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SCHENECTADY, N.Y. -- Schenectady Mayor Brian Stratton is speaking out against accusations of "pension padding" involving Fire Chief Bob Farstad.

Mayor Stratton said Farstad was not properly entered into the fireman's retirement system when he returned from a one year hiatus in 1999. Correcting that error would have cost the city $160,000.

Stratton said the city council didn't want to pay to do that, so he worked out a way to allow the chief to reduce his anticipated retirement by working overtime. He said everything was on the up and up and that the city council knew about the plan. He said it has ultimately benefited the city.

"Don't forget, though, that every dollar that he has earned in 2009 and 2010 is coming off of the $117,000 owed to him upon his retirement, so we're saving that," said Mayor Stratton. "We're also saving the $160,000 that it would have cost 11 years later to put him into the pension system that he should have been put into."

City council members have said that they were not aware of the deal and that, "There is no way that the council could have understood what this money was for by its description in the budget." They said the situation is especially unacceptable as the city continues to cut funding and jobs as it deals with budget issues.