A 5 raise buys a lot of trouble for Stonehams town moderator

STONEHAM–Five bucks can’t even get you into a movie in most places, but it can still buy a lot of trouble in Stoneham. Moderator Michael Rotondi won an annual pay raise of $5 from town meeting in May, but two months later the voters snatched it back, with some claiming they never realized just how valuable the salary increase was.

Stoneham Quick Facts Incorporated as a town: 1725 Population: 22,219 Town Meeting: Open Facts: Stoneham covers 6.7 square miles and is located nine miles west of Lynn and 13 miles north of Boston. The Median age in Stoneham is 40.6 years, and 28 percent of the households include residents under 18. The town’s median household income is $56,605, and its median home value is $227,900. Stoneham was a center for shoe manufacturing from the 1850s through the early 20th century, but today it is principally a commutter town. The town’s leading attraction is the Stone Zoo, operated by the Commonwealth Zoological Corporation.

Rotondi, who had been earning $200 a year as town moderator, wanted the 2.5 percent raise to strengthen his bid for a pension from this small suburb north of Boston. Evidently, this was not made clear to everyone who first voted on it. “I felt duped because we trusted Mr. Rotondi,” says Edie Previdi, a town resident who initially voted for the raise and later helped lead the charge for rescinding the increase.

For his part, Rotondi says that he is entitled to a pension with the raise or without it. “The word ‘discrimination’ comes to mind,” he says. “This is [part] of a brewing conflict between me and the [Stoneham] retirement board.”

Rotondi, 33, has been town moderator, presiding over Stoneham’s open town meeting, for 10 years. After he was re-elected to the post this spring, he approached the Stoneham retirement board and asked to be admitted into the town’s retirement system. Gaining such entry would bolster Rotondi’s claim on public-employee benefits in the future. Currently, Rotondi gets 85 percent of his Blue Cross Blue Shield health insurance policy covered by the town.

Formerly a director of municipal services for the state’s Department of Environmental Protection, Rotondi expected he would eventually earn a pension from the state. Laid off from that position, Rotondi ran unsuccessfully for state representative as a Republican in 2000, then went to graduate school–all the while assuming that his continuing tenure as town moderator would count toward the 10 years of public service he needs to accumulate to gain retirement benefits from the state.

He would not be the first to credit his time as an elected town official in a less-than-full-time position toward state benefits. In 2001, former Gov. Paul Cellucci qualified for an early pension on the grounds of 30 years of government service, and he was able to count six years that he served on Hudson’s board of selectmen in the 1970s–a post that paid $1,000 to $1,500 a year–even as he served as US ambassador to Canada (See “Pension liabilities,” CW, Spring 2002).

“This will help me fill in these gaps of service,” says Rotondi, who’s now unemployed. “I did all my homework, and state law and facts have backed me up.” If accepted into the town’s retirement plan and his service as moderator is counted toward the 10-year service requirement, Rotondi will become eligible for a pension based on the average of his three highest annual salaries while working in the public sector (in this case, those would be years working at his state job), plus health benefits. What percentage of this average he receives will depend on the age at which he retires.

Rotondi’s claim hangs in the balance of conflicting passages in Chapter 32, the statute that determines eligibility in any city or town’s retirement or pension system. One portion of the law states that part-time or temporary municipal employees who make more than $200 a year are eligible for membership in a municipality’s retirement system, but that employees who make less “shall not be eligible for membership except by vote of the board.” With Rotondi’s salary meeting, but not exceeding, the $200 threshold, the board hesitated, tabling Rotondi’s request for a pension at three separate meetings this spring.

But the Public Employee Retirement Administration Commission (PERAC), a state agency created to oversee and regulate the state’s 106 public pension systems, has sided with Rotondi, pointing to another section of the same state law, one that stipulates that an individual elected by popular vote to municipal office has 90 days after the election to join the town’s pension system, regardless of his or her compensation.

“The dollar amount is irrelevant, and that’s the point [the Stoneham retirement board] is missing,” says Joseph E. Connarton, PERAC’s executive director. “There is nothing in the law that mandates full-time service, and [Rotondi] qualifies because he was voted into office by a direct vote of the people.”

