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HomeMy WebLinkAbout832 EspositoIn Re: Fidel R. Esposito STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG. PENNSYLVANIA 17120 : File Docket: : Date Decided: : Date Mailed: Before: Dennis C. Harrington, James M. Howley, Vice Daneen E. Reese Roy W. Wilt Austin M. Lee James P. Gallagher Allan M. Kluger 91- 028 -C2 Febr »ry 20 , 199; Feb Luary 27. 1992 Chair Chair The State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, Act 9 of 1989, 65 P.S. 401 et. seq. Written notice, of the specific allegation(s) was served at the commencement of the investigation. A Findings Report was issued and served, upon completion of the investigation, which constituted the Complaint by the Investigation Division. An Answer was filed and a hearing was held. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusions of Law and Order. This adjudication is final and will be made available as a public document fifteen days after issuance. However, reconsideration may be requested which will defer public release of this adjudication pending action on the request by the Commission. A request for reconsideration, however, does not affect the finality of this adjudication. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code 52.38. The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. 408(h) during the fifteen day period and no one unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude discussing this case with an attorney at law. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year, 65 P.S. 409(e). I. ALLEGATION: That Fidel R. Esposito violated the following section of the Public Officials and Employees Ethics Law (Act 9 of 1988), when he, as Bristol Borough Business Manager, negotiated a labor contract which benefited his brother and then recommended to Borough Council that they approve the agreement. Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 P.S. 5403(a). II. Findings: Section 2. 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. "Conflict" or "conflict of interest" 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 included 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 P.S. S402. 1. Fidel Esposito has served as Business Manager for Bristol Borough, Bucks county, for approximately 20 years. 2. Esposito's duties as Business Manager include negotiating labor contracts with the borough's various employee unions. a. Esposito has been performing this function for at least ten years. b. He is given general guidelines by Council when negotiating a contract. c. Esposito presents results of negotiations to Council. 1) Contracts are voted upon by Council at a public meeting. Page 3 3. Bristol Borough has three employee unions: The First Line Supervisors Union, Borough Employees Union and the Police Benevolent Association. 4. The First Line Supervisors' Union represents the Sewer Plant Superintendent, Water Plant Superintendent, Streets and Highway Superintendent, Assistant Code Enforcement Officer, Assistant Treasurer, Administrative Assistant, Bookkeeper and Police Secretary. 5. Anthony Esposito has been employed as the Sewer Plant Superintendent for approximately the past 15 years. a. He is a member of the First Line Supervisors' Union. b. He is the brother of Borough Business Manager, Fidel Esposito. c. He retired as Sewer Plant Supervisor on December 15, 1991, effective December 31, 1991. 6. In 1991 Fidel Esposito negotiated contracts with the First Line Supervisors' Union, Borough Employees Union and the Police Benevolent Association. 7. The contract negotiated in 1991 with the First Line Supervisors' Union was for a three -year period. a. The contract called for five (5) percent wage increases for each year of the contract. b. The Borough Manager's secretary was to receive an additional $40.00 for attendance at regular Borough Council meetings. c. In addition to the five percent increase the following employees were to receive an additional flat, yearly increase effective January 1, 1991: Bookkeeper, Assistant Treasurer $1,000.00 Administrative Assistant $2,000.00 Water Plant Superintendent $2,000.00 Sewer Plant Superintendent $2,000.00 Street and Highway Superintendent $2,000.00 d. All employees were to receive an additional annual payroll increment of $300.00 per year, payable on or before January 30 of 1991, 1992 and 1993, with the exception of the Police Secretary who was to receive a $500.00 increment in 1991 and a $300.00 increment in 1992 and 1993. Page 4 8. The total increase in the Sewer Plant Superintendent's salary over the three years of the contract, amounted to a twenty (20) percent raise in pay. 9. The contract negotiated with the Borough employees union was for a three -year period. a. The contract called for a five - and - one -half (5 1/2) percent increase in 1991; a five - and - one -half (5 1/2) increase in 1992; and a five percent (5) increase in 1993. b. The total increase in Borough employees salaries, over the three years of the contract, amounted to a sixteen (16) percent increase in pay. 10. The contract negotiated with the Polio Benevolent Association was for a three -year period. a. The contract called for a six (6) percent increase in each year of the contract. b. The contract also called for a one (1) percent decrease in employee pension contributions in 1991 and 1992 and a two (2) percent decrease in employee pension contributions in 1993. c. The total increase in police salaries over the three years of this contract amounted to a twenty -two (22) percent increase in pay. 11. Bristol Borough Council reviewed the proposed contracts at the April 8, 1991 meeting of council. a. Eight council members were present. b. Borough Business Manager Esposito, Solicitor Snyder, Engineer Wright and the Chief of Police were also present. c. A motion was made by Councilman Piraino, seconded by Squillace to approve the three Borough employees and First Line Supervisors' contracts as negotiated by the borough manager. The motion carried unanimously. d. A motion was also approved for the three -year police contract as negotiated by the borougitmanager. The motion carried unanimously. 