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HomeMy WebLinkAbout1502 MillerIn Re: Dean Miller, Respondent File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella 07 -046 Order No. 1502 12/4/08 12/19/08 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was filed and a hearing was requested. A Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were subsequently submitted by the parties to the Commission for consideration. The Stipulated Findings are set forth as the Findings in this Order. The Consent Agreement has been approved. This adjudication of the State Ethics Commission is issued under the Ethics Act and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with the Ethics Act. Miller, 07 -046 Page 2 I. ALLEGATIONS: That Dean Miller, a public official /public employee in his capacity as the Executive Director of the Reading Area Water Authority, Berks County, violated Section 1103(a) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. § 1103(a), when he used the authority of his public position for private pecuniary benefit by taking actions as the Executive Director of the authority to approve work performed for the authority by his private business Miller Environmental Inc. including but not limited to approving scope of work as well as authorizing payments to said company. II. FINDINGS: 1. The Reading Area Water Authority (RAWA) was created by the City of Reading on or about May 27, 1994. a. Prior to the Authority's creation, water operations were handled by the City of Reading. b. The RAWA is operated by a five (5) member board appointed by the Reading City Council. c. The RAWA is a separate operating Authority independent of Reading City government. d. The day to day operations of the Authority are managed by the position of Executive Director. e. The RAWA maintains offices physically located within Reading City Hall. 2. On May 5, 1994, Reading City Council approved ordinance number 46 -94 authorizing the creation of the Reading Area Water Authority. a. The RAWA was created pursuant to the Municipal Authorities Act of 1945. b. The incorporating entity was the City of Reading, Berks County. c. The original RAWA Board consisted of five members with staggered five year terms. d. The City of Reading was operating as a Third Class City Government at the time the RAWA was created. 3. Prior to the creation of the RAWA, water services were handled by the City of Reading through a Water Department. a. Reading City's Water Department was responsible for the general care and maintenance of its water reservoir, distribution system, and all physical plants. b. All needed services were provided by Reading City employees. 4. Upon creation of the RAWA, the City of Reading enacted an ordinance approving the lease and operating agreement to transfer operations of the water system to the RAWA. a. Reading City ordinance number 281 -94 was enacted by Reading City Council on May 20, 1994. Miller, 07 -046 Page 3 b. This ordinance transferred operations of the City of Reading's water system to the RAWA. 5. The following provisions of Reading City ordinance number 281 -94 are pertinent to the lease of facilities and operating agreement: Article III, Duties of City: Section 3.01: The Authority hereby engages the City to provide personnel to conduct the day -to -day operation of the Water System and to perform other functions with respect to the Water System on behalf of the Authority as provided herein. Section 3.02: The City accepts the engagement by the Authority to provide personnel to operate the Water System as herein provided. Section 3.03: Subject to the provisions of this Agreement and subject to the general supervision, discretion and control of the Authority, in the exercise and discharge of lawful obligations of the Authority, the City shall provide personnel for the purpose of rendering to, for and on behalf of the Authority, the following services: a. The calculating, preparing and rendering of all bills or statements for services rendered in connection with the Water System, such bills or statements to be in accordance with the appropriate resolution or resolutions of the Authority in effect, from time to time; and b. The receipt and collection of receipts, revenues and money due and payable to the Authority, from time to time, in connection with the Water System, and the keeping of proper and appropriate records in connection therewith; and c. The keeping of proper accounts and records relating to its function with respect to the operation and maintenance of the Water System, and the submission to the Authority, from time to time, upon a monthly basis, of appropriate reports; and d. The employment of such persons as shall be required, as determined by the Board, for the proper operation and maintenance, including repair, of the Water System, who shall be City employees, to operate and maintain the Water System and to perform other functions with respect to the Water System, including the establishment, determination and negotiation of terms and conditions of employment and wages or salaries of such persons, and including the maintenance of appropriate unemployment compensation and workmen's compensation insurance and the keeping of records and the making of reports required in connection with the employment of such persons; provided that, in connection with the employment of personnel, the City shall hire only such number of persons as the Authority shall direct and shall take into account personnel recommendations of the Authority when determining who to employ; (ii) The Authority Executive Director shall manage the general supervision and control of the day -to -day operation and maintenance of the Water System, including, to the full extent not inconsistent with any AFSCME contract, all matters of employee discipline. Miller, 07 -046 Page 4 Article VI Lease Payments Section 6.01: In consideration of the lease of the Water System and the operating services to be provided by the City, the Authority shall pay lease payments to the City as provided herein. Such lease payments shall be the sum of the Administrative Expenses plus the Operating Expenses plus the Debt Service Expenses plus the Financing Fees for each "billing period." In addition, the Authority shall continue to provide, free of charge, such water service as is currently provided on such basis to the City. A supplemental lease and operating agreement was enacted January (day not listed) 1995 amending several provisions of the May 20, 1994 agreement. 1. None of the amendments related to the relevant provisions detailed above. 6. Since January 1, 1996 the City of Reading has operated under a Home Rule Charter form of government. a. The RAWA was operating as an incorporated municipal authority prior to this change in City operations. b. Home Rule Charter provisions did not change the RAWA's ability to function as a separate operating authority from City government. c. The Home Rule Charter includes language relating to elected and appointed city officials. d. No language is included regarding independent contractors hired by the city, its departments or authorities. e. The City of Reading's Home Rule Charter also established its own Ethics Board to address any conflict of interest allegations made against city officials and employees. 7 The RAWA provides water service for the City of Reading, Temple Borough, Bern Township, Kenhorst Borough and portions of Muhlenberg Township, Lower Alsare Township, Cumru Township, Owtelaunee Township and Maidencreek Township. 8. Professionally, Dean Miller is an employee of Miller Environmental Incorporated. a. Miller is the owner of the fictitious name Miller Environmental, Ltd., and Miller Environmental was incorporated on March 14, 1994. b. The principal office location for Miller Environmental, Inc. is 320 South 17 Street, Reading, Pennsylvania. 9. Miller Environmental, Inc. operates a website promoting its business operations. a. Corporate Principals are identified as Dean A. Miller, Michael Poyner and George H. Smith. b. Miller Environmental, Inc. manages and /or operates water and wastewater treatment facilities for municipalities. 10. The Miller Environmental, Inc. website details the following water and wastewater Miller, 07 -046 Page 5 11. treatment plants it has been involved with: a. Water Treatment Plants Chesapeake City, MD Avondale Borough, Avondale, PA St. Timothy's School, Stevenson, MD Charlestown, MD Wynnewood, Whitehall, PA Sandy Cove Ministries, North East, MD b. Wastewater Treatment Plants Norristown Municipal Waste Authority, Norristown, PA Parkesburg Borough, Parkesburg, PA St. Timothy's School, Stevenson, MD Robeson Township, Birdsboro, PA Barton's Meadows, Spring City, PA East Vincent Veteran's Center, Spring City, PA US Army Corps of Engineers Berks County, PA Hickory Golf Club, Gilbertsville, PA Cherry Tree Farms, Devault, PA Oak Grove Country Inn, Pipersville, PA Avondale Borough, Avondale, PA University of Maryland, Port Deposit, MD Wynnewood, Whitehall, PA Sandy Cove Ministries, North East, MD Eagleview, Uwchlan Twp, Chester County, PA Chesapeake City, MD Articles of Incorporation on file with the Pennsylvania Department of State include the following business filings for Miller Environmental, Ltd. and Miller Environmental, Inc. a. Entity Name Miller Environmental Miller Environmental Inc. Miller Environmental Inc. Entity # Date 1081201 02/15/89 2570707 03/14/94 2570707 06/01/05 Filing Owner Fictitious Name Dean A. Miller Incorporation Dean A. Miller Amended Inc. Dean A. Miller [President/Secretary] 12. Amended corporate filings also include George M. Poyner, Treasurer and George H. Smith, Vice - President. 