HomeMy WebLinkAbout969 FioreBefore:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
In Re: Patrick Fiore File Docket: 94- 005 -C2
Date Decided: 05/04/95
Date Mailed: 05/16/95
Daneen E. Reese, Chair
Austin M. Lee, Vice Chair
Roy W. Wilt
Boyd E. Wolff
The Investigative Division of the State Ethics Commission
conducted an investigation regarding a possible violation of the
State Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. 5401 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 waived. A consent agreement was submitted by the
parties to the Commission for consideration which was subsequently
approved. 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 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 §21.29(b).
The files in this case will remain confidential in accordance
with Act 9 of 1989, 65 P.S. 5408(h). Any person who violates
confidentiality of the Ethics Law 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. 5409(e). Confidentiality does not
preclude discussing this case with an attorney at law.
Fiore, 94- 005 -C2
Page 2
I. ALLEGATION:
That, Patrick Fiore, a public official /public employee, in his
capacity as a member of the Altoona City Authority, Blair County,
violated provisions of the State Ethics Act (Act 9 of 1989) when he
accepted compensation for attendance at meetings without the
approval of the appointing authority.
II. FINDINGS:
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).
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 of his immediate family or
a business with which he or a member of his
immediate family is associated. 65 P.S. §402.
1. Patrick Fiore has served as an appointed member of the Altoona
City Authority since January, 1991.
2. The Altoona City Authority provides sewer and /or water service
for the City of Altoona and neighboring municipalities.
a. Under the City Authority umbrella are separate sewer and
water divisions.
3. The Altoona City Authority is operated by a five member board
appointed by City Council.
a. Members are appointed to five year terms with one term
Fiore, 94- 005 -C2
Page 3
expiring annually.
b. Altoona City Authority became an operating Authority
effective February 1, 1981.
4. During the early 1980's, the City Authority undertook several
capital ventures which put extra time demands on Authority
members. Most notably was the acquisition of the Blair Gap
Water System.
5. In 1986, the City of Altoona transferred operational control
of its sewer system to the City Authority.
a. Since 1986, the City Authority has handled sewer and
water service exclusively.
6. The Altoona City Authority employs approximately 116 people.
Employees perform both administrative and operational
functions.
7. Between 1989 and 1993, William Cochran served as Executive
Director; Ronald Shimmel as Controller; and Karen Anderson as
Executive Secretary.
a. Cochran was responsible for overseeing the day to day
operation of the Authority.
b. Shimmel was responsible for handling the financial
aspects of Authority operation.
c. Anderson recorded and prepared board meeting minutes and
other designated administrative duties.
8. The Altoona City Authority holds one regularly scheduled
monthly meeting to conduct Authority business.
a. Special meetings and work sessions are held on an as
needed basis.
9. By -laws of the Altoona City Authority, in part, define
officers of the Authority as Chairman, Vice Chairman,
Secretary /Treasurer, and officers that may from time to time
be selected by the Board.
10. By -laws of the Altoona City Authority provide the following
definition of duties of officers:
a. Chairman: The Chairman shall conduct all meetings of the
board, shall jointly with the secretary execute all
contracts and shall jointly, with the treasurer, sign all
checks, and shall have general and active management of
Fiore, 94- 005 -C2
Page 4
the affairs of the corporation.
b. Vice Chairman: The Vice Chairman shall have all the
powers of the chairman in his absence.
c. Secretary: The secretary shall act as clerk of all
meetings of the board; shall record all the proceedings
of such meetings in a book kept for that purpose; shall
give proper notice of all meetings; shall record all
votes, and shall have custody of all the books and
records of the authority, except those kept by the
treasurer and shall jointly, with the chairman, execute
all contracts and perform all other duties as may from
time to time be assigned to him.
d. Treasurer: The treasurer shall jointly with the chairman
sign all checks and keep the financial records of the
authority, provide for the custody of the funds and other
property of the authority, and perform all other duties
incident to his office.
e. Other Officers: Such other officers as may from time to
time be selected by the board to perform such duties as
may be specifically assigned to them by the board.
11. Members of the City Authority Board have annually been
appointed to officer positions since at least 1981.
12. During his tenure on the City Authority Board, Fiore has held
the officer position of Assistant Treasurer from 1991 through
1993.
