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Report: Town Was Sloppy on Pension Decisions; Mallozzi: We'll Clean up

New Canaan officials didn't follow the law when they let former First Selectman Jeb Walker get a fatter pension than he was entitled to, according to an official report; current First Selectman Robert Mallozzi says he's starting repairs.

 

Over the course of years, New Canaan officials violated the Town Charter multiple times when they made decisions on town pensions, both for general rules and in the specific case of calculating a higher pension than the rules allowed for former First Selectman Jeb Walker.

Here are some of the town's pension misdeeds, as determined by Garrett A. Denniston, a lawyer from an outside law firm the town hired to examine various pension decisions (report attached to this article):

  • Former town Chief Financial Officer Gary Conrad didn't have the authority to grant Walker the pension benefits of a five-year vested retiree, even though he did just that. "Both [Walker and Conrad] were in a position to know that their actions in approving the benefits were improper," Denniston wrote, because they sat on the Pension Committee that administers town pensions.
  • On at least one occasion, the Town Council didn't follow requirements of state law when it voted to retroactively approve the higher benefits for Walker. According to Denniston's report, the Town Council needed a "qualified cost analysis from an enrolled actuary," as required by state law, before acting. It didn't have one. Therefore, "the Town Council's later vote to retroactively approve the benefits approved by the former CFO is of no effect."
  • "In 2007, the Board of Finance voted to modify the employee group insurance plan and eliminate the employee contributions for retired officials and employees." But according to the Town Charter, Denniston wrote, only the Town Council can establish or modify the insurance plan by adopting or rejecting a recommendation approved by the Board of Finance. Under state law, the Town Council also would have needed a qualified cost estimate from a proper actuary.
  • "In 2011, the payroll benefits administrator disseminated an email purporting to reverse the 2007 decision and require a 13 percent employee contribution to the health insurance for non-union employees." The 2011 email was no more in compliance with the Town Charter than the 2007 vote had been, and "for the same reasons," Denniston wrote.

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Denniston cautioned against the town trying to recover money improperly given to retirees as a result of the 2007 decision, giving two reasons for doing so: First, it might be considered unfair to retirees who had received the money in good faith and made financial decisions based on it to then be told they'd have to return the money. Second, because once the town led retirees to expect that money, courts might well rule that the retirees have a legal right to it.

Walker has agreed to return $4,300 in overpayments on his pension to the town.

Another consideration in whether or not to get money improperly paid out to a retiree is whether the cost of doing so starts rivaling the benefit. Filing a lawsuit to recover money can be quite expensive, Denniston pointed out. Reducing future payments (called "recoupment"), on the other hand, could be effective.

"It is our opinion that the town should revise the [pension] plan to provide a method of recovery of overpayments," Denniston wrote. First Selectman Robert Mallozzi said he expects the town to do that.

If Walker and Conrad intended to grant Walker pension payments they knew he had no right to receive, then "it is possible that the conduct constitutes a criminal violation such as larceny or theft," Denniston wrote. But if the decision to grant higher payments was made by mistake, "it is equally possible there is no criminal wrongdoing."

The town Pension Committee should decide whether to refer the matter to police, he wrote.

"[T]here is reason to believe" that both Conrad and Walker violated the town's Code of Ethics in granting the higher pension to Walker, Denniston wrote. Since neither is a town employee any more, there is little the town could do to sanction them, he wrote.

Mallozzi's reaction to the report

Mallozzi issued a written statement Tuesday morning that set out various things he intends to do "to prevent this from happening in the future." His statement, along with Denniston's report, were both posted on the Home page of the town website (and are each attached to this article).

"There are still questions to be answered such as the status of medical benefits awarded to retired elected officials and certain definitions we need to have in place regarding the status of former elected officials," Mallozzi wrote.

Town Attorney Ira Bloom and his law firm will help the town figure out answers to those questions, with the cooperation and advice of the Board of Finance and Town Council, Mallozzi wrote.

Mallozzi also listed several steps taken so far that should help to prevent the town's past pension mistakes:

  • "A new CFO was hired in May. I can't emphasize enough the implications and the importance of this single action," Mallozzi wrote.
  • The Pension Committee now meets more regularly, more often, with agendas and minutes posted ("not a consistent process in the past," according to Mallozzi).
  • The Pension Committee now approves all disbursements, not just disability benefits. "This is a major change and, had this been the case prior to my arrival, and [it] would have certainly prevented the overpayments we have just reviewed."
  • The pension plan document will get new language to clarify how the town may recover money improperly sent to retirees.
  • A "whistle blower" policy has been drafted to deal with anonymous complaints from town employees.
  • Mallozzi said he has "instructed HR [the human resources director] to conduct exit interviews in October of the year a non-returning elected official is leaving office. The meeting will cover expected benefits and other issues and will be held with the HR director in the presence of the administrative officer. The pension committee will have final vote on benefits during a November meeting."


