HomeMy WebLinkAbout1508 MarshallIn Re: Judith A. Marshall,
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 -018
Order No. 1508
3/12/09
3/27/09
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding possible violation(s) 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 held. The record is
complete.
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.
Marshall, 07 -018
Page 2
I. ALLEGATIONS:
That Judith Marshall, a (public official /public employee) in her capacity as
Commissioner for Elizabeth Township, Allegheny County violated the following provisions
of the State Ethics Act (Act 93 of 1998) when she used the authority of her office for private
pecuniary gain by participating in actions of the board authorizing her inclusion in and
ultimate receipt of pension payments funded in part by the Township.
§ 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).
§ 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
a member of his immediate family is associated.
65 Pa.C.S. § 1102.
II. FINDINGS:
A. Stipulations /Pleadings
1 The Investigative Division of the State Ethics Commission received information
alleging that Judith A. Marshall [Marshall] violated provisions of the State Ethics Act
(Act 93 of 1998).
2. Upon review of the information received, the Investigative Division initiated an own -
motion preliminary inquiry on January 4, 2007.
3. The preliminary inquiry was completed within sixty days.
4. On February 21, 2007, a letter was forwarded to Judith A. Marshall, by the
Investigative Division of the State Ethics Commission informing her that a full
investigation was being commenced by the Investigative Division.
a. Said letter was forwarded by certified mail, no. 7006 2150 0000 8776 4643.
b. This letter was returned by the McKeesport, Pennsylvania, Postmaster.
1. The Postmaster indicated delivery was attempted on March 1, 2007,
and March 10, 2007 — both attempts resulted in the article being
Marshall, 07 -018
Page 3
"Unclaimed."
5. Upon return of the Investigative Notice Letter, personal service was attempted.
a. On March 28, 2007, at 4:55 p.m. Special Investigator Mary P. Albert, of the
Investigative Division of the State Ethics Commission, served the original
February 21, 2007, Investigative Notice Letter upon Judith Marshall.
1. Service was effectuated by personally handing the letter to the
Respondent.
2. Service was obtained at the same address where a prior attempt of
service through First Class United States Postage, Return Receipt
Request[ed], was attempted.
6. Periodic notice letters were forwarded to Marshall in accordance with the provisions
of the Ethics Law advising her of the general status of the investigation.
7 The Investigative Complaint was mailed to the Respondent on August 8, 2007.
8. Elizabeth Township is a township of the First Class located in Allegheny County,
Commonwealth of Pennsylvania.
a. Elizabeth Township is governed by a Board consisting of seven (7)
members, elected by ward.
9. Judith A. Marshall is an adult individual who served as a member of the Elizabeth
Township Board of Commissioners from January 1, 1994, until December 31, 2005.
a. A Public Official is defined as:
Any person elected by the public or elected or appointed by a governmental
body or an appointed official in the executive, legislative or judicial branch of
this Commonwealth or any political subdivision thereof, provided that it shall
not include members of advisory boards that have no authority to expend
public funds other than reimbursement for personal expense or to otherwise
exercise the power of the State or any political subdivision thereof.
65 Pa. C. S. § 1102.
b. As a Township Commissioner, Marshall is /was considered a "public official"
as that term is defined with[in] the Pennsylvania Public Official and
Employee Ethics Act ([65] Pa. C.S. §1101 et seq.)
1. Throughout her service as Commissioner, Marshall was elected /re-
elected by the citizens of Elizabeth Township, Pennsylvania.
2. As Township Commissioner, Marshall served in a role [in] which she
was given authority to expend public funds and otherwise exercise
the authority of the Township of Elizabeth.
10. Marshall was never employed as an employee of the Township of Elizabeth.
11. On or about December 31, 2005, Marshall retired from public service as a
Commissioner of Elizabeth Township.
12. As an elected official of Elizabeth Township, Marshall was afforded an opportunity
to participate in a pension plan, partially funded by the Township of Elizabeth.
Marshall, 07 -018
Page 4
13. On or about April 1, 1968, the Township of Elizabeth proposed Ordinance #330
creating the Township's non - uniformed pension plan and publicly presented the
proposed ordinance with a first and second reading.
a. Section 1 of Ordinance #330 establishes that the township's pension plan will
be regulated by the Municipal Employes' Retirement System.
b. Section 11 of Ordinance #330 directs that membership in the pension plan
shall be mandatory for all elected officials.
c. Credit for prior service to the Township was established at ten (10) years per
Section 111 and liability for payment of the member's contributions concerning
the past ten (10) years was assumed by the Township.
14. On or about April 29, 1968, the Township of Elizabeth again proposed Ordinance
#330 creating the Township's non - uniformed pension plan and publicly presented
the proposed ordinance for a third and final time.
a. The Board of Commissioners approved Ordinance #330 upon the third and
final reading.
