An audit released last week by the Nassau County comptroller’s office showed that the county lost more than $6 million in PILOT payments due to expired or terminated agreements on properties that were not added back to the tax roll.
“Our team found massive deficiencies in how the County recorded, tracked, and collected PILOT payments,” Nassau County Comptroller Jack Schnirman said. “Nassau County cannot afford to just write off $6 million in revenue, but in this case that is exactly what happened.”
PILOT stands for “payment in lieu of taxes.” Such deals are granted to certain industrial or commercial parcels by industrial development agencies — in this case, the Nassau IDA and the Town of Hempstead IDA.
The audit was started in 2016 by the previous county comptroller, George Maragos, to determine if all PILOT revenues were properly collected, calculated and allocated to the municipalities in a timely and accurate manner.
Auditors found that the county was not being notified of the early termination of PILOT agreements in the Town of Hempstead. They also found that the Hempstead IDA failed to ensure that the expired PILOTs were billed at the full assessed value until the parcels were restored to the tax rolls.
The audit also revealed a lack of oversight from the Nassau IDA. The county IDA failed to provide evidence that it was ensuring compliance on PILOT employment goals. Almost half of Nassau PILOT agreements did not meet such goals. On several occasions, late fees were waived.
Additionally, the Nassau IDA was not invoiced by the county’s Department of Assessment for more than $500,000 in reimbursements to the county’s general fund.
While the $6 million in missing PILOT revenues is lost forever, Schnirman did have some good news: the Town of Hempstead would send Nassau County $7.6 million for missing payments from 2017 and the first half of 2018.
“Our investigation is shining a light on these wasteful practices, providing corrective actions and resulting in money being returned to county taxpayers,” Schnirman said.
The comptroller’s office said that the Department of Assessment has agreed to take steps to ensure that PILOT revenues are properly recorded and collected. The audit calls for increased transparency in the Nassau and Hempstead IDAs. It also recommended that PILOT recipients must disclose if a PILOT has expired within 30 days or incur a penalty.
The comptroller’s office is currently conducting a separate audit of the Nassau County IDA.
Reach reporter Luke Torrance by email at email@example.com, by phone at 516-307-1045, ext. 214, or follow him on Twitter @LukeATorrance.