13. Meeting minutes of the Altoona City Authority Annual
Reorganizational Meetings include action appointing all board
members to officer positions.
a. Reorganizational meeting minutes reflect board members
were appointed to the following office positions for a
term of one year:
Meeting Date
01/30/91 Chairman
Vice Chairman
Secretary /Treasurer
Assistant Treasurer
Assistant Secretary
01/29/92 Chairman
Vice Chairman
Officer Position Member
Andronic Pappas
Maurice Lawruk
Richard Fornwalt
Patrick Fiore
William Geis
Andronic Pappas
Maurice Lawruk
iore, 94- 005 -C2
Page 5
a .
01/22/93
Secretary /Treasurer
Assistant Treasurer
Assistant Secretary
Chairman
Vice Chairman
Secretary /Treasurer
Assistant Treasurer
Assistant Secretary
Richard Fornwalt
Patrick Fiore
William Geis
Andronic Pappas
Maurice Lawruk
Richard Fornwalt
Patrick Fiore
William Geis
14. By -laws of the Altoona City Authority provide that city council can
set a salary for board members attendance at meetings and that the
board can set compensation for members who serve as officers.
15. By -laws of the Altoona City Authority include the following
specific guidelines for members receipt of compensation:
"Members of the Board shall receive such a salary as may be
determined by the Council of the City of Altoona but no salary
of any member shall be increased or diminished by the said
council during the term for which the members receiving the
same shall have been appointed. All officers and agents of
this authority shall receive such compensation as shall be
determined and fixed by the members of the Board."
16. By way of Resolution #7445, adopted October 10, 1950, Altoona
City Council set compensation for City Authority members at
$20.00 per meeting.
A meeting pay fee of $20.00 per event was the only
compensation approved by Altoona City Council for members
of the Authority.
17. The Altoona City Authority held a special Executive Session on
March 17, 1981. A recommendation was made that members be
compensated as follows:
$100.00 per meeting attended by authority ($30.00 from Sewer
EPA Grant Fund and $70.00 from Water Division Operating
funds) .
$200.00 per month for authority secretary ($100.00 from EPA
Grant Fund and $100 from Water Division funds).
$50.00 per committee meeting attended any duly called Water
Division meeting."
Present: Smith, Reilly, Dillen, Freeburn.
Fiore, 94- 005 -C2
Page 6
18. At the City Authority's March 27, 1981, Regular meeting, the
recommendations approved at the March 17, 1981, Special Work
Session were approved as follows:
a. Compensation for Authority members for regular meetings
attended $100 ($30 from EPA grant funds $70 from Water
Division) $50 per committee meeting attended (from Water
Division)
b. Compensation for Authority Secretary $200 per month ($100
from EPA grant fund, $100 from Water Division)
Present: Smith Reilly, Dillen, Freeburn, Sheetz.
19. No salaries were set by the Authority for the officer
positions of Chairman, Vice Chairman, Treasurer, Assistant
Secretary and Assistant Treasurer.
20. Members of the Altoona City Authority board were compensated
for attending regular meetings, special meetings and work
sessions based on the resolution passed March 17, 1981.
21. Meeting compensation is paid to the Altoona City Authority
Board Members on a quarterly basis.
a. Payments are made from both the sewer and water divisions
operating accounts.
b. The Board Secretary /Treasurer provides Controller Ronald
Shimmel with a list of meetings attended by board members
during each quarter.
c. Board members are compensated for attending meetings
based on these quarterly reports.
d. Checks were signed by Executive Director William Cochran.
e. Executive Director William Cochran was authorized by the
City Authority to issue checks in amounts less than
$500.00.
f. Board action was not required for the issuance of meeting
pay-
22. Since March 27, 1981, Authority Board members received $100.00
per regular meeting attended and $50.00 for each special
meeting or work session attended. During 1992 and 1993, some
special meetings were paid at a rate of $100.00 per meeting.
a. Members received $80.00 in excess pay for each regular
meeting attended.
Fiore, 94- 005 -C2
Page 7
b. Members received $80.00 in excess pay for special
meetings held during 1992 and 1993 paid at a rate of
$100.00 per meeting.
c. Members received $30.00 in excess pay for each special
meeting or work session attended paid at a rate of $50.00
per meeting.
23. 1099 Miscellaneous Income Statements on file with the City
Authority reflect the following aggregate disbursements to
Fiore for his attendance at meetings during the specified
calendar year:
Year Amount
1991 $ 950.00
1992 $2,400.00
1993 $1,400.00
24. Around October, 1993, the compensation for City Authority
Board members was questioned by Altoona City Council.
25. By way of correspondence dated November 4, 1993, William
Cochran, Executive Director of the Altoona City Authority
advised N. John Casanave, Altoona City Solicitor Cochran that
"Altoona City Authority Board members are paid $100.00 for
regular board meetings and $50.00 for work sessions. Each
individual board member must be in attendance to receive the
above mentioned director's fees."