13. Prior to providing any services to the RAWA, Miller d /b /a Miller Environmental, Inc. was under contract with the Norristown Municipal Waste Authority to provide services as "Contract Manager of Facilities." a. Miller Environmental, Inc. has provided services to the Norristown Municipal Waste Authority, as Contract Manager, since approximately 1994. 14. During 2000 the RAWA Board believed there was a need to hire an outside company to manage the operations and maintenance of the Authority's water filtration plant. a. At the time, the RAWA was experiencing difficulties in meeting the Environmental Protection Agency (EPA) safe drinking water standards. Miller, 07 -046 Page 6 b. The RAWA did not formally seek bids for this service, however, proposals to manage the operations and maintenance of the water filtration plant were received by the Authority. c. This service fell under the overall supervision of the then Executive Director, Anthony Consentino. d. The RAWA Board and Executive Director believed that an independent company would provide a more thorough job of meeting established EPA water quality standards than the then current staff. e. Miller Environmental, Inc. was chosen by the RAWA sometime between August 2000 and September 2000. 15. The Municipality Authorities Act, 53 Pa.C.S. Section 5607(d)(13) and (17) specifically authorizes municipal authorities, such as RAWA, to contract for services which further the purpose of the authority. a. Specifically the Municipal Authorities Act reads: (d) POWERS. -- Every authority may exercise all powers necessary or convenient for the carrying out of the purposes set forth in this section, including, but without limiting the generality of the foregoing, the following rights and powers: (13) To make contracts of every name and nature and to execute all instruments necessary or convenient for the carrying on of its business. (17) To do all acts and things necessary or convenient for the promotion of its business and the general welfare of the authority to carry out the powers granted to it by this chapter or other law, including, but not limited to, the adoption of reasonable rules and regulations that apply to water and sewer lines located on a property owned or leased by a customer and to refer for prosecution as a summary offense any violation dealing with rules and regulations relating to water and sewer lines located on a property owned or leased by a customer. Under this paragraph, an authority established by a county of the second class A which is not a home rule county shall have powers for the inspection and repair of sewer facilities comparable to the powers of health officials under section 3007 of the act of May 1, 1933 (P. L. 103, No. 69), known as The Second Class Township Code. 53 Pa.C.S. § 5607. 16. On September 22, 2000, the RAWA entered into an agreement with Miller Environmental, Inc. for the management of its facilities. a. The basis for this agreement was for Miller Environmental, Inc. to manage, supervise and direct the operation and maintenance of the RAWA water treatment plant and related facilities. b. Dean Miller was the Miller Environmental, Inc. employee responsible for providing the services agreed upon pursuant to the agreement. Miller, 07 -046 Page 7 c. Prior to this agreement, Miller Environmental, Inc. had not provided any services, contractual or otherwise, to the RAWA. d. The first payment to Miller Environmental, Inc. pursuant to this contract was made on or about October 26, 2000. 17. Anthony Consentino was the RAWA Executive Director when the facilities management agreement was negotiated. a. Consentino had supervisory responsibility over the agreement with Miller Environmental, Inc. b. As Executive Director, Consentino had the authority to negotiate the contract with representatives of Miller Environmental, Inc. c. Dean Miller was the point -of- contact for Miller Environmental, Inc. 18. The September 22, 2000, agreement entered into between the Reading Area Water Authority and Miller Environmental, Inc. for Miller Environmental, Inc. to serve as the facilities manager for the Authority, consisted of nine pages with signatures of Dean A. Miller, President of Miller Environmental, Inc. and Anthony J. Consentino, Executive Director of the Authority. Article 2, Scope of Services, of the contract provides the following definitions: a. Section 2.1 b. Section 2.2 The contract manager shall be responsible for the management of all operational and maintenance activities of the water filter plant of the owner, reporting to the owner or its designated representative, while remaining an employee of manager. The duties of the contract manager shall involve, generally; planning, organizing, coordinating, supervising, and directing all internal and external activities of the water filter plant facilities, and interaction with representatives of the state and federal governments, and other appropriate parties. These duties shall include, but not be limited to, the following: a. Manage, coordinate, and direct the activities of all divisions and sections within the facilities with full charge and supervision of its employees subject to the owner's regulations and other applicable procedures. b. Plan, organize, and administrator the operation and maintenance of the owner's water filter plant facilities. c. Recommend policies to the owner and supply necessary information for policy formulation. d. Recommend to the owner various capital improvement projects and modifications. e. Respond to questions and concerns from the public and representatives of organizations concerning various aspects of Miller, 07 -046 Page 8 g. c. Article 3- Responsiblities of the Owner Section 4.1 Section 4.2 J. Section 3.1 Article 4 -Term the owner's program. f Meet on an as needed basis with the various committees of the owner to report on activities and necessary actions. Appear before departments, boards, and commissions, and departments and agencies of the state and federal government as a representative of the owner. h. Formulate schedules listing actions needed to complete program goals. Prepare and recommend to the owner an annual operating budget for the water filter treatment plant and administrator same as approved. Prepare and recommend to the owner an annual capital project budget for the water filter treatment plant and cooperate in the execution of said capital projects, including soliciting bids, awarding contracts, and administering construction of any facilities contemplated by the approved capital projects budget. k. Administer the operation and maintenance of the facilities in accordance with the provisions of all applicable local, state and federal regulations. Submit status reports in a form acceptable to the owner and as frequently as needed but not less than once a month. The owner shall at its own expense provide the person(s) designated by manager as the contract manager with suitable offices at the facility and shall use its best efforts to secure materials or information requested by manager for the purpose of carrying out services under this agreement, and shall generally offer whatever cooperation manager requires to perform its duties and responsibilities hereunder. This agreement shall become effective when signed by the authorized representatives of both parties hereto. Manager shall commence providing services on September 19, 2000. This agreement shall remain in effect unless extended or terminated as provided herein as long as payment is provided by the owner to manager in accordance with this agreement until January 31, 2001. This agreement shall be automatically renewed for subsequent one month terms unless one of the parties gives written notice to the other at least thirty days prior to the termination date contained herein. Miller, 07 -046 Page 9 Article 5- Compensation Section 5.1 Section 5.4 The owner shall compensate manager for contract management services at a rate of $48.00 per man hour, portal -to- portal, during the first year of this agreement, payable monthly as billed. The aforementioned rate is applicable regardless of the amount of daily hours or weekly hours provided by manager and regardless of whether the manager provides on -site services or emergency response services. Beginning on October 1, 2001 and continuing until this agreement is terminated, the compensation paid by owner to manager, shall increase at a rate of 5% each year. This annual increase shall take effect on October 1 of each year that the agreement remains in effect. 19. On September 4, 2002, the RAWA issued a Request for Proposals from qualified companies to perform regular monthly water meter reading services. a. A pre -bid meeting was scheduled for early September 2002. b. Sealed bids were due to the Authority by September 17, 2002. 20. A sign -in sheet for the RAWA meter reading RFP pre -bid meeting held on September 17, 2002, identified the following potential bidding companies in attendance: a. Company Representative Miller Environmental Inc. Mike Poyner PA American Water Richard Seliga PA American Water Doug DeArment PA American Water Brian Hassinger L/B Water Service Roger Duffey 21. The RAWA received water meter reading bids from American Water Services Inc. and Miller Environmental, Inc. 22. During the RAWA October 8, 2002, Board meeting, a report from the Authority's Solicitor, Michael Setley, Esquire, regarding proposals received for meter reading services was provided. Excerpts of those minutes read: Recorded Discussion: ... proposals received from two firms for the meter reading services. One bid received from American Water Services, Inc. for $2,039,994.00 and a bid from Miller Environmental, Inc. for $1,120,675.00. Both bids are to cover the next three years. Action: Solicitor requested a resolution be adopted to authorize the Administrative Staff, Solicitor and the Engineer to continue negotiating the agreement with Miller Environmental, Inc. and also to execute the appropriate agreement upon completed negotiations. Motion made by Mr. Ludgate to adopt the resolution as outlined Miller, 07 -046 Page 10 above with the understanding that the price does not exceed the quoted price of $1,120,675. Motion seconded by Mr. Leonardziak. Motion passed unanimously. Present: Edward Leonardziak, Lynn Christy, Robert Ludgate. Absent: Anthony Calvaresi, John Ulrich. 