HomeMy WebLinkAbout1593 Kaltenbaugh
In Re: Jack Kaltenbaugh, : File Docket: 10-019
Respondent : X-ref: Order No. 1593
: Date Decided: 9/27/11
: Date Mailed: 10/6/11
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Donald M. McCurdy
Raquel K. Bergen
Nicholas A. Colafella
Mark Volk
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 filed and a hearing was requested. A
Stipulation of Findings and a Consent Agreement 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.
I. ALLEGATIONS:
That Jack Kaltenbaugh, a public official/public employee in his capacity as a Supervisor for
Connoquenessing Township, Butler 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 [the] private pecuniary benefit of himself and/or a business with which he is
associated by participating in discussions and actions of the Board of Supervisors to
approve matters regarding a subdivision/land development application being considered
by the Board at a time when his company was performing excavating and construction
services in relation to the project that was the subject of the application or when he had a
reasonable expectation that his company would be considered for or receive contracts in
relation to that project.
II.FINDINGS:
1. Jack Kaltenbaugh has served as a Supervisor for Connoquenessing Township
(hereafter “Township”), Butler County since January 7, 2008.
a. Kaltenbaugh has served as Vice Chairman of the Board of Supervisors from
January 7, 2008, to the present.
b. Kaltenbaugh has served as Township Road Master from January 7, 2008, to
the present.
Kaltenbaugh, 10-019
Page 2
c. Kaltenbaugh served as Township Code Enforcement Officer from January 7,
2008, to December 31, 2008.
2. Kaltenbaugh previously served as a Township Supervisor for two consecutive terms
spanning from January 6, 1992, to December 31, 2003.
a. Kaltenbaugh served as Vice-Chairman of the Board of Supervisors from
1992 to 1998.
b. Kaltenbaugh served as Chairman of the Board of Supervisors from 1999 to
2003.
3. Connoquenessing Township is governed by a three-Member Board of Supervisors.
a. Supervisors hold legislative meetings on the first Wednesday of each month
at 7:00 p.m.
b. Supervisors hold special meetings as necessary.
4. Township Supervisors are compensated $156.25 (gross) and $137.93 (net) monthly
for their service.
a. Attendance at the monthly meeting is not required in order to receive the
monthly stipend.
5. Board voting occurs in roll call fashion after a motion is made and seconded.
a. All objections and abstentions are noted in the minutes.
1. The minutes of each meeting are approved for accuracy at each
subsequent meeting.
6. The Township Supervisors are responsible for appointing Members of the Township
Planning Commission (hereafter “Planning Commission”).
a. Appointments generally are made at the Supervisors' re-organizational
meeting held in January of each year.
b. Exceptions to this practice occur due to resignations, untimely death, etc.
7. The Planning Commission is advisory to the Board of Supervisors and is to be
composed of five Members.
a. The Planning Commission was composed of four Members in 2009 due to a
lack of community interest in serving on the Planning Commission.
b. Appointees to the Planning Commission serve staggered terms ranging from
one-year terms to five-year terms.
1. Planning Commission Members were appointed/re-appointed
annually by the Board of Supervisors prior to 2007.
8. Developers interested in developing land within Connoquenessing Township are
required to submit a land development application and plans to the Township
approximately fifteen days prior to a Planning Commission meeting.
Kaltenbaugh, 10-019
Page 3
a. The Township Engineer, Bill Braun, has approximately fifteen days prior to a
Planning Commission meeting to review the application and plans submitted
for consideration.
b. Braun generates and submits a letter of recommendation to the Planning
Commission/Supervisors advising them of the potential issues that the
development might cause if the plans are approved as submitted.
c. The Planning Commission is required to take action on plans within ninety
days of them being submitted to the Township.
1. Actions that the Planning Commission can take include
recommending the approval of the plans to the Supervisors,
recommending a denial of the plans to the Supervisors, or taking no
official action.
2. If no official action is taken by the Planning Commission, the plans
are forwarded to the Supervisors for review as if they were
recommended for approval by the Planning Commission.
d. Plans are ultimately approved by the Supervisors after the developer and the
Supervisors can come to a mutual agreement as to how the development is
to be constructed.
e. Both the Planning Commission and Supervisors have the opportunity to ask
for an extension of time to review the plans.
1. Approximately three extensions is the maximum of extensions allowed
to be taken by the Planning Commission and/or Supervisors.
9. Ronald Kaltenbaugh is Kaltenbaugh’s brother and a resident of the Township.
10. Ronald Kaltenbaugh has served as a Member of the Planning Commission from
January 3, 2006, to the present.
a. Ronald Kaltenbaugh was initially appointed to the Planning Commission on
January 3, 2006, to serve a one-year term.
1. Kaltenbaugh was not a Supervisor in 2006 when his brother was
appointed to serve on the Planning Commission.
b. Ronald Kaltenbaugh was re-appointed to the Planning Commission on
January 2, 2007, to serve a three-year term.
1. Jack Kaltenbaugh was not a Supervisor in 2007 when his brother was
appointed to serve on the Planning Commission.
c. Jack Kaltenbaugh seconded the motion to appoint his brother to a five-year
term on the Planning Commission at the January 4, 2010, Supervisors' re-
organizational meeting.
1. The vote at the January 4, 2010, re-organizational meeting extended
Ronald Kaltenbaugh’s term into 2015.
11. Since or about 1982, Kaltenbaugh and his brother have each owned a 50% interest
in JL & RE Building and Excavating (hereafter “JL & RE”), a business located within
the geographical boundaries of the Township.
Kaltenbaugh, 10-019
Page 4
a. The physical address of JL & RE is 184 Stevenson Road, Renfrew, PA
16053.
b. The telephone numbers associated with JL & RE are listed below:
1. 724-321-0044: JL & RE business number
2. 724-321-2912: Ron Kaltenbaugh business cell number
3. 724-321-2479: Wayne Kaltenbaugh business cell number
4. 724-789-7555: JL & RE office number
5. 724-321-2910: Jack Kaltenbaugh business cell number
c. JL & RE specializes in excavation work.
d. JL & RE is not incorporated in the Commonwealth of Pennsylvania.
12. Honda North is an automobile dealership that has been operating within the
geographical boundaries of the Township since approximately 2005.
a. Honda North is owned by Joe Palmiero (hereafter “Palmiero”), John
Palmiero (Joe Palmiero's son), and Howard Neff.
13. Honda North was located at and operated from 630 Evans City Road, Butler, PA
16001 from approximately 2005 to July 31, 2010.
a. Honda North was renting building space and property from Robert Hollack
during the time period that Honda North was located at 630 Evans City
Road, Butler, PA 16001.
b. The five-year rental agreement was set to expire on May 1, 2010.
14. Palmiero determined in early to mid-2007 that Honda North needed to expand in
order to accommodate the growing number of Honda customers in Northwestern
Pennsylvania.
a. Palmiero’s decision was encouraged by the Honda corporation.
15. Palmiero began negotiations with Hollack in approximately early to mid-2007 for a
new rental agreement between Honda North and Hollack.
a. If unsuccessful in negotiating a new rental agreement, Palmiero was hopeful
of purchasing the building and property located at 630 Evans City Road,
Butler, PA 16001 from Hollack.
16. During the time period that Palmiero was negotiating with Hollack, Palmiero learned
that Township residents Rick and Robb Ritenour were interested in selling
approximately eight acres of property at the intersection of Route 68 and Kriess
Road in the Township.
a. The land for sale by the Ritenours was located less than one mile south of
where Palmiero was renting building space and property from Hollack.
Kaltenbaugh, 10-019
Page 5
17. The property for sale by the Ritenours consisted of two parcels of land, as identified
below:
a. Parcel #120-3F47-2AB-0000 (Lot 5R) consisting of 4.796 acres.
b. Parcel #120-3F47-2Y-0000 (Lot 4R) consisting of 3.153 acres.
18. On April 25, 2007, a Land Purchase Option was entered into between the Ritenours
and Palmiero.
a. The agreement provided that the "Optionors" (Ritenours) agreed to give
"Optionee" (Palmiero) two 6-month options to purchase Lot 4 and Lot 5
"containing 7.95 acres located at the intersection of Route 68 and Kriess
Road, and referred to by the Butler County Tax Assessment Office as
D/M/P120-3F47-2AB-0000 and D/M/P120-3F47-2Y-0000."
19. Palmiero contacted Paul Buettell, then Vice-President of Associated Contractors
Inc. (“ACI”), in approximately mid to late 2007 to discuss ACI serving as project
manager for construction of a new Honda North dealership at the location of the
property owned by the Ritenours.
a. Palmiero was still negotiating with Hollack at the time, but negotiations had
stalled.
b. Buettell started the planning of the new Honda North facility in approximately
late 2007/early 2008.
c. Buettell and Palmiero had maintained a business relationship from at least
2005.
1. ACI and Palmiero have maintained a business relationship for
approximately fifteen years.
2. Palmiero was Buettell’s main contact at Honda North.
20. Buettell started the planning of the new Honda North facility prior to a written
contract between Honda North and ACI due to Buettell's established business
relationship with Palmiero.
a. In late 2007/early 2008, Buettell utilized the services of an architectural firm,
4-Most Group, and an engineer, Engineering Development, to generate the
preliminary plans for the new Honda North dealership.
b. Buettell’s primary contact at 4-Most Group was architect/part-owner Richard
Forsythe.
[c]. Buettell’s primary contact at Engineering Development was engineer/owner
Larry Smith.
21. Forsythe, on behalf of Honda North, submitted correspondence to the Township
Planning Commission dated March 13, 2008, in preparation for a Pre-Application
Conference with the Planning Commission scheduled for March 19, 2008.
a. The correspondence documented Honda North's intentions to develop the
property owned by the Ritenours.
Kaltenbaugh, 10-019
Page 6
b. Palmiero did not own the Ritenours’ property at the time that the
correspondence was sent to the Township.
22. On March 19, 2008, Forsythe met with the Planning Commission to discuss Honda
North's intentions to build a new car dealership at the intersection of Route 68 and
Kriess Road.
a. Ronald Kaltenbaugh was present at the meeting as a Member of the
Planning Commission.
b. Members of the Planning Commission were not opposed to the plan
presented by Forsythe.
23. The Planning Commission suggested to Forsythe that a traffic study be completed
prior to land development plans being submitted to the Township Board of
Supervisors for approval.
a. The Planning Commission was concerned that a turning lane may be
needed to avoid congestion at the intersection of the proposed dealership
due to heavy traffic on Route 68.
24. On or about April 9, 2008, Forsythe contracted with David E. Wooster and
Associates to conduct a traffic study at the intersection of Route 68 and Kriess
Road to determine if any roadway changes would be needed to accommodate the
additional traffic to the proposed dealership.
a. David E. Wooster & Associates performed a traffic study from April 15, 2008,
through April 19, 2008.
25. The results of the traffic study were published on or about May 20, 2008, and
concluded that a turning lane on Route 68 would not be needed.
a. The study recommended that a 110' northbound auxiliary right turn lane be
constructed on Kriess Road, and that the traffic timing signals be optimized
at the intersection of Route 68 and Kriess Road.
b. Scott Snyder, District 10-0 Permit Engineer, PennDOT, reviewed the traffic
study and concurred with the analysis done by David E. Wooster and
Associates.
c. Snyder forwarded correspondence dated June 4, 2008, to John Balay,
Engineering Technician, David E. Wooster and Associates, advising that the
traffic study be submitted to the Township for review.
