WILDWOOD – Former Wildwood Mayor Ernie Troiano, current Mayor Pete Byron and Commissioner Steve Mikulski were charged with theft and tampering with public records June 24. All three have received health insurance in connection with their work; state officials say that wasn’t legal.
Why Does it Matter?
A copy of the summons shows a small preview of the state’s case against the Wildwood officials.
Each complaint reads similarly: “[He] knowingly did unlawfully take or exercise unlawful control over health and medical benefits to which he was not entitled.”
At the center of the case lies the question of whether Wildwood’s elected officials work full-time.
Since 2011, the three men have collectively received $1 million in health benefits from the taxpayers.
How Did Wildwood Get Here?
For decades, health insurance for elected officials was par for the course, regardless of the amount of time spent working. In most towns, mayors and commissioners served in part-time positions. Despite that fact, winning local elected office came with comprehensive health insurance and pension packages.
In 2010, all that changed. Republican Chris Christie had just been elected governor on a platform of reducing government spending. His most famous reforms involved changes to the state’s pension plans, but health insurance for public employees also received scrutiny.
The result was two pieces of legislation in 2010 and 2011 that altered the state’s public employee health insurance system.
Under the Public Employee Health Benefits Reform Law, passed in May 2010, only elected officials who had held office continuously since before May 2010 were eligible to maintain health insurance as part-time employees. Newly elected officials would need to be full-time employees to receive health insurance.
When new legislation that impacts municipalities is passed, the state’s Division of Local Government Services (DLGS) issues a Local Finance Notice. They issued such a notice in 2010; the goal was to instruct local government leadership on how to properly implement the new law.
The notice issued by DLGS in 2010 makes it clear that newly elected full-time officials could still collect health benefits going forward, but only if they worked a minimum of 35 hours per week.
The Local Finance Notice from 2010 suggests that more clarification would follow.
“The State Health Benefits Commission will soon provide guidance about the meaning of ‘full-time’ and certification of time worked for elected officials,” the notice reads.
“What’s particularly egregious here is that they never did,” said Byron’s attorney, William Hughes Jr.
Marc Pfeiffer served as acting director for the DLGS in 2010 and was responsible for writing that Local Finance Notice. He agrees with Byron’s attorney.
“I am not aware that clarification was ever provided by the State Health Benefits Commission,” said Pfeiffer.
“Because of the uncertainty that was created in the Local Finance Notice, elected officials who wanted to make an argument that they worked more than 35 hours a week and would thus qualify for coverage should have sought attorney or state guidance on the question,” Pfeiffer added.
The Local Finance Notice offers further help on the matter.
“Local units that participate in the State Health Benefits Program may also contact the NJ Division of Pensions and Benefits for assistance,” page three reads.
Although Troiano had been mayor until 2009, Gary DeMarzo ran and unseated him in a recall election. DeMarzo lost in 2011, but by then, newly elected officials needed to meet the 35-hour-per-week requirement.
To make sure it was clear that they qualified, Troiano, Byron, and then-Commissioner Anthony Leonetti passed a 2011 resolution declaring themselves full-time employees who did not work less than 35 hours per week.
It is standard practice for resolutions to be vetted by the city solicitor before they are passed.
Marcus Karavan served as Wildwood’s attorney in 2011 and would have been responsible for reviewing any new resolutions passed. It’s unclear whether he sought the state’s guidance before the resolution was passed. Karavan did not respond to a request for comment and his communications as city solicitor are protected by attorney-client privilege.
Pfeiffer also highlighted the role of a city’s certifying officer. Every municipality has an employee who is responsible for certifying time worked to the Division of Pension and Benefits. Sometimes, it’s the chief financial officer and sometimes it’s the director of human resources. That individual is responsible for staying abreast of state directives to ensure compliance.
A review of the 2010 legislation and the Local Finance Notice indicates that if an elected official works full-time, they can receive health insurance.
Did They Work Full-time?
It takes more than a resolution to make a full-time employee. Were they spending more than 35 hours a week working?
Wildwood only keeps timesheets for six years before they’re destroyed, but for the years they were available, the Herald was able to view timesheets for Troiano, Byron, Leonetti, and Mikulski.
Troiano, Byron and Leonetti all appear to work full-time as elected officials in Wildwood. Each of their timesheets shows them working seven hours a day, Monday through Friday.
Troiano heads E. Troiano & Sons, a prominent local concrete business.
Byron works as a real estate broker.
Leonetti owned a Wildwood Crest hardware store and had his own general contracting business. He is now mostly retired.
When the New Jersey Office of the Attorney General announced the charges in June, the statement said, “Troiano and Byron did not work a regular full-time schedule or work at least 35 hours per week.”
The release suggests that the pair allegedly signed and submitted false timesheets.
The three men served two terms together in office, from 2011 through 2019. In the 2019 election, Byron and Troiano ran against one another. Leonetti did not run for reelection. Byron won office and became mayor in 2019, along with Commissioners Mikulski and Krista Fitzsimmons.
After the 2019 election, Byron’s timesheets show that he continues to work seven-hour days, five days a week.
Initially, Mikulski’s timesheets show him working the same seven hours a day that Byron worked, but after the beginning of March 2020, Mikulski stopped submitting the same timesheets.
