City overpaid Nassau County for a decade

They only do testing on a sample basis, the sample period that they were auditing. The amount was much different.”

Mike Piccirillo controller, Glen Cove

Nassau County is expected to issue refunds totaling $1,583,000 to Glen Cove and the Glen Cove City School District this week. The refunds will resolve the accidental overpayment to the county of payments in lieu of taxes from 2010 to 2021, which were discovered during a 2021 audit of the city’s Industrial Development Agency by the state controller’s office. Glen Cove City Councilwoman Marsha Silverman expressed her criticism of the IDA, and requested the city undergo a self-audit in 2017 by employing an inspector general. After her request was denied, Silverman began talks with Legislator Delia DeRiggi-Whitton and former Mayor Tim Tenke to formally begin requesting the initial audit.

Further calculations from the audit in 2020 from Mike Piccirillo, the city’s controller, found that some of the payments that should have gone to Glen Cove and the school district had gone to the county instead. The county will refund $778,000 to the city and $805,000 to the school district.

The city Industrial Development Agency incorrectly calculated how to divide PILOT payments from 2010 to 2021. State Comptroller Thomas DiNapoli’s office discovered overpayments to the county in an audit for the fiscal years 2017 and 2018. The report concluded that eight of the nine projects involving PILOTs in those years made payments that were based on percentages calculated by the city. DiNapoli’s office reviewed the projects to determine whether the PI-LOTs were correctly allocated using the real property tax amounts that would have been due in 2017 and 2018. His office determined that the schedules used by the city were never adjusted to correspond to the changing city and county tax rates and assessments.

The report also found that Amy Franklin, the principal account clerk in the city’s finance department, working for the controller, said she used a schedule prepared by former controllers Sal Lombardi and Sandra Yu-Clarson as the source for how much was allocated to each jurisdiction. She did not confirm the accuracy of the percentages calculated by the former controllers.

The audit reported that the IDA's Chief Financial Officer, Anne Lamorte and executive directors Barbara Peebles and Ann Fangmann, were unaware they needed to review PILOT allocation percentages to ensure they were receiving the amounts they were entitled to, based on approved agreements.

The schedules created to determine the PILOT allocations were created by the previous controllers, who never verified the calculations in the language in the actual PILOT agreements to ensure accuracy.

During the audit, Fangmann and Piccirillo found discrepancies in PILOT agreements spanning 10 years.

While reading a PILOT agreement in 2020, Piccirillo noticed the allocation methodology was not how it was being billed.

“They only do testing on a sample basis, the sample period that they were auditing. The amount was much different,” Piccirillo said. “And then what we did at the end of the audit was, we decided, with the administration, and the IDA, to extrapolate it to all active PILOTs as far back as we can go. That’s when we realized that there was a lot more than what the audit had discovered.”

When Glen Cove Mayor Pam Panzenbeck took office, she learned he city had been overpaying its PILOTs to the county, while underpaying its school district, for more than a decade. Panzenbeck and Piccirillo met with Nassau County Comptroller Elaine Phillips to discuss reimbursement.

Panzenbeck met with Maria Rianna, Glen Cove City School District’s superintendent, and Nassau County Executive Bruce Blakeman in February. Panzenbeck was assured the city and school district would get the refund.

The city’s portion of the refund was preemptively included as revenue in Glen Cove’s 2023 budget. It indicates $565,000 of the refund will be used for the general fund to help flatten tax rates and $235,000 will go toward reducing the city’s current fund balance deficit.

Residents were promised a zero percent tax increase because, Panzenbeck said, she had faith the city would be issued the refund in 2023.

Rianna said that although the money was owed to the school district, the district administration had not preemptively discussed how the funds would be allocated. The funds will be deposited into the district’s general fund, and from there it will go toward any special projects or bill payments, or be put into one of the district’s reserves, she said.

Piccirillo said there is now a process in place in which all invoices that are created are double-checked by him and by Fangmann.