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HomeMy WebLinkAbout1511 SiddonsIn Re: James Siddons, 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 08 -038 Order No. 1511 4/30/09 5/15/09 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 allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed. A Stipulation of Findings and a Consent Agreement waiving an evidentiary hearing were 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. Siddons, 08 -038 Page 2 I. ALLEGATIONS: That James Siddons, a public official /public employee in his capacity as a Member of Council of Archbald Borough, Lackawanna 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 a private pecuniary benefit to obtain compensation not provided for by law, including but not limited to participating in actions of the Borough resulting in his authorization to participate in a pension plan funded, in part, with Borough funds; and when he voted to approve funds to be appropriated to the pension plan. II. FINDINGS: 1. James Siddons served as a member of the Archbald Borough Council from January 5, 1988, through December 2007. a. As such, Siddons attended and participated in council meetings and the overall operations of the borough, throughout his tenure. 2. Council members are compensated at an annual rate of $2,500.00 a year, as per the Borough Code, based upon the population of the borough. a. According to the U.S. Census Bureau's 2000 Census, Archbald Borough has a total population of 6,220. 3. Archbald Borough operates by a seven member - strong council, weak mayor - form of government. 4. The Borough Code, which outlines the specific powers of the borough, provides for the establishment of a pension plan for only employees of a borough. a. "OTHER INSURANCE...to contract with any such company, granting annuities or pensions, for the pensioning of borough employees, or any class, or classes thereof, and to agree to pay part [or] all of the premiums or charges for carrying such contracts, and to appropriate moneys from the borough treasury for such purposes." 5. The Borough Code provides that council members and other elected officials of a borough with a population that exceeds 3,000 cannot serve as an employee of that borough. 6. Prior to December 1991, the Borough of Archbald offered a pension plan exclusively for uniformed employees of the borough. a. Participants in the Uniformed Pension Plan included only members of the Borough's Police Department. b. The borough's uniformed pension plan was administered by ASCO Financial, Inc. 7 On December 27, 1991, the Archbald Borough Council voted, during a regular meeting, to adopt an ordinance providing for the establishment and regulation of a pension plan for non - uniformed employees of the borough. a. The purpose of establishing the plan was to provide non - uniformed employees of the Borough the opportunity to participate and receive a Borough pension. Siddons, 08 -038 Page 3 b. All present members of council, including Siddons, voted in favor of adopting the ordinance. 8. Archbald Borough ordinance number 16 -1991 of 1991, establishing the pension plan for Non - Uniformed Employees, was adopted by the Borough and signed into law on December 27, 1991. a. The ordinance was signed by President of Council, Joseph Daley; attested to by Secretary Leonard E. Hosie; and approved by Mayor James McLaughlin. b. Archbald Borough ordinance, number 16 -1991, reads as follows: "A pension plan is hereby established for the non - uniformed employees of the Borough of Archbald pursuant to and in compliance with the act of December 18, 1984, P.L 1005, No. 205, as amended; said plan shall be under the direction of the borough council of the Borough of Archbald and shall be applied and set forth under such regulations as council may prescribe, said regulations being incorporated herein by reference. The effective date of the pension plan established hereby shall be January 1, 1992." c. Ordinance No. 16 -1991 is void of language regarding the inclusion of the council members in the pension plan. 9. On January 1, 1992, the Archbald Borough Non - Uniformed Pension Plan Agreement was entered into by the borough with plan trustees, Joseph Daley, Harold McGee and William Roe. a. The Archbald Borough Non - Uniformed Pension Plan is a single - employer defined contribution pension plan. b. Eligible employees in the plan contribute at least 4% of their gross annual compensation, which is matched by a Borough contribution of 4 %. c. "Eligible employees" are defined in the plan as follows: Any person who is employed by the