26. The traffic study was submitted to the Township and discussed at the August 6,
2008, Supervisors’ meeting.
a. Kaltenbaugh was present at the meeting.
b. No action was taken by the Board to accept the study submitted on behalf of
Honda North.
27. Both the Planning Commission and the Supervisors disagreed with the study’s
conclusion that a left-hand turning lane was not needed on Route 68.
Kaltenbaugh, 10-019
Page 7
a. Kaltenbaugh and his brother discussed the results of the study outside of a
formal meeting setting and believed that a left-hand turning lane was needed
on Route 68 regardless of what the results of the traffic study indicated.
28. On September 15, 2008, Palmiero finalized the purchase of the Ritenours’ parcels
of land for 1.1 million dollars.
a. The 4.796 acre parcel (#120-3F47-2AB-0000) (Lot 5R) sold for $700,000.00.
b. The 3.153 acre parcel (#120-3F47-2Y-0000) (Lot 4R) sold for $400,000.00.
29. In or about March 2009, ACI’s construction project manager for the Honda North
project began soliciting quotes from subcontractors.
a. Then ACI Assistant Project Manager/Estimator Bryan Sealer was
responsible for obtaining initial price quotes from subcontractors needed in
relation to the construction of the Honda North project.
30. Sealer began obtaining price quotes from subcontractors in relation to the Honda
North project as early as March 18, 2009.
a. Sealer obtained price quotes to generate a pool of subcontractors to select
from once Township approval was given for the project to begin.
1. The Township had not approved any Honda North plans by March
2009.
b. Sealer did not solicit any quotes from JL & RE Excavating.
c. Sealer left employment at ACI in June of 2009 without ever hearing of or
contacting Kaltenbaugh’s business, JL & RE.
31. On June 1, 2009, a Subdivision and Land Development application and plans for
the Honda North project were submitted to the Township for review by 4Most
Group/Engineering Development.
32. Township Engineer Bill Braun reviewed the application and plans related to the new
Honda North dealership between June 1, 2009, and June 15, 2009.
a. On June 15, 2009, Braun issued a letter to the Planning Commission
Members outlining twenty-three concerns he had with the Honda North land
development plans.
1. Of the twenty-three concerns, Braun was most concerned with storm
water management issues and turning lane issues that would result if
the plans were approved as submitted.
33. On June 17, 2009, the Planning Commission (including Ronald Kaltenbaugh)
discussed Braun's letter with Braun and Smith of Engineering Development, Honda
North’s engineer.
a. The Planning Commission tabled the Honda North land development plans
to be reviewed at a later date.
1. The Planning Commission made no recommendation to the Township
Supervisors to approve the Honda North land development plans at
that time.
Kaltenbaugh, 10-019
Page 8
b. The Planning Commission tabled the plans to provide Honda North time to
revise the plans in order to address the twenty-three issues outlined in
Braun's letter.
34. Kaltenbaugh, Sherry Lokhaiser (Planning Commission Member), and Township
Engineer Braun met at the location of the proposed Honda North dealership
subsequent to the June 17, 2009, Planning Commission meeting.
a. Kaltenbaugh, Lokhaiser, and Braun primarily discussed the storm water
management issues that would result via the construction of the proposed
dealership.
b. Township officials were concerned that if the storm water runoff was not
managed correctly that businesses/residents located downhill from the
proposed dealership might sue the Township for negligence if flooding
problems occurred on their property subsequent to the construction of the
dealership.
35. On or about June 19, 2009, Supervisor Hockenberry received correspondence from
the Butler County Planning Commission (“BCPC”) indicating that the BCPC
reviewed the Honda North plans in accordance with Section 502 (b) of the
Pennsylvania Municipalities Planning Code.
a. The BCPC advised Hockenberry of concerns of increased traffic that would
result on Kriess Road due to the construction of the Honda North dealership.
b. The BCPC further advised Hockenberry that PennDOT should review the
plans to determine whether a turning lane would be needed both east and
west on Route 68.
36. On June 26, 2009, Township Engineer Braun emailed Larry Smith, Engineer for
Honda North (Palmiero) to inform him of his concerns with the storm water
management being proposed by Engineering Development.
a. Braun’s concerns were outlined in his email as follows:
“Larry:
1. I am concerned about the storm water. You are adding approx. 8.8cfs
(100 yr storm) to the Henry Kriess property which it does not currently
receive. The storm system thru his property already appears
inadequate. It is unclear if you have accounted for the entire tributary
watershed for the Kriess storm system in the calcs. and does the inlet
on Kriess rd surcharge. The location of the new point of interest is
unclear. I suggest that the storm system thru the Kriess property be
studied and replaced as necessary or you install a “parallel” storm
system thru the Kriess (sic) property for the Honda North discharge
only.
2. I am concerned about the additional runoff conveyed to the SR 68
storm system due to the additional pavement widening on Kriess Rd.
Approval from PennDOT should be obtained.”
37. On June 30, 2009, Smith responded to the storm water concerns and the Route 68
turning lane issue via correspondence.
Kaltenbaugh, 10-019
Page 9
a. Smith addressed Braun’s storm water concerns without proposing any
changes to the storm water management plan submitted previously, and
indicated that he was opposed to a parallel storm water system.
b. Smith’s response also provided that “the installation of a turn lane on Route
68 was analyzed by David Wooster and Associates as a part of the traffic
study for this project. It was deemed to not be required as confirmed in
Wooster’s response dated June 16 that was previously submitted. In
addition, PennDOT has reviewed and approved the results of the traffic
study in their letter of August 6, 2008.”
38. On June 30, 2009, the Planning Commission recommended that the Supervisors
approve the plans related to the new Honda North dealership contingent upon the
Supervisors’ approval of the storm water management plan for the development.
a. Ronald Kaltenbaugh was present at the June 30, 2009, meeting.
b. The plans were recommended to the Supervisors for approval via a 4-0 vote
with Ronald Kaltenbaugh voting affirmatively.
39. At the June 30, 2009, meeting, the Planning Commission approved a motion
recommending the Supervisors contact PennDOT to discuss the potential need for
a turning lane on Route 68.
a. The motion passed unanimously via a 4-0 vote with Ronald Kaltenbaugh
voting affirmatively.
40. At the July 1, 2009, meeting of the Township Supervisors, the Honda North plans
were reviewed and discussed.
a. Kaltenbaugh was present at the meeting.
b. The Supervisors decided to table the plans for approval due to concerns
regarding the need for a left-hand turning lane on Route 68, and the storm
water management issues.
41. On July 10, 2009, correspondence was faxed to the Supervisors by Robert Bailey,
Counsel to Joe Palmiero, which addressed the concerns expressed by the
Supervisors at the July 1, 2009, meeting regarding the new Honda North facility.
a. Bailey's correspondence indicated that his firm has been in contact with
PennDOT representative David Tomaswick and that it was PennDOT's
position based upon the David E. Wooster and Associates traffic study that a
left-hand turning lane was not justified on Route 68 and that PennDOT would
not allow the construction of a left-hand turning lane by a private developer
without PennDOT approval.
b. Additionally, Bailey addressed the Supervisors’ concern that possible legal
action may come against the Township as a result of storm water draining
from the new Honda North dealership onto the property of downstream
landowners by citing LaForm v. Bethlehem Township and advised the
Supervisors that "pursuant to Section 1501 of the Township SALDO" the
owner (Palmiero) is required to release the Township from any responsibility
related to storm water.
c. Bailey concluded his correspondence by stating:
Kaltenbaugh, 10-019
Page 10
"We understand that the advertisement for the township meeting on Monday
July 13th did not include reference to the Honda North project. In light of the
rapidly passing summer building season, we respectfully request a special
meeting to be set before the end of July for consideration of the Honda North
project approval. Honda North is willing to pay the advertising costs for such
a meeting. Thank you for your kind consideration."
42. The Supervisors did not hold a special meeting in July 2009 to discuss the Honda
North project as requested by Palmiero's attorney.
a. The next regularly scheduled Supervisor meeting did not occur until August
5, 2009.
43. Palmiero was concerned that the Honda North project was losing valuable
construction time due to the Township tabling the approval of the project on June
17, 2009, by the Planning Commission and July 1, 2009, by the Township
Supervisors.
a. Palmiero also wanted the project to proceed so that the project would be
completed prior to the expiration of his rental agreement with Hollack.
44. As a result of the concerns raised by the Township Engineer and the Township
Supervisors with Honda North’s plans, a relative of Palmiero contacted Donald
Domhoff, a Township resident, for assistance in obtaining Township approval of
Honda North’s plans.
a. Domhoff previously served as a Member of the Township Planning
Commission from approximately 2000 to 2008.
45. Domhoff met with Palmiero at Palmiero's Honda North office in or about June of
2009 to discuss the situation involving Honda North and the Township.
a. The meeting was arranged by Palmiero or at Palmiero’s direction.
b. Domhoff was informed that Honda North was having problems getting the
plans approved.
c. Domhoff advised Palmiero that he would assist Honda North in receiving
Township approval.
46. In or about June and July 2009, Palmiero had discussions with ACI Manager
Buettell, Domhoff, architect Forsythe, and engineer Smith in order to strategize
ways to obtain Township approval of the Honda North project.
a. The majority of the discussions took place via the telephone or at Palmiero's
prior Honda North office.
47. Beginning on or about July 21, 2009, Kaltenbaugh began receiving telephone calls
from individuals associated with the Honda North project.
a. Domhoff and Palmiero both contacted Kaltenbaugh eight times between July
21, 2009, and July 23, 2009.
48. Kaltenbaugh maintains a cellular telephone through Sprint-Nextel.
a. The telephone number assigned to Kaltenbaugh’s cellular telephone is 724-
321-2910.
Kaltenbaugh, 10-019
Page 11
b. Kaltenbaugh maintained the cellular telephone at all times spanning the time
frame of the Honda North project.
c. Kaltenbaugh maintains a landline home telephone number through
CenturyLink.
1. The telephone number associated with Kaltenbaugh’s home
telephone number is [telephone number redacted].
49. Kaltenbaugh's cellular telephone records reflect that the first receipt of telephone
calls on his cellular telephone from Honda North representatives occurred after
Kaltenbaugh’s tabling of the Honda North plans at the July 1, 2009, Supervisors’
meeting.
a. Approximately one hour after Domhoff called Kaltenbaugh on July 21, 2009,
Palmiero called Domhoff at 9:49 a.m. and at 11:30 a.m.
1. Palmiero and Domhoff spoke for sixteen minutes during their second
conversation spanning the time frame of approximately 11:30 a.m. to
11:46 a.m.
b. Approximately twenty-three minutes after Domhoff spoke with Palmiero for
the second time on July 21, 2009, Domhoff called Kaltenbaugh at 12:09 p.m.
and at 12:22 p.m.
c. Palmiero talked to Domhoff and Buettell on July 22, 2009, for a combined
total of fifteen minutes prior to a telephone call being placed from the Honda
North dealership to Kaltenbaugh at 11:54 a.m. on July 22, 2009.
1. Palmiero subsequently called Kaltenbaugh three times during the
evening of July 22, 2009.
d. On July 23, 2009, Palmiero placed calls to Domhoff and Buettell for a
combined total of forty-three minutes prior to Domhoff’s call to Kaltenbaugh
on July 23, 2009, at 2:24 p.m.
50. Twenty-nine telephone calls totaling at least 128 minutes are documented as
having occurred between representatives of Honda North, ACI, and JL & RE
representatives between the dates of July 20, 2009, and July 23, 2009.
