N.J. official paid himself an extra $244K, town says. How it fought to get the money back.

For a decade in Palisades Park, it was great to be the boss, a lawsuit alleged.

As the small Bergen County borough’s longtime administrator, David Lorenzo earned a salary that topped $227,000 a year when he was fired in 2024 after clashing with town leaders.

A generous paycheck — but it wasn’t the only compensation Lorenzo received. Each year, he would supplement those earnings by tens of thousands of dollars on average, cashing in unused sick leave and vacation time to pull in even more money from taxpayers.

But now, Lorenzo must pay back those funds, a Superior Court judge ordered last month. To the tune of $240,335.

Judge David Nasta’s decision came after he concluded the payments violated a 2007 state law that limited how and when top employees are permitted to cash out the paid leave they accumulate. The ruling followed a civil suit last year by the borough that sought to claw back the money, claiming Lorenzo “aided and abetted” hefty payouts to himself that he knew weren’t allowed.

“From the very beginning, our priority has been protecting the interests of Palisades Park taxpayers,” said Mayor Chong “Paul” Kim in a statement. “We have a fiduciary responsibility to safeguard public funds and ensure accountability in municipal government.”

Kim called Nasta’s June 24 order “an important step forward” and said the borough “will continue to pursue every appropriate legal avenue to recover taxpayer dollars while remaining transparent with our residents throughout this process.”

Huge payouts for accumulated leave have long been a fact of life in local government in New Jersey, though they typically come only when an employee retires. The windfalls — known colloquially as “boat checks” — have exceeded $1 million in the most egregious cases, and are often derided by good government groups as a waste of taxpayer money.

Lorenzo’s lawyers insist he was entitled to what he received, and charge he has been targeted for political reasons. They said the payments were vetted by the borough’s financial officer and its attorney and approved by Borough Council at the time.

“Is the takeaway from this trial court ruling that a retired municipal employee who fell out of favor with the current mayor and council can have his rights violated and be singled out and sued to pay back earned and accrued sick and vacation time?“ asked lawyer Richard Malagiere.

”The answer is yes for now; at least until Mr. Lorenzo has his day in court on appeal,” Malagiere added in a statement.

In 2021, Palisades Park’s payments were scrutinized in a scathing report by the Office of the State Comptroller, a fiscal watchdog that found “widespread financial mismanagement” in the 1.25-square-mile borough of 20,000 people.

The report accused Palisades Park of ignoring state laws that seek to limit sick leave payouts to $15,000 and restrict employees from socking away their vacation time. The investigation found the borough had made improper payments to at least a couple of dozen employees, but focused on Lorenzo, who had served as business administrator since 2008.

The report cited “extravagant benefits” that Lorenzo’s employment contract provided him, which included more than 11 weeks off each year: 25 vacation days, 15 holidays, 12 sick days, four personal days and his birthday. And he was permitted to regularly cash those days out, though the report said he was entitled only to $15,000 — and only when he retired.

In its lawsuit, Palisades Park said the payments continued even after the comptroller flagged them, stretching from 2015 to 2024. The suit called them “inexcusable” and said they showed “flagrant contempt for the citizens of the borough and the law.”

“Now, despite Mr. Lorenzo having been the ringleader of his corrupt scheme to illegally pay himself, he now cries, with unclean hands, that somehow it was the fault of the borough which he controlled and cheated…,” wrote municipal attorney Scott Krumholz in a February legal filing.

Malagiere countered that Lorenzo received only what his contracts called for, and noted that each of those contracts was voted on by Borough Council. Malagiere charged the payments went forward with the knowledge of officials who are now complaining about them, and he highlighted that Lorenzo wasn’t the only worker who benefitted.

“Dozens of other Palisades Park present and former employees received similar payments and have not been sued by the borough to get these monies back,” Malagiere said.

In the meantime, Lorenzo is pursuing an unresolved lawsuit of his own against Palisades Park over his February 2024 firing. The federal civil rights suit alleges he lost his job for political reasons, following a contentious local election that featured infighting between Democrats.

Lorenzo, who headed the Palisades Park Democratic Club, claimed he was punished because the group withdrew its endorsement of Councilman Suk “John” Min, who nonetheless triumphed in his bid to remain on the board.

Mayor Kim is among those named in the suit, which charged he became enraged after seeing Democratic campaign signs with duct tape covering Min’s name.

In legal filings, the borough denied politics had anything to do with Lorenzo’s ouster.