Employer or Affiliated Employer, but excludes any person who is an independent contractor. Employee shall include Leased Employees within the meaning of Code Sections 414(n) (2) and 414(0) (2) unless such Leased Employees are covered by a plan described in Code Section 414(n) (5) and such Leased Employees do not constitute more than 20% of the recipient's non - highly compensated work force." d. Employees of the borough were eligible to participate in the plan after six months of service with the borough. e. After a Borough employee completed six months of service, the Borough notified those individuals of their eligibility to participate in the pension plan in writing. f. The pension plan established a vesting schedule where participants would become fully vested after 5 years of service. 10. The Borough of Archbald automatically withdrew a participant's set contribution Siddons, 08 -038 Page 4 from [his or her] Borough- issued compensation or payroll checks. 11. During the meeting of September 19, 2001, the borough council, including Siddons, voted to approve a resolution amending the borough's non - uniformed pension plan. a. Siddons seconded the motion. b. The resolution increased the employee and employer contribution for full - time employees from 4% to 5 %. c. The employee and employer contribution for non -full time employees remained at 4 %. d. The resolution contained wording which specifically included council members and officers as employees of the borough. 1. "Whereas, the other non - uniform employees of the borough (council members, officers, etc.) who are not full -time employees, shall contribute 4% of their wages toward the retirement plan effective January 1, 1999, employer will match the 4 %." 12. Newly elected /appointed council members and newly hired employees were notified of the non - uniformed pension plan upon entering office or employment. a. Eligible participants were provided with an application upon being employed or elected to the borough. 13. On November 21, 2001, during a meeting of the Archbald Borough Council, Council including Siddons adopted a resolution amending the vesting schedule of the non- uniform pension plan. a. b. The resolution amended the pension plan to provide for 100% vesting upon entry into the plan, for all future and current plan participants. This motion was approved with a unanimous vote. c. This resolution was made so that council members and other elected officials, who participated in the plan, could be fully vested even if they only served one term. 14. Archbald Borough Council authorized contributions into the investment accounts for the Borough's Non - Uniformed Employee Pension Plan as part of the routine payment of employee payroll. a. Council was provided with a monthly Treasurer's Report detailing financial activity for the prior month. b. Employee payroll was included as a monthly total without an itemized breakdown. c. Included in the monthly total was disbursement(s) made to Nationwide Provident and Morgan Stanley, the plan's investment firms since 2003. 1 Bi- weekly payments to Nationwide Provident ceased on March 12, 2004. 2. Bi- weekly payments to Morgan Stanley began on March 26, 2004. CH. # Date Amt. Approval Siddons 147 01/03/03 $915.34 2/19/2003 Vote 195 01/17/03 $910.03 244 01/31/03 $819.92 291 02/14/03 $792.83 3/19/2003 Vote 338 02/28/03 $878.51 386 03/14/03 $769.29 4/16/2003 Vote 435 03/28/03 $755.07 484 04/11/03 $771.81 5/21/2003 Vote 533 04/25/03 $777.83 581 05/09/03 $847.09 6/18/2003 Vote 630 05/23/03 $785.45 680 06/06/03 $763.24 No Vote No Action 732 06/20/03 $828.37 783 07/03/03 $732.23 8/20/2003 Vote 829 07/18/03 $776.22 876 08/01/03 $699.43 9/17/2003 Vote 922 08/15/03 $670.58 968 08/29/03 $766.30 1017 09/12/03 $780.00 10/15/2003 Vote 1067 09/26/03 $784.22 1116 10/10/03 $738.77 11/19/2003 Vote 1165 10/24/03 $754.62 1215 11/07/03 $745.85 12/3/2003 Vote 1271 11/21/03 $923.06 1321 12/05/03 $792.51 1/21/2004 Vote 1371 12/19/03 $849.77 1418 01/02/04 $850.59 No Vote No Action 1468 01/16/04 $822.32 1517 01/30/04 $888.28 Siddons, 08 -038 Page 5 d. Employee payroll was processed by We Pay Payroll, Scranton, PA, a payroll service utilized by Archbald Borough since approximately 2003. e. Payments were also authorized by Council for Council Member contributions. 15. Archbald Borough records reflect that between January 2003 and August 2007, Siddons participated in the approval of Non - Uniformed Employee Pension payments issued to Nationwide Provident and Morgan Stanley as detailed in the following chart. a. This funding allocation was for all Non - Uniformed Employee Pension participants including Siddons and other participating Council members. b. The Archbald Borough Non - Uniformed Pension Plan had approximately twenty -two (22) participants including Siddons at various times between 2001 and 2007. 