The mayor is now saying he redirected city funds to Fire Chief Robert Farstad out of a sense of fairness.
It was the mayor’s third attempt in two days to explain the situation, which has infuriated City Council members because he spent money they did not approve.
He admitted Wednesday that he intended to give Farstad $117,000 over the next year, which would have allowed Farstad to double his pension when he retires in 2011. Farstad had received $47,000 when Stratton stopped the payments after The Daily Gazette learned of them through a Freedom of Information request.
In a news conference Thursday afternoon, Stratton said he decided Farstad deserved the money because the City Council wouldn’t put the chief into a better pension plan. The plan would have allowed him to take a pension of 70 percent of his final salary, rather than 64 percent.
While Farstad was running the Scotia Fire Department in 1997, the council allowed the rest of the department to go into the more valuable pension plan. But Farstad didn’t get permission to move into that plan when he returned to run the city’s Fire Department in 1998, which Stratton characterized as an “error.” It would have cost the city $160,000 to put Farstad into the plan.
Stratton said that last year he asked the council, behind closed doors, to put Farstad in the better system before he retired.
“My understanding was that there was not a majority of support on the council for that expenditure,” Stratton said. “I made what I believed was a right, fair and equitable adjustment.”
That explanation came after a week of attempts by city officials to describe why Farstad was suddenly allowed to get the pay, characterized as overtime, for work that had previously been part of his regular duties. Every other city manager, including the police chief, does not get overtime.
At first, Director of Administration John Paolino said he didn’t know why Farstad got overtime but that the City Council had approved it. When City Council President Gary McCarthy categorically denied that, the mayor said that the deal was approved in secret with former Councilman Mark Blanchfield in 2008.
He said it was never put in writing because Blanchfield “wanted it that way.”
Blanchfield, who is now a city judge, said he didn’t recall any deal. At the time in question, both men said publicly that they weren’t speaking to each other.
After Blanchfield rejected the mayor’s description of the deal, Stratton said he was trying to save the city the burden of paying Farstad’s accumulated sick and vacation leave when he retired. That amounted to $117,000.
Farstad agreed to take the money as overtime over a three-year period rather than the lump sum in 2011, Stratton said.
He argued that would make it easier for the city, in terms of cash flow.
But when it became clear that the change would significantly increase Farstad’s pension, Stratton called a news conference Thursday to offer his new explanation.
The deal was reasonable because Farstad was stuck with a smaller pension, he said.
When asked why he didn’t mention issues of fairness and Farstad’s pension plan earlier, Stratton said, “This has been a very complex issue.”
But he insisted that he understood it all along. “It was a way to restore equity to him,” he said.
He said he stopped the deal Wednesday when a reporter made it clear that it would increase Farstad’s pension. But he wouldn’t explain how he thought the deal could be fair to Farstad but not increase his pension.
Since Farstad would have received $117,000 without the deal, through his accumulated leave payout, he would not gain financially unless the change affected his pension.
Vacation and sick leave don’t count toward calculating an employee’s pension — but any money coded as overtime does count.
If Farstad had received a pension based on his normal salary of $106,080, he would have an annual pension of about $67,891.
If, instead, he had been in the better retirement plan, he would have retired with a pension of more than $74,000.
But Stratton’s deal offered him much more money.
If Farstad were to take the entire $117,000 in overtime, as the deal had projected, he would be able to base his pension on a final year’s salary of $175,800. That would have allowed him to double his pension to $112,512 a year — more than he made as fire chief.
Farstad’s pension will be based on the year in which he made the most money — which would be this year, if he is not allowed to collect overtime next year. In that case, after various retirement rules reducing his salary are taken into account, his pension would be based on a salary of $128,017 — giving him a pension of $81,930.
Stratton said he didn’t understand how much money Farstad would get, but said he did not consider it “pension padding.”
He also said he supported the overtime because Farstad was needed at fires. “He was needed, not only as chief but as a front-line firefighter,” he said.
However, Farstad himself told the council last month that he is not in the physical condition to be a front-line firefighter.
“You don’t want me fighting fires,” he told them.
Farstad has had extensive back problems and is well over the age of the average front-line firefighter.
Public Safety Commissioner Wayne Bennett also defended Farstad Thursday, saying that he merely made “business decisions” regarding his pension.
“Bob Farstad is not a thief. Bob Farstad is an honest person with professional integrity and personal integrity,” Bennett said.
To prove his point, he said that Farstad and Assistant Chief Michael Della Rocco rushed to a fire after hours Wednesday even though they knew they would not be paid overtime.
Firefighters believed, briefly, that someone was trapped in the house.
“Bob Farstad and Mike Della Rocco were there. They were fully aware they’re not getting compensated. They were there for a number of hours,” Bennett said.
Della Rocco has not asked for any overtime this year.