51. Neither Supervisors Evelyn Hockenberry nor Steve Misko were contacted outside of
Township meetings by Honda North representatives during the same time period
that Palmiero and Domhoff contacted Kaltenbaugh.
52. On or about July 16, 2009, Bailey, Counsel to Palmiero/Honda North, forwarded a
letter to then Township Solicitor Robert Hawk documenting his conversation with
Hawk on July 15, 2009.
a. Bailey asserts in his letter that his client, Joe Palmiero/Honda North, is in full
compliance with the Township’s requirements by referencing outcomes of
various court cases.
b. Bailey summarizes his letter by stating:
“Time is of the essence and damages continue to mount because of the
delays in approving this plan despite full compliance. We urge
Kaltenbaugh, 10-019
Page 12
Connoquenessing Township to promptly approve this plan so Honda North
can begin construction. Further delay will leave my client no choice but to
consider alternative methods of obtaining approval and recovering the
damages lost.”
53. Kaltenbaugh met with Palmiero at Palmiero’s Honda North office on at least one
occasion between July 1, 2009, and August 4, 2009.
a. Kaltenbaugh met with Palmiero to discuss how the Township and Honda
North could come to an agreement in regards to addressing the storm water
management aspects related to the Honda North project.
54. A letter dated August 4, 2009, was submitted to the Board of Supervisors by
Palmiero, proposing a resolution to the Board’s primary concerns with the Honda
North plans (Route 68 turning lane and storm water management).
a. The letter was to be reviewed by the Board at its August 5, 2009, meeting.
b. Palmiero’s letter provided that Honda North would reimburse the Township
$87,500.00 for expenses actually incurred by Connoquenessing Township in
its efforts to accomplish the completion of a left turn lane on Route 68
contingent upon the following five conditions:
1. “That Honda North receives, at the August 5, 2009 Township
meeting, final approval of its plans and approval to proceed
immediately with construction of its development project at the
intersection of Kriess Road and Route 68. Time is very much of the
essence and if such approval is not received on August 5, 2009, the
above offer of contribution shall be automatically withdrawn.”
2. “This contribution offer is on the further condition that the Township
selects between the Kriess Road and Route 68 storm-water
management system proposed by Honda North, but if the Kress [sic]
Road Storm-Water System is chosen by the Township, Honda North’s
construction obligations shall be limited to those appearing on the
Kriess Road Storm-Water Management drawings previously supplied
to the Township by Honda North. If the Township desires any
downstream work on the Kriess Road Storm-Water System, any such
work shall be at the sole option and expense of the Township.”
3. “If the Township removes the requirement of Honda North to construct
a turn-lane on Kriess Road, Honda North will raise the above
contribution by the sum of Twenty-Five Thousand ($25,000) Dollars.”
4. “That the above offer of contribution is made as a legal commitment
but is not to be paid unless and until the Township actually incurs
expenses related to the Route 68 turn-lane, at which time Honda
North will reimburse the Township for costs as and when incurred by
the Township.”
5. “Any portion of the above contribution that is not expended by August
5, 2014 shall automatically expire on that date.”
c. The Supervisors did not take any actions on the stipulations outlined within
Palmiero’s August 4, 2009, proposal.
Kaltenbaugh, 10-019
Page 13
55. The Board of Supervisors reviewed the Honda North plans at its August 5, 2009,
meeting and voted to approve the plans subject to conditions.
a. Kaltenbaugh was present at the meeting and participated in the discussions
and the vote.
b. A motion was made by Hockenberry and seconded by Kaltenbaugh to grant
preliminary and final approval to the Honda North Development at Kriess
Road and Route 68 contingent upon engineer review and approval of storm
water plans and contingent upon signing of legal agreements requiring
Honda North to deposit $87,500.00 in a Township account for improvements
to Route 68. Bonding amount required is 110% of construction cost, which
is $618,881.96. The motion was unanimously approved.
56. Honda North (Palmiero) was opposed to the contingencies approved by the Board.
57. On August 6, 2009, the day after the Board gave contingent approval to Honda
North’s plans, Palmiero, Domhoff and Kaltenbaugh were engaged in a series of
telephone calls.
a. The calls were initiated by Palmiero at 11:15 a.m. on August 6, 2009, with a
call to Domhoff.
b. Domhoff had a return call to Palmiero at 2:26 p.m., which lasted nine (9)
minutes.
c. Immediately after ending the call with Palmiero, Domhoff had a five (5)
minute call with Kaltenbaugh, which concluded at approximately 2:40 p.m.
d. Domhoff then called Palmiero at 2:52 p.m.
e. Also receiving calls from Palmiero during the 11:00 a.m. to 3:00 p.m. time
frame was ACI Project Manager Paul Buettell.
58. No other Connoquenessing Township officials were contacted on August 6, 2009.
59. On August 7, 2009, Palmiero hosted a groundbreaking ceremony at the future
Honda North location.
a. Kaltenbaugh attended the August 7, 2009, groundbreaking ceremony with
Palmiero, Domhoff, Buettell (ACI Project Manager) and other various
individuals associated with the Honda North project.
b. Kaltenbaugh was invited to the ceremony by Domhoff.
c. No other Member of the Township Board of Supervisors was invited.
60. At the groundbreaking ceremony of August 7, 2009, Kaltenbaugh spoke with
Buettell, ACI Construction Manager, regarding whether subcontractors were chosen
for the preliminary site preparation related to the project.
a. Buettell questioned Kaltenbaugh if Kaltenbaugh’s company was interested in
fencing of the septic area of the project.
b. Buettell later commented to Forsythe (architect for the Honda North project)
that he (Buettell) would have to issue Kaltenbaugh a purchase order for an
Kaltenbaugh, 10-019
Page 14
unknown dollar amount since Buettell had not obtained a quote or estimate
from Kaltenbaugh to do the preliminary site work.
1. Quotes had previously been obtained from subcontractors intended to
be used on the project.
2. Kaltenbaugh’s company, JL & RE, was not being considered for any
project work prior to or about August 2009.
61. Kaltenbaugh called Buettell on August 10, 2009, from his business landline (724-
789-7555), at 7:20 a.m. with the call lasting 2 minutes.
a. Buettell’s ACI cellular telephone (814-720-0502) records indicate that he
was in the Connoquenessing Township area on August 10, 2009.
62. As of August 11, 2009, the Board of Supervisors and Palmiero had not reached an
agreement in relation to a Route 68 turning lane and the storm water management.
63. On August 11, 2009, counsel for Honda North directed correspondence to the
Board of Supervisors, which provided as follows:
“Thank you very much for faxing me the appropriate pages of the draft Minutes of
th
the August 5 Township meeting dealing with the Honda North development project
approval. I do, however, have one correction which should be made.
th
Our payment proposal at the August 5 meeting was to reimburse the Township
(rather than deposit $87,500 at this time) as and when expenses are incurred
related to the Route 68 turn lane. In a draft letter I provided to the Township
Supervisors and your solicitor, the night of the meeting and earlier provided to
Engineer, William Braun (copy attached), the agreement is that Honda North will
legally obligate itself to reimburse Connoquenessing Township up to a maximum of
$87,500 for expenses actually incurred by Connoquenessing Township in its efforts
to accomplish the completion of a left turn lane on Rt. 68. Honda North agrees to
reimburse for not only construction costs but also engineering drawings and
expenses incurred in any grant applications as well as actual construction.
As drafted, the Minutes speak of a deposit being made to Connoquenessing
Township. A critical term of the negotiations with Mr. Braun prior to last week’s
meeting, was that the expenditure by Honda North, while legally binding, would only
occur if and when actual expenses were incurred directly related to the Rt. 68 turn
lane.
On behalf of my client, I request that you check with Mr. Braun to confirm this
arrangement (i.e. that it is a reimbursement, not a deposit at this time) and make the
appropriate changes in the minutes of the meeting and the resolution.”
64. At the August 5, 2009, Board meeting, the Supervisors (including Kaltenbaugh) did
not agree to the proposal that Honda North would only reimburse the Township a
maximum of $87,500.00 for expenses actually incurred by the Township in its
efforts to accomplish the completion of a left turn lane on Route 68.
65. JL & RE began work on the Honda North project on August 12, 2009, two days after
Kaltenbaugh called Buettell and six [sic] days after Kaltenbaugh participated in the
conditional approval of the Honda North project.
Kaltenbaugh, 10-019
Page 15
66. A JL & RE Job Order Form for “Customer Honda North” reflects that JL & RE
performed work between August 12, 2009, and August 14, 2009, related to the
construction of the new Honda North facility, as detailed below:
JOB ORDER FORM
JL & RE KALTENBAUGH
Date Phone # Customer: Honda North
Septic
8-12-09 Jack Install Chain Link Fence
8-13-09 Jack Labor 7hr, 7hr $175.00
8-14-09 Jack Labor 5 1/2hrs, 5 1/2 $137.50
8-13-09 Jack Home Depot 3x5 post $84.84
8-13-09 Jack Trader Horn Alum. Wire $21.00
Rental on Fence $381.50 Chain link - 6'H 400'L $763.00 plus
tax
$8,900.50
Paul @ Asso Contractors Cell 814-720-0502
Office 814-724-8200
a. Attached to the JL & RE Job Order Form was a “Celtic Healthcare” post-it
note that stated the following:
“Need Wayne’s hrs also.
8-13-09 10=5 (410) drove fence post 7hrs $490.00
8-14-09 7-12:30 Install fence – labor 5 ½ &137.50
<724-285-4000> Lowe’s”
b. A yellow post-it note appended to the JL & RE order form stated:
st
“1 Worked Performed
Verbal Contract
Between Paul from
Asso. Contractors + Jack K.
Date Invoiced 8/31/2009.
Start Date on Fence 8/12/2009
11/6/2009 CK 44886”
c. Paul from Assoc. Contractors refers to Paul Buettell.
67. A letter dated August 11, 2009, from Palmiero’s attorney to the Supervisors was
faxed to the Township on August 13, 2009, outlining Honda North’s understanding
of the conditions set by the Board of Supervisors regarding costs of a turn lane and
providing a consent and approval for the Board to sign. The letter noted the
following:
“Attached please find a proposed final letter outlining the specifics of the obligation
of Honda North to contribute up to $87,500 towards costs related to the Rt. 68 to
Kriess Road turn lane. The letter is substantially the same as the draft presented at
th
the August 5 meeting with the following exceptions:
1. The paragraph giving the Township the option of increasing the
contribution by eliminating of the Kriess Road left turn lane has been
eliminated at the request of the Township.
Kaltenbaugh, 10-019
Page 16
2. Paragraphs 5 and 6 address the extent to which Honda North might
receive some reimbursement of its payments to the Township in the
event grants are obtained to pay all of or part of the cost of the Rt. 68
turn lane. Paragraph 5 deals with the situation on where full grant
money is obtained with paragraph 6 addressing a situation where
only part of the project costs are covered by grants.
My client is prepared to sign the attached letter as soon as the Township approves
its format. You will see I have also added at the end a “Consent and Approval”
under which the Township consents to the terms and conditions of the letter and
references the Resolution passed at the August 5, 2009 meeting.”
68. The August 13, 2009, proposed agreement submitted by Honda North to the
Township Supervisors contained the following:
“Subject to the terms and conditions set forth below, Honda North herby agrees to
be legally obligated to reimburse Connoquenessing Township up to a maximum
amount of Eighty-seven Thousand Five Hundred and 00/100 ($87,500) Dollars for
expenses actually incurred by Connoquenessing Township in its efforts to
accomplish the completion of a left turn lane on Route 68 (on to Kriess Road). This
would include reimbursement for actual expenses incurred in any grant applications
and, of course, actual construction costs incurred by the Township.