16. Payments issued by the Borough to the pension fund and Siddons' actions in relation thereto are noted below: 1568 02/13/04 $943.82 3/17/2004 Vote 1620 02/27/04 $823.87 1673 03/12/04 $138.45 4/17/2004 Vote 1626 03/26/04 $948.73 1778 04/09/04 $855.51 5/19/2004 Vote 1829 04/23/04 $829.74 1881 05/07/04 $897.60 6/16/2004 Vote 1933 05/21/04 $894.66 1985 06/04/04 $848.61 No Vote No Action 2037 06/18/04 $836.91 2085 07/02/04 $817.63 8/18/2004 Vote 2135 07/16/04 $838.57 2182 07/30/04 $778.91 2230 08/13/04 $789.22 9/15/2004 Vote 2277 08/27/04 $764.26 2328 09/10/04 $752.77 10/20/2004 Vote 2377 09/24/04 $807.45 2425 10/08/04 $848.31 11/17/2004 Vote 2472 10/22/04 $762.81 2519 11/15/04 $762.82 12/1/2004 Vote 2571 11/19/04 $935.69 2618 12/03/04 $805.52 1/12/2005 Vote 2667 12/17/04 $801.32 2714 12/30/04 $825.16 2762 01/14/05 $892.48 2/16/2005 Vote 2806 01/28/05 $1,034.53 2850 02/11/05 $1,040.18 3/30/2005 Vote 2894 02/25/05 $1,005.75 2938 03/11/05 $1,086.13 4/13/2005 Vote 2984 03/25/05 $925.14 3030 04/08/05 $934.75 5/18/2005 Vote 3078 04/22/05 $883.05 3125 05/06/06 [sic] $810.70 6/15/2005 Vote 3174 05/20/05 $800.11 3221 06/03/05 $804.69 7/13/2005 Vote 3270 06/17/05 $859.03 3313 07/01/05 $956.24 8/17/2005 Vote 3358 07/15/05 $838.63 3400 07/09/05 $800.11 3443 08/12/05 $789.52 9/14/2005 Vote 3492 08/26/05 $818.10 3539 09/09/05 $815.88 10/19/2005 Absent 3587 09/23/05 $791.98 3633 10/07/05 $841.76 11/16/2005 Vote 3680 10/21/05 $819.85 3726 11/04/05 $838.60 12/7/2005 Vote 3772 11/18/05 $966.30 3819 12/02/05 $968.02 1/18/2006 2nd, Vote Siddons, 08 -038 Page 6 3865 12/16/05 $945.46 3910 12/29/05 $1,024.19 3945 01/13/06 $846.14 2/15/2006 Vote 3991 01/27/06 $992.34 4038 02/01/06 $818.82 3/22/2006 2nd, Vote 4085 02/24/06 $766.99 4133 03/01/06 $899.65 4/19/2006 2nd, Vote 4180 03/24/06 $783.03 4184 03/24/06 $705.98 4227 04/07/06 $695.08 5/17/2006 Vote 4273 04/21/06 $727.62 4318 05/05/06 $692.17 6/21/2006 Vote 4362 05/19/06 $722.25 4405 06/02/06 $693.68 No Vote No Action 4449 06/16/06 $703.47 4492 06/30/06 $740.25 4537 07/14/06 $995.19 8/16/2006 Vote 4583 07/28/06 $812.96 4626 08/11/06 $756.25 9/20/2006 Absent 4671 08/25/06 $846.69 4718 09/08/06 $891.18 10/18/2006 Vote 4763 09/22/06 $812.93 4808 10/06/06 $783.42 11/15/2006 Vote 4853 10/20/06 $755.66 4898 11/03/06 $813.60 12/6/2006 Vote 4943 11/17/06 $779.47 4988 12/01/06 $936.47 1/17/2007 Vote 5033 12/15/06 $821.87 5077 12/29/06 $874.23 5122 01/12/07 $929.38 2/21/2007 Absent 5167 01/26/07 $892.16 5213 02/09/07 $979.99 3/21/2007 2nd, Vote 5258 02/23/07 $1,264.36 5303 03/09/07 $1,138.23 4/18/2007 Motion, Vote 5358 03/23/07 $1,125.37 5402 04/05/07 $851.24 5/16/2007 2nd, Vote 5446 04/20/07 $892.07 5490 05/04/07 $932.56 6/20/2007 Absent 5534 05/18/07 $880.79 5589 06/01/07 $909.43 7/18/2007 Absent 5645 06/15/07 $896.80 5691 06/29/07 $943.89 5739 07/13/07 $907.82 8/15/2007 Absent 5787 07/27/07 $955.24 5834 08/10/07 $951.59 9/19/2007 Absent 5882 08/24/07 $901.65 5931 09/07/07 $874.67 10/17/2007 2nd, Vote 5980 09/21/07 $918.53 6025 10/05/07 $903.36 11/21/2007 Vote Siddons, 08 -038 Page 7 Budget Year Meeting Date Action 2001 6- Dec -00 Voted in Favor 2002 5- Dec -01 Voted in Favor 2003 4- Dec -02 Voted in Favor 2004 3- Dec -03 Voted in Favor 2005 1- Dec -04 Voted in Favor 2006 7- Dec -05 Voted in Favor 2007 6- Dec -06 Voted in Favor 2007 20- Dec -06 Absent 6069 10/19/07 $894.79 6115 11/02/07 $875.43 12/19/2007 Vote 6162 11/16/07 $935.64 6206 11/30/07 $1,084.43 Siddons, 08 -038 Page 8 17. In conjunction with the partic contributions, the borough began to make contributions on a yearly bass to the 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 Borough. b. The MMO is approved by council on a yearly basis as part of the annual budget. 