Additional coverage on this topic:

  • Mallozzi: Town Will Halt Excess Payments to Jeb Walker
  • Mallozzi Seeks Clarification of Process Behind Pension Fund [Updated]
Esprit de Corps October 17, 2012 at 11:23 AM
Of course, the police will investigate if the pension committee tells it to so do. It is not apparent from the Town website, however, if there is a current pension committee and if so, who are its members. How can the fox guard the henhouse if he can't find it? The First Rooster must staff up the henhouse immediately so the police don't start independent investigative action. Is this the new transparency? And the police charge a teenager with a felony for liberating a flag? Please don't laugh too loud or you may be cited under the noise ordinance.
Jon S. October 17, 2012 at 12:21 PM
It’s good to hear it from an outside expert, but honestly, the six Town Council members (Ken Campbell, Mark DeWaele, Steve Karl, Tucker Murphy, Tom O’Dea and Penelope Young) who tried to bend the rules retroactively for Mr. Walker should’ve known better. You shouldn’t require an expert to tell you right from wrong.
robert October 17, 2012 at 12:38 PM
interesting choice of words "didnt follow the law". another way of saying the same thing is that they stole taxpayer money on behalf of walker and committed a crime. time for mallozi to to refer the matter to the state attorney general for felony prosecution.
R A Leon October 17, 2012 at 12:46 PM
The single posted mysterious pension committee agenda for September, 2012 and the absence of any posted minutes at all can be seen at the link below. Please note that no members are listed. It would have been very interesting to see what was discussed on July 31, 2012 and who said and did what. http://www.newcanaan.info/content/9494/9226/3352/9791/default.aspx "Politics: A strife of interests masquerading as a contest of principles. The conduct of public affairs for private advantage." Ambrose Bierce
Glen K Dunbar October 17, 2012 at 12:47 PM
Whether good ole Jed got a bigger pension or not...at least he is getting/got a pension. No disrespect...He should be greatful for whatever He gets. I know when I turn retirement age nobody will give me a pension. yes, I am complaining !! GLEN
Esprit de Corps October 17, 2012 at 01:08 PM
M. Dunbar, perhaps I misunderstand English grammar but I hope you are not implying divinity or the divine right of kings when you capitalize "He" in reference to Mr. Walker. You should understand his claim reported in the New Canaan News on October 22, 2009 to be political puffery when he said, "I am the best first selectman this town has ever had . . ." Many people in and out of government might have been unduly persuaded, too, and not just you. If you can sacrifice and save some money for the next 20 years you might be able to generate your own pension and avoid a calamity such as we are seeing today. Responsible spending and not borrowing is a good idea for you and me and government officials, too.
NCFamily October 17, 2012 at 04:04 PM
Kudos to First Selectman Mallozzi, Selectman Beth Jones and Selectman Nick Williams for hiring a lawyer from an outside law firm to examine the pension issue and for initiating the steps necessary to prevent this from happening again. According to this article, "On at least one occasion, the Town Council didn't follow requirements of state law when it voted to retroactively approve the higher benefits for Walker. According to Denniston's report, the Town Council needed a "qualified cost analysis from an enrolled actuary," as required by state law, before acting. It didn't have one. Therefore, "the Town Council's later vote to retroactively approve the benefits approved by the former CFO is of no effect." I agree with Jon S: Town Council did not unanimously vote "yes" to retroactively approve higher benefits for Walker. The yes voters were: 1. Penny Young, 2.Tucker Murphy, 3.Ken Campbell, 4.Mark DeWaele, 5.Steve Karl and 6.Tom O'Dea,[who is currently running for State Representative in the 125th district in Wilton and New Canaan against Democrat Mark Robbins] The Town Council members who voted AGAINST the higher benefits were: 1. Republican Roger Williams, 2.Democrats Kit Devereau, 3.Joe Paladino and 4. John Emert
Angie S. October 17, 2012 at 04:56 PM
Hmm...the town website seems to be down?
Esprit de Corps October 17, 2012 at 07:54 PM
The 2012 minutes and agendas have now been posted. Congratulations to Patch for motivating the opening of a window to the murky events surrounding Mssrs. Walker and Conrad, and those members of the Finance Board and Town Council; including the First Selectman, who voted to grant this pension. Thanks to the TV debates, we are getting better prepared for evasive answers and fence sitting. It is good that the Pension Committee, now known and including a police representative, will meet more often. It might be time for an unpensioned retirement of the Pension Committee's rubber stamp. Keep the police whistle ready.
rough1 October 18, 2012 at 01:50 AM
To a certain extent, technical mistakes like this can happen...however, the Town Council pulled a big bag of crap over everyone's eyes..if they didn't think their "yes" vote was susoect..then they are plum stupid..they knew they were throwing Jedro a pile of gold..shame on each and every one of them...I also agree they should be investigated by State authorities..kudos to Williams..the only decent one of the bunch .
