HomeMy WebLinkAbout419-R BerryMs. Esther Rerry
c/o George A. Verlihay, Esquire
1015 Seventh Avenue
Beaver Falls, PA 15010
Re: 84 -154 -C
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
May 2, 1986
Order No. 419 -R
Dear Ms. Berry:
The State Ethics Commission has received a complaint regarding you and a
possible violation of Act 170 of 1978. The Commission has now completed its
investigation. A hearing on the matter was conducted on December 4, 1985, at
which time relevant testimony and evidence was received. The individual
allegations, conclusions, and findings on which those conclusions are based
are as follows:
I. Allegation: That you, a Councilmember for the City of Beaver Falls,
violated Section 3(a) of the Ethics Act, 65 P.S. 403(a), by having the city
pay for a hospitalization /medical plan and life insurance policy in which you
participate.
A. Findings:
1. You have served as a city councilmemher of Beaver Falls since January,
1982 and, as such, are subject to the Ethics Act (Act 170- 1978).
2. You state that you were not aware that you were eligible for health care
coverage until you were asked to sign the forms.
a. Upon the assumption of your duties as a city councilmemher, in 1982
you were requested by the city clerk to sign a card enrolling you in the
Reaver Falls Insurance Programs.
h. This occurred approximately one week after you took the oath of
office.
c. You did not participate in any vote in order to receive this
hospitalization or life insurance.
d. The insurance programs were in effect prior to your assumption of
office in 1982,
Ms. Esther Berry
Page 2
May 2, 1986
3. According to the city clerk, officials are automatically added to the
hospitalization and life insurance plans when they assume office.
4. The city auditor acknowledges that he was aware the city paid for borough
officials participation i:i life and hospitalization plans but never questioned
it.
5. City council took the fol lowi ng actions relating to insurance:
a. Ordinance #975 passed by council April 13, 1951 and signed by Mayor
Edward C. Corcoran, authorized contracts with insurance companies
insuring the employees of the City of Beaver Falls under policies for
group insurance coveri ng life, health and accident insurance and
agreed that the borough could pay part of the premimums. This
ordinance references to Section 2403 of the Third Class City Law as
amended May 22, 1933 specifically in relation to clause 53 which
relates to various types of insurance.
b. This ordinance authorized the city to contract for group life
insurance for its employees with Sun Life Assurance Company of
Canada and Zurich General Accident and Liability Insurance Company,
LTD, insuring its employees under a group, health and accident
policy.
c. The city was authorized to pay approximately 2/3 of the premiums or
chErges for such contracts but this payment was not to exceed $7 per
month for each employee.
d. The city clerk and mayor who were in office in 1951 and who were
involved in the passage of Ordinance #975 have affirmed that it was
the intent of the city council, at that time, to include city
officials and officers within the provisions of the ordinance.
6. The council also approved an ordinance in 1976. This ordinance involved
changes in compensation, expenses, bonds and organization of the police
department but did not affect Ordinance #975. The 1976 ordinance did not deal
with life insurance or hospitalization benefits..
a. Ordinance #975 was passed prior to your term in office.
7. The city has paid premiums for your participation in the life insurance
program as follows:
a. From February, 1983 through January, 1984 $ 96.00
b. From February, 1984 through September, 1984 $ 72.00
c. From October, 1984 through September, 1985 $108.00
Ms. Esther Berry
Page 3
May 2, 1986
8. The total cost to the city for your participation in the life insurance
program from February, 1983 to September, 1985 was $276.00.
9. The city has paid the following premiums for your particiation in the
hospitalization program from:
a. February, 1982 through January, 1983. Total $664.92
b. February, 1983 through January, 1984. Total $754.92
c. February, 1984 through 1984. Total $712.68
d. November, 1984 through September, 1985. Total $682.12
10. The total premiums paid by the city for your hospitalization program from
February, 1982 through September, 1985 was $2,814.64.
11. The State Ethics Commission investigation commenced on or about October
18, 1984.
12. The city of Beaver Falls maintained a group vision plan for city
officials. You did not participate in this plan at the city expense.
13. Other city officials have received similar hospitalization and life
i nsurance benefits at city expense.
14. You served the city of Beaver Falls as a councilperson and are not
employed by the city in any other capacity.
15. The Beaver Falls city council routinely has passed ordinances adopting
city budgets. These budgets included payments for hospitalization and life
i nsurance.
16. You no longer serve in public office.
B. Discussion: As an elected member of city council, you were a public
official as that term is defined in the State Ethics Act. 65 P.S. §401 et.
seq. As such, your conduct must conform to the requirements thereof. Boyle,
80 -020; Rosenfeld, 82 -010.
The Ethics Act provides, in part, that:
Section 3. Restricted activities.
(a) No public official or public employee shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself, a
member of his. immediate family, or a business with which
he is associated. 65 P.S. 403(a).
Ms. Esther Berry May 2, 1986
Page 6
insurance benefits for employees of the city. While the ordinance did not
reference to such coverage for officials or officers of the city, we have
received the sworn statements of several individuals who were in office at the
time of the passage of the ordinance. These individuals, in substance, have
indicated that it was the intent of the ordinance to extend the insurance
coverage to members of council and other city officials. The council had
believed that the ordi nance, i n fact, had accomplished this goal .
In several matters we have, in the past, accepted the statements of
intent of authorized officials as sufficient evidence of appropriate approval.
Kiniry, 84 -008; Saunders, 85- 006 -R. Based upon our prior decisions, we
believe that the intent of Ordinance #975 was to extend the insurance coverage
to the city officials.
We must here note that the argument has been advanced; that the
officials and officers of the city are, in fact, employees within the meaning
of that term. Our decision herein is not based upon that analysis and we
believe that the officers and officials are not employees of the city. See,
e.g., Conrad v. Exeter Township, 76 Berks L.J. No. 2p. 7, (1983); In Re:
Appeal of Auditors Report of Muncy Creek Township, 16 Lycomi ng Rep. 159,
(1985).
Our decision is based solely upon our finding that the Third Class City
Code allows for the purchase of such insurance benefits for city officials and
our finding that the ordinance enacted was intended to implement this
provision of the code.
As such, we do not believe that you violated the State Ethics Act in the
instant situation.
We must note, that the problems encountered in this matter were
occasioned by the faulty language of the in question ordinance.
In this respect, we strongly suggest that said ordinance be amended so as
to include the proper language to clearly extend the benefits to officials
and officers of the city.
C. Conclusion: Based upon the foregoing, we do not believe that you violated
the State Ethics Act when you received certain insurance benefits. The Third
Class City Code allows for the purchase of such benefits for officials of a
city when a duly enacted ordinance is promulgated. Here, while the ordinance
only references to such benefits for employees, we believe that it was also
the intent of the council to provide said benefits to officials and officers
as well. We do suggest that an appropriate ordinance be enacted so as to .
avoid future problems of this type.
Ms. Esther Berry
Page 7
May 2, 1986
Our files in this case will remain confidential in accordance with
Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final
and will be made available as a public document 15 days after service (defined
as mailing) unless you file documentation with the Commission which justifies
reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code
2.38. During this 15 -day period, no one, including the Respondent unless he
waives his right to challenge this Order, may violate this confidentiality by
releasing, discussing or circulating this Order.
Any person who violates the confidentiality of a Commission proceeding
is guilty of a misdemeanor and shall be fined not more than $1,000 or
imprisoned for not more than one year or both, see 65 P.S. 409(e).
By the Commission,
,et. 44:4.Q,t, Qo ✓wc.ct -t
G. Sieber Pancoast
Chairman