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HomeMy WebLinkAbout1599 Boyer In Re: Donald E. Boyer, : File Docket: 10-047 Respondent : X-ref: Order No. 1599 : Date Decided: 4/12/12 : Date Mailed: 4/25/12 Before: Louis W. Fryman, 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 Boyer, a public official/public employee in his capacity as the Superintendent of the Montour School District, violated Sections 1103(a) and 1103(f) of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. §§ 1103(a) and 1103(f), 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 when he participated in the discussions with the Board resulting in the use of a business with which he is associated to provide Business Manager functions for the School District; and when the contract with his company was awarded without an open and public process. II.FINDINGS: 1. Donald E. Boyer has served as the Superintendent of Montour School District (hereafter “District”) from September 15, 2010, through the present. a. Boyer served as the Acting Superintendent of the District from September 15, 2009, through June 30, 2010, in the capacity of a contract District employee. b. Boyer served as the Acting Superintendent of the District from July 1, 2010, through September 14, 2010, via an independent contractor agreement between the District and The Education Management Group, LLC. Boyer, 10-047 Page 2 1. Boyer was identified in the contract as the individual who would be serving as the Acting Superintendent. 2. The individual serving as the Superintendent of a District is responsible for the day- to-day administration and operation of the District. a. Although the Superintendent is an appointed position and can only be terminated by procedures set forth under Pennsylvania Statute, the Superintendent is accountable to the District and the board of directors. b. The board of directors serves as the immediate supervisor of the District superintendent. c. The superintendent is entitled to a seat on the board and the right to speak at board meetings. 1. The superintendent does not hold voting privileges. 3. Duties of superintendents, in general, are set forth in Pennsylvania Statute; Title 24-Education, Chapter 1-Public School Code of 1949, Article X-District and Assistant Superintendents, Sub-Section (E)-District Superintendents and Assistant District Superintendents. a. 24 P.S. § 10-1081 documents duties of superintendents as follows: “The duties of District superintendents shall be to visit personally as often as practicable the several schools under his supervision, to note the courses and methods of instruction and branches taught, to give such directions in the art and methods of teaching in each school as he deems expedient and necessary, and to report to the board of school directors any insufficiency found, so that each school shall be equal to the grade for which it was established and that there may be, as far as practicable, uniformity in the course of study in the schools of the several grades, and such other duties as may be required by the board of school directors. The District superintendent shall have a seat on the board of school directors of the District, and the right to speak on all matters before the board, but not to vote. 4. The District is governed by a nine Member Board of Directors. a. The District currently holds workshop meetings and legislative meetings on the second and fourth Thursday of each month respectively. 1. Voting regarding District issues occurs only at the legislative meeting. b. Special meetings are held as necessary. 5. Voting at District meetings primarily occurs via individual roll call vote with group “aye/nay” votes normally occurring only for procedural type issues. a. Roll call votes are utilized to address matters involving the expenditure of District funds, personnel issues, important/controversial issues, etc. 1. Each individual Board Member’s vote, including abstentions or objections cast, is recorded in the meeting minutes. Boyer, 10-047 Page 3 b. Group “aye/nay” votes are utilized to address issues such as approval of prior month’s minutes, adjournment, etc. 1. Any abstentions cast during the group vote are specifically noted in the minutes. c. Minutes of all meetings held are approved for accuracy by the Board at subsequent Board meetings. 6. The District Board of Directors receives informational meeting packets for review via e-mail transmission from the Board secretary approximately two to three days prior to the committee of the whole/workshop meeting. a. The packet routinely consists of the agenda, various reports, correspondence, prior month’s meeting minutes, a register of bills, etc. 1. The register of bills incorporated in the meeting packet documents all those bills which have been received at the District since the prior monthly legislative meeting. b. Meeting packets and information contained therein are compiled and organized by the District Superintendent and Board secretary. c. Periodic updates to the meeting packet are provided to the Board of Directors by the Board secretary as needed up to the day of the regular legislative meeting. 7. Signature authority over the District general fund account rests with the Board president, vice-president, secretary, and treasurer. 8. The Education Management Group, LLC (hereafter “EMG”) is a consulting company which engages in management assessment and consultation to school entities within the Commonwealth of Pennsylvania. a. EMG is registered as a Domestic Limited Liability Company with the Pennsylvania Department of State Corporation Bureau. 1. EMG’s certificate of organization was filed with the Department of State on May 18, 2004. 2. EMG’s current status with the Pennsylvania Department of State Corporation Bureau is documented as “Active.” b. EMG’s registered office address is 268 Turkey Path Road, Sugarloaf, PA 18249. 1. Robert Heeter owns property . . . at 268 Turkey Path Road, Sugarloaf, PA 18249. aa. The Department of State Corporation Bureau website documents Heeter as the President and Treasurer of EMG. 9. EMG’s original company Operating Agreement was made on June 28, 2004, by and among Donald Boyer, Heeter, Edward Copeland, and Nancy Neil. a. Article IV of the Operating Agreement documents that net profits, losses, gains, deductions, and credits from operations and financing shall be Boyer, 10-047 Page 4 distributed among the members in proportion to their respective interest and involvement in operations. b. Each of the four original members maintained an equal interest in the company. 10. On September 3, 2004, and September 18, 2008, a Resolution of the members of EMG and an Amendment to the Operating Agreement respectively altered the make-up of the members of EMG. a. The Resolution called for the addition of Ronald Stainbrook as a full member of EMG. 1. The Resolution also mandated that each member or members may contract work as an individual and be compensated for work performed and that the percentage of profit disbursements were to be determined by the member’s participation in each company project. b. The Amendment verified EMG’s acceptance of Copeland’s resignation and the acceptance of Linda Nelson as a full member of EMG. 11. EMG currently is composed of five separate individuals (Boyer, Heeter, Neil, Stainbrook, and Nelson) who are available to perform tasks associated with education and related subjects. a. Each of the partners maintains a twenty percent interest in the company. b. Each partner maintains an area or areas of expertise regarding consulting services provided. 1. Areas of specialized training/experience include, but are not limited to: - Business Office/Financial Consulting; - Technology Consulting; - Curriculum Consulting; - Special Education Consulting; and - Physical Plant/Food Service Consulting. c. Boyer serves as the Business Office/Financial Consultant for EMG. 1. Boyer also maintains expertise in the areas of construction and transportation. 12. Boyer filed Statements of Financial Interests (“SFIs”) with the District for the 2009 and 2010 calendar years. a. Boyer’s SFI for the 2009 calendar year filed on April 29, 2010, disclosed the following: 1. EMG under Section 10, as a Direct or Indirect Source of Income. 2. EMG under Section 13, as Office, Directorship or Employment in any Business. Boyer, 10-047 Page 5 - Boyer disclosed the business address as “Sugarloaf, PA.” - Boyer failed to disclose his position held in the section supplied for said information. 3. EMG under Section 14, Financial Interest in any Legal Entity in Business for Profit. - Boyer failed to disclose his interest held in the business in the section supplied for said information. b. Boyer’s SFI for the 2010 calendar year filed on April 22, 2011, reported the following: Direct/Indirect Sources of Income: Montour School District PSERS Allegheny Valley School District Penn Hills School District The Education Management Group, LLC Office, Directorship or Employment in any Business: The Education Management Group, LLC – Member Financial Interest in any Legal Entity in Business for Profit: The Education Management Group, Turkey Path Road, Sugarloaf, PA 20% 13. EMG maintains a Business Economy Checking account with Bank of America N.A. under Account Number [XXXX XXXX 5867]. a. The account is documented under the name of EMG. b. Heeter is the custodian of records regarding the account. 1. Heeter deposits all income received by EMG for projects completed into the Bank of America account and distributes all payment due to partners participating in projects from the account. aa. Heeter is the individual responsible for actual generation of checks from EMG’s account for distribution to the applicable partner(s). 14. Heeter is responsible for all invoicing and distributing compensation received by interested members of EMG in relation to projects completed. a. Payments received by EMG for a project are equally split between the partners who work on the project, regardless of the number of hours spent working on it. b. If a project is handled entirely by one partner, that partner receives all of the funds paid to EMG for the services provided. Boyer, 10-047 Page 6 c. Each partner operates as an independent contractor and is responsible for his/her own expenses. 