Lawsuit Filed Over Superintendent’s Retirement

Former Johnston County School Superintendent Dr. Ed Croom and his retirement cost to Johnston County taxpayers is back in the news.  The latest developments include a lawsuit being filed by Johnston County Schools against the State of North Carolina Retirement System saying they acted inappropriately in the interpretation of a law.

Ed-Croom-2-10-16Croom was being paid $215,022 a year when he retired at the end of February. He was making such a large salary, state law required Johnston County to pay towards his retirement pension.

In a press release from School Board Attorney Jimmy Lawrence, the Johnston County Board of Education announced Monday they have taken two steps to dispute the bill it received from the Teachers’ and State Employees’ Retirement System.  Applying legislation enacted in 2014, the Retirement System initially billed the Johnston County Schools $508,346.96. Last week the school system was notified that the amount had been recalculated to $435,913.54.

The first action taken by the Board of Education was the filing of a contested case in the Office of Administrative Hearings asserting that the Retirement System did not follow correct procedure and acted arbitrarily and capriciously in the assessment against the Johnston County Schools. The second action was the filing of a lawsuit in Wake County Superior Court asserting that the Retirement System violated the state’s Administrative Procedure Act when it set the formula for determining the cap on retirement benefits without following the procedures for adopting an administrative rule. The two legal actions are related and together question whether the Retirement System acted appropriately in deciding whether Johnston County Schools should pay an additional amount for Dr. Croom’s retirement over the contributions he and the schools made to the Retirement System, according to the law then in place, throughout his 28 years employment”

The contested case will be heard by an administrative law judge in the Office of Administrative Hearings. The lawsuit will be heard by a superior court judge in Wake County. The next step in each proceeding is for the Retirement System to file a response. No timetable will be set for hearing the matters until the responses are filed. The Board of Education’s goal is to have the assessment against the Johnston County Schools declared invalid.

The school system contends the 2014 legislation applies to Croom’s situation because he worked at a “low teacher’s salary” for a number of years before moving to a higher compensated administrative position late in his career.  The Johnston County Board of Education is represented by the Raleigh attorney Michael Crowell with the law firm of Tharrington Smith.

In March, Dr. Croom repaid $50,000 to Johnston County Schools – $25,000 he received in 2014 and $25,000 in 2015 – paid to him towards an annuity to cover a potential loss in his pension when he retired.  He was eligible for an additional $25,000 payment but reportedly turned it down. When he retired his pension had not been cut.