18. Archbald Borough financial records reflect annual MMO totals were approved by Council as part of the annual budget process in the following amounts. Calendar Year MMO 2002 15, 582.08 2003 $13,898.00 2004 $16,780.00 2005 $20,060.00 2006 $19,902.00 2007 $18,770.00 19. Meeting minutes confirm that Siddons voted in favor of paying the MMO, as part of the annual budget, on a yearly basis from 2000 through 2006 covering budget years 2001 through 2007. a. 20. James Siddons has participated in the non - uniform pension plan continuously since the ordinance was amended on November 21, 2001,* to include elected officials. a. Yearly contributions into the plan were made by Siddons, and the Borough, at 4% of Siddons' gross compensation as a Borough Council Member. b. From 1992 through 2007, Siddons contributed a total of $638.46 of his Borough Council Member compensation into the Borough's non - uniform pension plan. *[Cf., Fact Findings 11 d, 13, 32 d -e.] Siddons, 08 -038 Page 9 21. The Archbald Borough Pension Plan has been invested by a plan administrator in various deposits and investments. a. ASCO served as the plan administrator for the non - uniform plan from 1992 to 2002. b. Michael Cummings of the Pennsylvania Municipal Pension Service acted as the plan administrator from 2003 to March 2007. c. Pension records currently are maintained by Joseph Duda d /b /a Duda Actuarial Consulting. d. Investments included managed futures, money market funds, stocks, [and] certificates of deposits, and were purchased through Nationwide Provident and Morgan Stanley. 22. Siddons, as a Council Member, voted to approve various borough ordinances increasing the amount of borough funds contributed to the pension plan and also utilized the authority of his office to vote into law ordinances regarding the vesting of pension plan participants. 23. At the time Siddons voted on these ordinances, in his capacity as Borough Council Member, he was also a member of the pension plan. 24. At no time during his participation in the Borough Pension Plan was Siddons an employee of the Borough. 25. Per the Borough Code, Siddons was ineligible to receive any compensation in excess of $2,500.00 per year, outside of that set by borough ordinance. a. Contributions by the Borough into a pension plan would be considered compensation in excess of that allowed by the Borough Code. 26. As of September 30, 2008, Siddons' Borough Pension contained $3,854.25, of which $638.46 was directly contributed by Siddons. 27. Siddons realized a private pecuniary gain of $3,215.79 ($3,854.25 - $638.46) as a result of the use of his public position by voting on resolutions and ordinances which amended the Non - Uniformed Pension Plan resulting in receipt of compensation from the Borough through Borough contributions into the pension plan, to which Siddons has access and control. 28. On January 2, 2008, Siddons submitted correspondence to Borough Manager Anthony J. Giordano requesting a withdrawal of all pension funds held in Siddons' name within the Archbald Non - Uniformed Pension Fund. a. Siddons requested the withdrawal to be consistent with State Ethics Commission Order numbers 1447 (Daley) and 1448 (Propst), [involving] other former Archbald Borough officials. b. Siddons made the request approximately seven (7) months prior to the preliminary inquiry being commenced in this matter. c. Manager Giordano failed to follow through with Siddons' request to withdraw the funds. 29. Borough records include correspondence dated January 24, 2008, from then Siddons, 08 -038 Page 10 Manager Anthony Giordano to Joseph Duda, Duda Actuarial Consulting, Inc., providing Duda with requests from former Councilmen who wished to withdraw their pension funds" (Paone, Sr., Chindemi, Siddons), and copies of two Ethics adjudications..." (Propst, Daley). a. Duda Actuarial Consulting, Inc. did not take any action on these requests. 30. On January 29, 2009, Siddons submitted correspondence to Michael Narcavage, current Archbald Borough Manager, again requesting a withdrawal of all pension funds held in Siddons' name within the Archbald Non - Uniformed Pension Plan. a. Michael Narcavage replaced Anthony Giordano as the Archbald Borough Manager around November 2008. 31. Siddons' January 29, 2009, request specifically asks for a return of all contributions made by Siddons with the remaining portion of the account, comprised of matching Borough contributions and investment earnings, returned to the Borough. 32. Siddons in his official capacity as a member of Archbald Borough Council participated in the following actions detailed in this report resulting in a private pecuniary gain of $3,215.79. a. Voted on December 27, 1991, to adopt the Non - Uniformed Employee Pension Plan. b. Voted to authorize investment payments to the Non - Uniformed Employee Pension plan invested by Nationwide Provident and Morgan Stanley. c. Voted to approve MMO's for budget years 2001 through 2007. d. Voted on September 19, 2001, to amend the Non - Uniformed Employee Pension Plan increasing the contribution rate and include Council members as employees of the Borough. e. Voted on November 21, 2001, to amend the vesting schedule of the Non - Uniformed Employee