OIG Report 2020: Leadership Failures in Methuen Police Contracts Executive Summary

The Office of the Inspector General’s review of two Methuen Police Department contracts found a failure of leadership at all levels of city government.

Introduction

The Office of the Inspector General (“OIG” or “the Office”) reviewed the collective bargaining agreement between the city of Methuen (“City”) and the union representing sergeants, lieutenants and captains employed by the Methuen police department, as well as an individual employment contract between the City and its chief of police, Joseph Solomon.

Specifically, in 2018, the OIG initiated a review of the contract (“Superiors’ Contract”) between the City and the Methuen Police Superior Officers’ Association, New England Police Benevolent Association, Local 17 (the “superiors’ union”) in response to complaints that a substantial raise in the contract was a waste of public funds and might have been the result of fraud.

In February 2019, the Office published a letter finding that the former mayor, Stephen Zanni, and the Methuen City Council violated various laws, rules and duties of care to the City.¹

Following the release of its 2019 letter, the Office continued its review of the Superiors’ Contract and expanded its work to include Chief Solomon’s employment contract for the period from March 1, 2017 to February 28, 2022.

A Failure of Leadership

As a result of this continued investigation, the OIG found a failure of leadership at all levels, including the following:

1. Mayor Zanni agreed to unprecedented changes to the Superiors’ Contract without understanding their financial impact. Mayor Zanni successfully held the superiors’ union to the same modest cost-of-living adjustment raises that he negotiated with other City unions: no increase to base pay in first year of the contract, and 2% increases to base pay in both the second and third years of the contract. However, he also agreed to several costly changes, including expanding the definition of base pay in a way that would significantly increase the superior officers’ total compensation.
2. The president of the superiors’ union, Captain Gregory Gallant, drafted the final contract and added language that had never been agreed to by City officials. Primary among these revisions, Captain Gallant further expanded the definition of base pay and created a formula designed to maximize the superior officers’ total compensation. These two changes resulted in 35%-to-183% raises for superior officers. The city solicitor had asked Captain Gallant to draft the contract so that the superiors’ union could not dispute its terms. However, the city solicitor failed to review any drafts to ensure they accurately reflected the negotiated terms.
3. Mayor Zanni agreed to the Superiors’ Contract without understanding its financial implications. He never asked the city auditor to analyze the full financial impact of the proposed changes, including the expanded definition of base pay. He also failed to include a salary schedule in the contract.
4. Mayor Zanni signed the final contract in September 2017 without fully reviewing it or requesting a thorough review by the city solicitor or the city auditor. City officials also did not review the final contract before presenting it to the City Council for approval. The lack of due diligence by city officials continued until Mayor Zanni left office at the end of 2017.
5. Chief Solomon represented the City in contract negotiations with both the superiors’ union and the patrol officers’ union despite the fact that his employment contract tied his compensation to both of those contracts. Chief Solomon also knew that Captain Gallant had inserted unapproved language into the contract but failed to tell his colleagues on the City’s negotiating team. The unapproved language indirectly – but substantially – increased Chief Solomon’s compensation. Chief Solomon remained silent about this change even after the financial impact of the Superiors’ Contract came to light and even after the City was facing a serious budget shortfall.
6. Mayor Zanni did not exercise due diligence or sound management practices when he negotiated Chief Solomon’s contract extension in 2017. The resulting contract makes Chief Solomon one of the highest-paid police chiefs in the country, earning more than the Massachusetts State Police Colonel and the Boston Police Commissioner. Mayor Zanni also failed to include basic oversight provisions in the contract, and he agreed to provisions that make it both difficult and expensive to discipline or terminate Chief Solomon.

Conclusions

Based on the above findings, the OIG concluded that:

1. Mayor Zanni breached his fiduciary duty to City and the public with respect to the Superiors’ Contract and Chief Solomon’s contract extension.
2. The city solicitor may have breached his duty of care to the City by failing to review the Superiors’ Contract before Mayor Zanni signed it, before the City Council approved it, or even after Mayor Jajuga learned about the contract’s financial impact.
3. Captain Gallant acted in bad faith when he added contract language that had not been agreed to by City officials during negotiations.
4. Chief Solomon violated his obligations to the City and the public by remaining silent about the unapproved language Captain Gallant put in the Superiors’ Contract.
5. Chief Solomon did not act in the best interests of the City and may have had a conflict of interest when he served on the City’s negotiating team for contracts that increased his compensation.

Recommendations

The OIG makes the following recommendations:

1. First and foremost, City officials and the chief of police must put the City’s interests above their own. In carrying out their duties, they must diligently fulfill their fiduciary obligations to the public. Since being sworn into office in January 2020, Mayor Neil Perry has taken important steps to improve the City’s oversight and governance. For instance, Mayor Perry hired an audit firm to conduct a performance audit of the police department. He also created the position of Director of Human Resources to provide the City and City employees with a dedicated human resources manager as well as to update policies and procedures for the City. Furthermore, Mayor Perry hired an assistant city solicitor to serve as his legal advisor.²
2. The mayor must exercise due diligence in all contract negotiations. This includes:

a. Being fully prepared for contract negotiations, including being familiar with the current salaries of the City’s employees, understanding the compensation packages in similarly situated municipalities and understanding the City’s budget constraints.

b. Selecting a negotiating team that has expertise in the legal and fiscal review of collective bargaining agreements, including the ability to analyze the financial and legal consequences of every contract term.

c. Excluding anyone who may have a conflict of interest from the City’s negotiating team.

d. Requiring the negotiating team to memorialize agreements in writing immediately following each negotiation session and present these writings to the union’s negotiators for approval or disapproval.

e. Requiring every collective bargaining agreement to include an accurate salary schedule initialed by both City and union representatives.

f. Requiring the city solicitor to play an active role in finalizing each and every collective bargaining agreement.

g. Understanding the financial and legal consequences of all contract terms and providing a written analysis to the City Council in accordance with City Council Resolution #4720, which requires the mayor to present a written contract analysis to the City Council at least 10 days before it votes to approve a contract.

3. The mayor should exercise strong oversight of all department heads, including Chief Solomon. This includes:

a. Carefully considering the findings and recommendations in the upcoming audit of the police department.

b. Conducting an annual performance evaluation of every department head, including Chief Solomon, unless contractually prohibited from doing so. Among other components, the performance evaluation should identify areas for improvement and set measurable goals.

c. Reviewing and approving Chief Solomon’s weekly time records, including defining the chief’s “regular business hours” and tracking his use of leave time.

d. Requiring Chief Solomon to report his compensatory hours to the city auditor for tracking.

e. Reviewing the necessity of any training that Chief Solomon seeks to attend.

f. Reviewing any requested reimbursement associated with any approved training that
Chief Solomon attends to ensure that the request is appropriate.

4. The mayor should evaluate all available avenues of discipline against Chief Solomon and Captain Gallant.
5. The City Council must exercise its own due diligence before approving collective bargaining agreements or other contracts. When approving collective bargaining agreements, the due diligence should include:

a. Enforcing City Council Resolution #4720.

b. Independently reviewing the contract for both substance and form.

A more complete discussion of recommendations for the City Council is included in the OIG’s February 2019 letter (see Appendix 1).

Additional Resources

Leadership Failures in Methuen Police Contracts

¹ See Appendix 1, Letter from Inspector General Glenn A. Cunha to Mayor James Jajuga, et al., dated February 1, 2019.

² The city solicitor reports to the City Council, not the mayor.

Date published:	December 23, 2020