15. Dr. Patrick A. Dworakowski served as the Superintendent of Montour School District prior to Boyer’s appointment as Acting Superintendent. a. Dworakowski resigned from his position as District Superintendent at the August 27, 2009, regular Board meeting. 1. The Board had no knowledge of Dworakowski’s intent to resign prior to the August 27, 2009, meeting. b. Dworakowski’s effective resignation date was September 8, 2009. 16. The District Board of Directors ultimately requested advice from Ira Weiss/The Law Offices of Ira Weiss, then District Solicitor, in relation to how to proceed due to Dworakowski’s unexpected resignation at the beginning of the actual 2009-2010 school year. a. Actual solicitor services for the District were primarily provided by either Weiss or Attorney Gregory Gleason of Weiss’s firm. 17. The authority of a Pennsylvania School Board to appoint an Acting Superintendent is vested in the Public School Code of 1949, 24 P.S. § 10-1079. a. 24 P.S. § 10-1079 addresses, “Vacancies; acting and substitute superintendents and assistants.” 1. 24 P.S. § 10-1079, in part, prohibits the appointment of an acting superintendent or an acting assistant superintendent by the board for a period of time in excess of one year from the time of appointment. 18. Weiss presented the possibility of filling the vacant Superintendent position with an Acting Superintendent as a stop-gap measure in order to quickly fill the position for the 2009-2010 school year. a. Weiss subsequently recommended Boyer to the Board to serve as the Acting Superintendent. 1. Weiss advised that he had worked with Boyer in the past. 2. Weiss’s recommendation was based on Boyer’s prior employment by the Pennsylvania Department of Education as well as various school Districts in the past. 3. Weiss was aware that Boyer had experience with renovations and building construction which appealed to the Board. aa. The District was undergoing renovations to its existing high school at the time. 19. Weiss subsequently contacted Boyer via telephone to gauge Boyer’s interest in serving as the Acting Superintendent. a. Weiss contacted Boyer with the Board’s consent. Boyer, 10-047 Page 7 b. Boyer ultimately agreed to travel to the District and meet with the Board regarding the position. 20. Boyer was an active benefit recipient with the Public School Employees’ Retirement System (hereafter “PSERS”) at the time that Weiss recommended Boyer to the Board of Directors. a. Boyer’s effective retirement date was September 1, 1999. b. Boyer’s monthly retirement check from PSERS totaled approximately $4,300.00 net (rounded to the nearest hundred) in 2009 and 2010. 21. Act 2004-63 identifies the period of time and conditions under which PSERS retirees may return to Pennsylvania public school employment without loss of their monthly retirement benefit. a. Act 2004-63 defines the ability of a PSERS retiree to be employed by a Pennsylvania public school in emergency, shortage of personnel, and extracurricular situations. 1. Whenever a school employer determines there has been an increase in workload that creates a serious impairment of service to the public or there is a shortage of appropriate subject certified teachers or other personnel, a retiree may return to Pennsylvania public school service for a period not to extend beyond the school year during which the emergency or shortage exists. aa. Initial determination of an emergency or shortage of school personnel is made by the school employer; however PSERS maintains the right to review the employment of any retiree for compliance with the intent of the law. bb. PSERS expects the employer to make a genuine effort to fill a position with a non-retired individual before employing a retiree. cc. Any determination by PSERS that a retiree’s Pennsylvania public school employment does not meet the emergency or shortage of personnel provision will result in the suspension of the retiree’s monthly retirement benefit payments and the retiree must become an active contributing member of PSERS. 22. As a result of Weiss’s recommendation to the Board, Boyer attended an executive session meeting with Members of the District Board of Directors in the District Middle School library regarding the vacant superintendent position. a. The September 2009 meeting served as an informal interview of Boyer. 1. Boyer presented his experience and educational background to the Board Members in attendance at the meeting. 2. Boyer disclosed his association with EMG at the meeting. 3. Boyer informed the Board Members present that he could work for the District only for a specific period of time as a result of his active retirement status. Boyer, 10-047 Page 8 23. At the September 15, 2009, special meeting of the District Board of Directors, Board Member Greg Clarke motioned, seconded by Board Member Joyce Snell, to appoint Boyer as Acting Superintendent of the District. a. The motion to appoint Boyer as Acting Superintendent passed via 7-0 unanimous vote. 1. Board Members Andrew Julius and Ronald Smith were absent from the meeting. b. Boyer was appointed to the Acting Superintendent position. 1. Boyer was not hired as an agent/representative of EMG at that time. 24. Boyer’s Agreement with District set forth the contract term, Boyer’s compensation, and Boyer’s duties, among other considerations. a. Boyer’s contract as the Acting Superintendent documented the effective term of the contract as the period of September 15, 2009, through June 30, 2010. b. Boyer’s contract as the Acting Superintendent established Boyer’s compensation at $500.00 per day for each day worked. 1. Boyer was to receive no fringe benefits. 2. The District was to make no PSERS contributions on Boyer’s behalf. 3. Boyer was eligible to receive reimbursement for mileage incurred while traveling to or from meetings or other matters on behalf of the District at the approved IRS rates. 4. Boyer was to receive no reimbursement for lodging or meals other than on school business. c. Boyer’s contract as the Acting Superintendent called for Boyer to perform all the normal duties of a District Superintendent as well as the following: 1. Assist the District in the search for a new, permanent Superintendent; 2. Serve as the District representative and assist the District in the (then) current building renovation program in matters involving the Construction Manager, District Architect, and Commonwealth of Pennsylvania Department of Education; 3. Assist as requested in the collective bargaining process; and 4. Perform all other duties reasonably assigned to him following discussion with the Board of School Directors. 25. Boyer’s Acting Superintendent Agreement (a/k/a contract) became effective on September 15, 2009. a. Boyer negotiated and signed the contract on his own behalf. b. Board President William Ewonce signed the contract on behalf of the District. Boyer, 10-047 Page 9 1. The contract was attested to by Samuel Reichl, III (District Director of Fiscal Affairs). c. The board in general served as the negotiating body for the District in regard to the contract negotiations. 1. The terms and conditions of Boyer’s employment with the District were primarily negotiated at the executive session meeting. 2. The actual contract format, language, etc. was developed through Weiss’s office. 26. At all times from September 15, 2009, through June 30, 2010, Boyer performed services and actions at the District consistent with the duties and responsibilities associated with the position of Superintendent. a. Boyer’s salary was issued from the District payroll fund. 27. Although Boyer’s contract with the District was effective until June 30, 2010, the District proceeded with a search for a full-time superintendent shortly after Boyer’s September 15, 2009, effective employment date. a. Boyer’s contract incorporated a clause which permitted the District to terminate the agreement following an agreed transition period if the District elected a permanent Superintendent prior to June 30, 2010. 1. The Agreement could also be terminated via mutual agreement or by either party with sixty day written notice to the other party. 28. In or about late winter/early spring 2010, Boyer began a review of the practices and procedures of the District Business Office in association with his responsibilities as Acting Superintendent and as a result of various notices received by the District and concerns raised. a. A factor for the review of District Business Office practices included notification dated March 25, 2010, from PSBA of the District’s failure to provide the PSBA a copy of the District’s 2008-2009 Annual Financial Reports. b. An additional factor included formal notification dated March 26, 2010, from nd the Office of State Senator Wayne Fontana (42 Senatorial District) that the District had an outstanding grant close-out report due to the Department of Community and Economic Development (“DCED”). 1. The notice documented that the District had been “flagged” and would receive no further grant funding from DCED until the report was submitted and accepted. 2. The notice documented the District’s prior receipt of two written notices from DCED, the provision of all documentation needed for the report having been submitted to Reichl, and multiple telephone messages from Fontana’s office to the District which were not returned. aa. Reichl, as the Director of Fiscal Affairs, was responsible for the operation of the Business Office. Boyer, 10-047 Page 10 c. Boyer was familiar with school district business office practices as a result of his prior work experience. 29. As a result of the Board’s satisfaction with Boyer’s performance as Acting Superintendent, the majority of the Board Members wanted to retain Boyer as the Acting Superintendent until the renovation of the District High School was complete. a. Boyer’s initial contract was set to expire as of June 30, 2010. 30. On May 6, 2010, Boyer authored correspondence to Reichl informing Reichl that he was placed on paid administrative leave effective immediately. a. The action was taken based on the Board’s decision to initiate a review of the performance of the Business Office, compliance with state mandated reports, and Reichl’s job performance as Business Manager as well as Reichl’s actions since the April 29, 2010, Board meeting. b. Reichl was not permitted on District property without Boyer’s permission while on administrative leave. 