15. On June 3, 1968, the Elizabeth Township Board of Commissioners voted on and
approved Ordinance #332, amending Ordinance #330 by rewording Section 11.
a. The amendment to Section 11 included language making participation in the
Township's non - uniformed pension plan mandatory for all full -time
employees as well as [providing for] mandatory participation by all elected
officials.
b. Ordinance #332 was voted [on] and approved by all present Commissioners
upon the third and final public reading of Ordinance #332.
16. Marshall was elected to the Township Board of Commissioners and began service
on or about January 1, 1994.
a. On or about February 5, 1995, Marshall made application to enroll in the
Township of Elizabeth's non - uniformed Pension Plan.
17. Marshall joined a pension plan sponsored in whole or in part by the Township of
Elizabeth, after January 1, 1985, where the only criteria regarding entry was the fact
that she was an elected official of Elizabeth Township.
a. Marshall was not an elected member of council in 1984/1985.
b. Marshall did not purchase the township's interest in any pension plan within
sixty (60) days of December 31, 1984, as Marshall was not a member of
council at that time.
18. Between January 1, 1994, and December 31, 2005, the Township of Elizabeth
approved at least one (1) ordinance regarding the Township's non - uniformed
pension plan.
a. On October 2, 1995, Ordinance #678 was approved, altering the benefit
agreement concerning the non - uniformed pension plan for Elizabeth
Township.
Marshall, 07 -018
Page 5
1. Ordinance #678 again made participation of elected officials in the
Township funded /partially funded pension plan mandatory.
2. A tally of the votes indicates [that] Ordinance #678 passed YEAS 9/
NAYS 0.
b. It is stipulated that the last page of Ordinance #678 /Elizabeth Township
Municipal Employee Pension Plan Agreement, contains the signatures of
representatives of the Office of Attorney General, Chief Counsel and Office
of General Counsel.
1. The stipulation referenced above in 18 b, does not include a
stipulation or agreement as to any legal conclusion nor the impact, if
any, that said document has upon the Pennsylvania State Ethics
Commission's independent interpretation of the Ethics Act (65
Pa.C.S. §1101 et seq.) and how the facts of the instant matter may or
may not constitute a violation of said Ethics Act (65 Pa.C.S. §1101 et
seq.)
c. It is stipulated that the Counsel for [the] Pennsylvania Municipal Retirement
System (PMRS) has drafted at least one (1) opinion regarding its
interpretation of the First Class Township Code and any implications it may
have regarding the ability of First Class Township Commissioners to
participate in a Township sponsored pension plan.
1. The stipulation referenced above in 18 c, does not include a
stipulation or agreement as to any legal conclusion nor the impact, if
any, that said document has upon the Pennsylvania State Ethics
Commission's independent interpretation of the Ethics Act (65
Pa.C.S. §1101 et seq.) and how the facts of the instant matter may or
may not constitute a violation of said Ethics Act (65 Pa.C.S. §1101 et
seq.)
19. In order to maintain proper funding of the Township's non - uniformed pension plan,
the Township made contributions on a yearly basis to the pension plan in the form
of a Minimum Municipal Obligation (MMO).
a. The MMO is determined by the plan's actuary, who provides the information
to the Township.
b. The MMO is approved by the Board of Commissioners on a yearly basis as
part of the annual budget.
1. In the year 2000, the Township of Elizabeth expended $203,291.00
towards the non - uniformed pension plan, as agreed by the Township
Board of Commissioners.
2. In the year 2001, the Township of Elizabeth expended $194,273.00
towards the non - uniformed pension plan, as agreed by the Township
Board of Commissioners.
3. In the year 2002, the Township of Elizabeth expended $191,884.00
towards the non - uniformed pension plan, as agreed by the Township
Board of Commissioners.
4. In the year 2003, the Township of Elizabeth expended $99,852.00
towards the non - uniformed pension plan, as agreed by the Township
Marshall, 07 -018
Page 6
Board of Commissioners.
5. In the year 2004, the Township of Elizabeth expended $106,044.00
towards the non - uniformed pension plan, as agreed by the Township
Board of Commissioners.
6. In the year 2005, the Township of Elizabeth expended $48,849.00
towards the non - uniformed pension plan, as agreed by the Township
Board of Commissioners.
20. As a member of the Board of Commissioners, Marshall voted to approve the
payment of the MMO regarding the non - uniformed pension plan, of which she was
mandated to participate.
21. On or about December 31, 2005, Marshall retired from service regarding the
Elizabeth Township Board of Commissioners.
a. Marshall had served as an active member of the Elizabeth Township Board
of Commissioners from January 1, 1994, until December 31, 2005.