26. By way of memorandum dated December 8, 1993, Robert F.
Hagemann III, City Manager requested a written opinion of John
Casanave, City Solicitor, regarding, "the legalities involved
with the current fee structure utilized by appointed board
members of the City Authority for attending board meetings."
27. City Solicitor N. John Casanave provided City Council with an
Opinion dated December 21, 1993, on the compensation issue.
"After researching the Municipal Authorities Act and
reviewing the minutes of the Authority meetings and the
resolutions of the City of Altoona, I have concluded as
follows:
It is my judgement and opinion that the Authority Board
had no authority to unilaterally raise their fees for
attendance at meetings because only the City Council of
the City of Altoona has the authority to increase those
fees.
Reference to the following section of the Municipal
Fiore, 94- 005 -C2
Page 8
Authorities Act governs this issue in it's entirety:
"Members of an Authority shall hold office until their
successors have been appointed, and may succeed
themselves and shall receive such salaries as may be
determined by the governing body of the municipality, but
none of such salaries shall be increased or diminished by
such governing body during the term for which the member
receiving same shall be appointed."
With regard to the instant matter, the only governmental
action taken by the City of Altoona was a resolution
dated October 10, 1950, a copy of which is attached to
this opinion, wherein the compensation of the members of
the Altoona City Authority was determined and fixed at
TWENTY DOLLARS ($20.00), per member per meeting.
Thus, it appears that the only valid consideration for
the current members of the Altoona City Authority would
be TWENTY DOLLARS ($20.00) per meeting as heretofore
established by the governing body of the City as far as
the official records of the City are concerned.
28. With respect to Authority Board members compensation,
correspondence was submitted to Altoona City Council by former
city officials on December 7 and 8, 1993.
a. The former officials, including the Mayor and four former
council members, believed authority members should
receive an increase in meeting compensation.
b. They requested council to consider granting a retroactive
increase.
29. Altoona City Council took no action on the request from the
former administration requesting a retroactive approval of
City Authority Board member meeting compensation.
30. At the Altoona City Authority's February 18, 1994, meeting,
discussion and action took place regarding restructuring the
meeting pay received by City Authority Board members.
a. Mr. Lawruk motioned to formalize the job descriptions as
distributed by the Chairman in accordance with the By-
Laws of the Altoona City Authority providing a legal
basis for the fees established in 1981 when the Authority
became a fully operating Authority. Motion was seconded
by Mr. Geis and carried 4 -1, with Mr. Wilkin opposing.
31. Attached to the Authority's February 18, 1994, meeting
minutes, is the following "Clarification of Board meeting
Fiore, 94- 005 -C2
Page 9
minutes February 18, 1
In order to clarify the Resolution adopted by the Board during
its February 18, 1994, meeting concerning the payment of
officers compensation, the following shall be incorporated
into the Minutes dated February 18, 1994.
1.) The following compensation shall be received:
A. Members of the Board shall receive Twenty Dollars
($20.00) per month for their services as Board
Members as approved by City Council.
B. The Officers of the Authority shall receive Eighty
Dollars ($80.00) per month for the services which
they render as an Officer.
2). Recognizing that the Board Members may from time to time
be required to attend Special meetings concerning
Authority business, the fee of Fifty Dollars ($50.00) per
meeting shall be paid to those Board Members required to
attend such meetings.
3). Any out -of- pocket costs that are incurred by any Board
Member, shall be documented and presented to the
Authority. Once determined by Altoona City Authority
Staff to be incurred for the benefit of the Altoona City
Authority, costs shall be promptly reimbursed.
4). Any Board Member may at their discretion waive the
payment of any or all of the compensation listed above."
32. City Authority Solicitor David Halpern provided the following
opinion to City Solicitor N. John Casanave, dated July 1,
1994, on City Authority Board member compensation:
"In response to your inquiry of June 16, 1994, be
advised that when I was presented with the issue
concerning the compensation of the members of the Altoona
City Authority I did conclude, after research, that the
manner in which the compensation was increased from
$20.00 to $100.00 per month in 1981 was technically
incorrect. I utilized the term "technically" assuming
that it was the intention of all concerned, including
City Council, to increase the compensation of Authority
Board Members to take into account the additional duties
and responsibilities that would be naturally incident to
their obligations as members of the Board an operating
authority with the expanded system as opposed to that
required of members of a funding authority. I have made
no independent investigation relative to this added
Fiore, 94- 005 -C2
Page 10
compensation, but have been presented with statements
which would indicate that it may have been the intention
of City Council at the time to increase the compensation
of the Board members and the error lay in the manner in
which the increase was accomplished. Either City Council
should have increased the Board Members stipend to
$100.00 per meeting or the Resolution passed in 1981 by
the Authority Board should have reflected that the
additional compensation was for duties as officers of the
Authority as opposed to compensation for attendance at
meetings. Not being involved, I do not know which
method, if any, the parties intended to utilize
accomplish the increase.
