A three-member arbitration panel is expected to decide soon whether former Plum manager Denise Herceg Rumbaugh must repay about $2,000 she received as part of a raise while still employed by the borough. The panel heard testimony Thursday on the issue in response to the borough’s civil action demanding repayment. In papers filed in January, the borough contends the raise was not approved at a council meeting and that the raise is not valid because Plum Mayor John Schmeck vetoed it twice. Craig Alexander, an attorney with Bruce Dice & Associates, who represented the borough yesterday, argued that Schmeck’s approval of the raises was necessary. “The fixing of salaries is legislative in nature and must be submitted to the mayor for approval even if promises or offers are made,” Alexander said. “You cannot make an agreement to agree at a later time.” Tom Castello, Herceg Rumbaugh’s attorney, argued that the former manager met the stipulations for receiving the raise, which he said was reached in an oral agreement with council when she was hired as manager in October 1998. Further, Castello argued that Schmeck did not have the authority to veto the pay raise. “The veto power does not stand in this situation,” Castello said. “Even if it does, this was a binding agreement and she is entitled to the benefits.” The two-hour proceeding included testimony from Schmeck, Herceg Rumbaugh, Plum Solicitor Bruce Dice and former council members Harry Schlegel and Al Flickinger. Herceg was hired as Plum manager in October 1998 at a salary of $45,000 a year, and her 2001 salary before the raise was $50,132. Her predecessor, Martha Perego, was making $58,039 when she resigned in February 1998. Schmeck testified that last year he twice vetoed raises for Herceg Rumbaugh, Planning Director Greg Bachy and sanitation department Administrator Sandy Furko. Council reinstated the raises after the vetoes. “I thought (the raise) was not in the best interest of Plum,” Schmeck said. “Given the financial disarray in the community, it strengthens the argument. The solicitor never advised (council) that they could reinstate the vote.” The raises would have totaled about $17,500 after the first year — $11,000 for Herceg Rumbaugh; $4,500 for Bachy; and $2,000 for Furko. Bachy and Furko returned the money. “I don’t recall them promising any type of monetary reimbursement to Miss Herceg,” Schmeck testified. But Herceg Rumbaugh testified that she accepted the manager’s position in 1998 with the understanding that she would receive the increase upon meeting two conditions: receiving her bachelor’s degree and moving into Plum, both of which she did. “All seven councilmen were made aware of what was going on,” said Schlegel, who was a councilman from 1998 through February 2000, when he was appointed Plum’s tax collector. “The motion to hire Denise was unanimous. The agreement was made by all of council prior to the motion to hire. She honored her part and the borough should honor theirs. The night of the council meeting, everything was reviewed, and there were no objections.” Castello argued that Herceg Rumbaugh’s salary increase was identical to benefits such as vacation time and health care, which also were not spelled out in the motion to hire her. “The motion to hire did not reflect all of the provisions,” Castello said. Further, Castello argued that Schmeck in his two vetoes did not object to the agreement between council and Herceg Rumbaugh. In July, Herceg Rumbaugh became manager of Scott Township. She estimated the amount of the raise she received from Plum was $2,233. “The first time he vetoed the salary increases, he claimed it was because it was not in the budget and not done in his eyes properly,” Herceg Rumbaugh said. “We looked at budgeting within the constraints. Council approved the raises. I got my increase and I left. Six months later (January) I got a letter that he vetoed the second one (raise). I spent the money six months ago.” Castello said council demanded the raise be repaid after Herceg Rumbaugh filed a federal lawsuit against Plum Borough alleging sexual discrimination. In turn, Herceg Rumbaugh amended her federal lawsuit to include a charge of retaliation. The case is expected to go to trial later this year. Herceg Rumbaugh alleges that beginning in March 2000 and continuing until after she left borough employment, “certain borough officials subjected her to verbal abuse, public embarrassment and slanderous accusations because of her gender.” When asked yesterday about the federal lawsuit, Schmeck responded, “I didn’t know that it was for me specifically.” The lawsuit comes after the Equal Employment Opportunity Commission in May dismissed complaints filed by Herceg Rumbaugh and Assistant Manager Kathleen E. Butter. The two alleged that Schmeck and Council President Clem Barbarino swore at them, made derogatory comments and accused them of fraud and forgery because they are women. Schmeck is expected to give a deposition in the federal lawsuit today.

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