31. Contemporaneous to May 6, 2010, when Reichl was placed on administrative leave, Boyer and the Board held discussions regarding the continued operation of the Business Office. a. The Board discussed replacing Reichl but opted against doing so. 1. The Board also felt it was not appropriate to hire a new Business Manager while concerns/discrepancies existed within the Business Office/Business Office practices. b. Boyer presented to the Board and affirmed that he and Connie Luksis, District Bookkeeper at that time, could maintain the daily operations of the Business Office. 1. Luksis was promoted to the position of Assistant Business Manager at the May 27, 2010, regular meeting. 2. Luksis was to complete the day-to-day functions of the Business Office and Boyer was to provide guidance and oversight as well as completion of specific reports. c. Boyer performed the additional duties associated with the Business Office during his Acting Superintendent hours. 1. The Board did not approve nor did Boyer receive additional compensation for duties performed in relation to the Business Office. 2. The Board did not formally approve an increase in the average number of days which Boyer was to work at the District as a result of the new responsibilities. 3. Boyer was assigned the additional duty after discussion with the Board as established and permitted in Boyer’s employment contract. 32. Communication occurred between PSERS and Weiss regarding Boyer’s retirement/employment status after Reichl had been placed on administrative leave. Boyer, 10-047 Page 11 33. On May 21, 2010, Wendy K. Stevens, Senior Benefits Manager, Bureau of Benefits Administration, authored a response denying the District’s request to employ Boyer as Interim Superintendent beyond June 30, 2010. The denial letter included the following: a. The District had fifteen applicants for the position of Superintendent in November 2009 and deemed none of the applicants appropriate for consideration even though they possessed qualifications for the position. 1. The District had not demonstrated that the fifteen non-selected candidates did not possess the required certification that would qualify them for the position of Superintendent. b. The District took no additional steps to secure a permanent Superintendent until the District began placing newspaper advertisements for the position in late April 2010. 1. The District did not place the advertisements until requested by PSERS to produce documentation of current efforts taken to fill the position. c. PSERS’ expectation with regard to emergency employment is that a qualified applicant be sought rather than the best qualified when choosing a retiree over a non-retiree. d. Boyer was required to cease employment with the District by June 30, 2010. 1. Boyer was required to submit a written request to PSERS to be removed from PSERS annuity payroll and become an active contributing member of PSERS if he desired to continue employment with the District past June 30, 2010. e. PSERS required a written response to the correspondence by June 30, 2010, to confirm action taken by the District. f. The correspondence was courtesy copied to Boyer. 34. Weiss contacted Boyer via telephone subsequent to Weiss’s receipt of the May 21, 2010, letter from Stevens denying Boyer’s continued employment with the District past June 30, 2010. a. Boyer and Weiss discussed possible options which would permit Boyer to remain as the Acting Superintendent as no potential full-time candidate had yet been identified. b. Boyer presented the idea to Weiss of the District contracting with EMG to provide Acting Superintendent services with Boyer to serve as EMG’s representative. 1. Boyer and Weiss discussed that all terms and conditions of Boyer’s initial private contract be incorporated into the new contract with EMG. 35. On May 25, 2010, Weiss authored a response to Stevens seeking clarification of Stevens’ May 21, 2010, correspondence and questioning if the District may have a contractual relationship with Boyer as a consultant without jeopardizing Boyer’s annuity status. Boyer, 10-047 Page 12 a. Explained in the letter was that Boyer undertakes a number of professional assignments on a consulting basis with other clients throughout the Commonwealth of Pennsylvania through a professional consulting company. 1. Although Boyer maintained a twenty percent interest in EMG at that time, Boyer was not providing Acting Superintendent services to the District through EMG at that time. b. The letter indicated that because of the multiplicity of Boyer’s clients and the fact that Boyer’s schedule would vary from week to week, the District would treat Boyer as a consultant rather than an employee. c. The letter was courtesy copied to Boyer. 36. Weiss provided supplementary correspondence to Stevens dated June 1, 2010, detailing events occurring at the District as the reason that the District believed that an emergency existed and again requested permission to retain Boyer as the Acting Superintendent beyond June 30, 2010, on a consulting basis. 37. Between the dates of June 1, 2010, and June 24, 2010, at least three letters were issued by PSERS representatives to Weiss regarding Boyer’s consultant status in relation to services provided for the District. a. Correspondence dated June 1, 2010, from Peechatka requested a copy of the contract between the District and the consulting company with which Boyer was employed as well as copies of District meeting minutes referencing the hiring of Boyer and/or the consulting company. 1. The District had no contract in effect with EMG for Boyer’s services as Acting Superintendent at that time. b. Correspondence dated June 16, 2010, from Stevens advised that PSERS had not received documentation requested on June 1, 2010, and Boyer’s continued employment as an independent contractor was not approved past June 30, 2010. 1. PSERS refused to approve any continued employment of Boyer as an independent contractor until the requested documents were provided. aa. The District had no contract in effect with EMG for Boyer’s services as Acting Superintendent at that time. 2. In response to Weiss’s June 1, 2010, letter, Stevens’ correspondence again referenced that emergency employment of Boyer past June 30, 2010, was not approved. c. Correspondence dated June 24, 2010, from Stevens advised that, to date, PSERS had not received documents previously requested and had determined that Boyer’s continued employment as an independent contractor was not approved beyond June 30, 2010. 1. PSERS documented in the correspondence its intent to stop Boyer’s monthly pension as of July 1, 2010. 2. The District had no contract in effect with EMG for Boyer’s services as Acting Superintendent at that time. Boyer, 10-047 Page 13 3. The correspondence was courtesy copied to Boyer. 38. Weiss responded to Stevens via facsimile transmission dated June 25, 2010, explaining why the documents requested by PSERS had not been provided for review. a. Weiss indicated that he had been unable to forward the required documents due to the fact that the next District meeting was scheduled for June 29, 2010. 1. Weiss referenced an attached Resolution and contract to be considered by the Board at the June 29, 2010, meeting and his belief that said documents would be approved at said meeting. aa. The Resolution and contract referred to the District’s contracting with EMG to provide Acting Superintendent services in a consulting capacity. 2. Weiss stated that Boyer would not be an employee of the District as of June 30, 2010. aa. Weiss requested reconsideration of PSERS’ determination to not approve Boyer’s employment as an independent contractor past June 30, 2010. bb. Weiss requested reconsideration of PSERS’ determination to stop Boyer’s monthly pension as of July 1, 2010. 39. In or about the time of the June 29, 2010, regular Board meeting, information regarding Boyer’s continued service as the Acting Superintendent for the District was presented by Weiss and discussed by the Board. a. Information was presented by Weiss that Boyer’s contract extension as an independent contractor approved at the April 29, 2010 [sic] for Boyer to work beyond June 30, 2010, had been disallowed by PSERS. b. In the ensuing discussion Boyer identified his inability to remain in retirement status and continue service with the District in an independent/personal capacity. c. Boyer explained to the Board that he could remain as the District Acting Superintendent only if the District contracted with EMG, which would then provide Boyer as a consultant to provide Acting Superintendent services. 40. On June 29, 2010, Stevens authored a response to Weiss’s letter dated June 25, 2010, granting the District’s request to employ Boyer as an independent contractor in the capacity as Acting Superintendent from July 1, 2010, through September 30, 2010. a. Stevens advised that Boyer’s employment as an independent contractor would not place his retirement in jeopardy. b. Stevens specified in the correspondence that the determination was based on the specific facts and the proposed contract provided to PSERS by Weiss. Boyer, 10-047 Page 14 1. PSERS documented in the correspondence its reservation of the right to re-examine the determination should additional information be presented in the future. 41. At the June 29, 2010, regular Board meeting, Weiss presented the Solicitor’s report, which addressed various items including an Agreement with Education Management Group, LLC. a. Board Member Smith motioned, seconded by Ewonce, for the agenda presented at the June 29, 2010, meeting, including items documented under the Solicitor’s report, to be approved in its entirely. b. The motion passed 6-0 with Board Members Snell, Morrow, and Mosimann absent. 42. EMG’s Agreement with the District set forth the contract purpose and term, EMG’s compensation, and EMG’s duties, among other considerations. a. EMG’s contract mandated the supply of a consultant to serve as the District Acting Superintendent for the period of July 1, 2010, through September 30, 2010. 