When the issue was presented to me by the
Authority's Chairman in December of 1993, after research,
I came to the conclusion that the only manner in which
this matter could be properly assessed and resolved would
be to submit the same to the State Ethics Commission for
a determination. However, prior to obtaining the Board's
approval to request that opinion, I learned that, in
fact, the Commission had initiated an investigation of
this matter which, to the best of my knowledge, is
ongoing as of the date of this letter.
It was my opinion at the time, and is still my
opinion, that there is only two ways in which this matter
can be reasonably and properly resolved. First, await
the results of the Commission's investigation or, in the
alternative, for City Council to determine, based upon
the evidence before it or that which it may wish to
elicit, that the 1981 increase was intended and to
confirm that action in a proper manner, retroactively.
I am not, however, opining that the latter course would
be proper. If that was Council's desire, I am sure you
would advise them accordingly.
As to the question related to the actions taken by
the Authority in 1994, I did advise the Board that it
had the power to set the duties and compensation of its
officers under the provisions of the Municipal
Authorities Act of 1945 so long as, in my opinion, the
duties for which that compensation was rendered was not
for duties generally contemplated as within the scope of
their duties as Board Members. It was evident to me that
the officers of the Authority are required to expend
considerable time on Authority business between Board
meetings to maintain and accomplish the business of the
Authority.
Hopefully, the above addresses any questions City
Fiore, 94- 005 -C2
Page 11
Council may
rendered to
33. At the October
officers was set
Chairman:
Vice Chairman:
Secretary:
Treasurer:
Assistant Secretary/
Treasurer
have concerning the
the Authority on this
24, 1994, Authority
as follows:
opinions which I have
issue."
meeting salaries for
$225 /month, $20.00 per meeting
$125 /month, $20.00 per meeting
$175 /month, $20.00 per meeting
$100 /month, $20.00 per meeting
$ 75 /month, $20.00 per meeting
Present: Fiore, Geis, Lawruk, Covino, Wilkin
Vote: 4 to 1. Wilkin votes no stating he won't accept
compensation.
34. Job descriptions for the Board of Directors were adopted by
the Authority on October 24, 1994, for the positions of
Chairman, Vice - Chairman, Secretary, Treasurer and Assistant
Secretary.
35. From January, 1991, through December, 1993, Fiore was
compensated as follows:
33 regular meetings @ $100.00 per meeting -
7 special meetings @ $100.00 per meeting -
15 special meetings /work sessions @
$50.00 per meeting
$3,300.00
$ 700.00
$ 750.00
TOTAL $4,750.00
36. The compensation received by Fiore in the form of meeting pay
was $3,650.00 in excess than what was authorized by Altoona
City Council.
a. Fiore was authorized to receive $20.00 per meeting for
55 meetings for a total of $1,100.00.
37. Fiore was not a member of the Authority at the time when the
meeting compensation was increased to $100.00 per meeting.
a. Fiore believed he was entitled to such compensation.
b. Fiore was not advised that increases in compensation
required City Council Approval.
c. Fiore relied on the advice of the authority solicitor
when receiving compensation.
Fiore, 94- 005 -C2
Page 12
III. DISCUSSION:
As a member of the Altoona City Authority, Blair County,
Patrick Fiore, hereinafter Fiore, is a public official 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 in the allegations.
The issue in this case is whether Fiore violated Section 3(a)
of Act 9 of 1989 regarding the allegation that he accepted
compensation for attending meetings without the approval of the
appointing authority.
Factually, Fiore has served as a member of the Altoona City
Authority (ACA) since January, 1991. The ACA is made up of a five
member board appointed by the Altoona City Council (Council) to
provide sewer and water services for the City of Altoona and
neighboring municipalities. The by -laws of the ACA provide for the
officer positions of Chairman, Vice - Chairman, Secretary, Treasurer
and officers who may be selected by the ACA board. During his
tenure on the ACA, Fiore has held the officer position of Assistant
Treasurer. As to the receipt of compensation by members of the
ACA, the by -laws provide that members shall receive a salary
determined by Council which salary may not be increased or
diminished during the term for which the members are appointed. By
Resolution No. 7445 adopted on October 10, 1950, Council set
compensation for the ACA board members at $20.00 a meeting which
Fiore, 94- 005 -C2
Page 13
was the only compensation ever approved.