When including ‘holiday time,’ Mikulski worked a weekly average of 34.4 hours in 2020 and a weekly average of 32.5 hours in 2021. The calculations are not precise, though; at times, Mikulski’s timesheet shows him logging hours of work on a holiday and adding it to the seven hours of vacation time.
Mikulski also owns Key West Café, in Wildwood.
“His timesheets only reflect a portion of the actual time he put in. Actually, he works 24 hours a day. Most times, day and night, addressing concerns of constituents,” said John Tumelty, Mikulski’s attorney.
Timesheets may serve as one indicator of a full-time position. Compensation may serve as another.
Although classified as full-time, the commissioner and mayor positions have been paid between $20,000 and $30,000 a year since 2011. Fluctuations have accompanied changing financial conditions.
Importantly, the amount they are paid directly impacts the cost of their health insurance.
A second 2011 law led to further reforms to public employee benefits programs. This law determined the contributions an individual would need to make toward their insurance. The contribution tiers are income-based.
As full-time employees being paid $25,000, Troiano, Byron and Mikulski would only have to contribute 4% toward a plan for themselves and their families.
That’s dramatically less than the 35% contributions required of the city clerk, the chief financial officer, or the tax assessor, three similarly senior roles in Wildwood.
In addition to the low pay, the City of Wildwood’s ordinance on full-time employees defines a full-time, permanent employee as “any assignment to any position of employment with the city of an indeterminate period.” When elected, city officials take the job for four years, a pre-determined amount of time.
In many smaller municipalities across New Jersey, commissioners and mayors are classified as part-time roles. Wildwood is the only Cape May Countymunicipality to classify elected officials as full-time.
Vineland, a city of 61,000, has five council members and a mayor. Only one of the elected officials is classified as full-time. None receive health insurance.
Cherry Hill, a Philadelphia suburb of 75,000, has seven council members and a mayor. None are classified as full-time, and none receive health insurance.
Trenton, with 90,000, has seven council members and a mayor. None are classified as full-time, and none receive health insurance.
Did They Know It Might Have Been Wrong?
At the center of the story lies a series of alleged meetings in which then-City Solicitor Mary Bittner and then-City Administrator Chris Fox told Troiano, Byron, and Leonetti that the law did not allow them to collect health benefits.
According to Leonetti, Bittner told him this information and he immediately went downstairs to Hope Pinto, director of human resources for the City of Wildwood, and unenrolled from the health insurance plan.
Pinto could not comment on the personnel matter. Public employee health records are protected from public access under state law.
“I took myself off the benefits immediately when I was advised. Literally immediately,” Leonetti said.
He told the Herald that he talked about the issue with Troiano and Byron at the time.
“You’re your own person. You do what you got to do,” Leonetti said he told them.
The Herald was unable to reach Bittner for comment. Any meetings held between a city solicitor and employees of the city are protected by attorney-client privilege.
Fox, in his role as city administrator, was also privy to these meetings, per Leonetti. He did not respond to multiple requests for comment.
Byron, per an NJ.com article, denied ever having a conversation with the solicitor about issues with him receiving benefits, but Leonetti disputes that claim.
Byron and Troiano both declined to comment for this story.
Byron’s attorney did not comment, citing the fact that he hasn’t yet seen the discovery for the case.
Brian Pelloni, Troiano’s attorney, could not be reached for comment after multiple calls to his law firm went unanswered.
The aforementioned article from NJ.com broke news of the investigation to the public just weeks before the November 2019 election. In that article, Troiano and Byron both confirmed that officials from the state Department of the Treasury had contacted them about an investigation into their health insurance, but Tumelty claims that Mikulski followed the rules after being elected.
“Every piece of information he received, including from city officials, conveyed to him, he was acting 100% with the approval and the authority of the city,” said Tumelty.
What Comes Next in the Case?
Byron, Troiano, and Mikulski are charged with theft by unlawful taking and tampering with public records. Theft is a second-degree crime and tampering with public records is a third-degree crime.
As of now, none of the three men have been indicted.
“The prosecutor intends to present the case to a grand jury, so I expect an indictment,” said Tumelty.
What’s clear is that the stakes in the case are higher because they’re public employees. Some Wildwood residents just want to see justice.
Todd Stevens has lived in the city for over 25 years. He isn’t happy with the news he’s hearing.
“It’s such a small town, and I love living here, but if they stole, they should go to jail. That’s what most of my friends are saying, and they know them. They’re friends with them,” Stevens said. “I just know it’s not okay to make a resolution that benefits yourself.”
The implications are big for Stevens.
“These things tell me that there’s something rotten in Wildwood. They know better,” Stevens said.
Even in 2002, when the state did a local government budget review of Wildwood, health insurance for elected officials came up as an area of potential cost savings.
“In light of the part-time nature of governing in small communities, we believe commission members should reimburse or decline to take them altogether,” the state wrote.
Twenty years later, the issue has morphed from a recommendation into criminal charges.
Soon, it will rest in the hands of the court to decide. Until then, Byron and Mikulski continue to serve in their elected positions.
To contact Alec Hansen, email ahansen@cmcherald.com.