1. Boyer is specifically documented in the contract as the consultant to be supplied. b. EMG’s contract to provide Acting Superintendent services established compensation due EMG at $500.00 per day for each day that Boyer’s services were provided. 1. The District was to make no PSERS contributions. 2. EMG was not eligible for reimbursement of any travel expenses incurred on Boyer’s behalf except traveling to and from meetings on behalf of the District. c. EMG’s contract to supply Acting Superintendent services called for the consultant provided (Boyer) to perform all the normal duties of a District Superintendent including the following: 1. Assist the District in the search for a new, permanent Superintendent; 2. Serve as the District representative and assist the District in the (then) current building renovation program in matters involving the Construction Manager, District Architect, and Commonwealth of Pennsylvania Department of Education; 3. Assist as requested in the collective bargaining process; and 4. Perform all other duties reasonably assigned to him following discussion with the Board of School Directors. 43. EMG’s Agreement to supply Acting Superintendent services became effective on July 1, 2010. a. Heeter signed the contract on behalf of EMG. Boyer, 10-047 Page 15 b. Board Vice-President Frank Dalmas signed the contract on behalf of the District. c. The contract was attested to by DiCenzo. 44. As of July 1, 2010, Boyer no longer held the classification a District employee. a. District payroll records document two payments to Boyer each month beginning on October 15, 2009, and ending on June 30, 2010. b. Boyer was no longer on the District payroll as of July 1, 2010. 45. Although no longer on the District payroll as of July 1, 2010, Boyer continued to serve as the Acting Superintendent for the District from that time through the District’s original Agreement with EMG. 46. At all times from July 1, 2010, through September 15, 2010, Boyer performed services and actions at the District consistent with the duties and responsibilities associated with the position of Superintendent. 47. At all times from at least July 1, 2010, through September 15, 2010, Boyer performed services and actions at the District to assist in the operation of the Business Office as prescribed by the Board and permitted via the District’s contract with EMG. a. No increase in compensation was provided to Boyer from the District for the extra duties provided in relation to Business Office services. b. No increase in compensation was provided to EMG from the District in relation to the extra duties provided by Boyer as an independent contractor for assistance in the Business Office. 1. Boyer received no additional payment from EMG in relation to the extra duties completed in association with the Business Office. 48. On August 26, 2010, Weiss authored correspondence to the Pennsylvania Department of Education, Division of School Services, requesting permission for Boyer to serve as the District Interim Superintendent under the contractual agreement with EMG described in the correspondence until a successor was appointed. a. Weiss identified that the District had utilized Boyer as Acting Superintendent after the prior Superintendent had resigned effective September 8, 2009. b. Weiss identified that the arrangement between the District and EMG to utilize Boyer had been approved by PSERS. c. Weiss identified that the contract with EMG was set to expire on September 30, 2010. d. Weiss identified that the District had retained the Pennsylvania School Board Association to undertake a search for a new Superintendent. 49. At the August 26, 2010, regular Board meeting, Weiss presented the Solicitor’s report during which Weiss requested a motion to extend the contract with Boyer for a period of one year. Boyer, 10-047 Page 16 a. A motion was made by Smith, seconded by Ewonce, to “renew” the contract. b. The contract in effect at that time was between the District and EMG. c. The motion passed 9-0. 50. Pennsylvania School Districts previously had been permitted to submit a waiver request to the Pennsylvania Department of Education under the authority of the Mandate Waiver Law to allow for a waiver of the one year service period mandated via 24 P.S. § 10-1079. a. The Mandate Waiver Law was included within the Education Empowerment Act. b. The Education Empowerment Act expired on June 30, 2010. 1. As a result, the Pennsylvania Department of Education’s ability to rule on waiver requests expired on June 30, 2010. 51. Weiss subsequently received telephonic contact as well as written correspondence from a representative of the Division of School Services, Pennsylvania Department of Education, that the request could not be approved. a. Weiss subsequently contacted Boyer via telephone and informed Boyer that the extension request could not be granted. 52. In addition to the extension request being denied by the Pennsylvania Department of Education, PSERS had not given approval for or been informed by the District of the District’s intent to extend the contract with EMG for Boyer’s services as an independent contractor for an additional year beyond September 30, 2010. a. Neither item was documented on the agenda prepared for the August 26, 2010, Board meeting. 53. Discussion at the meeting included Boyer being questioned on his requirements to accept employment as the full-time District Superintendent. a. Boyer advised those in attendance that the only way that he could continue to provide Superintendent services to the District was to come out of retirement and accept employment as the full-time Superintendent. 54. During the September 2, 2010, informal meeting, Weiss advised the Board that Business Office services to be provided by EMG required completion by a company representative other than Boyer if Boyer was serving as the full-time Superintendent. a. Weiss identified the need for an EMG representative other than Boyer to be in place, on site at the District Business Office multiple days per week. b. The discussion which occurred indicated that a representative or representatives other than Boyer would develop protocols and procedures for the Business Office, put the system in place, and train Luksis on a regular basis. 55. The District held a special meeting on September 14, 2010, to address multiple issues, including the Boyer contract. Boyer, 10-047 Page 17 a. Boyer requested and created the agenda for the September 14, 2010, special meeting. b. The agenda created for the special meeting noted Boyer’s election as the District Superintendent under “Personnel.” c. The agenda created for the special meeting also noted approval of amendments to the existing EMG contract with the District under “Personnel.” 56. An executive session was held by the Board immediately prior to the convening of the September 14, 2010, special meeting. a. Executive sessions held by the Board are procedurally run by the District Superintendent. 1. The Superintendent normally introduces and presents any applicable agenda items for discussion during the executive session. 57. Subsequent to the discussion regarding Boyer’s employment as the full-time District Superintendent, Solicitor Gleason presented for consideration to the Board the amendments to the existing contract with EMG, which included EMG Business Office services to the District. 58. During the executive session, Boyer presented information to the Board on behalf of EMG that EMG had the ability/expertise to provide consulting services for the Business Office. a. Boyer stated that a need existed to be filled in order to complete duties and operations associated with the Business Office. b. Boyer presented EMG for consideration and explained services the company could perform including general oversight of the Business Office, ensuring completion of delinquent audits, etc. c. Boyer explained to the Board that it was logical for EMG to continue to perform Business Office functions for the District due to his familiarity of the Business Office, his knowledge of existing concerns, his familiarity with Luksis, etc. d. Boyer presented or recommended no other individuals or entities to the Board for consideration regarding the performance of Business Office services for the District. 59. During the September 14, 2010, special meeting held immediately following the executive session, a motion was made by Snell, seconded by Ewonce, that the Board approve the election of Boyer as Superintendent of the District for a three year term commencing on September 15, 2010, to run through September 14, 2013. a. The motion to elect Boyer as Superintendent passed 6-2 with Board Members Morrow and Richards voting in opposition to the motion. 60. Immediately following the motion to elect Boyer, Snell motioned, seconded by Ewonce, that the Board approve the amendments to the contract between the District and EMG. Boyer, 10-047 Page 18 a. The motion to approve EMG’s contract amendments passed 7-1 with Richards voting in opposition to the motion. 61. The amendments to the existing contract between the District and EMG were set forth in written form which documented the contract purpose and term, EMG’s compensation, and EMG’s duties, among other considerations. a. The amended contract with EMG mandated the supply of a consultant to the District to serve in the Business Office as needed for the period of September 15, 2010, through September 14, 2013, or during the period the Business Manager was not working due to pending personnel action or until such time as the District had a permanent school business official on duty. 1. The consultant to be supplied to the District to serve in the Business Office was not specifically identified in the contract. 2. Boyer’s approximate net monthly annuity payment was $4,300.00. b. EMG’s amended contract to provide Business Office services established compensation due EMG at $4,300.00 per month for services provided. 1. EMG was not eligible to bill the District for any travel expenses incurred on behalf of the consultant except expenses incurred traveling to and from meetings on behalf of the District. c. EMG’s amended contract to supply Business Office services called for the provision of consulting services to include, but not be limited to, the following: 1. EMG was to assist the School District in the day-to-day management of the Business Office and provide additional training and input to the Assistant Business Manager. 