12. On April 25, 1991 the Bristol Borough Benevolent Association 4 Page 5 filed an unfair labor practice charge against Bristol Borough in relation to the 1991, 1992 and 1993 contracts. a. The Association argued that the B engaged in bad faith bargaining when it disclosed its interests in regionalization and because agreements with the other bargaining units allows for a larger pay increase than what the Association received. b. A hearing was scheduled for May 10, 1991 before the Pennsylvania Labor Relations Board. c. As findings of fact, the board found in part,: 1) That during the course of negotiations, the Borough informed the Association that it was financially burdened and was consequently exploring the possibility of regionalizing its police force. 2) That during the course of negotiations, the Borough informed the Association that its millage rate was at the maximum rate allowable by law. 3) That the salaries for the police department come out of the general fund. The revenues for the general fund budget are raised predominantly through taxes. 4) That the salaries for the department employees come out sewer department budget. The are produced by the Borough's 5 water and sewer of a separate water and revenues for that budget water and sewer plants. 5) That two - thirds of the first line supervisors' salaries come out of the water and sewer department budget. 6) That the agreement entered into with the Borough by the first line supervisors includes a total percentage increase for first line supervisors of 20% over a three -year period. 7) The agreement between the Association and the Borough includes a 6% increase per year for the three years of the agreement. In addition, the Borough agreed to reduce the percentage rate of the employees' contribution to their pension plan. In the first and second year of the agreement the employe contribution rate is reduced by i %, for the third year of the agreement the rate will be reduced by 2 %. The total percentage increase covering Page 6 the three -year agreement with the Association is 22 %. 8) That the agreement between the Borough and the non - uniformed employees includes'a total percentage increase for non - uniformed employees of approximately 16% over a three -year period. 9) That all of the bargaining units that the Borough negotiated with received the same limitations in their Blue - Cross /Blue Shield. 10) That the police department raises are 1% or 2% higher than the first line supervisor rates which, in turn, are 4% or 5% higher than the non - uniformed employe raises. 11) The majority of funds necessary to support the pay increases of the other two units come from the water and sewer budget, which is funded by proceeds from the water and sewer plants. 12) These funds are separate from the general fund and cannot be used to supplement funds to pay the police force. d. On August 7, 1991 the Pennsylvania Labor Relations Board dismissed the charge of an unfair labor practice. 13. The members of Bristol Borough Council were aware that Fidel Esposito was negotiating contracts in 1991 with the various unions. III. DISCUSSION: a. Council members were aware of the increases for the First Line Supervisors' Union. 1.) Esposito routinely informed council members of negotiations. b. Council members agreed that the salary increases were needed for the first line supervisors to keep the salaries competitive. c. Council members agreed that contracts, overall, were good packages. d. Esposito did not pressure council to approve the contracts. 6 Page 7 As the Business Manager for Bristol Borough, Bucks County, Fidel R. Esposito, hereinafter Esposito, is a public employee as that term is defined under Act 9 of 1989. 65 P.S. 402. As such, his conduct is subject to the provisions of the Ethics Law and :the restrictions therein are applicable to him. Initially, it is noted that Section 9 of Act 9 of June 26, 1989 provides, in part, as follows: "This amendatory act shall not apply to violations committed prior to the effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto." Since the occurrences in this case transpired after the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 9 to determine whether the Ethics Act was violated. Under Section 3(a) of Act 9 of 1989 quoted above, a public official /employee shall not engage in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under Act 9 of 1989 as follows: Section 2. 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. "Conflict" or "conflict of interest" 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 or his immediate family or a 7 Page 8 business with which he or a member of his immediate family is associated. 