have it. A lot of people have died. Retirees have died and this money has been willed to spouses, to grandchildren.The money has been spent and redistributed.”

Sen. West said he doesn’t think that will be likely.

“I don’t believe that that particular tool will be utilized unless it’s absolutely necessary to, number one, save the fund, but for actuarial soundness.”

The full Senate will vote on this bill next week.


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Old 05-20-2017, 09:33 PM
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SAN DIEGO, CALIFORNIA

https://www.ai-cio.com/news/san-dieg...nsion-changes/

Quote:
San Diego Union Appeals Ruling Upholding Pension Changes

The board of the San Diego Municipal Employees Association (MEA) has voted to seek a review from the state Supreme Court to overturn a Court of Appeals ruling that upheld pension cutbacks.

MEA’s board of directors voted unanimously to appeal to the California Supreme Court last month’s Proposition B ruling by the Fourth District Court of Appeals. The board said that if left unchallenged, the court decision would not only prevent San Diego city employees hired on or after July 20, 2012, from being put back into a defined benefit pension system, but it could also undermine future bargaining.

Proposition B replaced guaranteed defined-benefit pensions with 401(k)-style defined contribution retirement plans for all new city employees, except police officers.

The appellate court ruling in April overturned a 2015 state labor board ruling that found that the pension cutbacks were illegal because of then-Mayor Jerry Sanders’ involvement in the initiative that made the changes.

.....
The union, which represents about 4,000 city workers, said that the process for pursuing a review with the California Supreme Court will take several months, and that a decision on whether or not the court will even hear the appeal won’t come until late summer.

“This decision condones the opt-out scheme which Mayor Sanders and his allies adopted – and in which the City Council became complicit – to defeat rights guaranteed to all public employees under California’s statewide collective bargaining law, the Meyers-Milias-Brown Act (MMBA),” said the MEA in a statement after the April appellate court ruling. “This decision is a disheartening setback in MEA’s righteous battle to gain the City’s compliance with this important statewide bargaining law.”

The MEA also said that if the ruling is not overturned, it will make it hard for the city to hire quality employees because many will take jobs with other cities that still offer defined benefit pensions.

If the California Supreme Court sides with the MEA and overturns the appellate court decision, it could mean that the city of San Diego will have to shell out millions of dollars to create retroactive pensions for more than 3,000 workers hired since 2012.


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Old 05-20-2017, 09:39 PM
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ILLINOIS

https://teamsterslocal700.com/2017/0...eral-assembly/

Quote:
Home » News » Take Action: Pension-cutting bills moving in the General Assembly
Take Action: Pension-cutting bills moving in the General Assembly

It’s critical that you call your State Representative TODAY to urge a NO vote on SB 16, HB 4027, HB 4045 or any other bill that cuts the pensions of public employees. Dial 888-412-6570 or Click to Call. Make clear that these bills are unconstitutional, unfair, and you expect your representative to OPPOSE them.

In recent years, the Illinois Supreme Court has twice found legislation reducing the pension benefits of active and retired public employees to be unconstitutional. So why does Governor Rauner keep pushing to cut public employee pensions—and why are some legislators going along with him?
It’s important to note that no legislation before the General Assembly would cut the pension benefits of current retirees. There is widespread acceptance that the court has flatly rejected any reductions in the pensions of those who have already retired. And it’s important to remember that, despite strong opposition from the unions of We Are One Illinois, the General Assembly acted in 2010 to significantly reduce the pension benefits of all those hired after January 1, 2011 (Tier 2 pension participants). The courts have consistently ruled that only the benefits of current employees and retirees are constitutionally protected. Benefit reductions—or even elimination—are legal for any employee not yet hired at the time changes to the pension code are made.

Rauner and some in the General Assembly are focused on finding ways to get around the constitutional prohibition against cutting the benefits of all employees hired before 1/1/2011 (Tier 1 participants). Relying on the principle of “consideration”, they argue that if employees are given something in return for the reduction in benefits, then the cuts would be constitutional. Senate Bill 16, House Bill 4027 and House Bill 4045 are all based on this “consideration” model, as are several other bills that have been introduced.

SB 16, HB 4027 and HB 4045 affect all Tier 1 active employees in the SERS, SURS, TRS and Chicago Teachers pension systems. Each requires employees to make an irrevocable choice between:

1. Accepting a delay and reduction in his/her cost-of-living annual adjustment when he/she retires; or

2. Agreeing that his/her pension benefit would be calculated using only his/her current salary, excluding all future pay increases from calculation of his/her benefit.

These bills attempt to compensate employees who choose Option 1 above by providing for a “consideration payment” of 10% of an employee’s past pension contributions and lowering the employee’s future contribution rate by 10%. However, the amount that the employee receives through this payment would be far short of the amount he/she would lose.