2. EMG was to assist the Superintendent in all matters normally associated with that of a school Business Office. 3. EMG was to assist the Assistant Business Manager in preparation of all necessary federal and state recording requirements and in the preparation of the annual audit. 4. EMG was to perform all duties reasonably assigned to that person following discussion with the Board of Directors. 62. EMG’s amended Agreement to supply Business Office services became effective on September 14, 2010, via approval granted by the District Board of Directors at the September 14, 2010, special meeting. a. Boyer solely negotiated the contract on behalf of EMG. 1. Neither Heeter nor any other individuals associated with EMG participated in any negotiations of the contract. b. Morrow, Board President at that time, signed the contract on behalf of the District. 1. The contract was attested to by DiCenzo. Boyer, 10-047 Page 19 c. District representatives present at the September 2, 2010, meeting at DeBlasio’s negotiated the contract on behalf of the District. aa. The actual contract format, language, etc. was developed through Weiss’s office. 63. Although the amended contract with EMG was approved at the September 14, 2010, special meeting, the contract was not signed by a representative of EMG until at least February 15, 2011. a. The District provided Heeter with correspondence dated February 15, 2011, and two copies of the amended contract, among other items, via the United States Postal Service. 1. The District requested, among other requests, that Heeter sign both copies of the contract, retain one copy for his records, and return the other copy to the District. b. Boyer informed Heeter via telephone of Heeter’s pending receipt of the contract for signature. 64. Language present in the amended contract regarding the services to be performed reference assistance to be provided by EMG’s consultant to the District Superintendent. a. The amended contract implied that a representative from EMG other than Boyer was to serve as the EMG consultant to provide Business Office services for the District per language of the contract. 1. A specific duty for which the consultant supplied was responsible per the amended contract was, “…to assist the Superintendent in all matters normally associated with that of a school Business Office.” 2. Boyer was employed as the full-time District superintendent at the time the contract became effective. 65. Between the dates of July 23, 2010, and December 31, 2010, Heeter submitted seven invoices to the District on behalf of EMG totaling $36,100.00 in payment due EMG for Acting Superintendent and/or Business Office [services] provided. a. Heeter was informed by Boyer regarding identification of days worked at the District for which payment was required. b. Heeter submitted one invoice to the District for payment in the amount of $8,600.00 for Business Office services provided regarding the months of October and November 2010, as shown below: Invoice Invoice Description Amount Date No. 11/30/2010 E1011 Business Office services month of October 2010 $4,300.00 Business Office services month of November 2010 $4,300.00 Total $8,600.00 66. The District issued seven checks from the District General Fund payable to EMG totaling $36,100.00 during the time frame of August 2010 through December 2010 for Acting Superintendent and/or Business Office services provided. Boyer, 10-047 Page 20 a. All seven of the checks issued to EMG were endorsed via a “for deposit only” stamp referencing EMG and account number xxxxxx5867. 1. Account number xxxxxx5867 is assigned to EMG’s checking account maintained at Bank of America. b. Heeter received and deposited all seven of the checks into EMG’s account at Bank of America. 67. Between the dates of August 5, 2010, and December 13, 2010, Heeter issued six checks from EMG’s account at Bank of America (Account No. xxxxxx5867) totaling $36,100.00 to Boyer representative of payment for Acting Superintendent and/or Business Office services provided to the District through Boyer’s association with EMG. a. Boyer’s signature appears as the endorsing signature on all six checks received from Heeter through EMG. b. Boyer deposited all or a portion of all six checks received from Heeter into accounts over which he maintained signature authority. c. Of the six checks issued to Boyer, only check number 1195 in the amount of $8,600.00 was issued in relation to Business Office services performed. 1. All remaining checks issued at that time had been issued for the performance of Acting Superintendent services completed by Boyer. 68. From approximately May 8, 2010, through September 30, 2010, Boyer performed services for the District Business Office in conjunction with his services as the Acting Superintendent of the District. a. Boyer performed the Business Office services per discussion and agreement with the District Board of Directors. b. Boyer was not a full-time employee of the District from May 2010 through September 2010. c. No operational deficiencies existed regarding Boyer’s responsibilities as Acting Superintendent or the Business Office from May 2010 through September 2010. 1. Boyer completed all of the required functions as the District Superintendent as well as assisted in Business Office services. d. No other payments were made to Boyer by the District from May 2010 through June 2010 nor were any payments made to EMG from July 2010 through September 2010 in relation to services performed by Boyer for the Business Office. 1. Boyer/EMG received only the per diem amount established by the applicable contracts in place at the applicable time. 69. Upon retention as the District Superintendent in September 2010, Boyer required additional payment from the District for completion of Business Office services. Boyer, 10-047 Page 21 a. Boyer had previously provided the same services for a period of approximately five months with no increase in compensation as agreed to between Boyer and the District Board of Directors. b. Boyer required the additional payment in order to reach the salary benchmark he had presented in earlier employment negotiations. 70. Three days after receiving a Notice of Investigation dated January 6, 2011, from the Investigative Division of the State Ethics Commission in relation to allegations of violations of the State Ethics Act (Act 93 of 1998), Boyer issued a payment to EMG. a. The notice letter was received at Boyer’s residence on January 7, 2011. 71. Boyer issued personal check number 596, dated January 10, 2011, to EMG in the amount of $8,600.00 from his personal checking account at Miner’s Bank three days after receipt of the Notice of Investigation. a. Check number 596 documented “Montour Refund” in the “For” section of the check. 1. Check number 596 was deposited into EMG’s account at Bank of America on January 10, 2011. 72. As a result of the discussion with Boyer, Heeter issued correspondence on EMG letterhead dated January 10, 2011, to DiCenzo as the Secretary of the District Board of Directors in relation to EMG’s association with the District. a. Heeter informed DiCenzo in the correspondence that EMG was issuing a check under separate cover to the District Business Office as a refund for Business Office services rendered to the District. 1. The check was documented as representing a refund for the October and November invoices paid in December 2010. 2. The District was informed that no billing would occur for the months of December 2010 and January 2011. 3. EMG offered reimbursement to the District for interest if the District wanted to submit an invoice for such. b. Heeter also informed DiCenzo in the correspondence that EMG was terminating the contract for services to the District Business Office effective immediately. 1. Heeter documented that EMG did not have a signed copy of the document modifying the contract for Boyer’s services in the capacity of Acting Superintendent and as a result did not know of any termination requirements. aa. Heeter requested contact from the District regarding any termination requirements EMG must satisfy or if the District had any questions. 73. Heeter subsequently issued EMG check number 1196, dated January 11, 2011, in the amount of $8,600.00 to the District. a. The “For” section of the check documented “E1011.” Boyer, 10-047 Page 22 74. The District responded to Heeter via correspondence authored by Boyer dated February 15, 2011. a. Boyer dictated the correspondence, which was subsequently transcribed and signed by DiCenzo. b. Check number 1196 from EMG to the District was included with the correspondence. 1. The check had not been negotiated. 75. Boyer noted in the February 15, 2011, letter that it was the District’s intent that EMG continue to honor the contract in place at that time. a. The District supplied two copies of the contract with the correspondence for Heeter to sign. 1. One copy was to be retained by Heeter and the other was to be forwarded to the District. b. EMG was instructed by the Boyer correspondence to submit a written report of work performed and the analysis of the plans and specifications of the technology for the High School Construction Project. c. Boyer instructed EMG to bill the District for services performed for December 2010 and January 2011. d. Boyer’s letter also directed that EMG provide the following: 1. A study of the District’s Food Service program with emphasis placed on the application and verification process for free and reduced lunches; 2. A custodial staff study for the new High School Building; 3. Investigation and submission of a fixed asset program compatible with ProSoft; and 4. Generation of specifications suitable for the bidding process for cameras to be placed on all District school buses. aa. Services performed in relation to the additional duties delineated in the correspondence were performed by Heeter and Stainbrook. 