23. Miller Environmental, Inc. was already under contract with the Authority to provide facility management services at the time the above - referenced contract was bid. Miller Environmental, Inc. was not under contract to provide "additional services" (Executive Director) at the time the meter reading contract was bid. 24. The RAWA Board authorized the solicitor and staff, specifically Executive Director Consentino, to negotiate a contract with Miller Environmental, Inc. in accordance with its proposal dated September 27, 2002. a. 25. On January 17, 2003, an agreement was entered into between RAWA and Miller Environmental, Inc. for meter reading services. Portions of the terms of the agreement are identified in following: Section 4.1. Section 4.2 Section 4.3 Section 5.1 The agreement shall become effective when signed by the authorized representatives of both parties hereto. Operator shall commence providing services on March 1, 2003. This agreement shall remain in effect unless extended or terminated as provided herein so as long as [sic] payment is provided by owner to operator, in accordance with this agreement until February 28, 2006. If operator is willing to renew the agreement for subsequent three year term, operator shall submit such notice by certified US mail, return receipt requested to owner at least 180 days prior to the termination date contained herein. If owner does not want to renew the agreement for a subsequent three year term, owner shall submit such notice by certified US mail return receipt requested to operator at least 120 days prior to the termination date contained herein. This agreement shall automatically renew for subsequent three year terms unless one of the parties gives written notice to the other of their intention to terminate per the language contained herein. Article 5- Compensation The owner shall compensate operator for the services stated herein a. Shall pay operator a monthly operating fee of $29,624.22 for the meter reading services as defined in this agreement, with adjustments and additions as contained herein, based on a starting date of March 1, 2003. Miller, 07 -046 Page 11 Section 5.2 b. The fee shall be payable and due on the first day of each month for which services will be rendered, commencing on the date on which operator assumes responsibility for the meter reading services, and continuing until the contract expires with adjustments as contained herein. For any portion of a full operating month, the fee shall be apportioned appropriately. Additional compensation shall be added to the monthly contract fee in effect at the time such adjustment was deemed necessary. c. Owners shall additionally compensate operator in accordance with the following rate schedule for services rendered for after - hours, emergency call out services, portal to portal, with a minimum two (2) hour charge monthly as billed. Supervisor $54.00 per man hour, meter reader $36.00 per man hour. d. Owner shall additionally compensate operator in accordance with the following rate schedule for services rendered outside the scope of services, during normal working hours, portal to portal Monday through Friday excluding Holidays. Supervisor $36.00 per man hour and meter reader $24.00 per man hour. Starting on March 21, 2004, and continuing until this agreement expires, the fees and rates set forth above, in Sections 5.1 a, 5.1 c, and 5.1 d, paid by owner to operator shall increase at a rate of 5% each year. This annual increase shall take effect on the anniversary date of each year this agreement remains in effect. 26. Minutes from the RAWA January 14, 2003, meeting include discussion and official action, changing the contract language regarding an automatic renewal to an affirmative agreement. Minutes reflect the following recorded discussion and vote: Miller Environmental Agreement: The agreement with Miller Environmental is to begin March 1, 2003. The agreement is worded as a 3 -year automatic renew with a 180 -day termination. The concern is that it should be an affirmative agreement rather than an automatic renewal. Mr. Consentino will contact Miller Environmental to have wording changed to make this an affirmative agreement or a requirement of Miller Environmental to send RAWA a thirty day renewal notice. Motion by Mr. Ludgate to authorize execution of Miller Environmental agreement with noted agreement change. Motion seconded by Mr. Leonardziak. Motion passed unanimously. Contract will be signed upon completion of wording change. Contract must be signed by Friday, January 17, 2003 in order to meet the March 1, 2003 agreement start date. Present: Leonardziak, Christy, Ludgate, Ulrich Absent: Calvaresi 27. Payments to Miller Environmental, Inc. for the meter reading contract were made pursuant to terms and conditions of the January 17, 2003, agreement. a. Supervision of this contract fell under the duties and responsibilities of the Executive Director. 1. At the time of its implementation, this contract was monitored by then Miller, 07 -046 Page 12 Executive Director Anthony Consentino. b. From January 22, 2004, the supervision responsibility over this contract was assigned to the Meter Supervisor — an individual other than the Executive Director. 28. Miller Environmental, Inc. continued to provide plant management services under the supervision of Executive Director Anthony Consentino from September 19, 2000, until Consentino's retirement effective on or about December 31, 2003. a. Dean Miller was the Miller Environmental, Inc. employee providing the plant management services to the RAWA. b. Compensation was paid by the City of Reading in accordance with the monthly invoices submitted by Miller Environmental, Inc. 29. In preparation for Consentino's anticipated retirement, a RAWA Board Member in consultation with an outside consultant, created a job description for the RAWA Board's approval regarding the position of Executive Director. a. This job description was completed and submitted to the Board for review during the Board's October 30, 2003, meeting. b. The Board was considering conducting a search for candidates for the position of Executive Director. c. As Executive Director, Anthony Consentino performed his duties as an employee of the RAWA. 30. Minutes from the RAWA October 30, 2003, meeting include the following discussion on the Executive Director job description and a proposed interim contract for Miller Environmental, Inc. a. Executive Director job description has been completed. A proposed interim contract for the Executive Director position has been received from Miller Environmental, Inc. for review. 31. The job description for the Executive Director was approved by the Board during its November 30, 2003, Meeting. a. Minutes from that meeting include, in part, the following recorded discussion and official action: Retirement: Mr. Consentino submitted his letter of resignation /retirement. Executive Director Job Description: Job description was reviewed by the Board Members. The Board was made aware that as of 2004 anyone who is making the decisions regarding the water system and the treatment of the water must posses a Class A Type 1 Operators License. If the candidate does not hold this license, they will be required to obtain this license within a six month time period. The Board has asked Mr. Miller if he would be willing to "sign -off" on any Class A Type 1 obligations until a permanent Executive Director with the proper licensing can be hired. Mr. Miller has agreed to this arrangement on a temporary basis. In addition it was requested that Mr. Miller /Miller Environmental provide a six month agreement for the Executive Director position before the next meeting. Agreement should also include a clause to extend contract on a month to month basis. It was agreed by all members the job ad would request a resume with salary requirements be Miller, 07 -046 Page 13 submitted for review by all applicants. Job description will also be placed on the web site. Motion made by Mr. Ludgate to accept the Executive Director job description with the addition of the Class A Type 1 Operators License requirements. Motion seconded by Mr. Calvaresi. Motion passed unanimously. Present: Leonardziak, Christy, Ulrich, Ludgate, Calvaresi 32. Further discussion occurred regarding the Executive Director position during the Authority's December 9, 2003, meeting. Minutes from that meeting included, in part, the following recorded discussion: a. Executive Director Position: Position requirements were discussed. Mr. Ulrich suggested the new Director be a resident of the City of Reading. Miller Environmental, Inc. submitted a six -month contract with monthly renewals thereafter for the interim Executive Director position for review and discussion. Mr. Spencer addressed the Board regarding his concerns and City Council's concerns with the Miller Environmental, Inc. contract. It was requested that the vote be delayed until next week when Mr. Christy is available for the meeting and vote. b. Motion made by Mr. Ludgate to advertise Executive Director position with additional licensing requirements. In addition, copies of the job description may be released for review by prospective applicants upon request. Motion seconded by Mr. Calvaresi. 