In a special executive session of the ACA on March 17, 1981,
a recommendation was made to have the members compensated at a
$100.00 per meeting with the Authority Secretary compensated at
$200.00 per month and attendance at committee meetings compensated
at $50.00 per meeting. The foregoing schedule of compensation was
approved at a regular meeting of the ACA on March 27, 1981. At
that time no salaries were set by the Authority for the officer
positions of Chairman, Vice-Chairman, Treasurer, Assistant
Secretary and Assistant Treasurer. The board members of the ACA
were compensated based upon the salary schedule approved on March
17, 1981. In particular, ACA members received $100.00 for regular
meetings, $50.00 for special meetings or work sessions and in the
years 1992 and 1993, $100.00 for some special meetings. In
October, 1993, the amount of compensation received by ACA board
members was questioned by Council.
After the ACA Executive Director advised the Council Solicitor
that ACA board members were paid $100.00 for a regular board
meetings and $50.00 for work sessions, the City Manager requested
a written opinion from the Solicitor as to the legality of the
receipt of such compensation by the ACA board members. In a
written opinion dated December 21, 1993, the Solicitor advised that
the ACA board did not have the power to raise their salaries for
attending meetings because only Council had the authority to take
such action. The Solicitor concluded that the only valid
compensation for the ACA board members was $20.00 per meeting as
established by the Council as the governing body. Former Council
members and the Mayor wrote the Council seeking an increase for the
ACA board members to be applied retroactively. However, Council
took no such action.
At an ACA meeting on February 18, 1994, action was taken to
restructure the meeting pay for the ACA members. In a
"Clarification" which was attached to the meeting minutes,
compensation was provided for the ACA board members to receive
$20.00 a month as board members and $80.00 as officers for services
rendered. In addition, special meetings of the ACA would be
compensated at $50.00 per meeting together with any out of pocket
expenses. Thereafter, the ACA Solicitor provided his analysis and
opinion to the Council Solicitor dated July 1, 1994, on the subject
of the ACA board members compensation. The ACA Solicitor concluded
and so advised the ACA board that it had the power to set the
compensation for officers under the Municipality Authorities Act as
long as the duties for which the compensation was rendered were as
officers and not as board members. At the October 24, 1994 ACA
meeting, salaries were set for officers in amounts as delineated in
Fact Finding 33.
As to Fiore, he was not a member of the ACA at the time that
Fiore, 94- 005 -C2
Page 14
the compensation was increased to $100.00. In addition, Fiore
believed that he was entitled to the compensation and that
increases in compensation did not require Council approval.
Lastly, Fiore relied upon the advice of the ACA Solicitor when
receiving such compensation.
In applying the provision of Section 3(a) of Act 9 of 1989 to
the instant matter, we find no violation as to the receipt by Fiore
of the compensation for attending the ACA meetings. In order to
establish a violation of Section 3(a) of Act 9 of 1989, we must
show as to a public official that there was a use of authority of
office which resulted in a private pecuniary benefit to himself.
Latch, Order 823. In this case, we note that the action taken by
the ACA board members to increase their compensation to $100.00 was
taken at a time when Fiore was not on the board. Without the
requisite use of authority of office, which in this case is lacking
on the part of Fiore, we find that no violation of Section 3(a) of
the Ethics Law. In this regard, we also note that Fiore relied on
the ACA Solicitor and was never advised that his receipt of
compensation was in excess of the amount approved by the City of
Altoona.
IV. CONCLUSIONS OF LAW:
1. Patrick Fiore as a member of the Altoona City Authority is a
public official subject to the provisions of Act 9 of 1989.
2. Fiore did not violate Section 3(a) of Act 9 of 1989 regarding
the receipt of compensation for attending meetings without the
approval of the governing body in that he was not a member of
the Authority when such compensation was increased.
In Re: Patrick Fiore
ORDER NO. 969
File Docket: 94- 005 -C2
Date Decided: 05/04/95
Date Mailed: 05/16/95
1. Patrick Fiore as a member of the Altoona City Authority, did
not violate Section 3(a) of Act 9 of 1989 regarding the
receipt of compensation for attending meetings without the
approval of the governing body in that he was not a member of
the Authority when such compensation was increased.
BY THE COMMISSION,
teams
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DANEEN E. REESE, CHAIR