Baltimore County must pay more than $4.2 million to resolve class-action claims by 171 retirees that the state appellate court found were shortchanged when they moved their pensions from other entities to the county system.

The Appellate Court of Maryland’s Jan. 2 ruling marks the end of a complicated case that all Baltimore County judges recused themselves from because they use the retirement system.

The court found that Baltimore County used the wrong calculation when it valued the pensions of those transferring into the county system from other local governments. The $4.2 million includes $2.7 million to repay retirement benefits plus more than $1.5 million in interest. The retirees’ legal fees will be deducted from that amount.

The settlement marks the latest turmoil for the county’s pension system. In 2020, the county agreed to pay $5.4 million to more than 2,000 retirees to resolve age discrimination claims from the Equal Employment Opportunity Commission.

The courts ruled that the county’s system was forcing older employees to pay more into the pension system. That same year, Baltimore County Inspector General Kelly Madigan warned the county was rehiring retirees who were earning salaries while collecting pensions in violation of the county code.

The case started nearly two decades ago when Brian Rowe, a former county auditor, appealed a county pension decision to the Baltimore County Board of Appeals. He won, but the pension system appealed to the courts and Rowe came to lead a class of those who retired before July 1, 2007, in what became a class-action case.

“After almost 18 years, it feels pretty good,” Rowe said about his long-delayed victory. “I knew we were right the whole time. We knew they were violating state law.”

Other classes included those who retired between July 2007 and July 2010, represented by David E. Willis, a former audit manager; and Joanne Wachter, a third retiree, and employees who retired after July 1, 2010, represented by Patrick Roddy, the county’s former lobbyist.

Under the court’s order, Rowe and Willis will receive $25,000 each while Wachter and Roddy will receive $15,000 each, in addition to their settlement amounts for their work on the case.

Roddy, who previously worked for former Gov. William Donald Schaefer, left Baltimore County in 2003 but was not eligible for retirement until after July 1, 2010. He spent the next two decades as an Annapolis lobbyist for Rifkin Weiner Livingston.

Four days after the court entered its judgment, he became director of government relations for County Executive Kathy Klausmeier upon her appointment Jan. 6. Roddy, who is making $125,000 a year, declined to comment. His wife, Valerie Roddy, who also had retired from Baltimore County, similarly returned to advise Klausmeier; she’s earning $150,000.

Erica Palmisano, the county spokeswoman, said the county doesn’t comment on past or pending litigation.

Rowe became Baltimore County’s auditor in 1995 after 20 years with the state of Maryland, his last position being chief financial officer of Maryland’s retirement system. Prior to accepting the job, he said, he asked the county what his retirement would look like, and was satisfied with the calculations. He transferred his vested service credit from the state to the Baltimore County Employees’ Retirement System.

In 1997, Rowe said, the county was using one calculation to determine the value of incoming transfers when he found a written policy saying it should use a different calculation that never was implemented.

The county switched to follow the written policy, which resulted in thousands of dollars more per retiree being withheld over the decades.

Meanwhile, Rowe and then-County Administrator Fred Homan disputed which calculation was correct. Rowe insisted the original calculation was, and that it complied with state law; Homan argued the new calculation was appropriate. Years later, Homan would be forced out of his job and later filed an ongoing lawsuit against the county for failing to disclose information about a firefighter’s pension.

In 2006, Maryland’s attorney general agreed with Rowe. The following year, the Maryland General Assembly passed legislation in line with that opinion.

When Rowe retired March 31, 2007, the county retirement system was still using the wrong calculation. It also was compounding interest monthly instead of annually. Both reduced his benefits.

When Rowe filed his initial claim, he hired Virginia Barnhart, the county attorney from 1994 to 2001, to represent him.

The county did not object to Barnhart as his lawyer, but when Barnhart later represented Willis’ similar claim, the county attempted to have her disqualified on the grounds that she’d been privy to prior retirement conversations. The Circuit Court and the Appellate Court refused.

Having exhausted efforts at administrative relief, Rowe and Willis filed a class action suit in 2010 on behalf of all those not getting the retirement benefits they were entitled to. The case went to Harford County Circuit Court because of the Baltimore County judges’ recusal.

That same year, the Baltimore County Council passed a law codifying the use of the new calculation for service before 2007 and the older one for service after that date. Later, judges in a court filing would say that law “attempted to ratify the previous practice even after the Board of Appeals had ruled that that practice was legally incorrect.” By then, every county except Baltimore was using the state-sanctioned calculation method.

The case took years to make its way through the system. In 2020, the Harford Circuit Court ruled it was improper to charge the higher rate for those who retired after 2007, but fine to do so for some of those who retired before 2007.

Rowe appealed. The state appeals court ruled in his favor in 2022, remanding the case back to Harford to issue the order, which took until now.

The settlement is final. Retirees should receive their money in a couple of months. But Rowe, who retired to Pennsylvania, is relieved.

“They implemented a policy that I knew did not comply with state law, so I decided to sue for everybody,” he said. “It extended the lawsuit, but it was something that had to be done.”