Union attorneys argue that this scheme does not meet the “consideration” standard but rather is an involuntary and forced diminishment because either choice represents a reduction of benefits. No matter which choice an employee makes, he/she would lose tens of thousands, or even hundreds of thousands, of dollars over the course of his/her retirement years.

Moreover, both bills threaten further harm to retirement security because they initiate a process of moving new employees out of all the state’s pension systems and placing them in a defined-contribution plan. This will have the effect of reducing contributions into the systems, thus exacerbating the underfunding that has consistently plagued all the systems.

Yesterday, the Senate passed SB 16 with bipartisan support and little debate. Click here to read a summary of the bill and here to see how senators voted.

Now the battle shifts to the House of Representatives. HB 4027 and HB 4045 (which have the same core provisions as SB 16) passed the House Pension Committee earlier this week, but a number of those who voted to allow them to move out of committee made clear they intend to vote against them on the floor.

At this time, we don’t know whether the House will vote on SB 16, HB 4027 or HB 4045. But one of these bills is very likely to come to the House floor in the next few days.

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Old 05-20-2017, 09:40 PM
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NEBRASKA

http://update.legislature.ne.gov/?p=22276

Quote:
City bankruptcy tied to pension funding level

Cities with pension plans not funded to a certain level may not file for bankruptcy under a bill passed by the Legislature May 18.

Introduced by Columbus Sen. Paul Schumacher, LB72 prevents a city or village with a defined benefit retirement plan from filing for bankruptcy unless the plan’s funded ratio reaches a certain percentage. The ratio will increase incrementally from approximately 52 percent for any petition filed between 2020 and 2023 to 90 percent after Jan. 1, 2038.

The bill also allows a city or village without a pension plan to declare that its general obligation bonds would be equally and ratably secured by property taxes levied from year to year by the city or village. Those bonds would have a first lien on the property taxes levied.

LB72 passed 41-4.

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Old 05-20-2017, 09:43 PM
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CALIFORNIA

http://kvcrnews.org/post/calif-finan...-debt#stream/0

Quote:
Calif. Financial Analysts Want More Study On Brown Adm. Plan To Pay Down Pension Debt

The Brown administration has plans for an innovative money swap that could pay off billions in pension debt over the next two decades, but nonpartisan analysts say the proposal isn't fully cooked. Capital Public Radio's Ben Bradford explains.


[audio]


http://www.eastbaytimes.com/2017/05/...-pension-plan/

Quote:
Borenstein: A great deal could go wrong with Brown’s pension plan

Gov. Jerry Brown and state Treasurer John Chiang have a plan to help cover the state’s soaring pension payments: Borrow money at low interest rates and invest it to make a profit. What could go wrong?

Lots.

Unfortunately, as they try to sell this scheme to the public and the Legislature, the governor and the treasurer fail to mention the risks, or their aggressive assumptions.

Some local governments, like Oakland, that tried similar borrowing-and-investment schemes to help pay pension debts instead lost hundreds of millions of dollars.
Similarly, a Boston College nationwide study of such deals concluded that they carry significant risk and that financial success depends largely on when in the economic cycle investments are made.

The state plan presents the same sort of danger, especially because it calls for investing the entire $6 billion of borrowed money next fiscal year at what state analysts forecast could be a high point of the market.

Brown unveiled the plan May 11 as part of his state budget proposal for the 2017-18 fiscal year. Like local governments, the state faces rapidly rising pension payments in coming years to make up for past years of underfunding.

The problem was exacerbated because Brown’s so-called pension “reform” of 2012 failed to significantly rein in retirement costs. Statewide pension debt has increased 36 percent since his changes took effect.

Now Brown, with Chiang’s full-throated support, proposes this borrow-low, invest-high scheme to help cover payments to the California Public Employees’ Retirement System.

The Legislative Analyst’s Office on Tuesday concluded the plan would probably provide fiscal benefits, but the likelihood and magnitude are uncertain, and the administration has failed to carefully consider potential pitfalls.

Among the concerns are whether the plan is legal, the strain it will put on other parts of state government and, most significantly, the financial risks.

Brown wants his plan passed next month with the state budget, but the LAO wisely recommends that lawmakers apply the brakes until proper financial analyses are completed.

The governor plans to borrow from the state’s $50 billion short-term, low-yield savings account, which is generally for managing the state’s seasonal cash flow.

Under his proposal, the state would borrow $6 billion at an interest rate pegged to the two-year Treasury security rate, currently about 1.3 percent and forecast to rise to about 3.5 percent by 2021.

It would then invest the money with CalPERS, which forecasts 7 percent annual returns. The difference between the borrowing cost and projected earnings would be profit the state could use to pay part of its approximately $59 billion pension debt.