76. The additional services to be performed by EMG as documented in the February 15, 2001, correspondence to Heeter were authorized by Boyer as the District Superintendent. a. Boyer did not present the services to be performed by EMG to the Board for approval. b. Boyer assigned the duties to EMG for completion as a result of the existing contract with EMG, which allowed for EMG to assist the Superintendent in all matters normally associated with that of a school business office. Boyer, 10-047 Page 23 77. EMG retained the check no. 1196 in the amount of $8,600.00. a. Boyer returned the check to Heeter even though he directed Heeter to make the reimbursement. 78. Although dates on which specific services were performed were not documented by EMG, EMG business records note production of the following reports/studies for the District and individuals involved in said production: a. Evaluation of Fixed Asset Inventory Software / (Heeter); b. School Food Services Analysis / (Stainbrook); c. Custodial Staffing Requirements for Montour High School / (Stainbrook); d. Review of Technical Drawings and Specifications for Renovations at Montour High School / (Heeter); e. School Bus Video Surveillance System Specification / (Heeter); and f. Transportation Study 2010-2011 / (Heeter, Stainbrook, Boyer). 1. A draft of the Transportation Study was completed in 2009 and presented to the Board, which was later followed by a final study; the recommendations of said study were/are being implemented. 79. The contract between EMG and the District was cancelled effective March 24, 2011. a. Minutes of the March 24, 2011, regular Board meeting document Boyer’s request for a motion to cancel the contract with EMG. b. Ewonce motioned, seconded by Snell, to cancel the contract with EMG. 1. The vote to cancel the contract passed 8-0 with one Board Member absent. 80. Prior to or about June 16, 2011, Heeter sought direction from Boyer regarding the disposition of the $25,800.00 paid to EMG by the District for Business Office services provided through March 2011. 81. Boyer authored a memorandum to Heeter dated June 16, 2011, instructing how the funds received by EMG from the District were to be distributed: a. The $8,600.00 paid for October and November 2010 services was to be retained by EMG. b. The remaining $17,200.00 was to be divided between Heeter and Stainbrook for the following: 1. The analysis of the technology design in the Montour High School; 2. Producing a set of bid specifications to provide cameras for District buses; 3. The evaluation of Fixed Asset Inventory Software; 4. The School Food Service analysis; Boyer, 10-047 Page 24 5. The evaluation of a District employee handling of the “Free & Reduced” Applications; and 6. A Custodial Staffing Study of the New High School. c. The memorandum concluded by noting that the District had not received item number five and six and requested notification of any data required to complete items five, six, and to update the Transportation Study. d. Boyer’s memo listed his title as Superintendent and was prepared by his District secretary. 82. Although Boyer was documented as having participated in creation of the Transportation Study, Boyer received no additional checks from EMG’s account after his return of the $8,600.00 initially received. a. Funds personally received and kept in Boyer’s custody from EMG were limited to those received in association with Acting Superintendent services provided as a consultant through EMG. 83. Boyer was aware that both he and/or EMG would receive payment from the MSD for performing Superintendent and Business Administration duties. a. Boyer intended to receive payment from the MSD for services rendered as Superintendent. b. Boyer intended EMG to receive payment for duties provided by EMG to the MSD. c. While presenting his Superintendent salary requests, Boyer [was] aware that if the MSD accepted his conditions, he would receive a financial gain. d. Boyer was aware that when the MSD entered into contract(s) with EMG, Boyer and/or EMG would receive a financial gain. III.DISCUSSION: As the Superintendent of Montour School District (“District”), Respondent Donald E. Boyer, hereinafter also referred to as “Respondent,” “Respondent Boyer,” and “Boyer,” is a public official/public employeesubject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. The allegations are that Respondent Boyer violated Sections 1103(a) and 1103(f) of the Ethics Act: (1) 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 when he participated in the discussions with the Board resulting in the use of a business with which he is associated to provide Business Manager functions for the School District; and (2) when the contract with his company was awarded without an open and public process. 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 Boyer, 10-047 Page 25 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. Section 1103(f) of the Ethics Act imposes certain restrictions as to contracting: § 1103. Restricted activities (f)Contract.— No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. § 1103(f). Section 1103(f) of the Ethics Act provides in part that no public official/public employee or his spouse or child or business with which the public official/public employee Boyer, 10-047 Page 26 or his spouse or child is associated may enter into a contract with his governmental body valued at five hundred dollars or more or any subcontract valued at five hundred dollars or more with any person who has been awarded a contract with the governmental body with which the public official/public employee is associated unless the contract is awarded through an open and public process including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Respondent has served as the Superintendent of the District from September 15, 2010, through the present. The Superintendent is responsible for the day-to-day administration and operation of the District. Respondent previously served as the Acting Superintendent of the District from September 15, 2009, through June 30, 2010, in the capacity of a contract District employee. Respondent served as the Acting Superintendent of the District from July 1, 2010, through September 14, 2010, via an independent contractor agreement between the District and a consulting company named “The Education Management Group, LLC” (“EMG”). EMG engages in management assessment and consultation to school entities within the Commonwealth of Pennsylvania. Since September 18, 2008, EMG has been composed of five members, including Respondent and an individual named Robert Heeter (“Heeter”). Heeter is the President and Treasurer of EMG. Each member maintains a 20% interest in the company. Each member operates as an independent contractor. Respondent was initially appointed by the District’s Board of Directors (“Board”) to serve as the District’s Acting Superintendent effective September 15, 2009. The appointment occurred as a result of the unexpected resignation of the prior District Superintendent effective September 8, 2009. At that time, Respondent was receiving retirement benefits through the Public School Employees’ Retirement System (“PSERS”). However, by law, Respondent was able to be hired by the District for the limited time period of September 15, 2009, through June 30, 2010, without losing his monthly retirement benefit, due to the emergency/shortage of school personnel in the District. Prior to being hired by the District, Respondent disclosed to the Board his association with EMG. However, Respondent was not hired as an agent/representative of EMG in 2009. The parties have stipulated that from September 15, 2009, through June 30, 2010, Respondent was a “contract District employee.” Fact Finding 1 a. During the 2009-2010 school year, concerns arose regarding the practices and procedures of the District Business Office. On or about May 6, 2010, the District’s Director of Fiscal Affairs was placed on paid administrative leave. Respondent and the Board held discussions regarding the continued operation of the Business Office. Respondent presented to the Board and affirmed that he and Connie Luksis (“Luksis”), District Bookkeeper at that time, could maintain the daily operations of the Business Office. Luksis was promoted to the position of Assistant Business Manager at the Board’s May 27, 2010, regular meeting. Luksis was to complete the day-to-day functions of the Business Office, and Respondent was to provide guidance and oversight as well as completion of specific reports. Respondent performed the additional duties associated with the Business Office during his Acting Superintendent hours and for no additional compensation. June 30, 2010, was the last day that Respondent could remain employed by the District without being removed from the PSERS annuity payroll and becoming an active contributing member of PSERS. By correspondence dated May 21, 2010, PSERS denied a request of the District to employ Respondent as Interim Superintendent beyond June 30, 2010. Following receipt of the May 21, 2010, correspondence from PSERS, Respondent Boyer, 10-047 Page 27 and District Solicitor Ira Weiss (“Weiss”) discussed possible options that would permit Respondent to remain as the District’s Acting Superintendent. Respondent presented the idea to Weiss of the District contracting with EMG to provide Acting Superintendent services, with Respondent to serve as EMG’s representative. At or about the time of the Board’s June 29, 2010, regular meeting, Respondent participated in Board discussions during which Respondent identified his inability to remain in retirement status and continue service with the District in an independent/personal capacity. Respondent explained to the Board that he could remain as the District Acting Superintendent only if the District contracted with EMG, which would then provide Respondent as a consultant to provide Acting Superintendent services. On June 29, 2010, PSERS granted the District’s request to employ Respondent as an independent contractor in the capacity as Acting Superintendent from July 1, 2010, through September 30, 2010, through a contract between the District and EMG. At the June 29, 2010, regular Board meeting, the Board approved an agreement with EMG. EMG’s contract with the District became effective on July 1, 2010, and provided for EMG to supply Respondent as a consultant to serve as the District Acting Superintendent for the period of July 1, 2010, through September 30, 2010. As of July 1, 2010, Respondent was no longer classified as a District employee. From at least July 1, 2010, through September 15, 2010, Respondent performed services and actions to assist in the operation of the District Business Office as permitted by the District’s contract with EMG. No increase in compensation was provided by the District to EMG or Respondent for the extra duties in relation to Business Office services. The Public School Code provides that an acting district superintendent may serve for no more than one year from the time of his appointment. 