This offer is, however, under and subject to the following conditions:
1. That Honda North receives, at the August 5, 2009 Township meeting,
final approval of its plans and approval to proceed immediately with
construction of its development project at the intersection of Kriess
Road and Route 68. Time is very much of the essence and if such
approval is not received on August 5, 2009, the above offer of
contribution shall be automatically withdrawn.
2. This contribution offer is on the further condition that the Township
selects between the Kriess Road and Route 68 storm-water
management system proposed by Honda North, but if the Kriess
Road Storm-Water System is chosen by the Township, Honda North’s
construction obligations shall be limited to those appearing on the
Kriess Road Storm-Water Management drawings previously supplied
to the Township by Honda North. If the Township desires any
downstream work on the Kriess Road Storm-Water System, any such
work shall be at the sole option and expense of the Township.
3. That the above offer of contribution is made as a legal commitment
but is not to be paid unless and until the Township actually incurs
expenses related to the Route 68 turn-lane at which time Honda
North will reimburse the Township for costs as and when incurred by
the Township.
4. Any portion of Honda North’s obligation to reimburse that has not
been expended by August 5, 2014 shall automatically expire on that
date.
5. In the event Connoquenessing Township receives any sum or sums
of money, other than from township tax receipts, not requiring
repayment and/or reimbursement by Township and said payments are
used to pay the costs of the design and construction of the Rt. 68 turn
lane, (including but not limited to state and federal grants which sums
Kaltenbaugh, 10-019
Page 17
(collectively referred to as “Grant Money”)) and said sum or sums
equal to exceed the cost of the design and construction of the Rt. 68
turn lane, Honda North shall be released from any obligations to
reimburse Township for said costs and Township shall repay to
Honda North, all sums Honda North has reimbursed to Township.
6. If the Total Grant Money received by Township or paid directly for
project costs does not pay the entire cost of the design and
construction of the Rt. 68 turn lane, Honda North shall be reimbursed
by Township for payments made and relieved of future payment
obligations to pay Township in an amount equal to ½ of the total
Grant Money received by Township or applied against Route 68 turn
lane project.”
69. Kaltenbaugh/JL & RE was actively working at the Honda North site during the time
period that the August 13, 2009, agreement was submitted to the Township for
consideration of meeting the contingencies cited by the Board at the August 5,
2009, meeting.
70. Between August 24, 2009, and September 9, 2009, Kaltenbaugh and Buettell
(Honda North Project Manager) maintained regular telephonic contact.
a. Palmiero also telephonically contacted Kaltenbaugh during this time.
b. These contacts occurred during the period when the Township had placed
contingencies on Honda North’s plans, which had not been implemented.
71. Between August 24 and September 9, 2009, Kaltenbaugh and Buettell spoke by
telephone on seventeen occasions for a total of thirty-three minutes.
a. Buettell’s ACI cellular records show that he was in the Connoquenessing
Township area on the following dates:
1. August 31, 2009
2. September 1, 2009
3. September 2, 2009
4. September 4, 2009
5. September 9, 2009
6. September 16, 2009
7. September 17, 2009
b. Buettell and/or Palmiero contacted and/or were contacted by Kaltenbaugh
via telephone on the following five days that Buettell was in the
Connoquenessing Township area:
1. August 31, 2009
2. September 1, 2009
3. September 2, 2009
Kaltenbaugh, 10-019
Page 18
4. September 4, 2009
5. September 9, 2009
c. Supervisors Hockenberry and Misko were not contacted during this time
frame by any Honda North representative.
72. Kaltenbaugh called Buettell on September 2, 2009, at 7:37 a.m. and spoke for five
minutes on the same day as the Board of Supervisors was scheduled to meet to act
on Honda North’s August 13, 2009, proposal.
73. On September 2, 2009, Buettell and ACI Project Manager Kevin Tinko traveled to
the Honda North site together.
a. Buettell was familiarizing Tinko with the Honda North project since Buettell
was leaving the project and Tinko was to take over for him as Project
Manager.
b. Buettell made him aware of several subcontractors including JL & RE.
1. Buettell made Tinko aware of Supervisor Kaltenbaugh’s association
with JL & RE.
74. At the September 2, 2009, Supervisor meeting, the Supervisors reviewed the
August 13, 2009, agreement proposed by Honda North via fax.
a. Kaltenbaugh was present at the September 2, 2009, meeting and
participated in the discussions regarding the agreement.
b. Supervisor Steve Misko stated that he opposed paragraphs three, five, and
six of the agreement.
c. The Supervisors (including Kaltenbaugh) voted 3-0 to not accept the
agreement proposed by Honda North.
75. Tinko’s ACI cellular telephone (814-720-9784) records reflect that on September
16, 2009, at 8:29 a.m., Tinko called Kaltenbaugh’s residence.
76. Kaltenbaugh and his brother submitted a proposal to ACI on September 16, 2009,
in relation to digging footers for the structure of the Honda North dealership.
a. Kaltenbaugh and his brother previously presented their verbal bid to Tinko at
the Honda North project work site.
b. The bid was memorialized on an ACI Phone Bid sheet dated September 16,
2009.
c. The initial bid provided by JL & RE was in the amount of $36,800.00.
77. On September 17, 2009, ACI negotiated with Kaltenbaugh and his brother a
reduction in the JL & RE bid from $36,800.00 to $33,200.00.
a. Kaltenbaugh and his brother agreed to perform the footer work for the
negotiated price of $33,200.00.
b. The negotiated price of $33,200.00 was memorialized on the ACI Phone Bid
sheet dated September 16, 2009, indicating an addendum had occurred on
Kaltenbaugh, 10-019
Page 19
September 17, 2009, reducing the cost of the work from $36,800.00 to
$33,200.00.
78. JL & RE entered into a contract with ACI on September 18, 2009, to perform work
related to the Honda North project to include “the installation of concrete footings
and piers, to include rebar and foundation insulation installation, excavation, and
backfill” for $33,200.00.
a. The agreement provided that the subcontract sum of $33,200.00 included
“labor, materials, equipment, services, and other items required to complete
the agreed upon work.”
b. The agreement also stipulated that the subcontract sum of $33,200.00 was
“subject to additions and deductions as provided within the subcontract
documents.”
c. Kaltenbaugh executed the agreement on behalf of JL & RE on September
18, 2009.
79. At the time Kaltenbaugh/JL & RE submitted the bid to ACI and signed the contract
for the footer work at the Honda North job site, the Township had not approved the
contingencies for the project.
80. ACI Superintendent Daily Reports confirm that JL & RE performed work at the
Honda North job site on seventeen occasions from September 21, 2009, through
October 20, 2009, until its contractual agreement with ACI was complete.
81. Additional ACI Superintendent Daily Reports reflect that JL & RE performed
miscellaneous work at the Honda North job site between October 21, 2009, and
November 3, 2009, as shown below:
Report Date Description of Work Completed by JL & RE ACI
Superintendent's
Signature
10-21-2009 Load out dirt, J & R 8 loads Unknown
10-22-2009 Load out dirt, J & R 4 loads Unknown
10-30-2009 ACI – clean up job site, called Jack to take fence down Steve Minor
at septic location
11-3-2009 J & R – demo fence that was in our way Steve Minor
a. The JL & RE work described above was performed at no charge to ACI.
82. At the October 7, 2009, Board of Supervisors meeting, Township Engineer Braun
informed the Board that storm water running off of the Honda North facility was to
be discharged via a pipe down Kriess Road to an existing outlet.
a. No other discussions regarding the contingencies of the Honda North project
[occurred].
83. Kaltenbaugh kept in telephonic contact with Minor and Tinko while JL & RE was
performing work related to the footers of the Honda North dealership as well as
performing other miscellaneous work. Kaltenbaugh and Minor were in telephonic
contact eight times on September 23 and September 29, 2009, for a total of in
excess of 13 minutes. Kaltenbaugh and Tinko were in telephonic contact six times
between October 19 and November 3, 2009, for a total of 13 minutes.
Kaltenbaugh, 10-019
Page 20
84. On or about November 4, 2009, Kaltenbaugh and Hockenberry, in their capacities
as Township Supervisors, agreed to Honda North’s proposal to resolve the
outstanding issues (turn lane and storm water management).
a. Kaltenbaugh consented to and approved the August 13, 2009, agreement
proposal by Honda North.
b. Kaltenbaugh’s and Hockenberry’s signing of the agreement enabled Honda
North to proceed with the project.
85. There was no vote of the Board of Supervisors approving the proposal.
a. Minutes of the Board of Supervisors’ meeting of November 4, 2009, confirm
no vote or action of the Board.
b. Minutes reflect under Solicitor’s report the following:
“The agreement between Honda North and Connoquenessing Township that
Honda North contribute $87,000 to the building of a turning lane on Rt. 68
when construction of lane begins and if said lane is to be paid with taxpayer
monies only. The agreement was signed by Hockenberry and Kaltenbaugh.
Misko, opposed.”
86. The agreement proposed by Honda North contains the signatures of Kaltenbaugh
and Hockenberry approving the terms and condition set forth by Honda North.
a. Supervisor Misko was opposed to the agreement and refused to sign the
document.
87. Without Kaltenbaugh’s signature on the agreement approving the terms, Honda
North would not have been able to complete the project.
a. Honda North wanted the project to advance as it considered time of the
essence due to the passing of the building season.
88. By signing the agreement proposed by Honda North, Kaltenbaugh agreed to the
following:
a. To accept the storm water management systems proposed by Honda North.
b. Not requiring Honda North to escrow an amount of $87,500.00 in a
Township-controlled escrow account for the completion of a left turn lane on
Route 68 onto Kriess Road.
89. Palmiero and Domhoff and Kaltenbaugh maintained telephonic contact immediately
prior to and after the November 4, 2009, Board meeting by 14 phone calls between
the parties totaling in excess of 112 minutes.
a. Kaltenbaugh was contacted by both Domhoff and Palmiero on November 5,
2009, after Kaltenbaugh signed the consent for the Route 68 agreement at
the November 4, 2009, Supervisor meeting.
90. Supervisor Hockenberry was not contacted by Palmiero or Domhoff before or after
the November 5, 2009, meeting.
91. Supervisor Misko received a telephone call from Domhoff on or about November 4,
2009, requesting him to reconsider his position on the Honda North proposal.
Kaltenbaugh, 10-019
Page 21
a. Misko had been opposed because the agreement did not require Honda
North to escrow funds for any improvements deemed necessary.
92. Six days after [Kaltenbaugh signed] the consent authorizing Honda North to
continue with the project, Kaltenbaugh’s company was authorized to complete
additional work on Honda North’s site.
a. On November 10, 2009, Tinko faxed Kaltenbaugh a description of work that
needed to be completed at the Honda North work site, as follows:
“Per our conversation….SK-1 & SK-2 reflect additional footing needed ASAP
at front entrance. SK-3 reflects revised gas meter location & line routing to
Kriess Road. Please provide costs for footing ASAP & coordinate w/Steve.
Call me w/ any?”
b. An ACI Phone Bid sheet confirmed that Kaltenbaugh provided a telephonic
quote to Tinko on November 16, 2009, regarding the completion of
additional work at the Honda North work site.
c. The additional work Kaltenbaugh bid on included the following:
1. Excavate and install main entrance radius footer and foundation wall,
$5,000.00.
2. Installation of gas service main line from Kriess Road to building,
$2,750.00.