Reducing that debt would trim the state’s annual pension payments, currently forecast to nearly double to $11.2 billion by 2031-32. Under the proposal, the administration claims, the annual payments would instead peak at $10.4 billion.

All told, this plan “will save the state $11 billion over the next two decades,” the administration claims. They don’t say it might save $11 billion. They say it will. That sort of hubris, with no mention of downside risk, is what got us into today’s pension mess.

In this case, the administration overestimates the likely investment return and understates the borrowing cost.

For projecting the investment return, the administration relies on CalPERS’ long-term forecast, ranging from 7 percent to 7.375 percent annually. But CalPERS’ consultant expects only an average 6.2 percent in each of the next 10 years.

Moreover, timing is critical. The profit could be greatly reduced if the borrowed money is all invested, as Brown proposes, in the next fiscal year and the nation then hits the recession the governor has been warning about.

As for the borrowing cost, the use of the short-term savings account to fund a loan through 2030 is problematic. Tying up that money, the legislative analyst notes, could force the state to borrow elsewhere at higher interest rates when it needs to cover future cash flow deficits.

Also, if the state savings account makes a long-term loan, legally it must charge an appropriate interest rate. But a cheap two-year treasury rate seems inadequate for the proposed loan of up to 13 years.

It’s great that Brown wants to reduce the state’s pension debt. But doubling down on market risk at the same time he’s warning of a likely recession doesn’t make sense.
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Old 05-20-2017, 09:45 PM
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MICHIGAN

http://www.freep.com/story/money/car...ute/101885768/

Quote:
GOP leaders halt talks with Snyder after pension dispute

LANSING – Republican legislative leaders canceled budget talks with Gov. Rick Snyder’s administration due to their dispute with him over making newly hired school employees eligible only for a 401(k) and no longer a traditional pension.

The move — which nixed a meeting scheduled for Friday — left in doubt the status of future discussions and could put at risk a timely resolution of the next state budget, which Snyder and the GOP-led Legislature like to finish in early June. They often boast of enacting the budget months before it takes effect in the fall.

The Republican governor is resisting a legislative push to close the Michigan Public School Employees Retirement System’s hybrid pension/401(k) plan to new hires, saying the pension is working as is and citing large upfront transition costs that would extend beyond just the 2017-18 spending plan. GOP lawmakers say the state must stop piling up debt. They have trimmed Snyder’s budget proposal by hundreds of millions of dollars to make room for initial transition costs.

Senate Majority Leader Arlan Meekhof and House Speaker Tom Leonard “have identified reform of MPSERS as a top priority. It would be counterproductive to set budget targets without a clear forward path on MPSERS reform,” Meekhof spokesman Amber McCann said Thursday.

“We have a great opportunity to finally fix this important problem that is hurting our teachers, our schools and our state,” Leonard spokesman Gideon D’Assandro said. “We have to get it right.”

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Old 05-20-2017, 09:47 PM
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ILLINOIS

http://www.pjstar.com/news/20170519/...ng-states-debt

Quote:
Other Takes: Pension reform needs to focus on refinancing the state’s debt

It seems impossible Illinois will ever wake from its financial nightmare.


Where do you start? How do you prioritize a stack of unpaid bills that just this week topped $14 billion? Where do you start to rein in the $9.6 billion deficit the 2016 fiscal year ended on? How do you reverse the damage being done to the state’s businesses, universities and social service agencies that, at this point, just want some semblance of stability after being mired for nearly two years in a budget impasse?

We begin by understanding how Illinois got into this mess — and then find the courage to start reversing decades of poor financial choices. To not do so is to tie Illinois to an anchor and throw it overboard into uncharted waters, and let residents drown as the state sinks to an unknown depth.

Illinois has long spent more than it receives in revenue, and lawmakers have been loath to either raise taxes or make spending cuts to balance the two. Instead, the five state-funded pension funds have been the piggy bank legislators have repeatedly broken to cover their irresponsible spending, at the cost of racking up out-of-control debt accrued against the money owed to state employee retirees.

The groundwork for the current unfunded pension liability — which the Commission on Government forecasting and Accountability estimates will be about $130 billion by the end of this fiscal year in June — was laid in 1994 when the the General Assembly and Republican Gov. Jim Edgar agreed on a “pension ramp.” It set forth a plan that would allow the state’s pension systems to be 90 percent funded by 2045. The Center for Tax and Budget Accountability has reported the unfunded pension liability at that time was an estimated $17 billion, which now almost seems like a laughable amount to have fretted over.

