The Southampton Town Board on March 11 unanimously adopted a resolution that authorized the payment of nearly $2.55 million of the town’s outstanding debt to the New York State pension system.
In recent years, many municipalities have struggled to meet annual pension contributions required by the state Comptroller’s Office. In general, public pension funds, including New York’s, are still struggling to make up for steep investment losses incurred in the 2008 financial crisis, requiring local municipalities to contribute more to keep the system afloat.
In order to mitigate the budgetary impact of higher pension obligations, New York introduced an amortization process that required the prorating of an employer’s required contributions over a period of time.
Since 2010, the town has participated in the amortization program. Of the five cities and towns in Nassau County, and the 10 towns in Suffolk County, only three towns—Smithtown, Riverhead and Shelter Island—did not participate in the program.
Southampton is the first to fully repay its debt. “Because we have budgeted prudently and conservatively over the last few years, we now have the opportunity to finally pay down this costly debt, saving approximately $300,000 in interest payments,” said Southampton Town Supervisor Anna Throne-Holst. “This is very good news for our taxpayers, and reinforces the fact that the stringent budget practices we put in place are indeed working.”