65 P.S. §402. The issue in this case is whether Esposito as the Bristol Borough Business manager violated Section 3(a) of Act 9 of 1989, quoted above, when he negotiated labor contracts with the three Borough Unions when his brother was a member of one of those Unions. Factually, Esposito has served as Business Manager for Bristol Borough for approximately 20 years, with his duties including the responsibility of negotiating labor contracts with the Borough's employee Unions. Esposito has performed this function for the last ten years and negotiates under general guidelines given by Borough Council. After negotiations are completed, Esposito presents the results to Borough council, which votes on the contracts at a public meeting. Bristol Borough has three employee Unions consisting of the Borough Employee's Union, the Police Benevolent Association Union and the Firstline Supervisors Union. The Sewer Plant Superintendent, Water Plant Superintendent, Streets and Highways Superintendent, Assistant Code Enforcement Officer, Assistant Treasurer, Administrative Assistant, Bookkeeper and Police Secretary comprise the Firstline Supervisor's Union. Within the Firstline Supervisor's Union, the Sewer Plant Superintendent is Anthony Esposito who has been employed in that position for the last fifteen years. Anthony Esposito is the brother of Esposito, and retired on December 15, 1991, effective December 31, 1991 as Sewer Plant Supervisor. In 1991, Esposito negotiated contracts with the three Borough Unions. As to the contract for the Firstline Supervisor's Union, the contract was for a three year period wherein a five percent wage increase was provided in each year; the Borough Manager's secretary was to receive an additional $40.00 for attendance at each regular Borough Council meeting; the Administrative Assistant, Water Plant Superintendent, Sewer Plant Superintendent and Street and Highway Superintendent were to receive $2,000.00 in addition to the five percent increase and the Bookkeeper and Assistant Treasurer were to receive $'1,000.00 in addition to the five percent increase; and all employees were to receive an additional annual payroll increment of $300.00 per year payable on or before January 30 of each of three contract years, with the exception of the Police Secretary who was to receive a $500.00 increment in the first year and a $300.00 increment in each of the two following years. The total increase which the Sewer Plant Superintendent would receive for the three year contract amounted to a twenty percent raise in pay. As to the Borough Employee's Union contract, the contract was for a three year period with a five and one -half percent raise in the first and second years and a five percent raise in the third year which amounted to a total increase of sixteen percent in the three 8 Page 9 year period. As to the contract for the Police Benevolent Association, the contract was for a three year period whereby a six percent increase was given in each year coupled with a one percent decrease in employee pension contributions in the first two years and a two percent decrease in the third year which resulted in a total salary increase for the three year period of twenty -two percent. The three proposed contracts were reviewed by Bristol Borough Council on April 8, 1991 wherein all three contracts were unanimously approved by Council. However, on April 25, 1991 the Bristol Borough Benevolent Association filed an unfair labor practice against Bristol Borough regarding their particular contract. The unfair labor practice claim was based upon allegations that there was bad -faith bargaining by the Borough regarding consideration of regionalization of police services and secondly regarding the receipt of larger pay increases by the other two bargaining units. The hearing was scheduled before the Pennsylvania Labor Relations Board which subsequently issued the following findings of fact relative to the negotiation process: 1) That the Borough informed the Association that it was financially burdened and was considering regionalization of the police force; 2) That the Borough informed the Association that its millage rate was at the maximum rate allowed by law; 3) That the salaries of the Police Department came out of the general fund, the revenues of which are raised predominately through taxes; 4) That the salaries for the Water and Sewer Department employees came out of a separate Water and Sewer Department budget; 5) That two - thirds of the Firstline Supervisor's salaries came out of the Water and Sewer Department budget; 6) That the agreement entered into with the Firstline Supervisors amounted to a twenty percent raise over a three year period; 7) That the agreement as to the Association included a six percent increase per year over a period of three years coupled with a reduction of the percentage rate of employee contribution to the pension fund with a total salary increase over the three year agreement of twenty -two percent; 8) That the agreement between the Borough and the non - uniformed 9 Page 10 employees amounted to a sixteen percent increase over a three year period; 9) That all bargaining units received the same limitations as to Blue Cross /Blue Shield coverage; 10) That the Police Department raises are one to two percent higher than the Firstline Supervisors and also four to five percent higher than the non - uniformed employee raises; 11) That the majority of funds necessary to support the pay increase of the other two bargaining units came from Water and Sewer Budget and that the funds are separate from the general fund and cannot be used to supplement funds to pay the police force. The Pennsylvania Labor Relations Board on August 7, 1991 dismissed the charges of an unfair labor practice. The facts reflect that the members of Council were aware that Esposito was negotiating the contracts for 1991 with the various Borough Unions; that they were aware of the increases for the Firstline Supervisor's Union as to which Esposito routinely informed them as to the negotiations; that the salary increases were needed for Firstline Supervisors to keep the salaries competitive; that the contracts overall were good packages and lastly that Esposito did not pressure Council to approve the contracts. In determining whether Esposito violated Section 3 {a) of Act 9 of 1989, quoted above, we first must determine whether a conflict exists, and if so whether the exclusionary language contained in the definition of conflict has application. Preliminarily, we note that Anthony Esposito is a member of the immediate family of Esposito. The term immediate family is defined under the Ethics Law as follows: Section 2. Definitions "Immediate family." A parent, spouse, child, brother or sister. 