3 -Yeas, 1 -Nay Motion made by Mr. Ludgate to authorize the execution of the contract submitted by Miller Environmental, Inc. for the interim Executive Director. Motion seconded by Mr. Calvaresi. No Vote - motion withdrawn by Mr. Ludgate. Motion by Mr. Ludgate to postpone vote on the Miller Contract until the December 18, 2003 meeting and to authorize Mr. Weld and Mr. Setley to work together to develop a written interpretation of House Bill 1830 to present to Mr. Ludgate by Tuesday, December 16 Motion seconded by Mr. Ulrich. Motion passed unanimously. Present: Leonardziak, Calvaresi, Ludgate, Ulrich Absent: Christy. 33. The RAWA amended its contract with Miller Environmental, Inc. regarding plant management services on January 22, 2004. a. The reason for the amendment was to include additional duties relating to the position of Executive Director. b. The contract contained language regarding "additional duties" which "shall be similar to those performed by (the) Executive Director." c. The contract was approved by the appointed Board of Directors of the Authority at a regular public meeting. 34. Records of the RAWA include a job description for the position of Executive Director. a. The actual job description was created by a RAWA Board Member in consultation with an outside consultant. This job description was approved by the RAWA Board on November 30, 2003. b. By definition, the position of Executive Director ultimately oversees all Miller, 07 -046 Page 14 Authority personnel and directly supervises the Lake Ontelaunee Forester, Filter Plant, Manager, Distribution Superintendent, Engineering Department, Deputy Executive Director and Administrative Assistant. From time to time, these positions may be modified and others added. c. The Executive Director position reports to the RAWA Board. 35. The job description for the RAWA position of Executive Director contained the following language on examples of work; required knowledge, skills and abilities; and minimum requirements of training and experience: a. Examples of Work: Reviews and assess [sic] for efficient, continuous performance, the functional operations and maintenance of existing water protection, production, treatment, storage and distribution facilities, laboratory test facilities, and other water system components. Assures that long and short term goals are established and in place, and that management objectives are being achieved and properly conducted through delegation of authority. Plans and directs all assigned functional activities through broad based policies and procedures; establishes, reviews and revises policies as necessary to keep abreast of day -to -day operations and in compliance with Federal, State, and Local statutes pertaining to drinking water programs. Manages intergovernmental relations between the Authority and Local, State and Federal Officials. Prepares and /or submits various periodic reports to the board on all phases of the Authority's operation to enable it to set policy and to monitor the operation. Works in cooperation with the Authority's appointed professional consultants in addressing and resolving legal, technical and financial matters. Provides oversight of the design and construction phases of capital projects including, but not limited to, issuance, review, evaluation and negotiation of capital project contracts. Attends Board meetings and performs various other related tasks as necessary or as assigned by the Board. Provides financial oversight of the Authority Budget. Responsible for the collection, maintenance, and analysis of statistical data related to the operation of the water system. Responsible for the periodic review of the water system's rate structure to maintain financial stability of those systems. Proposes the annual budget, monitors cash flow and works with financial consultants on long -term financial planning. Works with the Treasurer's Office to ensure proper billing and addresses customers' inquiries and concerns in a manner which provides for expedient resolution and customer satisfaction. Testifies in court concerning Water Authority litigation. Prepares public notices and press releases on behalf of the Board and is responsible for maintaining good public relations within the community. Conducts research, prepares reports, and makes recommendations on Miller, 07 -046 Page 15 context. issues and matters related to water. Communicates and coordinates regularly with others to maximize the effectiveness and efficiency within the Authority and with other City of Reading departments operations and activities. Responsible for personnel issues within the Water Authority. Will oversee personnel issues regarding Authority employees and work closely with City of Reading Human Resources Department on issues regarding unionized City personnel, under contract to the Authority, whom perform services for the Water Authority. b. Required Knowledge, Skills and Abilities Extensive knowledge of water utility operations and the principles and practices of water utility management, including strategic planning, budgeting and personnel administration. Strong knowledge of surface water treatment processes highly desirable. Comprehensive knowledge of current applicable Federal, State and Local laws, rules and regulations for the Safe Drinking Water Act; and water production and water distribution system operation, maintenance, and construction. Comprehensive knowledge of budgetary principles within a municipal Comprehensive knowledge of intergovernmental relations, particularly as related to municipal relationships with State and Federal agencies. Comprehensive knowledge of operations principles and practices, including hydraulic, water treatment, pumping, and storage systems. Ability to plan and organize capital projects and read and interpret engineering design, blueprints, specifications and contracts. Ability to train, assign, motivate, supervise and evaluate the work of others. Working knowledge of personal computers and applicable word processing and spreadsheet software. Ability to effectively communicate orally and in writing with customers, contractors, supervisors, employees and general public on matters related to the water utility. Ability to follow verbal and /or written instructions. Ability to work under stress and handle stressful situations. Ability to meet deadlines. c. Minimum Requirements of Training and Experience 1. Bachelor's Degree in Engineering, Public Administration, Business Administration or related field required. A Master's Degree in Engineering, Public Administration, Business Administration, or related field may be substituted for two years of the experience requirement. Six years experience in the management or administration of a medium to large water utility. If the individual is an engineer, the individual shall possess a Professional Engineer's License issued by the Commonwealth of Pennsylvania or any State Miller, 07 -046 Page 16 Must possess a valid Pennsylvania Driver's License. 36. Additional services that were to be provided by Miller Environmental, Inc. (Executive Director duties) were further discussed by the Board during its December 18, 2003, meeting. a. During that meeting, the following discussions occurred on that topic as well as a potential conflict of interest with Miller's dual roles as Executive Director and Plant Operations Manager: Old Business: Discussion was held in regard (to) the executive director's temporary replacement. Mr. Calvaresi informed the board that he surveyed similar local contractors. Mr. Calvaresi explained his finding and concerns stating that most charged less than what had previously been submitted by Miller Environmental, Inc. to act as interim executive director. Mr. Calvaresi submitted to the board for their consideration a counter offer until a new executive director is found. Mr. Dean Miller, Miller Environmental be the Certified Operator in Direct Responsible Charge of the water system and will be responsible for all process control decisions throughout the entire system. Mr. Miller is to be compensated at an hourly rate of $85.00 if any process control decisions need to be made. Mrs. Palm, Deputy Executive Director, will be in charge of all administration and personnel decisions until a new Executive Director is named. Mr. Calvaresi moved, seconded by Mr. Ludgate that Miller Environmental be hired at an hourly rate of $85.00 for all process control decisions that may need to be made from time to time as the Certified Operator in direct responsible charge of the water system. Yeas: 3 Nays: 2 Motion passed. New Business Mr. Calvaresi recommended that Mr. Michael Setley be named contract administrator to ensure that contractors are fulfilling their contracts, with no conflict of interest. Mr. Calvaresi moved, seconded by Mr. Lugate [sic] that Mr. Setley, Solicitor for the authority be named Contract Administrator in order for no conflict of interest to be shown if the authority would need to hire other contractors for other services. Yeas: 3 Nays: 1 Abstain: 1 having reciprocity with the Commonwealth of Pennsylvania; OR 2. Water Operator's Certificate of the required classification for the Authority water system as determined by the Pennsylvania Department of Environmental Protection. Eight years experience in the management or administration of a medium to large water utility. Miller, 07 -046 Page 17 Motion passed. Present: Leonardziak, Calvaresi, Christy, Ulrich, Ludgate. 37. Solicitor Setley was given the responsibility to ensure that any conflict of interest issues relating to Miller Environmental, Inc. contracts be handled by someone other than Miller. a. At the time of the motion, Miller, serving as Executive Director, would have ultimate supervisory responsibilities over the meter reading contract and plant management contracts held by Miller Environmental, Inc. 38. During the RAWA's January 22, 2004, meeting, Solicitor Michael Setley reported to the Board that he reviewed the amendment to the agreement with Miller Environmental ... everything looked fine and that the amendment should be executed and attached to the existing agreement with Miller Environmental." 