Letter to Alexander raises questions about pension decision

When he was a board member of a nonprofit corporation aimed at economic development in Jefferson County, Donald C. Alexander asked officials at the state’s pension system whether an employee could roll his state retirement credits over to the two-year-old organization.

A response to his April 1989 letter came five months later: no.

“The Counsel for the New York State and Local Employees’ Retirement System has determined that the Jefferson County Economic Development Corporation as a not-for-profit corporation is not eligible to become a participating employer of the Retirement System,” Douglas Burr, a representative for the retirement system, wrote in a September 1989 letter which, like the original letter from Mr. Alexander, was obtained from the state comptroller via a Freedom of Information law request.

In 2012, the comptroller is making arguments along those very lines about organizations that are similar to the JCEDC, but this time, it’s after the fact — 17 years after the Jefferson County Job Development Corp., the successor to the Jefferson County Economic Development Corp., began enrolling employees in the state’s pension system. In January, Comptroller Thomas P. DiNapoli, who oversees the state’s retirement system, invalidated the credits of 12 employees.

Development officials likely will argue that Mr. Alexander’s request is unrelated to the current situation. The Jefferson County Economic Development Corp., which no longer exists, is not the same entity as the Jefferson County Job Development Corp. or the other local development corporations that have proliferated in the past 20 years.

In 1994, the Jefferson County Economic Development Corp. ceased to exist after it was “merged” with parts of the Industrial Development Agency to create the Jefferson County Job Development Corp., according to a Times account of the move. Industrial Development Agency employees are allowed to enroll in the system. Shortly after the creation of the Job Development Corp. in 1994, an employee became a member.

Jefferson County development officials past and present declined to speak with the Times about whether they asked the comptroller’s office if employees of this new organization could take part in the pension system. The IDA’s legal team has advised its employees not to speak to the press about the issue.

Mr. Alexander was not involved with the Jefferson County Job Development Corp. when it got up and running, according to Times archives. He had stepped down from the organization in 1990.

In 1994, he was the chairman of the Watertown Industrial Center Local Development Corp. Employees have also have been enrolled in the state pension system and are at risk of having those benefits taken away. Three employees that the comptroller says worked for WIC have been affected; the earliest their employment started was in 2000. It’s possible that people who are no longer employed by a development organization took in pension credits, though the comptroller’s office didn’t research that question and declined to answer it.

Mr. Alexander began working full time for the Jefferson County Job Development Corp. in early 2003. In 2008, Mr. Alexander got a promotion to the post of CEO of the JCJDC and JCIDA. Mr. Alexander could lose nine years of credits in the pension system. He declined to comment on the letters.

IDA officials argue that organizations like the Jefferson County Job Development Corp. are umbrella organizations of the IDA’s own creation, and the people who do LDC work are actually IDA staffers. That would make them eligible for pensions. The comptroller’s office has rejected the argument that they are IDA employees.

The 12 employees who lost pension credits have the right to appeal the decision. The IDA is funding their legal appeal. State lawmakers could pass a bill that would remedy the situation.