65 P.S. §402. We must now determine whether the negotiations conducted by Esposito constitute a use of authority of office to obtain a private pecuniary benefit for a member of his immediate family. Since Esposito's brother is a member of his immediate family and since his brother received a private pecuniary benefit consisting of the negotiated raises in the contract, it follows that there is a private pecuniary benefit to a member of Esposito's immediate family. The issue in this case reduces to whether there has been a use of authority of office on the part of Esposito. Although it is true that 10 Page 11 Esposito as the Borough Manager did not vote to approve the contract, it is equally true that he negotiated the contracts as part of his duties as Business Manager. We believe that the negotiations by Esposito as part of his duties and responsibilities as Borough Manager is clearly a use of authority of office as that term is defined under the Ethics Law. Section 2. Defin$tions "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. 65 P.S. 5402. We have had occasion to interpret and apply the above definition in Juliante, Order 809 wherein we opined: "A review of the term 'authority of office' quoted above indicates the term extends to all of the tasks needed to perform the functions of a given position. The words, 'authority of office or employment' mean the actual power provided by law which must be exercised, and the term 'unique' applies to the duties and responsibilities of that position. Thus, the 'authority of office or employment' is the actual power provided by law which must be exercised to perform the unique duties and responsibilities of any given position. The 'actual power provided by law' encompasses every facet of that position." Juliante, at 16. We therefore find in this case that there has been a use of authority of office on the part of Esposito to obtain a private pecuniary benefit for a member of his immediate family. The only issue remaining is whether the exclusionary language contained in the above definition of conflict has application to the instant matter. We must determine therefore whether the action by Esposito affects to the same degree a sub - class consisting of an industry, occupation or other group which included a member of the immediate family. In this case, the Borough had to negotiate with three different Unions. The Union in which Esposito's brother was a member was the Firstline Supervisor's Union which has a membership comprised of the Sewer Plant Superintendent, Water Plant Superintendent, Streets and Highway Superintendent, Assistant Code Enforcement Officer, Assistant Treasurer, Administrative Assistant, Bookkeeper and Police Secretary. 11 Page 12 In reviewing the negotiated contract as to that particular Borough Union, it is readily apparent that All Superintendents received the same salary package except for the Manager's Secretary and Police Secretary and Bookkeeper and Assistant Treasurer who received a slightly different structured package in the contract. Therefore, as to the grouping of the Superintendents, Esposito's brother was affected to the same degree as all the other Superintendents and therefore we find that the exclusion within the definition of conflict is applicable. Accordingly, we find that Esposito did not violate Section 3(a) of Act 9 of 1989 in that his action in negotiating the contract with the Firstline Supervisor's Union constituted - an action - which affected to the same degree a sub -class consisting of an occupation or a group which included a member of his immediate family. IV. CONCLUSIONS OF LAW: 1. Fidel R. Esposito as the Business Manager for Bristol Borough, Bucks County is a public employee subject to the provisions of Act 9 of 1989. 2. Esposito did not violate Section 3(a) of Act 9 of 1989 regarding negotiating a contract with the Bristol Borough Union, of which his brother was a member, since the action taken affected to the same degree a sub -class consisting of an occupation or other group which included a member of his immediate family. 12 In Re: Fidel R. Esposito : File Docket: 91- 028 -C2 : Date Decided: February 20, 1992 . Date Mailed: February 27. 1992 ORDER No. 832 1. Fidel R. Esposito as the Business Manager for Bristol Borough, Bucks County did not violate Section 3(a) of A:.t 9 of 1989 regarding negotiating a contract with the Bristol Borough Union, of which his brother was a member, since the action taken affected to the same degree a sub -class consisting of an occupation or other group which included a member of his immediate family. BY THE COMMISSION, DENNIS C. HARRINGTON,`' CHAIR Commissioner Austin M. Lee did not participate in this matter because he acted as single hearing officer and recused himself pursuant to 51 Pa. Code §2.34(d). 13