24 P.S. § 10-1079. On or about August 26, 2010, Weiss submitted a request to the Pennsylvania Department of Education (“Department”) on behalf of the District seeking an extension of time for Respondent to serve as the District’s Acting Superintendent. Weiss was informed by the Department that the District’s request could not be approved. At the August 26, 2010, regular Board meeting, Weiss requested a motion to extend the contract for Respondent’s services for a period of one year. Discussion at the meeting included Respondent being questioned regarding his requirements to accept employment as the full-time District Superintendent. Respondent advised those in attendance that the only way that he could continue to provide Superintendent services to the District was to come out of retirement and accept employment as the full-time Superintendent. The Board approved a motion to “renew” the contract between the District and EMG. During the Board’s September 2, 2010, informal meeting, Weiss advised the Board that Business Office services to be provided by EMG required completion by a company representative other than Respondent if Respondent was serving as the full-time Superintendent. Weiss identified the need for an EMG representative other than Respondent to be on site at the District Business Office multiple days per week. The discussion which occurred indicated that a representative or representatives other than Respondent would develop protocols and procedures for the Business Office, put the system in place, and train Luksis on a regular basis. The District held a special meeting on September 14, 2010. Respondent requested and created the agenda for the September 14, 2010, special meeting. The agenda noted Respondent’s election as the District Superintendent and approval of amendments to the existing EMG contract with the District. An executive session was held by the Board immediately prior to the convening of the September 14, 2010, special meeting. During the executive session, Respondent Boyer, 10-047 Page 28 presented information to the Board on behalf of EMG, indicating that EMG had the ability/expertise to provide needed services for the Business Office. Respondent explained to the Board that it was logical for EMG to continue to perform Business Office functions for the District due to his familiarity with the Business Office, his knowledge of existing concerns, his familiarity with Luksis, and the like. Respondent did not present or recommend any other individuals or entities to the Board for consideration regarding the performance of Business Office services. During the September 14, 2010, special meeting held immediately following the executive session, the Board approved the election of Respondent as Superintendent of the District for a three year term from September 15, 2010, through September 14, 2013. Immediately following the motion to elect Respondent, the Board approved amendments to the contract between the District and EMG. The amended contract with EMG mandated the supply of a consultant to the District to serve in the Business Office as needed for the period of September 15, 2010, through September 14, 2013, or during the period the Business Manager was not working due to pending personnel action or until such time as the District had a permanent school business official on duty. The consultant to be supplied to the District to serve in the Business Office was not specifically identified in the amended contract, but the amended contract implied that a representative from EMG other than Respondent was to serve as the EMG consultant to provide Business Office services to the District. The amended contract established compensation due EMG at $4,300.00 per month. This was the approximate net monthly amount of the retirement checks Respondent had previously received from PSERS. The amended contract became effective on September 14, 2010. Between July 23, 2010, and December 31, 2010, Heeter submitted EMG invoices to the District totaling $36,100.00 for services provided by Respondent, the District paid all such invoices, and Heeter issued EMG checks to Respondent totaling $36,100.00 for such services. Of the total amount, $8,600.00 was for Business Office services for the months of October and November 2010, and the rest was for Acting Superintendent services. Prior to becoming District Superintendent in September 2010, Respondent had provided the same Business Office services to the District in conjunction with his services as the Acting Superintendent of the District, and with no increase in compensation. Upon becoming District Superintendent in September 2010, Respondent required additional payment from the District for completion of Business Office services. Respondent required the additional payment in order to reach the salary benchmark he had presented in earlier employment negotiations. On January 7, 2011, Respondent received a Notice of Investigation dated January 6, 2011, from the Investigative Division of this Commission in relation to allegations of violations of the Ethics Act. Three days later, on January 10, 2011, Respondent issued personal check number 596, dated January 10, 2011, to EMG in the amount of $8,600.00 from his personal checking account. Check number 596 documented “Montour Refund” in the “For” section of the check. Check number 596 was deposited into EMG’s account at Bank of America on January 10, 2011. As a result of discussion with Respondent, Heeter issued correspondence on EMG letterhead dated January 10, 2011, to the Secretary of the Board indicating that EMG was issuing a check under separate cover to the District Business Office as a refund for Business Office services rendered to the District. The check was documented as representing a refund for the October and November invoices paid in December 2010. The District was informed that no billing would occur for the months of December 2010 and January 2011. EMG offered reimbursement to the District for interest if the District wanted to submit an invoice for such. Heeter also informed the Secretary of the Board in the correspondence that EMG was terminating the contract for services to the District Business Office effective immediately. Heeter documented that EMG did not have a Boyer, 10-047 Page 29 signed copy of the document modifying the contract for Respondent’s services in the capacity of Acting Superintendent and as a result did not know of any termination requirements. Heeter requested contact from the District regarding any termination requirements EMG must satisfy or if the District had any questions. Heeter subsequently issued EMG check number 1196, dated January 11, 2011, in the amount of $8,600.00 to the District. The “For” section of the check documented “E1011.” The District responded to Heeter via correspondence authored by Respondent dated February 15, 2011. Respondent dictated the correspondence, which was subsequently transcribed and signed by the Secretary of the Board. Check number 1196 from EMG to the District was included with the correspondence. The check had not been negotiated. Respondent noted in the February 15, 2011, letter that it was the District’s intent that EMG continue to honor the contract in place at that time. The District supplied two copies of the contract with the correspondence for Heeter to sign. One copy was to be retained by Heeter and the other was to be forwarded to the District. EMG was instructed by the correspondence to provide various additional services assigned by Respondent. EMG retained check number 1196 in the amount of $8,600.00. Respondent returned the check to Heeter even though he had directed Heeter to make the reimbursement. The contract between EMG and the District was cancelled effective March 24, 2011. Minutes of the March 24, 2011, regular Board meeting document Respondent’s request for a motion to cancel the contract with EMG. The vote to cancel the contract was 8-0 with one Board Member absent. Prior to or about June 16, 2011, Heeter sought direction from Respondent regarding the disposition of funds paid to EMG by the District for Business Office services provided through March 2011. Respondent authored a memorandum to Heeter dated June 16, 2011, in which Respondent instructed that the $8,600.00 paid for October and November 2010 services was to be retained by EMG. Respondent’s memorandum listed his title as Superintendent and was prepared by his District secretary. Funds from EMG that were personally received and kept by Respondent were limited to those received in association with Acting Superintendent services provided as a consultant through EMG. 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 when Boyer used the authority of his office as Superintendent, by refusing to accept a refund check issued to the Montour School District, from EMG, a business with which he is associated. Boyer, 10-047 Page 30 b. That no violation of Section 1103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred in relation to Boyer participating in discussions with the Board which resulted in the use of a business with which he is associated to provide Business Manager functions for the School District, in that at the time of the participation and/or discussions, Boyer did not use the authority of any office. c. That no violation of Section 1103(f) of the Public Official and Employee Ethics Act, 65 Pa.C.S. §1103(f) occurred in relation to Boyer’s company being awarded a contract without an open and public process, in that at the time the contract was awarded, Boyer was not a public official/public employee. 4. A payment in the amount of $5,000.00 will be made in settlement of this matter payable to the Montour School District and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. 