Hamilton school board reaches $17M settlement
HAMILTON » A class-action lawsuit filed by retired public schoolteachers, administrators and secretaries against the Hamilton Township School District has been settled.
The Hamilton Township Board of Education has approved a settlement agreement that calls for the school board to pay $17 million over the next 12 years to entitled district retirees, including former Superintendent of Schools Neil Bencivengo, to resolve a contract dispute.
Among the large list of plaintiffs who sued the school board are Bencivengo and former district business administrator Carol Chiacchio, who filed a complaint in Mercer County Superior Court in March 2014 alleging the district failed to make contractually obligatory cash payments to the retirees in lieu of prescription drug coverage for the retirees and their dependents.
The cash payments, according to the complaint, were allegedly supposed to be paid to certain retirees as annual replacement compensation due to the school district ending its former policy of providing retirees with lifetime prescription drug coverage. The cash payments stopped being disbursed around July 2013, and about $4 million in cash payments have allegedly not been paid in 2013, 2014 and 2015, according to the school district’s annual financial audit for the 2014-15 fiscal year.
Seeking to fully and finally resolve, discharge and settle the litigation, the school board on June 28 approved a settlement proposal to disburse $4 million in retroactive payments and $13 million in prospective payments to the retirees.
“The decision of the board and retirees to enter into a settlement was an economically responsible and just resolution to all sides of the dispute,” all sides said Monday in a joint statement. “The agreement will provide financial certainty and stability for the district while simultaneously guaranteeing full retroactive and fair and equitable prospective payments to the retirees for a fixed duration. The court will have an opportunity to weigh in on the terms and approve them.”
If the settlement receives court approval, $17 million over the next 12 years will be paid at fixed intervals to former members of the Hamilton Township Administrators and Supervisors Association (HTASA) and Hamilton Township School Secretaries’ Association (HTSSA) who retired from the district on or before July 1, 2011, and to former members of the Hamilton Township Education Association (HTEA) who retired from the district on or before July 1, 2012.
Under the settlement agreement, which The Trentonian obtained under an Open Public Records Act or OPRA request, the school board agrees to pay up but does not admit any wrongdoing.
“Neither the fact of the compromise and Settlement, nor the payment of any consideration thereunder, nor the execution of this Settlement Agreement constitutes an admission of any liability by any of the parties, or an admission that the claims or defenses lacked merit,” reads a clause in the agreement.
Payment schedule
The school board has agreed to make two equal retroactive payments to the plaintiffs, with the first payment to be allocated from the board’s fiscal year 2016-17 budget and paid “as soon as practicable” and for the second payment to be made from the board’s 2017-18 budget and paid in January 2018. The payments shall be retroactive to July 2013 for retirees, and some dependents will receive compensation retroactive to July 2011 or July 2012.
The retro pay is based upon “amounts definitively owed” to the retirees and eligible dependents for the years 2011 through 2017. The board further agreed to make the first of 10-annual prospective payments commencing on or about January 2019 from the board’s 2018-19 fiscal budget.
The plaintiffs shall be responsible for the payment of counsel fees and costs, which shall be paid through the settlement proceeds, according to the agreement.
The plaintiffs
More than 30 retired employees of the Hamilton Township School District filed the class-action lawsuit against the Board of Education. Joan Gray, who retired from the district in January 2010, was the first plaintiff listed in the class.
Bencivengo, who retired from the district in July 2011, and Chiacchio, who retired from the district in September 2010, are arguably the highest-profile plaintiffs in the class. Other notable plaintiffs in the class include former Hamilton school board member Kathleen Lord, who retired from the district in August 2004 as a secretary, and former Hamilton school board member Andrew Kaszimer, who retired early from the district in July 2006 as a math teacher.
If the settlement agreement is approved by the courts, the compensation that the plaintiffs shall receive will be in addition to their monthly pension allowances. Public records show some of the retirees in the class collect about $2,000 in monthly pension while some of the retired administrators collect more than $10,000 in monthly pension payments.
The lawyers who helped the parties reach the settlement agreement include Hamilton school board attorney Patrick F. Carrigg of the Lenox Law Firm, Robert M. Schwartz of the Schwartz Law Group that represented retired Hamilton administrators and their dependents and spouses, and Richard A. Friedman of the Zazzali Law Firm that represented retired teachers, secretaries and other subclass members who once worked in the Hamilton Township School District.