NEW SCOTLAND — The town will pay more than $10,000 to the state for a nearly 40-year-old error in its retirement system payments.

In 2007, the town got notice from the state’s retirement system that it had neglected to make its contributions on behalf of Walter Myers, who had been a truck driver for the town, from Sept. 1, 1972 to March 31, 1973.  The initial amount that the town owed was $1,011, according to court papers, but the amount that the state claimed in 2007 including interest was $10,300.

On Dec. 22, the Appellate Division, the middle level of the state’s three-tiered court system, affirmed the Supreme Court’s earlier decision that the town is obligated to pay.

“I’m disappointed,” said Michael Mackey, the town’s former attorney who had worked on the case with Peter Barber, a Guilderland lawyer whom the town hired for the case.  New Scotland set a cap of $2,500 for legal expenses, Supervisor Thomas Dolin said this week of how much it cost the town to defend itself.

The town had tried to argue that that statute of limitations had run out, but the court found that the statute of limitations started running when the town failed to pay the stated amount in 2008.

The retirement system had noticed the error when Myers applied for retirement benefits in 2006.

Mackey figured that the town has been charged 26 percent interest per year for 35 years.  New York State’s usury limit, or the amount of interest allowed to be charged on personal or consumer loans, is 16 percent.  The amount charged by the state “seems pretty draconian,” he said.

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