3. Installation of sand mound system including septic/dousing tank,
pump & discharge, $9,400.00.
93. An AIA Document G701-2001 Change Order form for the ACI/Honda North project
was generated by ACI on November 24, 2009.
a. The form identified the change order as number “001” for JL & RE.
b. The form indicated that the change order was for the following work to be
completed by JL & RE:
1. Excavate and install main entrance radius footer and foundation wall,
$5,000.00.
2. Installation of gas service main line from Kriess Road to building,
$2,750.00.
3. Installation of sand mound system including septic/dousing tank,
pump & discharge, $9,400.00.
c. The change order was for a total of $17,150.00 in work to be completed by
JL & RE.
d. Kaltenbaugh signed the form on behalf of JL & RE on December 8, 2009.
94. ACI Superintendent Daily Reports indicate that JL & RE was at the Honda North job
site fulfilling two aspects of Change Order 001 on four occasions between
November 20, 2009, and December 15, 2009.
Kaltenbaugh, 10-019
Page 22
a. JL & RE did not begin working on the installation of the sand mound until
approximately late March/early April 2009 [sic].
95. In or about November 2009, Honda North expressed interest to the Township in
developing a parking lot on Lot 4R.
a. The Honda North land development plans approved by the Supervisors on
August 5, 2009, were only in relation to the construction of a dealership
building and parking lot areas on Lot 5R.
1. The plans approved by the Supervisors included an oversized
retention pond on Lot 5R.
b. The plans did not include the development of Lot 4R.
c. The original plans included an oversized retention pond to handle storm
water runoff from Lot 5R and Lot 4R.
96. The Township Land Development Ordinances (Ordinance 45, July 14, 1987, as
amended through Ordinance 59, September 9, 1997) require that a ten foot buffer
area separate commercial properties from each other.
a. Any kind of shrubbery is considered an adequate buffer.
b. The Honda North land development plans approved by the Supervisors on
August 5, 2009, reflected a ten foot buffer area between Lot 5R and Lot 4R.
97. Township approval was required to have the ten foot buffer area removed from the
plans previously approved by the Supervisors on August 5, 2009, in order to begin
the process of developing the area [of] Lot 4R as a parking lot.
98. At the December 16, 2009, Planning Commission meeting, the Planning
Commission recommended the approval of the removal of all buffers on the east
side of the Lot 5R property between the Honda North dealership and Lot 4R.
a. Ron Kaltenbaugh was present at the meeting and voted in favor of
recommending to the Supervisors the removal of the ten foot buffers
between Lot 5R and Lot 4R.
b. JL & RE was recorded as working at the Honda North job site just one day
prior to the December 16, 2009, Planning Commission meeting.
99. The Planning Commission recommendation was not binding on the Township Board
of Supervisors.
a. Supervisor action was required to remove the buffer area.
100. Kaltenbaugh began receiving calls from Palmiero the day after the December 16,
2009, Planning Commission meeting.
a. Kaltenbaugh was the only Supervisor contacted by Honda North/ACI
representatives outside of public Township meetings during this time period.
101. Palmiero called Kaltenbaugh on his cellular telephone (#724-321-2910) and his
business landline (#724-789-7555) three times on December 17 and 18, 2009, for a
total of approximately five minutes.
Kaltenbaugh, 10-019
Page 23
102. The Honda North plan revisions to eliminate the buffer zone were to be considered
by the Board of Supervisors on January 6, 2010.
a. Prior to the January 6, 2010, Supervisors meeting to consider the removal of
the ten foot buffer between Lot 5R and Lot 4R, Kaltenbaugh received a
telephone call on December 28, 2009, and six telephone calls on January 4,
2010, on his cellular telephone (#724-321-2910) from Palmiero and Domhoff
totaling seventeen minutes.
b. Domhoff called Kaltenbaugh on January 4, 2010, shortly after conversing
with Palmiero.
1. Palmiero then telephoned Domhoff shortly after Domhoff called
Kaltenbaugh.
c. Kaltenbaugh was the only Supervisor contacted by Honda North/ACI
representatives outside of public Township meetings during this time period.
103. At the January 6, 2010, Supervisors’ meeting, the Supervisors approved the
removal of a ten foot buffer between Lot 5R and Lot 4R.
a. Kaltenbaugh and Hockenberry were the only Supervisors present at the
meeting.
b. Kaltenbaugh suggested that Honda North add a one-hundred foot buffer to
the rear of the dealership since Honda North was requesting the removal of
the ten foot buffer between Lot 5R and Lot 4R.
c. [Kaltenbaugh seconded a motion by Hockenberry for] the removal of the ten
foot buffer area between Lot 4R and Lot 5R from the original Honda North
land development plans and [the addition of] a one hundred foot buffer … to
the rear of Lot 5R.
1. Kaltenbaugh cast the deciding vote to remove the buffer.
2. Kaltenbaugh voted at a time when his company was contracting with
Honda North to perform site improvements to Lot 4R and Lot 5R.
104. In February 2010, Palmiero and Domhoff maintained telephonic contact with
Kaltenbaugh, as shown below:
Calling Individual Number Individual Date Time Min. of Call
Number Calling Called Called
814-282-6990 Palmiero 724-789-2430 Domhoff 2-3-10 10:13 a.m. 8
724-789-2430 Domhoff 724-321-2910 Kaltenbaugh 2-3-10 10:20 a.m. 3 (24 sec)
814-282-6990 Palmiero 724-789-2430 Domhoff 2-3-10 10:24 a.m. 7
814-282-6990 Palmiero 724-789-2430 Domhoff 2-3-10 6:54 p.m. 7
814-282-6990 Palmiero 724-789-2430 Domhoff 2-3-10 9:07 p.m. 6
724-789-2430 Domhoff 724-321-2910 Kaltenbaugh 2-3-10 9:13 p.m. 2 (2 sec)
814-720-6038 Minor 724-321-2910 Kaltenbaugh 2-18-10 10:42 a.m. 1 (57 sec)
724-789-2430 Domhoff 724-321-2910 Kaltenbaugh 2-20-10 1:09 p.m. 3 (33 sec)
814-720-6038 Minor 724-321-2910 Kaltenbaugh 2-26-10 10:01 a.m. (58 sec)
a. Kaltenbaugh was the only Supervisor contacted by Honda North/ACI
representatives via telephone outside of public Township meetings during
this time period.
Kaltenbaugh, 10-019
Page 24
105. In March of 2010, bids were solicited by ACI to develop Lot 4R into a gravel parking
lot and to install a catch basin at the southeast area between Lot 5R and Lot 4R.
a. A catch basin was recommended to be installed prior to the southeast
parking lot of Lot 5R being graded, graveled, and chipped so that the work
related to the southeast Lot 5R parking lot would not have to be disturbed to
install the catch basin for Lot 4R at a later date.
106. ACI solicited four bids between March 17, 2010, and March 29, 2010, related to
graveling Lot 4R and installing a catch basin between Lot 5R and Lot 4R, as show
below:
Company Date Catch Basin Cost Parking Lot Cost Total Bid
Solicited
Forbes Excavating 3-17-2010 $6,327.00 (no basin) $102,191.00 $108,518.00
JL & RE 3-18-2010 $3,200.00 (w/ basin) $126,300.00 $129,500.00
Sonntag Excavating 3-19-2010 $4,010.00 (w/ basin) $71,600.00 $75,610.00
Blain Excavating/ 3-29-2010 $4,061.00 (w/ basin) $115,834.00 $119,895.00
Spangler Bros. Paving
a. JL & RE was the lowest bidder regarding the catch basin work as of March
29, 2010.
b. JL & RE was the highest bidder regarding the gravel parking lot work as of
March 29, 2010.
c. Kaltenbaugh prepared the JL & RE bid.
107. In March 2010, JL & RE installed septic tanks and grading work at the Honda North
job site as reflected by the following ACI Superintendent Daily Reports:
Report Date Description of Work Completed by JL &RE ACI
Superintendent’s
Signature
3-11-2010 J & R - dug & set septic tanks Steve Minor
3-19-2010 J & R - start 2' pipe from septic to sand mound Steve Minor
3-24-2010 J & R - making grade at south site near car wash Steve Minor
3-25-2010 J & R - Exterior grading Steve Minor
3-26-2010 J & R - grade at east side Steve Minor
a. JL & RE was not solicited by ACI for a formal quote and/or bid to perform the
grading work performed from March 24, 2010, to March 26, 2010.
b. Kaltenbaugh and Tinko verbally agreed that JL & RE could perform grading
work at the east and south side of the dealership to correct previous grading
work that was performed by Forbes Excavating but ruined by weather
conditions.
108. In or about late March/early April 2010, the developers associated with the Honda
North project decided to delay the graveling of Lot 4R.
a. Instead of graveling Lot 4R, it was decided to proceed just with the
installation of the catch basin between Lot 5R and Lot 4R.
109. JL & RE submitted a follow-up bid to [its] March 29, 2010, bid on April 1, 2010.
Kaltenbaugh, 10-019
Page 25
a. The follow-up bid was related to the catch basin work only.
b. The JL & RE bid to install the catch basin was $460.00 more than previously
bid on March 29, 2010.
110. JL & RE’s March 18, 2010, bid was accepted by ACI on or about April 5, 2010.
a. ACI Change Order number 002 was issued on or about April 13, 2010,
indicating that JL & RE was awarded the additional payment of $3,660.00
related to the catch basin work.
b. Ron Kaltenbaugh signed the change order on behalf of JL & RE.
111. In April of 2010, JL & RE completed grading, septic system and catch basin [work]
at the Honda North job site as reflected by ACI Superintendent Daily Reports, as
detailed below:
4-1-2010 J+R - started sand mound + grading behind building
4-2-2010 J+R - continue w/ sand mound and grading
4-5-2010 J+R - set catch basin + pipe on east side, continue to grade parking lot for limestone
4-6-2010 J+R - grade behind building
4-7-2010 J+R - making grade S/E corner
4-8-2010 J+R - grading East + South lot
4-9-2010 J+R - set catch basin + make grade
4-12-2010 J+R - grading south end
4-15-2010 J+R - grade lot, at South
4-16-2010 J+R - grade south side
4-19-2010 J+R - grade at south side
4-20-2010 J+R - grade at south entrance
a. JL & RE performed work related to Lot 4R by setting the catch basin
between April 5, 2010, and April 9, 2010.
b. The Supervisors had not approved any work to be done at Lot 4R during the
time that the catch basin was being set by JL & RE.
c. The grading work performed was a continuation of the corrective grading
work that was started in late March.
1. JL & RE was not solicited by ACI for a formal quote and/or bid to
perform the grading work performed from April 1, 2010, to April 20,
2010.
112. Domhoff on behalf of Honda North attended the May 5, 2010, Supervisors’ meeting
to seek approval to move and level off the topsoil located on Lot 4R and to seed the
lot.
a. Honda North planned on using the area as a parking lot.
b. Kaltenbaugh and Hockenberry were the only Supervisors present at the
meeting.
113. Minutes of the May 5, 2010, Board meeting reflect that Hockenberry questioned
Domhoff’s request by asking, “So they are going to plant grass and then park cars
on it so the grass won’t grow?”
Kaltenbaugh, 10-019
Page 26
a. Braun stated that he did not see a problem with the request as it relates to
ground cover and storm water management.
b. Kaltenbaugh stated that he did not know they were planning that but did not
see a problem either.
c. No formal vote of approval was given by the Supervisors in regards to
Domhoff’s request.
114. Immediately after the May 5, 2010, meeting adjourned, Palmiero received a call
from Kaltenbaugh’s son’s cellular telephone ([telephone number redacted]) at 9:11
p.m.
a. The duration of the call was two minutes and thirty seconds.
115. Between May 10, 2010, and May 17, 2010, Kaltenbaugh kept in contact with Honda
North and ACI representatives by telephone on nine occasions totaling in excess of
16 minutes.
a. Kaltenbaugh was the only Supervisor contacted by Honda North/ACI
representatives via telephone outside of public Township meetings during
this time period.
116. Domhoff, on behalf of Honda North, attended the May 19, 2010, Planning
Commission meeting to seek Planning Commission approval to grade and gravel
Lot 4R for use as a parking lot.
a. The Planning Commission informed Domhoff that he must come back to the
Planning Commission with “numbers and figures” regarding the proposed
modifications to Lot 4R as well as present storm water management plans.
b. The Planning Commission did not recommend that the Supervisors approve
Domhoff’s request.
117. JL & RE submitted invoices #246 dated June 1, 2010, and #253 dated June 24,
2010, for work completed related to development of the area between Lot 5R and
Lot 4R, as shown below:
Invoice #246
Quantity Item Code Description Price Amount
Each
Extra work performed for parking
lot from 5/22 - 5/25/2010
1 Silk fence Silk fence $167.98 $167.98
27 Straw 27 bales of straw $3.00 $81.00
8.5 Labor Labor $25.00 $212.50
22 410 Backhoe $70.00 $1,540.00
9.5 700 Dozer $90.00 $855.00
26 130 Big skid steer $60.00 $1,560.00
257.93 2A Limestone 257.93 Tons Delivered $18.00 $4,642.74
Limestone
42.4 Limestone Note ***** Limestone **** Special $19.50 $826.80
Better looking stone
42.40 Tons
Kaltenbaugh, 10-019
Page 27
Quantity Item Code Description Price Amount
Each
Total:
$9,886.02
Invoice #253
Quantity Item Description Price Amount
Code Each
Add Dandy sack in parking lot, from
rain wash outs, more straw bales to
divert water and silk fence. 5/25/10
& 6/2/10
21 Straw 21 bales of straw $4.00 $84.00
1 Dandy Dandy Sack $70.70 $70.70
Sack
8 Labor Labor 8 hrs $25.00 $200.00
1 Silk Fence $63.99 $63.99
Fence
Total:
$418.69
a. JL & RE invoices #246 and #253 dated June 1, 2010, and June 24, 2010,
respectively, for a combined total of $10,304.71, were submitted to Honda
North for payment related to work completed between Lot 5R and Lot 4R.
1. JL & RE was authorized to do the work via a verbal agreement
between Kaltenbaugh and Palmiero.
b. Palmiero did not solicit competitive bids for the work invoiced by JL & RE.
118. Work performed for Honda North/Palmiero reflected in JL & RE invoices #246 and
#253 included the installation of a swale, a limestone-slanted parking lot area
between Lot 5R and Lot 4R, and steps taken to control storm water runoff.
a. The swale, catch basin, and limestone-slanted parking lot area between Lot
5R and Lot 4R were not originally a part of the Honda North land
development plans approved by the Supervisors on August [5], 2009.
119. The Supervisors had not approved the swale, catch basin, and limestone parking
lot of Lot 5R and Lot 4R related to the Honda North project.
a. Supervisor approval was required since this work constituted a change from
the original plans approved by the Board.
120. Plans to develop Lot 4R were not formally submitted by Smith to the Township until
on or about July 7, 2010.
a. Township Engineer Braun issued a letter to the Supervisors on or about July
13, 2010, documenting five concerns he had with the Lot 4R plans.
b. On August 25, 2010, Braun emailed Hockenberry, informing her that after
several revisions of the Lot 4R plans with Smith, it was being recommended
Kaltenbaugh, 10-019
Page 28
that the Lot 4R plans be determined to be consistent with the Township
Storm Water Management Ordinance.
c. On August 25, 2010, Hockenberry issued a letter to Honda North stating that
the Lot 4R plans had been determined to be consistent with the Township
Storm Water Management Ordinance.
121. At the November 4, 2010, Supervisors’ Meeting, Braun informed the Supervisors
that Honda North had decided to blacktop Lot 4R instead of tarring and chipping it.
a. Kaltenbaugh disagreed with Honda North’s decision and indicated that the
surface should be tarred and chipped due to storm water management
concerns.
b. The Supervisors did not approve of Honda North paving Lot 4R at the
meeting.
122. At the December 1, 2010, Supervisors’ meeting, Braun informed the Supervisors
that he had received Honda North’s “as-built” plans to pave Lot 4R, but was still
working with Smith to get the plans corrected.
a. At the December 29, 2010, Supervisors’ meeting, Domhoff on behalf of
Honda North showed the plans to the Supervisors regarding the
blacktopping of Lot 4R.
1. Kaltenbaugh said the as-built drawings related to Lot 4R needed to
be changed and reviewed by Braun before the Supervisors would
vote to approve them.
b. The Supervisors have not yet approved any plans for Lot 4R.
123. Kaltenbaugh and his company JL & RE entered into contracts with Honda
North/Palmiero beginning in or about August 2009 to perform services in relation to
a project that required approval of the Connoquenessing Township Supervisors.
a. Kaltenbaugh voted on August 5, 2009, to grant approval of Honda North’s
land development subject to conditions, and seven days later his company
began performing services in relation to Honda North’s project.
b. Kaltenbaugh’s company performed services between August 2009 and
October 2009, prior to the Supervisors final acceptance of Honda North’s
plans and contingencies.
1. Kaltenbaugh accepted contingencies proposed by Honda North on or
about November 5, 2009, even though his company was a Honda
North subcontractor.
c. Kaltenbaugh’s company continued to contract with Honda North after
Kaltenbaugh signed the agreement accepting Honda North’s proposal.
124. During the time period of August 2009 through October 2009, JL & RE submitted
invoices to ACI in relation to the development of Lot 5R totaling $34,805.80.
a. During the time period that JL & RE invoiced ACI for work performed in
relation to the development of Lot 5R, the Supervisors had not approved
Honda North’s proposal to meet contingencies required by the Board.
Kaltenbaugh, 10-019
Page 29
1. The Supervisors did not come to an agreement as to how the
contingencies of the project would be met until November 4, 2009.
125. Between December 4, 2009, and June 1, 2010, JL & RE billed ACI an additional
$40,721.75 in relation to the development of Lot 5R and the area between Lot 5R
and Lot 4R subsequent to the November 4, 2009, agreement.
a. Of the $40,721.75 invoiced to ACI, $4,974.25 was related to catch basin
work.
1. At the time the catch basin work was completed between Lot 5R and
Lot 4R, the Supervisors had yet to approve any plans for the
installation of said catch basin.
126. JL & RE invoiced Honda North $10,304.71 on invoices dated June 1 and 24, 2010,
in relation to the development of the area between Lot 5R and Lot 4R prior to any
Supervisor approval.
a. The work performed between Lot 5R and Lot 4R for Honda North occurred in
late May/early June 2010.
b. Plans to develop the area were not submitted to the Township for approval
until July 7, 2010.
127. JL & RE was paid a total of $85,832.75 for work completed for ACI/Honda North
covering the time period of August 2009 through June 2010.
a. ACI did not pay the full amount of JL & RE invoices 162, 164, 179, 186, 223,
and 235 at that time that payment was issued.
1. ACI did not pay a certain percent of the total initially invoiced to ACI.
2. The percentage withheld from payment acted as a retainer fee to be
paid at the completion of the project.
3. JL & RE received reimbursement of the retainer fees previously taken
via ACI check 047187.
b. ACI overpaid what was invoiced by JL & RE by $0.49.
128. JL & RE has maintained a bank account ([account number redacted]) at First
National Bank since at least January 18, 1982.
a. Kaltenbaugh and Ron Kaltenbaugh both have signature authority over the
bank account for JL & RE.
129. Payments issued to JL & RE by ACI totaling $75,528.04 and Honda North totaling
$10,304.71 in relation to the Honda North development were deposited into the
business bank account for JL & RE.
a. The majority of the checks issued to JL & RE were deposited in 2010.
b. The only check deposited in 2009 was ACI check no. 044886 dated October
30, 2009, in the amount of $1,325.00.
c. A total of $85,832.75 was paid to JL & RE for work performed for the Honda
North project.
Kaltenbaugh, 10-019
Page 30
130. U.S. Return of Partnership Income forms (#1065) for JL & RE for calendar years
2008, 2009, and 2010 reflect that JL & RE realized a profit percentage, as shown
below:
Year Gross Profit Net Profit Profit Percentage
2008 $354,131.00 $42,241.00 11.9%
2009 $255,440.00 $55,530.00 21.7%
2010 $277,167.00 $57,534.00 20.7%
a. The Honda North project was not yet approved by the Supervisors in 2008
when JL & RE realized a profit percentage of 11.9%.
b. JL & RE realized a profit percentage of 21.7% in 2009.
1. Of the $255,440.00 gross profit realized by JL & RE in 2009,
$1,325.00 was related to the Honda North project.
2. Only one ACI check (#044886) related to the Honda North project
was deposited into the JL & RE bank account in 2009.
c. JL & RE realized a profit percentage of 20.7% in 2010.
1. Of the $277,167.00 gross profit realized by JL & RE in 2010,
$84,507.75 was related to the Honda North project.
131. JL & RE realized a total net profit of $287.52 ($1,325.00 x 21.7[%] = 287.52) in
2009 in relation to work the business with which Kaltenbaugh is associated
performed for Honda North/ACI.
a. Kaltenbaugh’s portion of the profit was $143.76 ($287.52 / 2 = 143.76) in
2009 in relation to work performed for Honda North/ACI.
132. JL & RE, the business with which Kaltenbaugh is associated, realized a total net
profit of $17,493.10 ($84,507.75 x 20.7[%] = $17,493.10) in 2010 in relation to work
performed for Honda North/ACI.
a. Kaltenbaugh’s portion of the profit was $8,746.55 (17,493.10 / 2 = 8,746.55)
in 2010 in relation to work performed for Honda North/ACI.
133. Kaltenbaugh received net profits of $8,890.31 in relation to completing work for
Honda North/ACI in 2009 and 2010.
a. JL & RE net profits for 2009 and 2010 from contracting services performed
on behalf of Honda North totaled $17,780.62.
134. Kaltenbaugh provided SEC Investigators with sworn testimony on June 7, 2011,
during which he averred in part as follows:
a. Kaltenbaugh admitted he was telephonically contacted by Palmiero and
Domhoff prior to the August 5, 2009, Supervisors’ meeting.
1. He denied answering the calls that were placed by Palmiero and
Domhoff to his cellular telephone.
b. He is in favor of new development within the Township because of the
economic impact it brings to the community.
Kaltenbaugh, 10-019
Page 31
c. Kaltenbaugh was in favor of Honda North’s intentions to construct a new
dealership at the intersection of Route 68 and Kriess Road.
d. He admitted that if Honda North had decided to develop in an area outside
the geographical area of Connoquenessing Township, it would have been
difficult for JL & RE to obtain any work in relation to the project.
e. He voted to give preliminary and final approval to the Honda North project at
the August 5, 2009, meeting with the understanding that two contingencies
(storm water management and turning lane on Route 68) needed to be
resolved by the Township and Honda North in the future.
1. He was aware of the 2009 time constraints Honda North was under to
begin development prior to weather conditions worsening subsequent
to August 2009.
2. He acknowledged granting leniency to Honda North by granting
Honda North partial approval at the August 5, 2009, meeting so that
Honda North could begin development prior to the 2009 weather
conditions worsening for outdoor development.
f. He attended the August 7, 2009, Honda North groundbreaking ceremony at
the request of Don Domhoff.
1. Kaltenbaugh claimed that he attended in his capacity as a
representative of the Township.
2. At the groundbreaking ceremony, he conversed with Joe Palmiero for
the first time.
g. He spoke with Paul Buettell at the groundbreaking ceremony regarding what
subcontractors were going to be used for certain aspects of the
development.
1. He told Buettell that he would be interested in the work and stated
that he would supply Buettell with a quote in the near future.
h. He telephoned Buettell approximately a day or so after the groundbreaking
ceremony to provide Buettell with a quote for the fence work.
1. Buettell/ACI accepted the quote, and shortly thereafter, JL & RE
began working at the Honda North job site.
i. His main contact with ACI was Buettell until Buettell became ill and was
replaced by Kevin Tinko.
1. He also kept in close contact with the ACI Honda North site
supervisor, Steve Minor, who was at the work site on a daily basis.
j. As JL & RE was performing the fence work, an ACI representative asked
Kaltenbaugh if he would be interested in doing footer work for the project.
1. He expressed interest in the work, and he and his brother generated
several quotes and submitted them to ACI to perform the footer work.
Kaltenbaugh, 10-019
Page 32
k. He admitted that during the time frame that JL & RE was performing the
fence work and footer work for Honda North/ACI, the Supervisors had not yet
come to an agreement with Honda North as to how the contingencies would
be met.
1. He was aware while he was working at the Honda North site … that
as a Supervisor, he would have to come to an agreement with Honda
North regarding the contingencies at a later date.
l. It was not until he and Supervisor Evelyn Hockenberry signed the Honda
North agreement dated August 13, 2009, at the November 4, 2009,
Supervisor meeting, that the storm water contingency and turning lane
contingency were agreed upon as to how they would be met.
m. He and/or his brother were approached while working at the Honda North job
site by ACI representatives (either Tinko or Minor) to determine if JL & RE
would be interested in completing additional work.
1. Prior to JL & RE finishing one project, they were approached to see if
they were interested in completing a future project, and that one
project lead to another.
2. Kaltenbaugh acknowledged that if JL & RE had not obtained the
fence work, JL & RE may not have been solicited to perform
additional work for the Honda North project.
n. Some of the work JL & RE completed at the Honda North work site was not
approved by the Supervisors nor indicated on the plans originally provided to
the Township for approval.
1. His business installed a stone swale, a slanted stone parking lot, and
a catch basin between Lot 4R and Lot 5R that were items not
approved by the Supervisors for construction at the August 5, 2009,
Supervisor meeting.
2. He was aware that when he voted at the January 6, 2010, meeting to
remove the buffers between Lot 4R and Lot 5R, it was because
Honda North was interested in developing the area between Lot 4R
and Lot 5R.
135. Kaltenbaugh’s use of the authority of his public position included participation in
decisions and motions [sic] of the Board of Supervisors from August 5, 2009,
through 2010, regarding development plans of Honda North and resulted in a
private pecuniary benefit to him and JL & RE, a business with which he is
associated.
a. Within one week of voting on August 5, 2009, to accept Honda North’s
development plans with conditions, Kaltenbaugh’s company, JL & RE
Excavating, received a contract from Honda North valued at least at
$8,900.00.
b. Kaltenbaugh approved and consented to Honda North conditions on
November 4, 2009.
c. On January 6, 2010, Kaltenbaugh cast the deciding vote to permit Honda
North to remove a buffer zone between Lot 5R and Lot 4R.
Kaltenbaugh, 10-019
Page 33
136. Kaltenbaugh received a private pecuniary gain of $8,890.31 as a result of contracts
received from Honda North.
III.DISCUSSION:
As a Supervisor for Connoquenessing Township (“Township”) since January 7,
2008, Respondent Jack Kaltenbaugh, hereinafter also referred to as “Respondent,”
“Respondent Kaltenbaugh,” and “Kaltenbaugh,” 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 Kaltenbaugh violated Section 1103(a) of the Ethics Act
when he used the authority of his public position for the private pecuniary benefit of himself
and/or a business with which he is associated by participating in discussions and actions
of the Township Board of Supervisors (“Board”) to approve matters regarding a
subdivision/land development application being considered by the Board at a time when
his company was performing excavating and construction services in relation to the project
that was the subject of the application or when he had a reasonable expectation that his
company would be considered for or receive contracts in relation to that project.
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
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.
Kaltenbaugh, 10-019
Page 34
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.
Kaltenbaugh has served as a Township Supervisor since January 7, 2008. The
Township is governed by a three-Member Board. Kaltenbaugh has served as Vice
Chairman of the Board from January 7, 2008, to the present.
The Township Planning Commission (“Planning Commission”) is advisory to the
Board. Developers interested in developing land within the Township are required to
submit a land development application and plans to the Township approximately fifteen
days prior to a Planning Commission meeting. The Planning Commission can recommend
the approval or denial of the plans to the Supervisors or take no official action, in which
case the plans are forwarded to the Supervisors for review as if they were recommended
for approval by the Planning Commission. Plans are ultimately approved by the
Supervisors after the developer and the Supervisors can come to a mutual agreement as
to how the development is to be constructed.
Respondent’s brother, Ronald Kaltenbaugh, has served as a Member of the
Planning Commission since January 3, 2006.
Since approximately 1982, Respondent Kaltenbaugh and Ronald Kaltenbaugh have
each owned a 50% interest in a business named “JL & RE Building and Excavating” (“JL &
RE”). JL & RE is located in the Township and specializes in excavation work.
Honda North, an automobile dealership, has been operating within the geographical
boundaries of the Township since approximately 2005. Honda North is owned by Joe
Palmiero (“Palmiero”) and two other individuals. Palmiero determined in early to mid-2007
that Honda North needed to expand.
Palmiero learned that two Township residents were interested in selling
approximately eight acres of property, hereinafter referred to as “Property,” at the
intersection of Route 68 and Kriess Road in the Township. The Property consisted of two
parcels of land, hereinafter referred to as “Lot 4R” and “Lot 5R,” and it was located less
than one mile south of Honda North’s then-current location. On April 25, 2007, Palmiero
entered into a Land Purchase Option which gave him two 6-month options to purchase Lot
4R and Lot 5R.
In approximately mid to late 2007, Palmiero contacted Paul Buettell (“Buettell”), then
Vice-President of Associated Contractors Inc. (“ACI”), to discuss ACI serving as project
manager for the construction of a new Honda North dealership at the Property. Buettell
started the planning of the new Honda North facility in approximately late 2007 or early
2008. Subsequently, on March 19, 2008, an architect met with the Planning Commission
on behalf of Honda North to discuss Honda North's intentions for the Property. The
Planning Commission suggested to the architect that a traffic study be completed prior to
land development plans being submitted to the Board for approval in order to determine
whether a left-hand turning lane might be needed at the intersection of Route 68 and
Kriess Road to avoid traffic congestion.
A traffic study conducted on behalf of Honda North from April 15, 2008, through
April 19, 2008, concluded that a left-hand turning lane on Route 68 would not be needed.
The traffic study recommended the construction of an auxiliary right turn lane on Kriess
Road. The traffic study was submitted to the Township and was discussed at the August
6, 2008, Board meeting. Kaltenbaugh was present at the meeting. No action was taken by
the Board to accept the study submitted on behalf of Honda North.
Kaltenbaugh, 10-019
Page 35
On September 15, 2008, Palmiero finalized the purchase of the Property. In or
about March 2009, ACI’s construction project manager for the Honda North project began
soliciting quotes from subcontractors to generate a pool of subcontractors to select from
once Township approval was given for the project to begin. The construction project
manager did not solicit any quotes from JL & RE.
On June 1, 2009, a Subdivision and Land Development application and plans for
the Honda North project were submitted by the project’s architect and engineer to the
Township for review. At its meeting on June 17, 2009, the Planning Commission
discussed with Township Engineer Bill Braun (“Braun”) and the project engineer twenty-
three concerns that Braun had with the Honda North land development plans, including
storm water management issues and turning lane issues. The Planning Commission
tabled the Honda North land development plans to be reviewed at a later date.
Kaltenbaugh, Braun, and Planning Commission Member Sherry Lokhaiser
(“Lokhaiser”) met at the location of the proposed Honda North dealership subsequent to
the June 17, 2009, Planning Commission meeting. Kaltenbaugh, Lokhaiser, and Braun
primarily discussed the storm water management issues that would result via the
construction of the proposed dealership.
On June 30, 2009, the Planning Commission recommended that the Supervisors
approve the plans related to the new Honda North dealership contingent upon the
Supervisors’ approval of the storm water management plan for the development. At the
July 1, 2009, Board meeting, the Honda North plans were reviewed and discussed.
Kaltenbaugh was present at the meeting. The Supervisors decided to table the plans for
approval due to concerns regarding the need for a left-hand turning lane on Route 68 and
storm water management issues.
Palmiero was concerned that the Honda North project was losing valuable
construction time. As a result of the concerns raised by Braun and the Supervisors with
Honda North’s plans, a relative of Palmiero contacted Donald Domhoff (“Domhoff”), a
Township resident and former Planning Commission Member, for assistance in obtaining
Township approval of Honda North’s plans. In or about June and July 2009, Palmiero had
discussions with Buettell, Domhoff, and the Honda North project architect and engineer in
order to strategize ways to obtain Township approval of the project.
Beginning on or about July 21, 2009, Kaltenbaugh began receiving telephone calls
from individuals associated with the Honda North project. Domhoff and Palmiero both
contacted Kaltenbaugh eight times between July 21, 2009, and July 23, 2009.
Kaltenbaugh met with Palmiero at his Honda North office on at least one occasion between
July 1, 2009, and August 4, 2009, to discuss how the Township and Honda North could
come to an agreement with regard to addressing the storm water management issues
related to the Honda North project.
Palmiero submitted a letter to the Board dated August 4, 2009, proposing, in
pertinent part, that Honda North would reimburse the Township $87,500.00 for expenses
actually incurred by the Township in its efforts to accomplish the completion of a left-hand
turning lane on Route 68 contingent upon five conditions, including that Honda North
would receive final approval of its plans and approval to immediately proceed with
construction of its project at the next Board meeting on August 5, 2009. The Supervisors
did not take any action on Palmiero’s August 4, 2009, proposal.
At the August 5, 2009, Board meeting, Kaltenbaugh participated in discussions
regarding the Honda North project. Kaltenbaugh seconded a motion and participated in a
unanimous vote of the Board to grant preliminary and final approval to Honda North’s
plans for the proposed dealership for the Property, contingent upon engineer review and
approval of storm water plans and upon signing of legal agreements requiring Honda North
Kaltenbaugh, 10-019
Page 36
to deposit $87,500.00 in a Township account for improvements to Route 68. Palmiero
opposed the contingencies approved by the Board.
On August 6, 2009, Domhoff and Kaltenbaugh were engaged in a series of
telephone calls. At Domhoff’s invitation, Kaltenbaugh attended a groundbreaking
ceremony hosted by Palmiero at the future Honda North location on August 7, 2009. At
the groundbreaking ceremony, Kaltenbaugh spoke with Buettell, ACI’s manager for the
Honda North project, about whether subcontractors had been chosen for the preliminary
site preparation related to the project. Kaltenbaugh’s company, JL & RE, was not being
considered for any project work prior to or around August 2009. Buettell asked
Kaltenbaugh if his company was interested in fencing the septic area of the project.
Kaltenbaugh telephoned Buettell approximately a day or so after the groundbreaking
ceremony to provide Buettell with a quote for the fence work.
JL & RE began work on the Honda North project on August 12, 2009, seven days
after Kaltenbaugh participated in the Board’s conditional approval of the project. Between
August 12, 2009, and August 14, 2009, JL & RE performed work related to the construction
of the new Honda North facility as detailed in Fact Finding 66.
On August 13, 2009, Honda North submitted to the Township a proposed
agreement regarding the contingencies approved by the Board for the Honda North
project. Kaltenbaugh/JL & RE was actively working at the Honda North job site during the
time period that the August 13, 2009, agreement was submitted to the Township for
consideration. At the September 2, 2009, Board meeting, Kaltenbaugh participated in a
unanimous vote of the Board to not accept Honda North’s proposed agreement.
Meanwhile, between August 24, 2009, and September 9, 2009, Kaltenbaugh and
Buettell maintained regular telephonic contact.
On September 16, 2009, Kaltenbaugh and his brother submitted a bid in the amount
of $36,800.00 to ACI in relation to digging footers for the structure of the Honda North
dealership. On September 18, 2009, JL & RE entered into a contract with ACI to perform
the footer work at the Honda North job site for the negotiated price of $33,200.00. JL & RE
performed work at the Honda North job site on seventeen occasions from September 21,
2009, through October 20, 2009, until JL & RE’s contractual agreement with ACI was
completed. Between October 21, 2009, and November 3, 2009, JL & RE performed
miscellaneous work at the Honda North job site at no charge to ACI.
From August 2009 through October 2009, JL & RE submitted to ACI invoices
totaling $34,805.80 in relation to the Honda North project. During this time period, the
Supervisors had not approved Honda North’s proposal to meet the contingencies required
by the Board.
On or about November 4, 2009, Kaltenbaugh and Supervisor Evelyn Hockenberry
(“Hockenberry”), in their capacities as Township Supervisors, agreed to Honda North’s
proposal to resolve the outstanding issues pertaining to the Honda North project.
Kaltenbaugh and Hockenberry signed the August 13, 2009, agreement proposed by
Honda North. The third Supervisor opposed the agreement and refused to sign it. Without
Kaltenbaugh’s signature on the agreement, Honda North would not have been able to
complete the project.
Six days after Kaltenbaugh signed the August 13, 2009, agreement, JL & RE was
authorized to complete additional work on Honda North’s job site. On December 8, 2009,
Kaltenbaugh, on behalf of JL & RE, signed an ACI Change Order form for a total of
$17,150.00 of additional work to be completed by JL & RE at the Honda North job site.
Kaltenbaugh, 10-019
Page 37
In or about November 2009, Honda North expressed interest to the Township in
developing a parking lot on Lot 4R. The Honda North land development plans approved
by the Supervisors on August 5, 2009, were only related to the construction of a dealership
building and parking lot areas on Lot 5R and did not include the development of Lot 4R.
In order to begin the process of developing the area of Lot 4R as a parking lot, Township
approval was required to remove from the Honda North plans a ten foot buffer area
between Lot 5R and Lot 4R that was required by the Township land development
ordinances.
At the January 6, 2010, Board meeting, Kaltenbaugh seconded the motion and
participated in the Board’s vote to approve the removal of the ten foot buffer area between
Lot 5R and Lot 4R from the Honda North plans and the addition of a one hundred foot
buffer area to the rear of Lot 5R. Kaltenbaugh voted at a time when his company was
contracting with Honda North to perform site improvements to Lot 4R and Lot 5R.
In March 2010, JL & RE installed septic tanks and performed corrective grading
work at the Honda North job site. On or about April 5, 2010, ACI accepted a bid by JL &
RE to install a catch basin between Lot 5R and Lot 4R at the cost of $3,660.00. Between
April 1, 2010, and April 20, 2010, JL & RE completed grading, septic system, and catch
basin work at the Honda North job site.
Between December 4, 2009, and June 1, 2010, JL & RE billed ACI for $40,721.75
in relation to the development of Lot 5R and the area between Lot 5R and Lot 4R
subsequent to the November 4, 2009, agreement. JL & RE submitted to Honda North two
invoices dated June 1, 2010, and June 24, 2010, in the total amount of $10,304.71, for
work completed in late May/early June 2010 relative to the development of the area
between Lot 5R and Lot 4R, including the installation of a swale and a limestone-slanted
parking lot area and steps taken to control storm water runoff.
The swale, catch basin, and limestone-slanted parking lot area between Lot 5R and
Lot 4R were not originally part of the Honda North land development plans and had not
been approved by the Supervisors on August 5, 2009. Supervisor approval was required
since this work constituted a change from the original plans approved by the Board. Plans
to develop Lot 4R were not formally submitted by the Honda North project engineer to the
Township until on or about July 7, 2010.
Honda North and ACI paid JL & RE a total of $85,832.75 for work performed in
relation to the Honda North project for the time period from August 2009 through June
2010. The parties have stipulated that JL & RE realized total net profits of $287.52 in 2009
and $17,493.10 in 2010 in relation to work performed for Honda North/ACI and that
Kaltenbaugh received a total net profit of $8,890.31 from such work.
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 a violation of Section 1103(a) of the Public
Official and Employee Ethics Act, 65 Pa.C.S. §
1103(a), occurred in relation to Kaltenbaugh’s
approval regarding a subdivision/land
development application when his company was
performing excavating and construction services
Kaltenbaugh, 10-019
Page 38
in relation to the project that was the subject of
the application or when he had a reasonable
expectation that his company would be
considered for or receive contracts in relation to
that project.
4. Kaltenbaugh agrees to make payment in the amount of
$8,890.31 in settlement of this matter payable to the
Connoquenessing Township and forwarded to the
Pennsylvania State Ethics Commission within thirty (30) days
of the issuance of the final adjudication in this matter.
5. Kaltenbaugh agrees to not accept any reimbursement,
compensation or other payment from Connoquenessing
Township representing a full or partial reimbursement of the
amount paid in settlement of this matter.
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 2.
In considering the Consent Agreement, we accept the parties’ recommendation for a
finding of a violation of Section 1103(a) of the Ethics Act.
On August 5, 2009, Kaltenbaugh participated in discussions regarding the Honda
North project. Kaltenbaugh seconded a motion and participated in a unanimous vote of
the Board to grant preliminary and final approval to Honda North’s plans for the proposed
dealership for the Property, subject to conditions. Two days after Kaltenbaugh participated
in the Board’s conditional approval of the Honda North plans, he attended the
groundbreaking ceremony at the future Honda North location and spoke with Buettell,
ACI’s manager for the Honda North project, about whether subcontractors had been
chosen for the preliminary site preparation related to the project. Kaltenbaugh provided
Buettell with a quote for fencing the septic area of the project, and from August 12, 2009,
to August 14, 2009, JL & RE worked on the Honda North project. JL & RE is a business
with which both Kaltenbaugh and his brother, Ronald Kaltenbaugh, are associated as
owners of JL & RE. JL & RE performed additional work at the Honda North job site under
a contract with ACI from September 21, 2009, through October 20, 2009, when the
Supervisors had not approved Honda North’s proposal to meet the contingencies required
by the Board.
On or about November 4, 2009, Kaltenbaugh used the authority of his office when
he signed Honda North’s August 13, 2009, agreement to resolve outstanding issues
pertaining to the Honda North project. Six days after Kaltenbaugh signed the aforesaid
agreement, JL & RE was authorized to complete additional work on Honda North’s job site.
On December 8, 2009, Kaltenbaugh, on behalf of JL & RE, signed an ACI Change Order
form for a total of $17,150.00 of additional work to be completed by JL & RE at the Honda
North job site. On January 6, 2010, Kaltenbaugh used the authority of his office when he
participated in actions of the Board to approve the removal of the ten foot buffer area
between Lot 5R and Lot 4R of the Property from the Honda North plans and the addition of
Kaltenbaugh, 10-019
Page 39
a one hundred foot buffer area to the rear of Lot 5R, at a time when his company was
contracting with Honda North to perform site improvements to Lot 4R and Lot 5R. The
parties have stipulated that JL & RE realized total net profits of $287.52 in 2009 and
$17,493.10 in 2010 in relation to work performed for Honda North/ACI and that
Kaltenbaugh received a total net profit of $8,890.31 from such work.
Based upon the totality of the circumstances, we accept the disposition proposed by
the parties.
We hold that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a),
occurred in relation to Kaltenbaugh’s approval regarding a subdivision/land development
application when his company was performing excavating and construction services in
relation to the project that was the subject of the application or when he had a reasonable
expectation that his company would be considered for or receive contracts in relation to
that project.
As part of the Consent Agreement, Kaltenbaugh has agreed to make payment in the
amount of $8,890.31 payable to Connoquenessing Township and forwarded to this
Commission within thirty (30) days of the issuance of the final adjudication in this matter.
Kaltenbaugh has further agreed to not accept any reimbursement, compensation or
other payment from the Township representing a full or partial reimbursement of the
amount paid in settlement of this matter.
We determine that the Consent Agreement submitted by the parties sets forth a
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, Kaltenbaugh is directed to
make payment in the amount of $8,890.31 payable to Connoquenessing Township and
th
forwarded to this Commission by no later than the thirtieth (30) day after the mailing date
of this adjudication and Order.
Kaltenbaugh is further directed to not accept any reimbursement, compensation or
other payment from Connoquenessing Township representing a full or partial
reimbursement of the amount paid in settlement of this matter.
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 Supervisor for Connoquenessing Township since January 7, 2008,
Respondent Jack Kaltenbaugh (“Kaltenbaugh”) has been a public officialsubject to
the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65
Pa.C.S. § 1101 et seq.
2. Kaltenbaugh violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), in
relation to his approval regarding a subdivision/land development application when
his company was performing excavating and construction services in relation to the
project that was the subject of the application or when he had a reasonable
expectation that his company would be considered for or receive contracts in
relation to that project.
Kaltenbaugh, 10-019
Page 40
In Re: Jack Kaltenbaugh, : File Docket: 10-019
Respondent : Date Decided: 9/27/11
: Date Mailed: 10/6/11
ORDER NO. 1593
1. As a Supervisor for Connoquenessing Township (“Township”), Jack Kaltenbaugh
(“Kaltenbaugh”) violated Section 1103(a) of the Public Official and Employee Ethics
Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), in relation to his approval regarding a
subdivision/land development application when his company was performing
excavating and construction services in relation to the project that was the subject
of the application or when he had a reasonable expectation that his company would
be considered for or receive contracts in relation to that project
2. Per the Consent Agreement of the parties, Kaltenbaugh is directed to make
payment in the amount of $8,890.31 payable to Connoquenessing Township and
forwarded to the Pennsylvania State Ethics Commission by no later than the
th
thirtieth (30) day after the mailing date of this Order.
3. Per the Consent Agreement of the parties, Kaltenbaugh is further directed to not
accept any reimbursement, compensation or other payment from the Township
representing a full or partial reimbursement of the amount paid in settlement of this
matter.
4. Compliance with Paragraphs 2 and 3 of this Order will result in the closing of this
case with no further action by this Commission.
a. Non-compliance will result in the institution of an order enforcement action.
BY THE COMMISSION,
___________________________
Louis W. Fryman, Chair