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JCIDA employees await decision on ‘home rule’ legislation with pensions in jeopardy

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Twelve local development corporation employees from Jefferson County are crossing their fingers as they await proposed “home rule” legislation under consideration in the state Senate and Assembly that would enable them to retain retirement benefits taken away by a state comptroller’s ruling in February.

If the legislation isn’t passed before the session ends, the case will probably be decided in state court.

The Senate is now set to consider the bill this month, which has been pushed forward by Assemblywoman Addie J. Russell, D-Theresa, and Sen. Patricia A. Ritchie, R-Heuvelton. It still needs to be approved by a committee before the Assembly can vote.

The legislation would overturn a decision by Comptroller Thomas P. DiNapoli that contended the employees are ineligible to receive benefits because they aren’t employed by the Jefferson County Industrial Development Agency but by local development corporations, or LDCs.

By reversing that decision, the law would secure retroactive benefits for employees through the end of 2012, but it wouldn’t offer a solution to continue the plan after that.

Two law firms are representing the employees. Hancock & Estabrook, Syracuse, is representing 10 employees, and Wladis Law Firm, East Syracuse, is representing John McHugh. JCIDA CEO Donald C. Alexander does not have legal representation for the case. The JCIDA also has hired a separate law firm, Harris Beach in Rochester.

At the JCJDC board meeting Thursday, Mr. Alexander said that he’s “cautiously optimistic” the law will be approved in this legislative session, which likely will end by the fourth week of June. He said lawmakers likely will approve the law because it has no financial impact on the state budget.

“We’re all sitting and watching this with bated breath because we don’t want this issue to turn over into the next legislative calendar year for a thousand reasons,” he said, adding that it likely wouldn’t be considered again until the fall. “But if this issue can’t be resolved legislatively, then we’re going to have to legally fix it.”

To challenge the comptroller’s ruling, the JCIDA would need to send a letter to the state Comptroller’s office by June 14 stating that the employees are going to use the appeals process to challenge the comptroller’s decision, Mr. Alexander said. If that action is taken, the final step would be to have the comptroller’s decision overruled in state court through an Article 78 proceeding.

If the appeal is approved in court, it could have sweeping implications on the way IDAs and LDCs operate in New York state by establishing a precedent that would serve as a blueprint, said Mr. Alexander, who’s been contacted by numerous IDA executives who closely are watching the case. IDAs often use LDCs as a way to do business on their behalf to avoid corporate liability issues.

Watertown Trust CEO Donald W. Rutherford, who sits on the JCJDC board, agreed that appealing the decision will put the case in the limelight across the state.

“We’ve heard comments from IDA executives in Cooperstown who work with LDCs on projects,” he said.

Agreeing, board member W. Edward Walldroff said appealing the decision would “definitely have a ripple effect.”

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