But it was the ultimate kick-the-can-down-the-road play that has been perfected in the Statehouse. The “pension ramp” required relatively low payments for 15 years — and then drastically increased the amount owed for remaining years. Those levels quickly became unrealistic, and have been eating up a larger share of the state’s money ever since.

The prelude to the ramp was the 1989 decision, under Republican Gov. James Thompson, to allow for compounding 3 percent cost-of-living increase for retirees. Since the ramp, other horrible decisions made by lawmakers just exacerbated the problem. Republican Gov. George Ryan and Democratic House Speaker Michael Madigan in 2002 offered early retirement programs to those as young as 50; Crain’s Chicago Business reported it will “cost the pension systems at least four times more than originally billed and won’t be paid off until after 2045.” Under Democratic Gov. Rod Blagojevich, lawmakers decided to take “pension holidays” in fiscal years 2006 and 2007 where they skipped the state’s mandated contributions.

“Fixing” the state’s pension problems has been discussed for years, and yet few substantive solutions have been enacted. Most attempts to improve the situation have focused on changing benefits for state workers. Those hired after Jan. 1, 2011, for instance, are in what’s called the Tier 2 system, which provides less-generous benefits. But those gains won’t be realized for decades. There are measures pending now in the Statehouse that propose changing benefits for existing employees by giving them options to choose from.


Those may be unfruitful paths to tread. The state’s constitution says retirement benefits for state employees cannot be “diminished or impaired,” and the courts have been almost universal in agreeing former and current employees’ benefits can’t be touched. Short of a constitutional amendment, anything that challenges that is just going to be a waste of taxpayer money, as the state loses the inevitable lawsuit.

Lawmakers should instead refinance the “pension ramp” to make its payments more realistic. The Center for Tax and Budget Accountability suggests changing to annual payments that are level, like a fixed-rate mortgage. The payments would be predictable and more reasonable, allowing lawmakers to plan accordingly when doling out money during the annual budget (if the state ever has one again, that is).

The trade-off would be forfeiting having the pension systems 90 percent funded by 2045; the CTBA estimates it would be closer to 72 percent by 2045. But that’s a huge improvement over the roughly 40 percent level the state’s at now. Of course, it will work only if lawmakers stick to the plan and don’t resurrect the gimmicks of the past.

If lawmakers are dead-set on trying to change benefits for state employees, they should offer a self-managed plan similar to a 401(k) to future hires, a choice already offered to state university employees.They also should offer that to current employees: As long as it’s an option for current staff, and not required, it should meet the constitutional requirement. This would provide greater control of the account to the employee, with the added bonus of receiving the state’s contribution now, instead of waiting decades to see if Illinois will make good on its promise.

Another necessary step is to have local school districts pay their own pension costs, instead of the state. Some school districts have offered what arguably could be described as overly generous pensions, because it’s easy to spend someone else’s money. School boards might tighten the purse strings if they knew they would have to pay for pensions. This also would free up considerable dollars (the conservative-leaning Illinois Policy Institute estimates it at $1 billion) for the state to pay more of the share of K-12 education, which will be discussed more in Friday’s editorial.

The political will needed to make these reforms hasn’t been there in the past. Lawmakers need to find the courage now while it’s still possible to escape from the fiscal nightmare, or condemn Illinois into a type of paralysis from which there is no awakening.


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Old 05-20-2017, 09:48 PM
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NEW YORK
CRIMINAL OFFICIALS

http://www.newyorkupstate.com/news/2...e_pension.html

Quote:
Springport town clerk accused of padding her hours to boost state pension

Springport, N.Y. --Springport Town Clerk Deborah Waldron was arrested Friday for trespassing on a town computer to boost her state retirement benefits, the New York State Comptroller's Office said.

Waldron, 62, worked for the town for 25 years. The town clerk is an elected position.

She is accused of using another person's information to log into a town computer and enter the state retirement system. Once there, authorities allege Waldron, entered full-time work credits for herself, while working in a part-time capacity at her position as town clerk.


Waldron was charged with two counts of felony first-degree offering a false instrument for filing, misdemeanor official misconduct and felony computer trespass. She pleaded not guilty in the Aurelius Town Court Friday and was released on her own recognizance. She is due back in court on June 28.

.....
Waldron's actions were uncovered during the state comptroller's review of Springport's monthly retirement reports. The office re-calculated her actual hours and benefits and prevented Waldron from receiving money to which she was not entitled, the office said.

"This town clerk marred a 25-year career as a public servant by allegedly trying to pad her hours," Comptroller Thomas DiNapoli said. "Hopefully, her arrest will deter others from such corruption. My office works to safeguard the pension fund and thwart those who try to defraud the system."

Since taking office in 2007, DiNapoli's investigation of retirement frauds has led to 24 arrests and the recovery of nearly $3 million in retirement funds, the comptroller's office said.


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