22. On or about December 2, 2005, Marshall made application to receive retirement
benefits from her Elizabeth Township pension fund.
a. Said application listed the benefit as "Superannuation (Normal Retirement)."
b. The application was notarized by Joanne E. Beckowitz on the same date.
23. On or about January 24, 2006, Marshall was provided with information from the
Pennsylvania Municipal Retirement System, regarding her pension benefits.
a. Marshall opted to receive monthly pension payments in the amount of
$90.00 for the remainder of her life.
24. At the time of her retirement, Marshall had contributed $1,385.76 towards her
Elizabeth Township pension plan.
25. At the time of her retirement, the Township of Elizabeth had contributed $10,191.17
towards Marshall's Township pension plan.
a. On or about January 24, 2006, Marshall received a check in the amount of
$90.00, representing pension benefits due up to January 31, 2006.
1. Marshall did not withdraw any of her personal contributions from the
pension fund.
26. Since January 24, 2006, Marshall has received monthly payments, in the amount of
$90.00, from the Pennsylvania Municipal Retirement System, totaling $1,620.00 as
of July 31, 2007, and $2,880.00 as of September 30, 2008. (Investigative
Complaint and Answer to Investigative Complaint, paragraph 27; ID 23, page 6,
Stipulated Findings, paragraph 26).
a. The $2,880.00 Marshall has received represents contributions and interests
thereof, made by both Marshall and the Township of Elizabeth, towards
Marshall's township funded /partially funded pension plan.
b. Marshall personally contributed $1,385.76 towards her Township of
Elizabeth funded /partially funded pension plan.
Marshall, 07 -018
Page 7
27. Marshall has not refunded or otherwise made a pay -back of any pension funds, plus
interests, to the Township.
28. Marshall was never employed by the Township and only served as an elected
official.
a. Marshall received monetary payments from a funded /partially funded
township pension plan after January 1, 1985.
29. Marshall utilized the authority of her office as a member of the Elizabeth Township
Board of Commissioners, to vote on and approve at least one (1) ordinance
directing the management and /or requirements concerning payment of benefits, to
members of the Elizabeth Township non - uniformed pension plan, after January 1,
1985, of which Marshall was mandated to participate.
30. Marshall additionally utilized the authority of her office as a member of the Elizabeth
Township Board of Commissioners, to vote on and approve the payment of
Minimum Municipal Obligation (MMO) [to] the Elizabeth Township non - uniformed
pension plan, after January 1, 1985, of which Marshall was mandated to participate.
B. Documents
31. ID 5, pages 1 and 2 consist of Township Ordinance Number 330.
a. Township Ordinance Number 330 was enacted by the Township Board of
Commissioners on April 29, 1968.
b. Township Ordinance Number 330 provides, in part: The Township of
Elizabeth ... hereby elects to join the Municipal Employes' Retirement
System, established by the Municipal Employes' Retirement Law, Act of
June 4, 1943, P.L. 886, as amended ...." Ordinance No. 330, Section I. (ID
5, page 1).
c. Township Ordinance Number 330 provides, in part:
SECTION 11. Membership in the Municipal Employes'
Retirement System for elected officials shall be mandatory,
and membership therein for employees paid on a per diem
basis shall be prohibited. The election by elected officials to
join said System must be made within one year from the date
of this Ordinance, or within one year after the officials [sic] or
employe first enters the service of the Township of Elizabeth.
Officers and employes paid wholly on a fee basis shall not be
eligible for membership in the System.
Ordinance No. 330, Section 11 (ID 5, page 1).
32. ID 6, page 1 consists of Township Ordinance Number 332.
a. Township Ordinance Number 332 was enacted by the Township Board of
Commissioners on June 3, 1968.
b. Township Ordinance Number 332 amended Township Ordinance Number
330 by deleting Section 11 of Ordinance Number 330 and replacing it with a
new Section 11 providing as follows:
Marshall, 07 -018
Page 8
SECTION II. Membership in the Municipal Employes'
Retirement System by all full -time employes is mandatory.
Membership in the Municipal Employes' Retirement System for
elected officers shall be mandatory, and membership therein
for employes paid on a per diem basis shall be prohibited.
Further, officers or employes paid wholly on a fee basis shall
not be eligible for membership in the System.
Ordinance Number 332, Section II (ID 6, page 1).
33. ID 21, pages 1 and 2 consist of Township Ordinance Number 610.
a. Township Ordinance Number 610 was enacted by the Township Board of
Commissioners on July 1, 1991.
b. Township Ordinance Number 610 repealed previous agreements and
various Ordinances, including Ordinance Number 332, and made benefit
changes to the Township's municipal employees pension plan administered
by the Pennsylvania Municipal Retirement System.
c. Township Ordinance Number 610 provides, in part:
SECTION II. Membership in the Pennsylvania
Municipal Retirement System shall be mandatory for all
permanent, municipal employees of the Township as well as
for elected officials. Membership for employees hired on a
temporary or seasonal basis is prohibited, as is membership
for individuals paid only on a fee basis.