ed jedziniak October 18, 2012 at 06:04 AM
Jeb Walker is the A-Rod of New Canaan. The guy is just a magnet for drama. Like A-Rod, it's almost comical.
S Tadik October 18, 2012 at 08:32 AM
REMEMBER THE MYDOCK 6 To be fair, there were 3 Democrats and 1 Republican who voted against the Walker giveaway. They were Members Devereaux, Paladino, Emert and Williams. An acronym to help interested citizens to remember which 6 Town Council Members voted in favor of the illegal award is MYDOCK 6 -- Murphy, Young, DeWaele, O'Dea, Campbell and Karl. The original motion to approve the Walker pension was advanced by Member Young and seconded by Member Campbell. In a second vote to correct a mistake by Mr. Campbell a reconsideration motion was offered by Dr. DeWaele and seconded by Mr. O’Dea. Members of Town Council are elected. Town Council is chaired by Dr. DeWaele, who frequently consults with Mr. O’Dea, a lawyer, on specific legal wording of Town Council motions. The giveaway was unanimously approved by the Board of Finance before consideration by Town Council with six Board of Finance Member votes in favor -- Members Budnick, Cody, Giusti, Neville, Sheffield and Spangler. The motion to approve was made by Mr. Giusti and seconded by Mr. Sheffield. Members of the Board of Finance are currently appointed. The Board of Finance is chaired by Mr. Mallozzi, First Selectman, who was present at the meeting.
Craig October 19, 2012 at 12:09 AM
i hope there is one intelligent/proactive lawyer on this blog that can get this matter to the state attorney general. if one robbed a bank, or aided/abbeted such robbery, everyone would say the obvious: go to jail. To put it bluntly, any knucklehead who voted for, or accepted the proceeds, should resign and/or go to jail following due process. Anyone have a problem with that? Get with the program all you alleged do-gooders---you stole taxpayer money!!!!! Jeb, come on now, you were the best first selectman new canaan has ever seen? I do not know about that, but you are a first rate fool for getting caught red handed.
Craig October 19, 2012 at 12:42 AM
Michael, you seem qualified to inspire the atty general to seek convictions. go for it! set an example for the world to follow!
Greenhill October 19, 2012 at 01:21 AM
Mr. Nowacki, What are the "approved gifts" members of the NCPD are allowed to accept that specifically violate the Town Code of Ethics and conflicts of interest ordinance and what documented proof do you have that this document written by Jim Cole exists? Thank you in advance of your reply, GH.
Esprit de Corps October 19, 2012 at 02:00 AM
M. Nowacki, please see RA Leon's link above which will point you to the Pension Committee agendas and minutes for 2012. They were added later in the day today. They are not easy to follow and you will need to look at the agenda and the minutes for the day at the same time. Someone with experience in pension matters will, perhaps, find valuable information hidden in the minutes.
nccares October 19, 2012 at 01:22 PM
The Town's move to bring in a third party to review certain pension committee decisions and practices is a good example of best of breed practices and leadership on the part of our First Selectman. This will set a new bar for oversight and transparency, a need that one can only guess is needed in most municipalities and both public and private businesses. The goal here should be the improvement of the town's operations and I believe strongly that Selectman Mallozzi is fully committed to do so. Mr. Nowacki, if your goal is to see an improvement in operational integrity and oversight then we should all see value in the effort. However, your goal is far larger and involves a drive to label operational inefficiencies and scandalous and even criminal. You are in fact seeking legal redress against almost a countless number of entities and individuals. Your legal actions seek to force these "defendants" to pay you and your lawyer damages through their insurance policies. Now we have all seen examples of people like you in our lives. You seek to ruin people, administrations, businesses, boards, committees, etc. So often, this type of effort by people like you and your lawyer involves the press, sensationalism and is in whole totally unnecessary. As New Canaan community members we should seek to improve our system and aid our officials in that effort. We should not be interested in "bringing officials down". Your scorched earth approach is irresponsible.
Chandra Johnson Greene October 19, 2012 at 01:36 PM
Gary Conrad's response to the report can be read here: http://patch.com/A-yLWB
Glen K Dunbar October 19, 2012 at 01:42 PM
Mikey. Morning little buddy. I would LOVE to meet and sit and chat w/you. We could exchange telling each other our troubles. I got plenty. As for seeing documents. I do appreciate the offer. Yet, I got my own problem w/o worrying or involving my personal life in politcis. BORING! All I can say is the rich keep getting richer and poor Glen keeps getting poorer You are lucky to be rich Mikey. Wish I could be rich
Glen K Dunbar October 19, 2012 at 05:05 PM