39. Following Solicitor Setley's recommendations, the Board amended the September 22, 2000, agreement with Miller Environmental, Inc. on January 22, 2004. a. The amendment is signed by George H. Smith as President of Miller Environmental, Inc. and Debra A. Palm, Deputy Executive Director of the RAWA. b. Palm was performing administrative functions for the RAWA at the time. c. Relevant terms of the amendment included: Article 2 -Scope of Services (added) Section 2.5 Article 4 -Term Section 4.1 Section 4.2 The Contract Manager shall perform additional duties from time to time as specifically requested by OWNER, or its designated representative. Such additional duties shall be similar to those previously performed by OWNER's Executive Director, are expected to be within the OWNER's job description for Executive Director, and are duties outside of the scope of services intended for management of OWNER's water filter plant facilities. The amendment shall become effective when signed by the authorized representatives of both parties hereto. Manager shall commence providing the services as amended herein on February 1, 2004. This agreement shall remain in effect unless extended or terminated as provided herein so long as payment is provided the owner to manager in accordance with this agreement, until January 31, 2005. This agreement shall be automatically renewed for subsequent one year terms unless one of the parties gives written notice to the other at least 90 days prior to the termination date contained herein. Miller, 07 -046 Page 18 Additional changes included compensation as identified as part of Article 5. Section 5.1 Section 5.4 The owner shall compensate manager for services described in Article 2, paragraph 2.1 through and including paragraph 2.4 at a rate of $55.57 per man hour. The owner shall compensate manager for services described in Article 2 paragraph 2.5 at a rate of $85.00 per man hour. Both rates are portal -to- portal and represent the rates during the first year of this agreement, payable monthly as billed. The aforementioned rates are applicable regardless of the amount of daily hours or weekly hours provided by manager and regardless of whether the manager provides on -site services or emergency response services. Beginning on February 1, 2005 and continuing until this agreement is terminated, the compensation paid by owner to manager, shall increase at rate of 5% each year. This annual increase shall take effect on February 1 of each year that this agreement remains in effect. 40. Dean Miller has performed the duties of Executive Director of the Reading Area Water Authority (RAWA) since December 2005. a. Miller was the employee assigned by Miller Environmental, Inc. to fulfill the obligations of the Plant Management and Additional Services Agreement (Executive Director duties) between Miller Environmental, Inc. and the Authority. b. Miller served as interim Executive Director from approximately January 22, 2004, to December 2005. c. Miller Environmental, Inc. has had a business relationship with the RAWA since approximately September 22, 2000. 41. Dean Miller was listed as Director of Operations of the RAWA through December 2005. a. Effective with the Board's January 10, 2006, re- organizational meeting, Miller's position is identified as Executive Director. b. Effective December 2005, Miller was identified as the "Executive Director" on official RAWA letterhead. c. Miller has been acting as and performing the duties of the Executive Director since the [January 22, 2004, amendment to the September 22, 2000,] contract regarding "additional services." 42. Effective January 22, 2004, Debra Palm was serving in an administrative capacity as Deputy Executive Director. a. Palm was an employee of the Authority and not an employee of Miller Environmental, Inc. Miller, 07 -046 Page 19 b. Palm reported to Dean Miller in his official capacity as Executive Director, effective December 2005. 43. Compensation for the plant operations services were paid to Miller Environmental, Inc. by the City of Reading. a. Payments were generated as a result of invoices submitted by Miller Environmental, Inc. to the City. b. Initial approval of these invoices was completed under Supervision of Miller as Executive Director. c. All submitted invoices were subject to vote and approval by the appointed Board of Directors of the Authority at a public meeting. 44. Compensation for the additional services was paid by the City of Reading from March 2004 through October 2006 and by the RAWA thereafter. 45. Miller's financial interest in Miller Environmental, Inc. was disclosed on Pennsylvania State Ethics Commission (SEC) Statements of Financial Interests forms, filed by Miller for calendar years 2004 through 2006. a. Miller filed each of these forms checking the box for public official by contract" on his Statement of Financial Interests filed for calendar year 2006. 46. Statement of Financial Interests Forms on file with the Reading City Clerk's Office includes the following for Miller: Calendar Year: 2004 Filed: 06/13/2005 on SEC form 01/05 Position: Director of Operations Creditors: None Direct /indirect income: Miller Environmental Inc. Financial Interest in any business: Miller Environmental Inc. All other financial interests: None Calendar Year: 2005 Filed: 02/02/2006 on SEC form 01/06 Position: Executive Director Creditors: None Direct /indirect income: Miller Environmental Inc. Financial Interest in any business: Miller Environmental Inc. All other financial interests: None Calendar Year: 2006 Filed: 04/12/2007 on SEC form 01/07 Position: Contract Executive Director Creditors: None Direct /indirect income: Miller Environmental Inc. Office, directorship or employment in any business: Miller Environmental, Inc.; Secretary. Financial Interest in any business: Miller Environmental Inc., 40% All other financial interests: None 47. Miller continues, as the employee assigned by Miller Environmental, Inc., to provide services to the RAWA pursuant to the terms and conditions of the January 22, Miller, 07 -046 Page 20 2004, contract amendment. a. Miller simultaneously provides services within the job description of Executive Director and duties as plant operations manager. b. Billings for Miller's services are invoiced from Miller Environmental, Inc. to the RAWA. 48. Miller does not receive any compensation from the City of Reading or RAWA for performing these duties, however, Miller is provided with use of an Authority owned vehicle and office space within the RAWA office. a. As of at least January 11, 2006, Dean Miller — as an individual and not as Miller Environmental, Inc. - is listed on RAWA letterhead as "Executive Director." 49. Miller is responsible for creating an accounting of the hours worked as plant manager and as Executive Director, forwarding same to Miller Environmental, Inc. a. Miller Environmental, Inc. then creates an invoice of the hours worked by Miller and submits this invoice to the RAWA's administrative department for inclusion on a bill list. b. Miller, as Executive Director, oversees the creation of bill lists and creates a requisition that items submitted on the bill list be approved for payment. 1. Included with the requisitions submitted by Miller were requisitions regarding the invoices submitted by Miller Environmental, Inc. c. The bill list, upon approval /authorization by the Executive Director (Miller), is then forwarded to the RAWA Board for approval and issuance of payment. 50. Starting with the November 1, 2006, invoice, hours submitted by Miller Environmental, Inc. for additional services were paid directly by the RAWA. a. These payments previously were made by the City of Reading. b. Payments for treatment plant operations continued to be made by the City of Reading, which are ultimately paid through a lease payment from the Authority to the City of Reading to cover this expense and numerous other day -to -day expenses. c. Separate checks were issued to Miller Environmental, Inc. for each service based on the respective hours worked pursuant to the invoice. 