Michael Sacco, attorney for the Stoneham retirement board, counters that Rotondi may be an elected official, but his primary role is that of a temporary town employee. “The board does not dispute that elected officials who are compensated may elect to join the retirement [plan] within 90 days of assuming office,” Sacco says, then proceeding to dispute precisely that point. “The board’s past practice for at least the last 25 years [is that] any employee or elected official who earns $200 or less is not eligible for membership in the retirement system absent a specific vote [by the retirement board].” Not surprisingly, Rotondi agrees with PERAC, claiming that the retirement board is flouting the state standard for the compensation of town officials. “I know it’s been done,” Rotondi says of his bid to join Stoneham’s pension system. “Chapter 32 is riddled with elected officials who are allowed to access the pension fund.” Though unwilling to give any specifics, Rotondi hints that he may be the victim of personal grudges. “When you’ve been serving in town government and when you’re from a family that has been in town a long timeŠpeople can let their personal opinions override the correct application of the law,” he says.

But it’s not at all clear how common Rotondi’s situation is. Town moderators in nearby Reading and Winchester, for example, receive no stipends at all and thus do not receive health benefits and have not been granted eligibility for a pension. (Under Chapter 32, any municipal officials who work at least 20 hours a week and receive any kind of compensation are eligible for the town’s group health insurance.) In addition, as town governments look for savings during the state’s current fiscal crisis, there’s likely to be more scrutiny of compensation for elected town officials, particularly those who maintain full-time jobs in the private sector.

“The Rotondi case is somewhat of an anomaly,” says Connarton. “I’ve been in this position six years, and this is the first time I’ve seen this specific issue crop up. But there should be a broad-based debate on the current pension system as we know it today. [Cities and towns] should be discussing Chapter 32 as it relates to their citizens.”

Trying to force the retirement board to take him in, Rotondi turned to the people who elected him to office, asking them for a $5 raise at the annual town meeting in May. The proposal passed without debate, and without any explanation of why Rotondi wanted the extra five bucks. A few days later, town residents Previdi and Terri Ghannam discovered the reason for the raise when a curious Ghannam requested an explanation of why Rotondi asked for only $5. Feeling hoodwinked, the two women circulated a petition and received 297 signatures, well over the necessary 200, to bring the issue back to the floor at a special town meeting in late July.

Previdi says that if Rotondi had provided full disclosure at the spring town meeting, the issue might not have become such a brouhaha. “I’ve been here for 37 years and I’ve never [organized a petition],” she says. “If [Rotondi had]. . .explained the issue, people like him enough that we would have voted for it.”

At the special town meeting, Stoneham’s finance board released a statement that called “the lack of explanation and disclosure” before the original vote to be “significantly troubling.” The finance board also slammed the town’s selectmen for not publicly explaining the matter, even if Rotondi chose not to.

“The Board of Selectmen should not be allowed to act carelessly with the motions of the voters of Stoneham,” the written statement continued. “In this regard, the process short-changed Town Meeting voters.” (According to the Stoneham Sun, Rotondi did not directly notify the board of selectmen why he wanted the raise until after the town meeting. Rotondi, however, says that he discussed the reason for the raise with town manager David Berry and simply assumed that the selectmen were made aware of the issue. Berry could not be reached for comment.)

In the end, all but a handful of town meeting goers voted to rescind Rotondi’s $5 increase. “Putting a price on public service means the service is less than the best,” former selectman Jack Mahoney said at the meeting. “If someone is looking to get compensated for public service, we’re going to look for someone else.”

Rotondi believes that, by the time his case came back to town meeting, the deck was stacked against him. “The issue just snowballed,” he says.

The next day, the retirement board once again declined Rotondi’s bid for a pension.

“While I cannot speak for all the retirement boards in the Commonwealth, it is my understanding that most retirement boards universally reject membership for those individuals who earn $200 or less,” Sacco said. “There may be some who do not follow this principle, but the fact that other retirement boards may not apply the provisions of [Chapter 32] to elected officials does not mean that it is a correct application of the law.”

Whether Rotondi got the short end of the stick or his just deserts is still a matter of dispute among town residents. For now, he is planning to appeal the decision with the Contributory Retirement Appeal Board, and according to PERAC, the process could take as long as 18 months. (In the meantime, PERAC has sent a memo to cities and towns across Massachusetts reiterating its interpretation of the law.) By then, Rotondi, should he choose to run, will be seeking his sixth term as town moderator.

Rotondi may see himself as the victim of a personal grudge match, but the final judgment will be made by Stoneham voters. “The special town meeting [was] not about the $5,” Previdi says. “We want integrity brought back to town meeting. And it would be very hard to trust [Rotondi] in the future if we let this go.”

For his part, Rotondi maintains that he is right on principle but could have handled the politics differently. “It’s easy to play Monday morning quarterback,” he says, “but if [voters] don’t like me now, they can take that up at the ballot box.”

Victoria Groves is a freelance writer living in Chelmsford.