I just have to meet You sometime Mikey Sir. Even if you are rich..It is not your fault and I will would like to sit and tell you ALL my troubles. Do you think You can win? how much are you trying to get? Don't forget Glen if You do win. I will donate some to the Opera. Glen
rough1 October 19, 2012 at 09:29 PM
I have never seen offical meeting minutes posetd or distributed withoput listing who attended, who was absent, who left the meeting, early, etc--very strange. Is the Pesnion Committee a Secret Society? Moving to another point, the Town, its employess, and committees all have liability insurance to protect against malfeasance; why doesn't the new Town attorney recopmmend this approach/ And just how much of OUR taxpayer-funded monies was given away illegally? Shouldn't that be how we claw back this mistake? Lastly, I see/hear absolutely no signs of contrition from anyone connected with this...how sad.
mary parker October 20, 2012 at 04:10 AM
Rob Mallozzi was the one who brought it to our attention about Jeb Walker and this pension scandle. When Rob was elected First Selectman, he didn't waist time doing investigations on matters that happened when Walker was in office. If you remember correctly, when Rob was a Selectman and on the Board, he voted no for a lot of things he felt weren't right and voiced out to the public what was going on. He did stand up for us and that is why he is now the First Selectman. When Walker was in office, he controlled everyone by scaring them. Threatening their jobs. I know this for a fact as it happened to me. He was and is corrupt and why did Conrad leave if he was so innocent when Mallozzi started investigating the actions when Walker was in office? Why is Cheryl Jones still head of Humane Resources? It's obviouse she was involved and now is given the task to conduct "exit interviews"? Why didn't this be required all along? She didn't work in my favor when I was employed with the Town. She wouldn't hear anything from me.
mary parker October 20, 2012 at 04:26 AM
I was wrongfully fired from my job of 10 years. I suffered from 4th stage Lyme and have brain damage from it among hearing problems, nurve damage and sight problems due to migraines as a result of Lyme and short term memory loss. Yet when I accidently wrote down a wrong hour on my time sheet because of the affects the Lyme dissease was causing, I was accussed of larceny, fired without even being herd or able to produce medical proof and my 2 bosses told me " I can't help you Mary, I was told not to say anything or deffened you or I will lose my job". The reason I was fired was a personal in my opinion. I had no rights and was accused wrongly. And Walker was the head of it all. Should I get a lawyer and sue the right people? Can Mallozzi reopen my case and help clear my name?
mary parker October 20, 2012 at 04:34 AM
HEY JEB WALKER: WHAT COMES AROUND GOES AROUND. YOU BLAMED ME FOR TRYING TO SCREW THE TOWN WHEN ALL OF YOU KNEW MY CONDITION AND FORCED PEOPLE TO SHUT UP OR LOSE THEIR JOBS IF THEY DEFFENDED ME. NOW WHOSE THE REAL CORRUPT TIEF HERE? YOU ARE. HOPE YOU GET ARRESTED. AND TO ALL YOU PEOPLE WHO BELIEVED WALKER OVER ME, THANKS A LOT. YOU RUINED AN INNOCENT PERSONS LIFE! MINE!
Glen K Dunbar October 20, 2012 at 04:13 PM
Like I said Mary The rich get richer and to poor get poorer. I am sorry for all you have been through. That is hard.
Glen K Dunbar October 23, 2012 at 12:31 PM
Mikey. Good Morning Sir. Have not seen your posts lately. Hope you are well Sir. One correction if I may politely point out. You stated New Canaan Advertiser WILL BE printing your letter. Correction. HOPEFULLY the will print your letter. I have found from years in the past that they print what THEY WANT. Even when I was a Kid I never got anything I wanted printed in the paper. There was NO swear words or dirty talk either. Just an example of SOME in this town wanting to make an example of me, make me tow a line I can't tow. SOME wanting me to not have what others have and force me to do what nobody else has to. Sad but true. I hope they do publish your letter.....whatever it is and says. I still want to meet you Sir. GLEN
mary parker October 25, 2012 at 04:49 AM
Let me ask this question: To the people who are also trying to implicate Rob Mallozzi's involvement in voting yes to approve Jeb Walkers pension raise. Why would he vote yes? And if he did, why would he, once he became First Selectman, investigate and make us aware of the illegal actions if he could also be implicated and possibly prosecuted and black bald? Jeopardize his family business? If people remember correctly, Mollazzi was the one who went against the Board and Councel on numerous proposals and was the ONLY Official to notify the public about the wrong doings that were going on at Town Hall and the Boards and Councel. After he stood his ground then all of the others realized the trouble they were in so they back peddled. And now are trying to deface the only one who had and has the guts to stand up and expose the corrupt and unqualified idiots that continue to bring our town down. And are now trying to cover their butts by teaming together and throwing the blame on Mollazzi just to save their lying reputations and social status in this town. I know first hand they are liars and would do anything to save their reputations and their positions.

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