51. Starting with the February 1, 2007, invoice, Solicitor Michael Setley would review and approve the invoices for payment. a. In light of a perceived conflict of interest, Authority Solicitor Michael Setley signed invoices submitted by Miller Environmental, Inc. for payment since February 13, 2007. b. Miller would sign the City of Reading accounts payable form as Department Director. c. Solicitor Setley would review the invoices consistent with his responsibilities as contract administrator. Miller, 07 -046 Page 21 52. Miller executes the City of Reading accounts payable form as the "Department Director." a. Other signatures on the form include that of the Purchasing Manager and Finance Director. b. The Department Director's signature is required to process the payment, even though such signature does not authorize the payment. c. Miller's execution of the accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment must be approved by vote of the Board of the RAWA. 53. Miller, in executing his duties as Executive Director, signed approximately thirteen (13) City of Reading accounts payable forms since October 5, 2006, initially approving payments totaling $207,087.43 to Miller Environmental, Inc. a. Authorized payments totaling $57,724.64 represent payment from the City of Reading to Miller Environmental, Inc. for plant operations services. b. Authorized payments totaling $149,362.79 represent payment from the City of Reading and the RAWA to Miller Environmental, Inc. for additional services (Executive Director). c. Miller's execution of the accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment must be approved by vote of the Board of the RAWA. 54. Miller, in executing his duties as Executive Director, signed three (3) City of Reading accounts payable forms authorizing payments totaling $37,123.30 to Miller Environmental, Inc. which were not approved by any other RAWA official. a. These invoices were dated October 1, 2006; November 1, 2006; and December 1, 2006. b. Miller's execution of the accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment must be approved by vote of the Board of the RAWA. 55. Dean Miller provided plant operation services, pursuant to a contract, payable at an hourly rate. a. From March 1, 2003 [sic] *, until March 2004 [sic] *, these services were under the supervision of Executive Director Anthony Consentino. *[See, Fact Findings 16, 17, 17a, 28.] b. The date of each invoice, which is the first of each month, includes a total for the hours worked during the previous month. c. From February 2003 through March 2004, the invoices were addressed to Anthony Consentino. Between April 2004 and February 2007, they are addressed, to "Dear Sir /Madam," and since March 2007, invoices are addressed to Susan Days. 56. In addition to providing plant management and Executive Director services, Miller, 07 -046 Page 22 pursuant to the contract between Miller Environmental, Inc. and the RAWA, Miller Environmental, Inc. has continued to provide meter reading services for the RAWA since approximately March 1, 2003. a. These services were provided under the supervision of the Executive Director. b. The meter reading contract fell under the supervisor responsibility of the Meter Supervisor. 57. By way of correspondence dated December 13, 2005, from James P. Hopkin PE, Director of Administration for Miller Environmental, Inc., to the RAWA, Miller Environmental, Inc. submitted its Notice of Willingness to renew the meter reading service contract for an additional three (3) year period. a. The then current contract had a termination date of February 28, 2006. b. Notification to the RAWA was needed pursuant to terms and conditions of the January 17, 2003, meter reading contract. 58. The RAWA Board did not solicit bids for the meter reading contract in 2005 at the time Miller Environmental, Inc. submitted its intent to renew the contract. a. Miller, as an employee of Miller Environmental, Inc., was providing contracted services to the RAWA as Executive Director at the time. b. The meter reading contract fell under the supervisor responsibility of the Meter Supervisor. c. Solicitor Michael Setley oversaw negotiations between the Authority and Miller Environmental, Inc. d. The Board was satisfied with Miller Environmental, Inc.'s performance and wanted to extend the contract. 59. The next recorded discussion /action taken on the meter reading contract occurred during the Authority's January 11, 2006, meeting. Minutes from that meeting include, in part, the following recorded Board action renewing the meter reading contract with Miller Environmental, Inc.: a. It was discussed amongst the board the renewal of the current contract for Miller Environmental, Inc. for their meter reading services. A motion was made by Mr. Lynn Christy and seconded by Mr. Gerrill Hill to renew the current agreement between the Reading Area Water Authority and Miller Environmental, Inc. for the contract of meter reading services. All in favor. Motion passed unanimously. Present: Ulrich, Hill, Bricker, Christy Absent: Calvaresi b. The RAWA did not create a new contract for the meter reading service. The January [17], 2003, contract was simply renewed. 60. Minutes do not reflect any formal bid process occurring concerning the renewal of the January [17], 2003, contract. a. Miller held the position of Executive Director when this action occurred. Miller, 07 -046 Page 23 b. Miller Environmental, Inc. was a business that Miller had both an ownership and financial interest in at the time of the contract renewal. c. As Executive Director, Miller does not have the ability to vote on issues before the RAWA Board. 61. Miller Environmental, Inc. has received payments totaling $1,714,061.40 while Miller served as Executive Director of the RAWA as detailed in the previous finding. a. Checks issued to Miller Environmental, Inc. are signed by two (2) RAWA Board Members. b. Miller did not sign any RAWA checks issued to Miller Environmental, Inc. c. These payments were included as part of monthly bill lists approved by the RAWA Board. 62. Monthly meter reading payments were made consistent with terms and conditions of the meter reading contracts. 63. On July 26, 2006, Stephen P. Fuhs, Council District #1 for the City of Reading, requested an opinion from the City of Reading Board of Ethics. a. At issue was, "whether or not a conflict of interest exists with Mr. Dean Miller serving as Executive Director of the Reading Area Water Authority." The apparent basis for the potential conflict of interest concerns Miller Environmental, Inc., a business with which Mr. Miller is affiliated and which provides services to Reading Area Water Authority. 64. On October 7, 2006, the City of Reading Board of Ethics issued an Advisory Opinion, finding, in part, that: a. Reading Area Water Authority is an authority of the City of Reading and is therefore to be considered part of the government of the City of Reading. b. Mr. Miller is an employee and /or an official of the City of Reading. 65. City of Reading Ethics Board Solicitor, Edwin L. Stock, Esquire, was of the opinion that Dean Miller was a covered public employee of Reading City Government as the Executive Director of the RAWA. Stock's opinion was based on the following: a. Miller was providing the duties of Executive Director, a position whose predecessor was considered a public official /employee, and as such Miller is a public official /employee regardless of how he acquired the authority of his position. b. The plant operations portion of Miller's wages were paid by City funds. c. Miller had supervisory responsibility over City employees. 66. The RAWA Board was not involved with the decision of the City of Reading Ethics Board. a. Dean Miller did not provide any information to the City of Reading Ethics Board for consideration. Miller, 07 -046 Page 24 67. The RAWA was a separate operating authority independent of City Government at the time of the Ethics Board Decision. 68. The RAWA and Miller Environmental Inc., have taken measures so that there is no perceived conflict of interests in regards to Miller's execution of his duties as Executive Director and his obligations under the contract between RAWA and Miller Environmental, Inc. a. As of February 2007, Solicitor Michael Setley initially reviews and approves the invoices submitted by Miller Environmental, Inc. for final approval and payment by the RAWA Board. b. Additionally, an individual other than Miller has oversight over contractual issues or disputes involving the RAWA and Miller Environmental, Inc. III. DISCUSSION: Since December 2005, Respondent Dean Miller, hereinafter also referred to as "Respondent," "Respondent Miller," or "Miller," has been performing the duties of the Executive Director of the Reading Area Water Authority ( "RAWA "). Since at least January 10, 2006, Miller has been officially identified as Executive Director of the RAWA. The allegations are that Miller, a public official /public employee in his capacity as the Executive Director of the RAWA, violated Section 1103(a) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1103(a), when he used the authority of his public position for private pecuniary benefit by taking actions as the Executive Director of the RAWA to approve work performed for the RAWA by his private business, Miller Environmental Inc., including but not limited to approving scope of work as well as authorizing payments to said company. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted activities (a) Conflict of interest. —No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. § 1103(a). The term "conflict of interest" is defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or Miller, 07 -046 Page 25 a member of his immediate family is associated. 