Retired Schenectady fire chief again eyes pension bump
Farstad cites scuttled secret deal with Stratton
SCHENECTADY Retired Fire Chief Robert Farstad is still trying to get a bigger pension.
He is appealing his pension estimate, asking the state to grant him the 60 percent increase he would have gotten through a secret deal with former Mayor Brian U. Stratton. The deal would have transferred Farstad’s accumulated sick and vacation time into overtime, but was never approved by the City Council.
After it came to light, the deal was scuttled, Stratton chose not to run for re-election and a referendum last year changed the City Charter to specify that the mayor does not have the authority to single-handedly make financial contracts with employees. Only the City Council, which approves all city expenses, can make such decisions.
Current Mayor Gary McCarthy was dismayed to hear that Farstad is still looking to pad his pension.
“I thought the matter was over,” McCarthy said. “That was done without the council’s approval, and I believe it was solely the prerogative of the council. I believe the mayor exceeded his authority.”
But Farstad’s attorney, Michael Cuevas, says he can prove that Farstad should be given credit for overtime.
“There are documents. You have to piece things together,” he said.
The issue began in 2009, when Stratton agreed to transfer to overtime $117,000 in Farstad’s accumulated sick and vacation time. Overtime pay increases a pension, while sick and vacation time do not.
Farstad allegedly agreed to accept three annual payouts of overtime, equaling the cost of his sick and vacation time, while waiving his sick and vacation payout. The payments were staggered because the pension system only counts slight increases in pay each year when it calculates the final average salary. If Farstad had accepted the entire amount in one year, only a small percentage of it would have counted toward his final salary. Spreading it across three years would have increased his pension by 60 percent.
The Daily Gazette questioned Farstad’s first two payments because the chief had never before received overtime and other department heads are not eligible for overtime.
Stratton eventually explained that he agreed to the deal to make up for a city decision made years earlier. Members of the city firefighters’ union — but not management — agreed to givebacks in their contract to get into a better pension plan, with the givebacks equaling the cost the city had to pay to get into the better plan. Farstad had left the city at the time but was hired back as chief shortly thereafter. The cost to put him into the better plan was so high that city officials refused to do it.
Farstad later alleged that some mayors promised to save the money to eventually put him in the plan. Other fire department leaders said Farstad would not give up sick and vacation time to pay for his entrance into the plan. Union members of the fire department had given up raises and other pay for their admittance to the plan.
City Council members said Farstad often brought up the issue, but the cost of entering that plan at the end of his career was $160,000, which they said was far too high. Stratton said he thought the overtime deal was a fair way to resolve the issue, though he never asked the council to vote on the expense.
Once the City Council learned of the overtime deal, the council officially told the pension system that the overtime was not approved and should not count toward Farstad’s pension.
Farstad’s overtime requests were for work that had been part of his regular duties in previous years. In 2010, he asked for more than 12 weeks’ worth of overtime for everything from attending minor fires to talking about fire safety with neighborhood groups.
His attorney said that since Farstad had permission to file for overtime, he must get credit for it with the pension system.
“What he [Stratton] said was, Bob could work overtime,” Cuevas said. “There’s an overtime form that fire department members fill out. He filled it out on a regular basis.”
Cuevas also argued that Farstad’s situation was not unique. Since at least 1990, assistant chiefs and chiefs of both the police and fire departments have been given six weeks of overtime upon retirement, even if they could not provide documentation that they had actually worked overtime.
Farstad’s far more generous deal with Stratton would have given him roughly 34 weeks of overtime pay. But the precedent is there, Cuevas said.
“The important thing is there is a policy in place. It’s been applied to others,” he said.
Former Mayor Karen B. Johnson offered the 30-day overtime deal in a memo to police as she tried to encourage them to accept promotions to upper management, where they would no longer get overtime. When the Farstad deal came to light, then-Corporation Counsel L. John Van Norden unearthed that memo but said he didn’t think it could stand up in court because it appeared to violate federal law.
“A salaried [management] employee is expected to do their work and complete their jobs for their salary,” he said. “Technically, they would not be eligible for overtime under federal law.”
He also noted that there was never an official management overtime policy approved by the council, as required by the pension system.
Still, the system has accepted overtime for other chiefs. Cuevas has submitted documentation for Farstad and is awaiting word as to whether the board wants more information before making a ruling.