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HomeMy WebLinkAbout585 ModrovichMr. George Modrovich 309 Boyleston Street Ambridge, PA 15003 Re: 86 -107 -C Dear Mr. Modrovich: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 585 DATE DECIDED: July 21, 1987 DATE MAILED: July 28, 1987 The Ethics Commission has received a complaint regarding you and a possible violation of Act 170 of 1978. The Commission has now completed its investigation. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: That you, Director of the Ambridge Water Authority, violated Section 3(a) of the Ethics Act which prohibits a public employee or public official's use of office or confidential information gained through that office to obtain financial gain in that you voted at the January 9, 1986 meeting of the Ambridge Water Authority to hire your son for a position with the authority. A. Findings: 1. You have served as a member of the Ambridge Water Authority since January 9, 1980. Your appointment was for a five -year term to expire on December 31, 1984. You resigned on January 3, 1984 and were subsequently appointed to a new five -year term created by the expiration of a term served by a Eugene Casello. Your term of office is to expire on December 31, 1988. 2. Records of the. Ambridge Water Authority confirmed that the authority has hired summer workers since at least 1971. 3. You admit to having a son, Daniel Modrovich, aye 39. 4. Minutes of the Ambridge Water Authority meetings disclose the following: Mr. George Modrovich Page 2 a. May 31, 1985: The chair stated that the next item on the agenda is to take action pertaining to summer help. He added that funds were provided in the budget to hire five people for fifty days at $4.00 per hour. After further discussion Mr. Stubbins moved, seconded by you, to hire James Vincent Iorfido, James Joseph Dodaro, Daniel G. Modrovich and John Serak as summer help from June 3, 1985 thru August 9, 1985. (50 days) at $4.00 per hour, and an additional person, whoever, Mr. Smetanka selects. The motion was passed on roll cell vote as follows: AYES: Stubbins, Dodaro, Modrovich and Sangermano. NAYS: Smetanka. b. August 9, 1985: Correspondence from George Abraham, President, Local Union #1051 AFSCME read which stated Local 1051 has no objection to the three summer workers (Dodaro, Iorfido, Modrovich) currently in the employ of the authority to continue working under the current wages and conditions through the remainder of the month of August. You stated you would go along with it as long as the budgeted funds last. Motion by you, seconded by Modrovich that the summer workers continue in their present employment not to exceed the budgeted figure. Roll call vote: AYES: Stubbins, Modrovich, Dodaro, Sangermano NAYS: Smetanka Smetanka stated that he is voting no because did got need them from the beginning. NOTE: The three summer employees _taired werL the cons of Authority members Modrovich and Dodaro LA thcn Ambridge Borough Councilman Edward Iorfido. c. October 10, 1985: "ITEM NO. 10" TO: AMBRLDGE WUiER AU HORITY Mr. George Modrovich Page 3 FROM: GEORGE ABRAHAM, PRESIDENT, UNION LOCAL #1051 AFSCME RE: Current labor agreement states that the employer must make a decision on the status of summer employees at the end of 120 day period. Mr. Stubbins stated that he went along on the first recommendation of the board and summer is now long gone. The authority is faced with a deficit and the board should take appropriate action to do what we have to do. We are looking at 200 to 250% rate increase. Mr. Stubbins moved seconded by Mr. Smetanka that all summer help be terminated. The motion was passed on roll call vote as follows: AYES: MESSRS: Stubbins, Smetanka and Sangermano. NAYS: Modrovich and Dodaro. Mr. Dodaro stated that there is truth to what Mr. Stubbins says, but the summer help was originally hired for 50 work days and Mr. Stubbins agreed. Then it was extended to the end of August and then a motion was adopted not to exceed the $10,000.00 budget figure. He disagrees with Mr. Abraham because in summer help, the 120 consecutive work days don't exist. He understands a grievance is being made. Mr. Stubbins stated that the board hired summer help full -time and increased the wages to $8.00 per hour to incur more cost to the authority. The board is in no position to do more hiring. Mr. Sangermano, sitting as a member of the body, stated that we should get our heads together. We have been asked to wait for the union meeting, and he is not in favor of laying off 5, 6 or 7 people. He would like to recommend that effective Monday morning, the managers, secretaries, clerks, and all personnel go on a 4 day per week until the end of the year until we recoup what we are losing. Mr. Sangermano then moved seconded by Mr. Stubbins that all personnel go on 4 days per week to recoup what we are losing and with no lay -offs until the end of the year and with no days off. The motion was defeated on roll call vote as follows: AYES: MESSRS: Stubbins, Sangermano. Mr. George Modrovich Page 4 NAYS: Dodaro, Smetanka and Modrovich 1.) Members of ;.112 authority confirm that the outhority was in poor financial condition at this time due to the loss of revenue caused by the closing of Armco Steel Co. d. October 17, 1985: The chair stated that the purpose of this meeting is to discuss and take action on matters concernia9 the personnel of the Ambridge Water