65 Pa. C. S. § 1102. Section 1103(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. The RAWA was created by the City of Reading on or about May 27, 1994. The RAWA is a separate operating authority independent of Reading City government. The RAWA is operated by a five - member board (hereinafter, the "Board" or the "RAWA Board "). Members of the Board are appointed by Reading City Council. The day -to -day operations of the RAWA are managed by the position of Executive Director. The position of RAWA Executive Director has existed since the creation of the RAWA. During the time period under review in this matter, the duties of the position of RAWA Executive Director were initially performed by a RAWA employee, specifically, RAWA Executive Director Anthony Consentino ( "Consentino "). However, the duties of the RAWA Executive Director position were subsequently outsourced to a company named "Miller Environmental, Inc." when Consentino retired. Respondent Miller is an officer and employee of Miller Environmental, Inc. Respondent has reported having a 40% financial interest in the company. At the time that the RAWA Executive Director duties were outsourced to Miller Environmental, Inc., Miller Environmental, Inc. had an ongoing business relationship with the RAWA. On September 22, 2000, the RAWA entered into a contract with Miller Environmental, Inc., which provided for Miller Environmental, Inc. to manage, supervise and direct the operation and maintenance of the RAWA water treatment plant and related facilities. Respondent signed the contract as President of Miller Environmental, Inc. Respondent was the Miller Environmental, Inc. employee responsible for providing the services pursuant to the contract. Miller Environmental, Inc. was to be compensated at the rate of $48.00 per man hour for the contracted services, which rate was to increase each year the contract remained in effect. Miller Environmental, Inc. was to commence providing services under the contract on September 19, 2000. The initial term of the contract was to end January 31, 2001, but the contract was to be automatically renewed for subsequent one -month terms unless terminated by a party. The RAWA Executive Director had supervisory responsibility over the contract. Consentino, as a RAWA employee, supervised the provision of services under the contract from September 19, 2000, until his retirement effective on or about December 31, 2003. On January 17, 2003, Miller Environmental, Inc. and the RAWA entered into a second contract. Pursuant to this contract, Miller Environmental, Inc. was to provide meter reading services for the RAWA. Miller Environmental, Inc. was to receive a monthly operating fee of $29,624.22 for performing the meter reading services plus additional amounts for emergency call out services and services rendered outside the scope of services, all of which amounts /rates were to increase each year the contract remained in effect. Miller Environmental, Inc. was to commence providing services under the contract on March 1, 2003. The initial term of the contract was to end February 28, 2006. The contract could be renewed by the parties but would not be automatically renewed. Supervision of this contract fell under the duties of the RAWA Executive Director. This Miller, 07 -046 Page 26 contract was supervised by Consentino until he retired. Commencing January 22, 2004, the supervision responsibility over this contract was assigned to an individual other than the Executive Director, specifically the "Meter Supervisor." Fact Finding 27 b. In 2003, in the months leading up to Consentino's retirement, the Board was considering conducting a search for candidates for the position of Executive Director. The Board also considered entering into a third contract with Miller Environmental, Inc. for the provision of services as Executive Director on an interim basis, until a permanent Executive Director could be hired. At a meeting on November 30, 2003, the Board approved a job description for the position of RAWA Executive Director. The duties of the RAWA Executive Director as set forth in the job description are detailed at Fact Finding 35 a and include, inter alia: (1) Reviewing and assessing for efficient, continuous performance, the functional operations and maintenance of existing water protection, production, treatment, storage and distribution facilities, laboratory test facilities, and other water system components; (2) Working in cooperation with the Authority's appointed professional consultants in addressing and resolving legal, technical and financial matters; Performing responsibilities for the collection, maintenance, and analysis of statistical data related to the operation of the water system; (4) Proposing the RAWA's annual budget, performing financial oversight of the budget, monitoring cash flow and working with financial consultants on long -term financial planning; and Responsibility for personnel issues within the Water Authority, including overseeing personnel issues regarding Authority employees and working closely with the City of Reading Human Resources Department on issues regarding unionized City personnel under contract to the Authority. Fact Finding 35 a. The Executive Director position reports to the RAWA Board. Fact Finding 34 c. At the Board's December 18, 2003, meeting, a Board Member expressed concerns that the proposal submitted by Miller Environmental, Inc. for acting as Interim Executive Director was too costly. The Board approved a motion to hire and compensate Miller Environmental, Inc. at an hourly rate of $85.00 for all "process control decisions" that might need to be made by Respondent /Miller Environmental, Inc. as the Certified Operator in direct responsible charge of the water system. The Board gave RAWA Solicitor Michael Setley the responsibility to ensure that any conflict of interest issues relating to Miller Environmental, Inc. contracts would be handled by someone other than Respondent. On January 22, 2004, the Board amended its September 22, 2000, contract with Miller Environmental, Inc. to require the Contract Manager for Miller Environmental, Inc. (Respondent) to perform "additional duties" similar to those previously performed by the RAWA Executive Director. Such additional duties were expected to be within the RAWA job description for the Executive Director and were to be provided commencing February 1, 2004. The contract was to remain in effect until January 31, 2005, and was to be automatically renewed for subsequent one -year terms unless terminated. RAWA was to pay Miller Environmental, Inc. additional compensation at the rate of $85.00 per man hour (3) (5) Miller, 07 -046 Page 27 for the performance of such additional duties, which rate was to increase each year the contract remained in effect. Respondent was the employee assigned by Miller Environmental, Inc. to perform the additional duties. The parties have stipulated that Respondent, serving as RAWA Executive Director, would have ultimate supervisory responsibility over the meter reading contract and plant management contracts held by Miller Environmental, Inc. Fact Finding 37 a. Respondent has been acting as, and performing the duties of, the RAWA Executive Director since the aforesaid January 22, 2004, amendment to the September 22, 2000, contract adding "additional services." Fact Finding 41 c. Respondent served as interim Executive Director of the RAWA from approximately January 22, 2004, to December 2005. Effective with the Board's January 10, 2006, re- organizational meeting, Respondent's position has been identified as Executive Director. The RAWA Deputy Executive Director, as an employee of the RAWA, reported to Respondent as Executive Director effective December 2005. As an employee of Miller Environmental, Inc., Respondent has provided, and continues to provide, contractual services that are within the job description of the RAWA Executive Director while simultaneously performing duties as the contracted plant operations manager for the RAWA. Respondent is responsible for creating an accounting of the hours worked as Executive Director and as plant manager, and forwarding same to Miller Environmental, Inc. Miller Environmental, Inc. then creates an invoice for the hours worked by Respondent and submits this invoice to the RAWA's administrative department for inclusion on a bill list. Respondent, as Executive Director, oversees the creation of the bill list and creates a requisition that items submitted on the bill list be approved for payment. Such requisitions submitted by Respondent have included requisitions regarding invoices submitted by Miller Environmental, Inc. The bill list, upon approval /authorization by the Executive Director (Respondent), is then forwarded to the RAWA Board for approval and issuance of payment. Prior to February 2007, the initial approval of the Miller Environmental, Inc. invoices was completed under supervision of Respondent as Executive Director, with all submitted invoices subject to vote and approval by the RAWA Board. The parties have stipulated that the RAWA and Miller Environmental Inc. have taken measures so that there is no perceived conflict of interest with regard to Respondent's execution of his duties as Executive Director and his obligations under the contract between the RAWA and Miller Environmental, Inc. As of February 2007, RAWA Solicitor Michael Setley initially reviews and approves the invoices submitted by Miller Environmental, Inc. for final approval and payment by the RAWA Board. Additionally, an individual other than Respondent has oversight over contractual issues or disputes involving the RAWA and Miller Environmental, Inc. Miller has executed accounts payable forms for payments to Miller Environmental, Inc. in the capacity of a "Department Director." The parties have stipulated that Miller's execution of the accounts payable forms is a mere formality and neither authorizes payments to Miller Environmental, Inc. nor constitutes an actual payment to Miller Environmental, Inc., because any actual payment must be approved by vote of the Board. Miller Environmental, Inc. has received payments totaling $1,714,061.40 while Respondent has served as Executive Director of the RAWA. These payments were included as part of monthly bill lists approved by the RAWA Board. Respondent did not sign any RAWA checks issued to Miller Environmental, Inc. In 2006, when the meter reading contract between Miller Environmental, Inc. and the RAWA was about to expire, the RAWA did not solicit bids for a new contract. The January 17, 2003, contract with Miller Environmental, Inc. was simply renewed. The Miller, 07 -046 Page 28 parties have stipulated that the Board was satisfied with Miller Environmental, Inc.'s performance and wanted to extend the contract. Solicitor Michael Setley oversaw negotiations between the Authority and Miller Environmental, Inc. Finally, the parties have noted that Respondent filed State Ethics Commission Statements of Financial Interests ( "SFIs ") with the Reading City Clerk's Office for calendar years 2004 through 2006. Miller checked the box indicating status as a "public official" with the notation by contract" on at least one of these forms. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations as follows: 3. The Investigative Division will recommend the following in relation to the above allegations: a. That Miller's actions regarding the approval of work performed by Miller Environmental Inc. (a business with which he, Miller, is associated), regarding services rendered to the Reading Area Water [Authority] pursuant to a contract that is in conformance with the Municipality Authorities Act, 53 Pa.C.S. § 5607(d)(13) and (17), [are] not considered to be in conformity with the Public Official and Employee Ethics Act, 65 Pa.C.S. Section 1101, et seq., by the State Ethics Commission; and b. That Miller's approval of accounts payable forms authorizing payments to Miller Environmental Inc. (a business with which he, Miller, is associated) regarding services rendered to the Reading Area Water Authority pursuant to a contract, does not constitute a transgression of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1103(a), since said accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment must be approved by vote of the Board of the RAWA. 4. Miller acknowledges and agrees that despite the fact that he and /or Miller Environmental, Inc. are rendering services to the Reading Area Water Authority pursuant to a contract, and despite the fact that the Reading Area Water Authority considers Miller to be an independent contractor, Miller and /or Miller Environmental, Inc. are performing the duties and acting in such a capacity that, but for the fact that these services are being rendered pursuant to a contract, Miller and /or representatives of Miller Environmental, Inc. are fulfilling the duties and responsibilities of a public official and /or public employee, as defined by the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1102 and therefore are subject to said Act despite the common practice of contracting out with private firms and individuals such as Miller and /or Miller Environmental, Inc. to perform said services, pursuant to the Municipality Authorities Act, 53 Pa.C.S. Section 5607(d)(13) and (17). Miller, 07 -046 Page 29 5. Miller acknowledges and agrees that when performing duties of individuals who, but for the fact that services are rendered under contract in conformance with the Municipality Authorities Act, as outlined herein, would be considered to be public officials and /or public employees by the State Ethics Commission, [sic] and that any further action and /or services rendered by Miller will be in conformity with the Public Official and Employee Ethics Act, 65 Pa.C.S. Section 1101, et seq. 6. The Investigative Division will recommend that the State Ethics Commission take no further action in this matter and make no specific recommendations to any law enforcement or other authority to take action in this matter. Such, however, does not prohibit the Commission from initiating appropriate enforcement actions in the event of Respondent's failure to comply with this agreement or the Commission's order or cooperating with any other authority who may so choose to review this matter further. Consent Agreement, at 1 -2. In considering the Consent Agreement, we note that the restrictions of Section 1103(a) of the Ethics Act apply to "public officials" and "public employees." In order to be a "public employee" subject to the Ethics Act, one must be an "individual" and must stand in an employer - employee relationship with the Commonwealth or a political subdivision of the Commonwealth. Eiben, Opinion 04 -002; Ver Ellen, Opinion 03 -005. The term "public official" includes a "person elected or appointed by a governmental body," and the term "governmental body" includes any agency performing a governmental function." 65 Pa.C.S. § 1102. The aforesaid statutory language was added to the definitions of the terms "public official" and "governmental body" by Act 9 of 1989, effective June 26, 1989. There is no judicial precedent determining whether, under the Ethics Act, the aforesaid statutory language includes a private corporation or its representatives when contractually fulfilling the duties of a governmental position or otherwise performing a governmental function. The legislative debate regarding the inclusion of the aforesaid language in the definition of the term "governmental body" includes comments by Representatives Blaum and Heckler that the language - -which had been added by the Senate - -would not make the term "governmental body" applicable to a private corporation contracting to perform governmental responsibilities. Legislative Journal of House, 1989 Session, No. 43 at 1037. The Representatives did not specifically address the contractual fulfillment of the duties of an actual position with a governmental body, where a person holding such position would otherwise clearly be a public official /public employee subject to the Ethics Act. In the instant matter, we need not decide the issue because the parties have chosen to enter into a Consent Agreement with an agreed disposition of this case. As part of the Consent Agreement, Respondent has agreed that, given the duties and responsibilities that he as a representative of Miller Environmental, Inc. is fulfilling for the RAWA, he is subject to the Ethics Act, and that any further action and /or services that he renders will be in conformity with the Ethics Act. The specific recommendations of the Consent Agreement pertain to Respondent's actions as Executive Director of the RAWA regarding the approval of work performed by Miller Environmental, Inc., and the approval of accounts payable forms for payments to Miller, 07 -046 Page 30 Miller Environmental, Inc. Based upon the terms of the Consent Agreement, the totality of the Stipulated Findings, and the agreement of Respondent that he is subject to the Ethics Act, we shall accept the recommendations of the Consent Agreement. We hold that under the provisions of the Consent Agreement of the parties, Respondent's actions as Executive Director of the RAWA regarding the approval of work performed by Miller Environmental Inc., a business with which Respondent is associated, as to services rendered to the RAWA pursuant to a contract that is in conformance with the Municipality Authorities Act, 53 Pa.C.S. § 5607(d)(13) and (17), are not considered to be in conformity with the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101, et seq. Further, we accept the recommendation of the parties that Respondent's approval of the accounts payable forms for payments to Miller Environmental, Inc. would not form the basis for a violation of Section 1103(a) under the facts of this case, which facts include that such "approval" was a mere formality, and that only the RAWA Board could authorize the payments. Accordingly, we hold that Respondent's approval of accounts payable forms for payments to Miller Environmental Inc., a business with which Respondent is associated, regarding services rendered to the RAWA pursuant to a contract, did not constitute a transgression of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), where said accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment had to be approved by vote of the RAWA Board. Respondent is directed to comply with the Consent Agreement. Compliance with the Consent Agreement will result in the closing of this case with no further action by this Commission. IV. CONCLUSIONS OF LAW: 1. Under the provisions of the Consent Agreement of the parties, the actions of Dean Miller ( "Miller ") as Executive Director of the Reading Area Water Authority ( "RAWA ") regarding the approval of work performed by Miller Environmental Inc., a business with which Miller is associated, as to services rendered to the RAWA pursuant to a contract that is in conformance with the Municipality Authorities Act, 53 Pa.C.S. § 5607(d)(13) and (17), are not considered to be in conformity with the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101, et seq. 2. Miller's approval of accounts payable forms for payments to Miller Environmental Inc., a business with which Miller is associated, regarding services rendered to the RAWA pursuant to a contract, did not constitute a transgression of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), where said accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment had to be approved by vote of the RAWA Board. In Re: Dean Miller, Respondent ORDER NO. 1502 File Docket: 07 -046 Date Decided: 12/4/08 Date Mailed: 12/19/08 1 Under the provisions of the Consent Agreement of the parties, the actions of Dean Miller ( "Miller ") as Executive Director of the Reading Area Water Authority ( "RAWA ") regarding the approval of work performed by Miller Environmental Inc., a business with which Miller is associated, as to services rendered to the RAWA pursuant to a contract that is in conformance with the Municipality Authorities Act, 53 Pa.C.S. § 5607(d)(13) and (17), are not considered to be in conformity with the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1101, et seq. 2. Miller's approval of accounts payable forms for payments to Miller Environmental Inc., a business with which Miller is associated, regarding services rendered to the RAWA pursuant to a contract, did not constitute a transgression of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), where said accounts payable forms were a mere formality and did not constitute an actual payment to Miller Environmental, Inc., in that any actual payment had to be approved by vote of the RAWA Board. 3. Respondent is directed to comply with the Consent Agreement. a. Compliance with the Consent Agreement will result in the closing of this case with no further action by this Commission. BY THE COMMISSION, Louis W. Fryman, Chair