Pension Plan for 100% immediate vesting. III. DISCUSSION: As a Member of the Archbald Borough Council from January 5, 1988, through December 2007, Respondent James Siddons (hereinafter also referred to as "Respondent," "Respondent Siddons," and "Siddons ") has been 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 Siddons violated Section 1103(a) of the Ethics Act when he, as a Member of Council of Archbald Borough (also referred to herein as the Borough "), used the authority of his public position for a private pecuniary benefit to obtain compensation not provided for by law, including but not limited to participating in actions of the Borough resulting in his authorization to participate in a pension plan funded, in part, with Borough funds; and when he voted to approve funds to be appropriated to the pension plan 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 Siddons, 08 -038 Page 11 65 Pa.C.S. § 1103(a). (a) Conflict of interest. —No public official or public employee shall engage in conduct that constitutes a conflict of interest. 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 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. Respondent Siddons served as a member of the Archbald Borough Council from January 5, 1988, through December 2007. Archbald Borough Council has seven members and operates by a "strong council, weak mayor" form of government. As of the year 2000, Archbald Borough had a total population of 6,220. Pursuant to the Borough Code, compensation for borough council members is fixed by ordinance. For boroughs with populations of five thousand or more but less than ten thousand, the Borough Code sets maximum compensation for borough council members at $2,500 per year. 53 P.S. § 46001. Archbald Borough Council members receive compensation in the maximum amount of $2,500 per year. Pursuant to the Borough Code, elected officials of a borough with a population of 3,000 or more cannot serve as borough employees. 53 P.S. § 46104. As an Archbald Borough Council member, Respondent could not be a Borough employee. The Borough Code authorizes boroughs to establish pension plans for borough employees. 53 P.S. § 46202 (37). Prior to December 1991, Archbald Borough offered a pension plan that was only available to uniformed Borough employees. The only Siddons, 08 -038 Page 12 participants in this pension plan were members of the Borough Police Department. At its December 27, 1991, regular meeting, the Archbald Borough Council, including Siddons, voted to adopt an ordinance providing for the establishment and regulation of a pension plan for non - uniformed Borough employees. This ordinance, which does not specifically address the eligibility of Borough Council members to participate in the pension plan, provides as follows: A pension plan is hereby established for the non - uniformed employees of the Borough of Archbald pursuant to and in compliance with the act of December 18, 1984, P.L. 1005, No. 205, as amended; said plan shall be under the direction of the borough council of the Borough of Archbald and shall be applied and set forth under such regulations as council may prescribe, said regulations being incorporated herein by reference. The effective date of the pension plan established hereby shall be January 1, 1992. Archbald Borough Ordinance No. 16 -1991 of 1991. On January 1, 1992, Archbald Borough entered into the "Archbald Borough Non - Uniformed Pension Plan Agreement," establishing the Archbald Borough Non - Uniformed Pension Plan ( "the Plan "). The Plan is a single - employer defined contribution pension plan. Participants in the Plan contribute at least 4% of their gross annual compensation, which is matched by a Borough contribution of 4 %. The Plan was available to eligible employees who had worked for the Borough for six months. The Plan defined "eligible employees" as follows: Any person who is employed by the Employer or Affiliated Employer, but excludes any person who is an independent contractor. Employee shall include Leased Employees within the meaning of Code Sections 414(n) (2) and 414(0) (2) unless such Leased Employees are covered by a plan described in Code Section 414(n) (5) and such Leased Employees do not constitute more than 20% of the recipient's non - highly compensated work force. Fact Finding 9 c. After six months of Borough employment, eligible employees were notified in writing of their eligibility to participate in the Plan. For an eligible employee who chose to participate in the Plan, the Borough automatically withdrew a set contribution from the participant's