Authority and or matters related to their employment. Mr. Dodaro reported on the meeting held last night with the bargaining unit, which they requested. The question discussed was what could be done to help resolve the problem the authority will be facing with the loss of Armco. The union asked that they not take any action tonight, to leave the door open and to continue negotiations. For a starter, the union would relinquish the 4% increase for 1986. They admitted we have a problem. Mr. Stubbins also attended the meeting. Mr. Dodaro continued that he would bring back the report to the board and will continue to negotiate. He will not surrender any management rights under the agreement. If we take any action tonight, the door will be closed and they will withdraw the offer. He added that it is almost impossible to resolve the problem in one meeting, or tonight; it is a problem for next year. Mr. Stubbins stated that the 4% withdrawal is only if there is no layoffs or no hiring. They will fight the board on a four day work week, and they did recommend that we may be acting hastily and should check all areas before we jump the gun. Mr. Stubbins did recommend a ten per cent reduction of salary. Mr. Dodaro felt that we should take no action tonight and he wants to continue to negotiate. Mr. Stubbins and he are not satisfied with the 4% and are after other things besides the 4% withdrawal. Mr. Stubbins then made a motion seconded by Mr. Dodaro that we direct the engineer to see if we can operate on two shifts per day or seven hour day, how many hours per year or whatever. The motion to put to a roll call vote was passed as follows: AYES: MESSRS: Stubbins, Modrovich, Dodaro and Sangermano. NAYS: None ABSENT: Smetanka. Mr. George Modrovich Page 5 e. January 9, 1986: (3) Grievances received from all employees - Violation of Articles of Contract by reducing the work force from five (5) days, eight (8) hours to four (4) days, (8) hours. - Violation of Article XIV, Section 1 of the contract by reducing the entire units hours of work. - Violation of Article I, Section J to reduce the hours of work constituting a slowdown. Motion Stubbins that because of the grievances, to reconsider the four day work week. Roll call vote: AYES: Smetanka, Stubbins NAYS: Dodaro, Modrovich, Iorfido Mr. Modrovich moved seconded by Mr. Iorfido that all union negotiations be referred to Mr. Dodaro and that he report back to the board. The motion put to a roll call vote was passed as follows: AYES: MESSRS: Dodaro, Modrovich, Stubbins, Iorfido NAYS: Smetanka e. January 9, 1986: Mr. Dodaro moved seconded by Mr. Iorfido that Daniel Modrovich be placed, on permanent status to replace the . position of Mark Hochevar, effective January 13, 1986. The motion was passed on roll call vote as follows: AYES: MESSRS: Dodaro, Modrovich, Iorfido NAYS: MESSRS: Smetanka, Stubbins Mr. Stubbins stated that several months ago he brought in a minority application and it was voted down. The board will now be in violation of the minority employment system by the Federal Government and it will have an effect on grants. Mr. Smetanka asked how you can hire anyone by putting people on a 4 day week, and where are you going to get the money. Mr. George Modrovich Page 6 Mr. Iorfido stated that we are replacing an employee. Stubbins stated that if we went to five days, the work force would be there. f. January 16, 1986: Purpose of meeting to discuss and take action on the schedule for hours of work and wages of the employees of the authority and related matters. Motion Stubbins, seconded Smetanka to lay -off two members of the bargaining unit or the ones with the lease seniority. NOTE: Employees with the least seniority were Daniel Modrvict, and James Iorfido, sons of board members Modrovich and Iorfido. RG11 call vote: AYES: Smetanka, Stubbins NAYS: Dodaro, Modrovich, Iorfido Motion Dodaro, seconded by you to adopt the proposal submitted by the Union. Roll call vote: Unanimous vote. Motion Dodaro, seconded by you to adopt Resolution No. 282 of 1986 as follows: 1. All employees of the Ambridge Water Authority will return to a five day, forty hour work schedule. 2. The collective bargaining agreement between the Ambridge Water Authority and Local Union 1051, American Federation of State, County, and Municipal Employees, AFL -CIO, District Council 84 will be extended one year from January 1, 1987 to December 31, 1987 with wage rates to provide for a four (4) percent wage increase from the period of January 1, 1987 to December 31, 1987. 3. The wage rate for 1986 is to remain at the wage rate as provided for in the collective bargaining agreement between the Ambridge Water Authority and Local Union Mr. George Modrovich Page 7 1051, American Federation of State, County and Municipal Employees, AFL -CIO, District Council 84 for the year 1985. 