Ordinance Number 610, Section II (ID 21, page 1).
34. ID 7, pages 1 and 2 consist of Township Ordinance Number 678.
a. Township Ordinance Number 678 was enacted by the Township Board of
Commissioners on October 2, 1995.
b. Township Ordinance Number 678 repealed Ordinance Number 610 and
made benefit changes to the Township's plan administered by the
Pennsylvania Municipal Retirement System.
c. Township Ordinance Number 678 accepted the Elizabeth Township
Municipal Employee Pension Plan Agreement dated October 2, 1995.
d. Township Ordinance Number 678 provides, in part:
SECTION II. Membership in the Pennsylvania
Municipal Retirement System shall be mandatory for all
permanent, municipal employees of the Township.
Membership for elected officials shall be mandatory.
Membership for employees hired on a temporary or seasonal
basis is prohibited as is membership for individuals paid only
on a fee basis.
Ordinance Number 678, Section II (ID 7, page 1).
35. ID 12, pages 1 -9 consist of the minutes of the July 19, 2004, meeting of the
Township Board of Commissioners.
Marshall, 07 -018
Page 9
a. The Board Members present at the July 19, 2004, meeting voted
unanimously to close the Municipal Pension Plan Account and to submit that
account's balance to the Pennsylvania Municipal Retirement System to be
divided equally into the Police Pension Plan and the Non - Uniform Pension
Plan. (ID 12, page 7).
(1) Marshall participated in the vote. (ID 12, page 7).
36. ID 13, pages 1 -5 consist of the minutes of the October 18, 2004, workshop meeting
of the Township Board of Commissioners.
a. The Board Members present at the October 18, 2004, meeting voted
unanimously to approve payment of the 2004 Minimum Municipal Obligation
to the Non - Uniform Pension Plan. (ID 13, page 1).
(1) Marshall participated in the vote. (ID 13, page 1).
37. ID 14, pages 1 -7 consist of the minutes of the October 3, 2005, meeting of the
Township Board of Commissioners.
a. The Board Members present at the October 3, 2005, meeting voted
unanimously to approve payment of the 2005 Minimum Municipal Obligation
to the Non - Uniform Pension Plan. (ID 14, page 4).
(1) Marshall participated in the vote. (ID 14, page 4).
38. ID 22, pages 1 -7 consist of the July 1, 1991, Elizabeth Township Municipal
Employee Pension Plan Agreement between the Township and the Pennsylvania
Municipal Retirement Board.
a. The July 1, 1991, Township Pension Plan Agreement provides, in part:
1. Coverage: This plan shall cover all permanent
municipal employees, hereinafter referred to as member, of the
Township. Membership for elected officials shall be
mandatory. Membership for employees hired on a temporary
or seasonal basis is prohibited as is membership for
individuals paid only on a fee basis....
July 1, 1991, Elizabeth Township Municipal Employee Pension Plan Agreement, at
1 (ID 22, page 1).
b. The July 1, 1991, Township Pension Plan Agreement indicates that it was
approved as to form and legality by representatives of the Office of Attorney
General and the Office of General Counsel. (ID 22, page 7).
39. ID 15, pages 1 -7 consist of the October 2, 1995, Elizabeth Township Municipal
Employee Pension Plan Agreement between the Township and the Pennsylvania
Municipal Retirement Board.
a. The October 2, 1995, Township Pension Plan Agreement provides, in part:
1. Coverage: This plan shall cover all permanent
municipal employees, hereinafter referred to as member, of the
Township. Membership for elected officials shall be
mandatory. Membership for employees hired on a temporary
Marshall, 07 -018
Page 10
or seasonal basis is prohibited as is membership for
individuals paid only on a fee basis....
October 2, 1995, Elizabeth Township Municipal Employee Pension Plan
Agreement, at 1 (ID 15, page 1).
b. The October 2, 1995, Township Pension Plan Agreement indicates that it
was approved as to form and legality by an individual whose position is
indicated as "Chief Counsel," and by representatives of the Office of
Attorney General and the Office of General Counsel. (ID 15, page 7).
40. ID 17, page 1 consists of Marshall's Application for Membership in the
Pennsylvania Municipal Retirement System.
a. The Application for Membership indicates that Marshall signed the
Application on February 5, 1995. (ID 17, page 1).
b. The Application for Membership indicates Marshall's membership effective
date as January 1, 1994. (ID 17, page 1).
41. ID 19, pages 1 -4 consist of Marshall's Application for Retirement Benefits as to the
Township's pension plan with the Pennsylvania Municipal Retirement System.
a. The Application for Retirement Benefits indicates that Marshall signed the
Application on December 2, 2005. (ID 19, page 4).
42. R -1 consists of a memorandum dated October 31, 2007, from Jennifer A. Mills,
Esquire, Assistant Counsel with the Office of Chief Counsel of the Pennsylvania
Municipal Retirement System, to James B. Allen, Secretary of the Pennsylvania
Municipal Retirement System, with various attachments.
a. R -1 includes, as an attachment to Attorney Mills' memorandum, an earlier
memorandum dated February 21, 1986, from Nicholas Joseph Marcucci,
Esquire, then an Assistant Counsel with the Office of Chief Counsel of the
Pennsylvania Municipal Retirement System, to James B. Allen, Secretary of
the Pennsylvania Municipal Retirement System.
b. R -1 asserts that Act 82 of 1985 amending the First Class Township Code did
not reference or amend the Pennsylvania Municipal Retirement Law, applied
only to pensions administered by insurance companies or nonprofit
corporations, and did not have any impact on township commissioners
participating in a pension plan administered by the Pennsylvania Municipal
Retirement System.
c. R -1 asserts that the First Class Township Code does not authorize township
commissioners to enter into a benefit plan or contract with the Pennsylvania
Municipal Retirement System for any employee.
d. R -1 states the opinion of Counsel for the Pennsylvania Municipal Retirement
System that the Pennsylvania Municipal Retirement Law provides authority
independent of the First Class Township Code for township commissioners
to participate in a pension plan administered by the Pennsylvania Municipal
Retirement System (referencing 53 P.S. §§ 881.102, 881.107, 881.203,
881.204, and 881.402).
e. R -1 states the opinion of Counsel for the Pennsylvania Municipal Retirement
System that the authority to enter into the Pennsylvania Municipal
Marshall, 07 -018
Page 11
Retirement System can only be affected by statutes that expressly or
impliedly amend the Pennsylvania Municipal Retirement Law.
f. R -1 states the opinion of Counsel for the Pennsylvania Municipal Retirement
System that the forfeiture requirement of Act 82 of 1985 for commissioners
lacking lawful authority to enter into their pension contracts would not apply
to township commissioners enrolled in the Pennsylvania Municipal
Retirement System (based upon Counsel's assertion that the Pennsylvania
Municipal Retirement Law provides lawful authority for township
commissioners to be enrolled in a pension plan with the Pennsylvania
Municipal Retirement System).
R -1 states the opinion of Counsel for the Pennsylvania Municipal Retirement
System that first class township commissioners can continue to be enrolled
in the Pennsylvania Municipal Retirement System "provided that the
municipality elects to include such employees." October 31, 2007,
Memorandum of Jennifer A. Mills, Esquire, at 4 (R -1, page 4).
g.
III. DISCUSSION:
As a Member of the Elizabeth Township ( "Township ") Board of Commissioners
( "Board ") from January 1, 1994, until December 31, 2005, Respondent Judith A. Marshall
(hereinafter also referred to as "Respondent," "Respondent Marshall," and "Marshall ") was
a public official subject to the provisions of the Public Official and Employee Ethics Act
( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
The allegations are that Respondent Marshall violated Section 1103(a) of the Ethics
Act when she used the authority of her office for private pecuniary gain by participating in
actions of the Board authorizing her inclusion in and ultimate receipt of pension payments
funded in part by the Township.
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
Marshall, 07 -018
Page 12
member of his immediate family or a business with which he or
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.
We shall now summarize the relevant facts.
The Township is a First Class Township located in Allegheny County, Pennsylvania.
Respondent Marshall served as a Township Commissioner from January 1, 1994, until
December 31, 2005. Respondent was never employed by the Township and only served
as an elected official.
In 1968, approximately 251/2 years before Marshall became a Township
Commissioner, the Board approved the creation of a Township pension plan, now known
as the Non - Uniform Pension Plan ( "Pension Plan "), which was partially funded by the
Township and administered by the Municipal Employes' Retirement System, now the
Pennsylvania Municipal Retirement System. The Township Ordinance that approved the
creation of the Pension Plan was Ordinance Number 330, which was enacted on April 29,
1968. Ordinance Number 330 directed that membership in the Pension Plan would be
mandatory for elected officials.
On June 3, 1968, the Board enacted Ordinance Number 332, amending Ordinance
Number 330. Ordinance Number 332 continued to provide that membership in the
Pension Plan was mandatory for elected officials.
On July 1, 1991, the Board enacted Township Ordinance Number 610, which
repealed previous agreements and various Ordinances, including Ordinance Number 332,
and made benefit changes to the Pension Plan. Township Ordinance Number 610
continued to provide that membership in the Pension Plan was mandatory for elected
officials. The July 1, 1991, Elizabeth Township Municipal Employee Pension Plan
Agreement between the Township and the Pennsylvania Municipal Retirement Board
likewise provided that membership for elected officials was mandatory. The July 1, 1991,
Township Pension Plan Agreement was approved as to form and legality by
representatives of the Office of Attorney General and the Office of General Counsel.
On January 1, 1994, Respondent commenced service as a Township
Commissioner. Subsequently, on or about February 5, 1995, Respondent submitted an
Application to enroll in the Pension Plan. The effective date of Respondent's membership
in the Pension Plan was January 1, 1994.
On October 2, 1995, the Board enacted Township Ordinance Number 678, which
repealed Ordinance Number 610 and made benefit changes to the Pension Plan.
Township Ordinance Number 678 continued to provide that membership in the Pension
Plan was mandatory for elected officials. Although the minutes of the October 2, 1995,
meeting are not included in the record, the parties have stipulated that a tally of the votes
indicates that Ordinance Number 678 passed by a 9 -0 vote. (Finding 18 a 2). The
October 2, 1995, Elizabeth Township Municipal Employee Pension Plan Agreement
between the Township and the Pennsylvania Municipal Retirement Board likewise
provides that membership for elected officials is mandatory. The October 2, 1995,
Township Pension Plan Agreement was approved as to form and legality by an individual
whose position is indicated as "Chief Counsel," and by representatives of the Office of
Marshall, 07 -018
Page 13
Attorney General and the Office of General Counsel.
In order to maintain proper funding of the Pension Plan, the Township made
contributions on a yearly basis to the Pension Plan in the form of a "Minimum Municipal
Obligation" ( "MMO "). The MMO is determined by the Pension Plan's actuary. From 2000
through 2005, the Board approved the payment of MMOs as detailed in Findings 19 b 1 -6.
The parties have stipulated that Respondent utilized the authority of her office as a
Member of the Board to vote on and approve the payment of MMOs to the Pension Plan
"of which Marshall was mandated to participate." (Finding 30; see also, Finding 20; ID 23,
pages 5 -6, Stipulated Findings, paragraphs 20, 30). The record before us includes
minutes of the October 18, 2004, and October 3, 2005, meetings of the Board at which
Respondent participated in unanimous votes to approve payments of the 2004 MMO and
2005 MMO respectively.
The parties have further stipulated that Respondent utilized the authority of her
office as a Member of the Board to vote on and approve at least one ordinance directing
the management and /or requirements concerning payment of benefits, to members of the
Pension Plan "of which Marshall was mandated to participate." (Finding 29; ID 23, page 6,
Stipulated Findings, paragraph 29). The parties appear to be referring to Ordinance
Number 678, which, as stated above, was enacted on October 2, 1995. (See, Findings 18,
18 a, 34 a).
At the Board's July 19, 2004, meeting, Respondent participated in a unanimous vote
of the Board to close the Municipal Pension Plan Account and to submit that account's
balance to the Pennsylvania Municipal Retirement System to be divided equally between
the Police Pension Plan and the Pension Plan.
On or about December 2, 2005, Respondent submitted an Application to receive
retirement benefits from her Township pension plan. Respondent opted to receive monthly
pension payments in the amount of $90.00 for the remainder of her life. At the time of her
retirement, Respondent had contributed $1,385.76 and the Township had contributed
$10,191.17 towards Respondent's Township pension plan. Respondent did not withdraw
any of her personal contributions from the pension fund.
Since January 24, 2006, Respondent has received monthly payments in the amount
of $90.00 from the Pennsylvania Municipal Retirement System, totaling $2,880.00 as of
September 30, 2008. The $2,880.00 Respondent has received represents contributions
made by both Respondent and the Township towards Respondent's Township pension
plan and interest thereon.
Respondent has not refunded or otherwise made a pay -back of any pension funds
or interest to the Township.
Finally, we note that the record includes Exhibit R -1, which is a memorandum dated
October 31, 2007, from Jennifer A. Mills, Esquire, Assistant Counsel with the Office of
Chief Counsel of the Pennsylvania Municipal Retirement System, to James B. Allen,
Secretary of the Pennsylvania Municipal Retirement System, with various attachments. R-
1 includes, as an attachment to Attorney Mills' memorandum, an earlier memorandum
dated February 21, 1986, from Nicholas Joseph Marcucci, Esquire, then an Assistant
Counsel with the Office of Chief Counsel of the Pennsylvania Municipal Retirement
System, to James B. Allen, Secretary of the Pennsylvania Municipal Retirement System.
R -1 asserts that Act 82 of 1985 amending the First Class Township Code did not reference
or amend the Pennsylvania Municipal Retirement Law, applied only to pensions
administered by insurance companies or nonprofit corporations, and did not have any
impact on township commissioners participating in a pension plan administered by the
Pennsylvania Municipal Retirement System. R -1 states the opinion of Counsel for the
Marshall, 07 -018
Page 14
Pennsylvania Municipal Retirement System that the Pennsylvania Municipal Retirement
Law provides authority independent of the First Class Township Code for township
commissioners to participate in a pension plan administered by the Pennsylvania
Municipal Retirement System.
Having summarized the above relevant facts, we must now determine whether the
actions of Respondent Marshall violated Section 1103(a) of the Ethics Act. We begin our
analysis with a review of certain statutory provisions that have been referenced in this
matter.
During the time period under review in this matter, Section 56563 of the First Class
Township Code, on its face, has provided for pension plans for township employees,
specifically authorizing townships to "... contract with any such company, granting annuities
or pensions, for the pensioning of such employes, or any class or classes thereof...." 53
P.S. § 56563. Marshall never served as a Township employee.
Section 56563 of the First Class Township Code further provides:
§ 56563 Insurance
Any pension or annuity contract entered into by a
township between January 1, 1959, and December 31, 1984,
that includes or provides for benefits for commissioners at
township expense shall not be void or unlawful solely because
of such inclusion of such commissioners; nor shall any penalty,
assessment, surcharge or disciplinary action of any kind occur
as a result of such participation by commissioners: Provided,
however, That anyone entitled to benefit coverage under a
pension paid for, in whole or in part, by any township without
lawful authority shall deliver, surrender and assign to the
township all benefits paid thereunder after December 31,
1984.
Where any official personally contributed toward such a
pension plan or a purchase of such an annuity, he shall be
refunded his total contributions thereto, plus any interest
accumulated thereon, less any amount already paid to him
under the annuity or pension plan, when the annuity or
pension benefits are delivered, surrendered or assigned to the
township, or when the annuity becomes the property of the
township by operation of this section. In lieu of a refund of total
contributions plus accumulated interest, an official who
personally contributed toward the pension plan or toward the
purchase of the annuity may elect to purchase from the
township its interest in that pension plan or annuity program.
The election option shall be exercised within sixty (60) days of
the effective date of this act. The value of the interest of the
township in the pension plan or annuity program with respect
to the official shall be determined by the actuary who prepared
the 1983 municipal pension report for the township pension
plan or annuity program pursuant to the act of December 6,
1972 (P. L. 1383, No. 293), entitled "An act requiring municipal
pension systems to have an actuarial investigation of the fund
made by an actuary who shall report his findings to the
Department of Community Affairs," using the same applicable
Marshall, 07 -018
Page 15
actuarial assumptions as used in that report or, if no actuary
was retained for the 1983 report or no 1983 report was filed,
by an actuary retained for the purpose of valuing the township
interest. The cost of the actuarial valuation of the township
interest and any future administrative costs of the pension plan
or the annuity program attributable to the official shall be
payable by the official in a manner to be established by
agreement with the township auditors.
No elected or appointed township official included in a
township -paid pension or annuity plan entered into prior to
December 31, 1984, shall be subject to any penalty,
assessment, surcharge or disciplinary action of any kind as a
result of said participation. Any residual interest, value, refund
of premium or benefits payable on or after December 31, 1984,
arising out of the township -paid interest of the elected or
appointed township officials shall become the exclusive
property of the township.
53 P.S. § 56563 (Emphasis added). The "amnesty" provided by Section 56563 would not
apply to Marshall, who became a Township Commissioner well after the time period
covered by the amnesty.
The Pennsylvania Municipal Retirement Law, 53 P.S. § 881.101 et seq., authorizes
any municipality to join the Pennsylvania Municipal Retirement System. 53 P.S. §
881.107. The term "municipality" is defined to include various forms of municipalities
including townships. 53 P.S. § 881.102. The Pennsylvania Municipal Retirement Law
provides for the continuation of retirement plans established under the Municipal
Employes' Retirement Law, and for the enrollment of "municipal employees" of new
municipalities joining the Pennsylvania Municipal Retirement System. 53 P.S. § 881.201.
The term "municipal employe" is defined to include a person holding a municipal office or
position who is paid on a regular salary or per diem basis. 53 P.S. § 881.102. The
Pennsylvania Municipal Retirement Law further provides:
... Each municipality shall determine whether membership in
said system for elected officials and employes hired on a
temporary, seasonal or part -time basis shall be compulsory,
optional or prohibited. Where membership may be optional
with an elected officer or an employe hired on a temporary,
seasonal or part -time basis, an election to join the system must
be made within one year after the municipality elected to join
the system or within one year after the officer or temporary,
seasonal or part -time employe first entered the service of the
municipality. Officers and employes paid only on a fee basis
shall not be eligible to join the system.
53 P.S. §§ 881.203, 881.402.
Counsel for the Pennsylvania Municipal Retirement System have opined that Act 82
of 1985 amending the First Class Township Code applied only to pensions administered
by insurance companies or nonprofit corporations, and did not have any impact on
township commissioners participating in a pension plan administered by the Pennsylvania
Municipal Retirement System. They opine that the Pennsylvania Municipal Retirement
Law provides authority independent of the First Class Township Code for township
commissioners to participate in a pension plan with the Pennsylvania Municipal Retirement
System. They have interpreted the Pennsylvania Municipal Retirement Law to authorize
township commissioners who are not serving in a dual capacity as actual employees of the
Marshall, 07 -018
Page 16
township to award themselves a taxpayer- funded pension plan under the Pennsylvania
Municipal Retirement Law, irrespective of the eligibility requirements for township pensions
set forth in the First Class Township Code. (See, Findings 42 a -g).
In its Brief, the Investigative Division asserts that based upon the First Class
Township Code, as well as certain case law (Township of Ross v. McDonald, 431 A.2d 385
(Pa. Commw. Ct. 1981); McCutcheon v. State Ethics Commission, 466 A.2d 283 (Pa.
Commw. Ct. 1983)), township commissioners may not serve as township employees and
may not participate in township pension plans. The Investigative Division seeks an Order
finding that Respondent violated Section 1103(a) of the Ethics Act and directing
Respondent to pay restitution in the amount of $1,494.24, representing the total of the
monthly payments Respondent received from her Township pension as of September 30,
2008 ($2,880.00) less Respondent's personal contributions to her pension fund
($1,385.76).
Respondent seeks a dismissal of the Investigative Complaint and a ruling in her
favor. Respondent's Brief asserts: (1) that the Township Commissioners have been
required to participate in the Pension Plan administered by the Pennsylvania Municipal
Retirement System because the plans have so provided; (2) that the Township's
Ordinances and Pension Plan Agreements were approved by the Office of Attorney
General, the Office of General Counsel, and the Chief Counsel of the Pennsylvania
Municipal Retirement System as to form and legality; and (3) that it would be unfair to find
Respondent in violation of the Ethics Act when she relied upon legal advice from the
Pennsylvania Municipal Retirement System and the Commonwealth. (Respondent also
raises other arguments that need not be addressed, because they are based upon an
erroneous premise that the February 21, 1986, memorandum of Nicholas Joseph
Marcucci, Esquire, contained within R -1, was issued by Counsel for this Commission.)
Our disposition of the instant matter is not dependent upon the impact of the First
Class Township Code upon the Pennsylvania Municipal Retirement Law.
During the time period that is subject to review in this case (see, 65 Pa.C.S. §
1108(m)), Respondent's actions as to the Pension Plan consisted of voting to fund the
Pension Plan through MMOs, and voting to close the Municipal Pension Plan Account and
submit the balance to the Pennsylvania Municipal Retirement System to be divided equally
between the Township's Police Pension Plan and the Pension Plan, while Respondent was
participating in the Pension Plan. Per the Stipulated Findings (ID 23), the parties are in
agreement that Respondent's participation in the Pension Plan was "mandated." For
approximately 251/2 years before Respondent took office as a Township Commissioner, it
was deemed mandatory for all Township Commissioners to participate in the Pension Plan,
under color of Township Ordinances so stating. Such mandatory participation continued
after the 1985 amendment to the First Class Township Code, which pre -dated
Respondent's service on the Board by approximately 8 years.
Under the facts of this case, we hold that no violation of Section 1103(a) of the
Ethics Act occurred in relation to Respondent's receipt of pension payments funded in part
by the Township as it was deemed mandatory for all Commissioners to participate in said
Pension Plan. Cf., Carlock, Order 1456; Maha, Order 1494.
IV. CONCLUSIONS OF LAW:
1. As a Member of the Elizabeth Township ( "Township ") Board of Commissioners from
January 1, 1994, until December 31, 2005, Respondent Judith A. Marshall
( "Marshall ") was a public official subject to the provisions of the Public Official and
Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
Marshall, 07 -018
Page 17
2. Under the facts of this case, Marshall did not violate Section 1103(a) of the Ethics
Act in relation to her receipt of pension payments funded in part by the Township as
it was deemed mandatory for all Commissioners to participate in said pension plan.
In Re: Judith A. Marshall,
Respondent
ORDER NO. 1508
File Docket: 07 -018
Date Decided: 3/12/09
Date Mailed: 3/27/09
Under the facts of this case, Respondent Judith A. Marshall ( "Marshall "), a
public official in her capacity as a Commissioner for Elizabeth Township
( "Township ") from January 1, 1994, until December 31, 2005, did not violate Section
1103(a) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §
1103(a), in relation to her receipt of pension payments funded in part by the
Township as it was deemed mandatory for all Commissioners to participate in said
pension plan.
BY THE COMMISSION,
Louis W. Fryman, Chair