Borough- issued compensation or payroll checks. Participants in the Plan became fully vested after 5 years of Borough service. At Borough Council's September 19, 2001, meeting, Siddons seconded a motion and voted to approve a resolution amending the Plan to specifically include Borough Council members and Borough Officers as "employees" of the Borough for purposes of eligibility in the Plan: Whereas, the other non - uniform employees of the borough (council members, officers, etc.) who are not full -time employees, shall contribute 4% of their wages toward the retirement plan effective January 1, 1999, employer will match the 4 %. Fact Finding 11 d 1. This approved resolution also increased the employee and employer contribution for full -time employees in the Plan from 4% to 5% but did not change the employee and employer contribution for non - full -time employees. Siddons, 08 -038 Page 13 At the November 21, 2001, Borough Council meeting, Siddons participated in a unanimous vote of Council to adopt a resolution amending the vesting schedule of the Plan to provide for 100% vesting upon entry into the Plan for all current and future Plan participants. The purpose of this resolution was to ensure that Council members and other elected Borough Officials could be fully vested even if they only served one term of office. Siddons has participated in the Plan continuously since 2001, when Council acted to include elected officials as eligible participants in the Plan. Siddons made yearly contributions to the Plan at the rate of 4% of his gross compensation as a Borough Council member. From 2003 through 2007, Siddons participated in the approval of payments of contributions to the Plan by Archbald Borough as detailed in Fact Findings 15 -16. Such payments were for all Plan participants including Siddons and other participating Council members. The Borough also made yearly contributions to the Plan in the form of a "Minimum Municipal Obligation" ( "MMO "). The MMO was determined by the Plan's Actuary, who provided the information to the Borough. The Borough Council approved the MMO on a yearly basis as part of the annual Borough budget. Siddons voted in favor of paying the MMO as part of the annual budget on a yearly basis from 2000 through 2006, covering budget years 2001 through 2007. (Fact Finding 19). As of September 30, 2008, Siddons had accumulated $3,854.25 in the Plan through his own contributions of $638.46, Borough contributions, and investment earnings. The parties have stipulated that in his official capacity as a member of Archbald Borough Council, Siddons participated in the following actions resulting in a private pecuniary gain of $3,215.79 (calculated as $3,854.25 less $638.46): voted on December 27, 1991, to adopt the Plan; voted on September 19, 2001, to amend the Plan to include Council members as employees of the Borough; voted on November 21, 2001, to amend the vesting schedule of the Plan for 100% immediate vesting; voted to authorize investment payments to the Plan; and voted to approve MMO's for budget years 2001 through 2007. (Fact Finding 32). At no time during his participation in the Plan was Siddons an employee of the Borough. Per the Stipulated Findings, contributions by the Borough into the Plan for Siddons would be considered compensation in excess of that allowed by the Borough Code. The Stipulated Fact Findings note that Siddon sought to withdraw his own contributions made to the Plan and to have the remaining portion of the account returned to the Borough so as to be consistent with State Ethics Commission Orders 1447 (Daley) and 1448 (Propst), involving other Archbald Borough officials. 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 an unintentional violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred in relation to Siddons participating in Siddons, 08 -038 Page 14 Council actions to approve payments to [the] pension fund and to fund the Borough minimum Municipal obligation for [the] pension plan. 4. Siddons agrees to withdraw from the Borough pension plan and return to the Borough all Borough contributions plus the interest accrued; and to [forward] proof of such action to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 5. 