4. All employees of the Ambridge Water Authority shall be afforded an opportunity to make up time lost as a result of the 32 hour work week schedule that was imposed on January 1, 1986 to the present time. 5. It is hereby acknowledged that Local Union 1051, American Federation of State, County and Municipal Employees, AFL -CIO, District Council 84 will discontinue all grievances, labor board complaints and other related proceedings pertaining to the 32 hour work schedule as implemented by the Ambridge Water Authority effective January 1, 1986. Roll call vote: Unanimous vote. 5. Authority records and Wage and Tax Statements, (W -2) forms, disclose the following earnings for Daniel Modrovich: a. 1985 - $2,898 b. 1986 - $17,132.43 (full -time) 6. You made the following statements to an Ethics Commission investigator on February 25, 1987: a. You questioned whether your son was a second class citizen just because you served on the authority. b. Your son is thirty -ni'ne (39) years of age, residing with his wife and two children. He formerly worked for J & L Steel Co. and was an excellent welder and burner. c. Your son worked for 128 or 129 days and by union contract mandate he was to be made a full -time regular employee. d. Union employees only lost one day because of the thirty -two (32) hour work week. e. At the time your son was hired the authority was short three men, and there was money in the budget to hire your son. Mr. George Modrovich Page 8 The Ethics Act defines "immediate family" as: 7. By letter dated May 20, 1986 Solicitor Robert Taylor advised the Ethics Commission as follows: a. Daniel G. Modrovich, son of George A. Modrovich, resides at 3512 Sunflower Road, New Brighton, PA 15066, and has resided there since 1978 and he has not lived with his father, George A. Modrovich since 1978. b. George Modrovich gets no renumeration from his son from his job with the Ambridge Water Authority. Daniel Modrovich was hired as summer help by the Board of Directors of the Ambridge Water Authority on May 31, 1985 along with three other individuals and George Modrovich's vote as a member of the Board of Directors of the Ambridge Water Authority was not she deciding vote. Vote 4 to 1. d. In an agreement with the union, Daniel Modrovich's employment was extended and he was hired by the Ambridge Water Authority at the first vacancy at the request of the union. Li. Discussion: As a member of the Ambridge Water Authority, you are a "public employee" as that term is defined in the State Ethics Act. Accordingly, your conduct must conform to the requirements of the Ethics Act and the restricions therein are applicable to you. Section 3(a) of the Ethics Act provides: 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). Section 2. Definitions. "Immediate family." A spc'use resid rig in the person's household and minor dependent children. 65 P.S, §402.: Mr. George Modrovich Page 9 Factually, it is noted that on January 9, 1986 you voted on a motion to retain your son as a permanent employee of the authority. Since the vote was three in favor and two against, you tasted the deciding vote. Subsequently, on January 16, 1986, when a motion was made to lay off two members with the least seniority, one of whom was your son, the vote was two in favor and three against. Your vote (negative) was once again a deciding factor in retaining your son in his position of employment. Lastly, your son is of majority and has not lived at home since 1978. As a result of this, your son was not a member of your "immediate family" as that term is defined in the State Ethics Act and, as such, we are constrained to find no violation of Section 3(a) of the Act. This Commission in the past, however, has addressed this issue in similar cases. Thus, in O'Reilly /Johnston, 83 -012, this Commission opined that an official should have abstained in the hiring process of his son, who was not a minor dependent, in order to avoid the appearance of a conflict with the public trust. This ruling was based upon Section 1 of the law which provides as follows: Section 1. Purpose. The Legislature hereby declares that public office is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust. In order to strengthen the faith and confidence of the people of the State in their government, the Legislature further declares that the people have a right to be assured that the financial interests of holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this act shall be liberally construed to promote complete disclosure. 65 P.S. §401. In Rupinski, 338, this Commission decided that the vote by a borough councilman to hire his son as an employee of the street department did not violate Section 3(a) of the Ethics Act because the son was neither a minor nor a dependent. However, the vote by the councilman was found to create an appearance of a conflict of interest with the public trust. Similarly in Phillips, 451, this Commission ruled that there was no 3(a) violation in a situation wherein the county commissioner voted to appoint his son as a part -time solicitor to the county planning and zoning commission because the Mr. George Modrovich Page 10 son was not a minor dependent. Thus, while you did not violate Section 3(a) of the State Ethics Act, your actions in ensuring your adult son's position of employment with the authority created the appearance of a conflict of interest with the public trust. In the future, you must be aware of public perceptions and conform your conduct to both the letter and intent of the law by not participating in such actions. C. Conclusion and Order: While your conduct in appointing your adult son to a position of employment with the Water Authority did not violate the provisions of the State Ethics Act, your activities did create the appearance of a conflict of interests with the public trust. In the future, you must abstain from participating in any matter involving your son. 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, G. Sieber Pancoast Chairman