5. Boyer agrees to not accept any reimbursement, compensation or other payment from Montour School District 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 1-2. The parties have recommended a finding that a violation of Section 1103(a) of the Ethics Act occurred when Respondent used the authority of his office as District Superintendent by refusing to accept a refund check issued to the District from EMG, a business with which Respondent is associated. Although not referenced in the allegations, such conduct was contrary to Section 1103(a) of the Ethics Act, and we accept the parties’ recommendation. In January 2011, after receiving a Notice of Investigation from the Investigative Division, Respondent issued a personal check in the amount of $8,600.00 to EMG and arranged with Heeter to issue an EMG check in the amount of $8,600.00 to the District. The EMG check was documented as representing a refund of the amount paid by the District for Business Office services for October and November 2010. Such services were supposed to have been provided by an EMG representative other than Respondent. As a result of action taken by Respondent as District Superintendent, the “refund” was not Boyer, 10-047 Page 31 effectuated. Respondent authored correspondence for the Board Secretary to sign, refusing the refund. The $8,600.00 non-negotiated EMG check was returned to EMG. Respondent, acting as District Superintendent, subsequently issued a memorandum to Heeter dated June 16, 2011, instructing EMG to retain the $8,600.00 paid by the District for the October and November 2010 Business Office services. The $8,600.00 payment constituted a private pecuniary benefit to EMG, a business with which Respondent is associated, in that EMG had not supplied an EMG representative other than Respondent to provide the Business Office services. With each element of a violation of Section 1103(a) established, we hold that a violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred when Respondent used the authority of his office as District Superintendent by refusing to accept a refund check issued to the District from EMG, a business with which he is associated. The parties have recommended a finding that no violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to Respondent participating in discussions with the Board which resulted in the use of a business with which he is associated (EMG) to provide Business Manager functions for the School District, in that at the time of the participation and/or discussions, Respondent did not use the authority of any office. This recommendation of the parties pertains to Respondent’s participation in Board discussions at the Board’s executive session on September 14, 2010. (Prior to that time, Respondent performed Business Office services in conjunction with his services as the Acting Superintendent of the District, and at no additional charge beyond what the District paid for Acting Superintendent services.) At the September 14, 2010, executive session, Respondent presented information to the Board on behalf of EMG, indicating that EMG had the ability/expertise to provide needed services for the Business Office. Respondent explained to the Board that it was logical for EMG to continue to perform Business Office functions for the District due to his familiarity with the Business Office, his knowledge of existing concerns, his familiarity with Luksis, and the like. Respondent did not present or recommend any other individuals or entities to the Board for consideration regarding the performance of Business Office services. At the time Respondent participated in the aforesaid discussions of the Board, Respondent had not yet become District Superintendent and was providing services to the District through the EMG contract. Immediately following the Board’s September 14, 2010, executive session, the Board held a special meeting at which the Board approved the election of Respondent as Superintendent of the District for a three year term from September 15, 2010, through September 14, 2013. The Board also approved amendments to the contract between the District and EMG that provided for EMG to supply a consultant to serve in the District’s Business Office. The amended contract between the District and EMG became effective on September 14, 2010. Respondent did not become the District Superintendent until the following day, September 15, 2010. The parties are in agreement that at the time of Respondent’s participation in Board discussions as to the use of EMG to provide Business Manager functions for the District, Respondent did not use the authority of any office. Based upon the parties’ agreement, we hold that no violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to Respondent participating in discussions with the Board which resulted in the use of a business with which he is associated (EMG) to provide Business Manager functions for the School District, in that at the time of the participation and/or discussions, Respondent did not use the authority of any office. Boyer, 10-047 Page 32 The parties have further recommended a finding that no violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), occurred in relation to Respondent’s company being awarded a contract without an open and public process, in that at the time the contract was awarded, Respondent was not a public official/public employee. The Board first awarded a contract to EMG at the June 29, 2010, regular Board meeting, while Respondent was a contract District employee. The Board renewed and approved amendments to the contract on August 26, 2010, and September 14, 2010, respectively, prior to Respondent becoming District Superintendent and while Respondent was providing services through the EMG contract. Given the parties’ agreement that to the extent a contract between the District and EMG was awarded without an open and public process, Respondent was not a public official/public employee at the time, we accept the recommendation of the parties and hold that no violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. §1103(f), occurred in relation to Respondent’s company (EMG) being awarded a contract without an open and public process, in that at the time the contract was awarded, Respondent was not a public official/public employee. As part of the Consent Agreement, Respondent has agreed that payment in the amount of $5,000.00 will be made in settlement of this matter payable to the Montour School District and forwarded to this Commission within thirty (30) days of the issuance of the final adjudication in this matter. Respondent has further agreed to not accept any reimbursement, compensation or other payment from the District 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, Respondent is directed to make payment in the amount of $5,000.00 payable to Montour School District and th forwarded to this Commission by no later than the thirtieth (30) day after the mailing date of this adjudication and Order. Per the Consent Agreement of the parties, Respondent is further directed to not accept any reimbursement, compensation or other payment from the District 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 the Superintendent of Montour School District (“District”), Respondent Donald E. Boyer (“Boyer”) is a public official/public employeesubject to the provisions of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq. 2. Boyer violated Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), when he used the authority of his office as District Superintendent by refusing to accept a refund check issued to the District from The Education Management Group, LLC (“EMG”), a business with which he is associated. Boyer, 10-047 Page 33 3. No violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to Boyer participating in discussions with the District Board of Directors which resulted in the use of a business with which he is associated (EMG) to provide Business Manager functions for the District, in that at the time of the participation and/or discussions, Boyer did not use the authority of any office. 4. No violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), occurred in relation to Boyer’s company (EMG) being awarded a contract without an open and public process, in that at the time the contract was awarded, Boyer was not a public official/public employee. In Re: Donald E. Boyer, : File Docket: 10-047 Respondent : Date Decided: 4/12/12 : Date Mailed: 4/25/12 ORDER NO. 1599 1. As the Superintendent of Montour School District (“District”), Donald E. Boyer (“Boyer”) violated Section 1103(a) of the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1103(a), when he used the authority of his office as District Superintendent by refusing to accept a refund check issued to the District from The Education Management Group, LLC (“EMG”), a business with which he is associated. 2. No violation of Section 1103(a) of the Ethics Act, 65 Pa.C.S. § 1103(a), occurred in relation to Boyer participating in discussions with the District Board of Directors which resulted in the use of a business with which he is associated (EMG) to provide Business Manager functions for the District, in that at the time of the participation and/or discussions, Boyer did not use the authority of any office. 3. No violation of Section 1103(f) of the Ethics Act, 65 Pa.C.S. § 1103(f), occurred in relation to Boyer’s company (EMG) being awarded a contract without an open and public process, in that at the time the contract was awarded, Boyer was not a public official/public employee. 4. Per the Consent Agreement of the parties, Boyer is directed to make payment in the amount of $5,000.00 payable to Montour School District and forwarded to the th Pennsylvania State Ethics Commission by no later than the thirtieth (30) day after the mailing date of this Order. 5. Per the Consent Agreement of the parties, Boyer is further directed to not accept any reimbursement, compensation or other payment from the District representing a full or partial reimbursement of the amount paid in settlement of this matter. 6. Compliance with Paragraphs 4 and 5 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