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 accept the parties' recommendation for the finding of an unintentional violation of Section 1103(a) of the Ethics Act. The element of use of authority of public office /employment requires action by the public official /public employee that in some way facilitates receipt of a private pecuniary benefit. See, McGuire v. State Ethics Commission, 657 A.2d 1346 (Pa. Commw. Ct. 1995). Siddons initially used the authority of his public office as a Borough Council Member by: (1) voting on December 27, 1991, to establish the Plan; (2) seconding a motion and voting on September 19, 2001, to amend the Plan to include Borough Council members as eligible participants in the Plan; and (3) voting on November 21, 2001, to adopt a resolution amending the Plan vesting schedule to provide for 100% vesting upon entry into the Plan for both future and current Plan participants. These particular actions may not form the basis for a violation in this matter due to the passage of time. (See, limitations provision of the Ethics Act, 65 Pa.C.S. § 1108(m).) During the time period under review, Siddons used the authority of office by: (1) making /seconding motions and voting to authorize Borough contributions to the Plan; and (2) voting to approve MMO's as part of the Borough's annual budgets. But for his official position as a Borough Council Member, Siddons would not have been able to take the aforesaid actions. Such actions resulted in a private pecuniary benefit to Siddons, consisting of Borough contributions made to the Plan on his behalf and accrued interest, received in contravention of the Borough Code. As noted above, the Borough Code provides that a borough may provide a pension plan for borough employees. 53 P.S. § 46202 (37). Elected borough council members and other elected officials in a borough with a population of 3,000 or more cannot serve as employees of the borough. 53 P.S. § 46104. As a Borough Council Member, Siddons could not be a Borough employee. Therefore, Siddons could not lawfully participate in the Plan. Per the Borough Code, Siddons' compensation as a Borough Council Member could not exceed $2,500 per year. 53 P.S. § 46001. Contributions by the Borough to the Plan on Siddons' behalf were in excess of his $2,500 yearly Borough compensation. Such excess compensation was unauthorized in law. Intent is not a requisite element for a violation of Section 1103(a) of the Ethics Act. Siddons, 08 -038 Page 15 See, e.q., Yocabet v. State Ethics Commission, 531 A.2d 536 (Pa. Commw. Ct. 1987). Nevertheless, based upon the Stipulated Findings, it would appear that the aforesaid violation was unintentional. Therefore, we hold that an unintentional violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to Siddons participating in Borough Council actions to approve payments to the Plan fund and to fund the Borough Minimum Municipal Obligation(s) for the Plan. As part of the Consent Agreement, Siddons has agreed to withdraw from the Plan and to return to the Borough all Borough contributions plus the interest accrued, and to forward proof of such action to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, per the Consent Agreement of the parties, Siddons is directed to withdraw from the Plan and to return to the Borough all Borough contributions plus the interest accrued, and to forward proof of such action to this Commission by no later than the thirtieth (30 day after the mailing date of this adjudication and Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: 1. As a Member of Council for Archbald Borough ( "the Borough ") from January 5, 1988, through December 2007, Respondent James Siddons ( "Siddons ") has been a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. 2. Siddons unintentionally violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he participated in Borough Council actions to approve payments to the Archbald Borough Non - Uniformed Pension Plan ( "the Plan ") fund, and to fund the Borough Minimum Municipal Obligation(s) for the Plan. In Re: James Siddons, Respondent File Docket: 08 -038 Date Decided: 4/30/09 Date Mailed: 5/15/09 ORDER NO. 1511 1 James Siddons ( "Siddons "), as a Member of Council for Archbald Borough ( "the Borough "), unintentionally violated Section 1103(a) of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1103(a), when he participated in Borough Council actions to approve payments to the Archbald Borough Non - Uniformed Pension Plan ( "the Plan ") fund and to fund the Borough Minimum Municipal Obligation(s) for the Plan. 2. Per the Consent Agreement of the parties, Siddons is directed to withdraw from the Plan and to return to the Borough all Borough contributions plus the interest accrued, and to forward proof of such action to the Pennsylvania State Ethics Commission by no later than the thirtieth (30 day after the mailing date of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair