HomeMy WebLinkAbout594 EastMr. Richard East
4459 N. Colonial Parkway
Erie, PA 16509
Re: 86 -184 -C
Dear Mr. East:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 594
DATE DECIDED: August 31, 1987
DATE MAILED: September 8, 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, a Supervisor in McKean Township, violated Section
3(a) of the Ethics Act, 65 P.S. §403(a), which prohibits a public employee's
or public official's use of office or confidential information gained through
that office to obtain financial gain other than compensation allowed by law,
in that you were paid for "administrative time" not authorized by the auditors
in addition to being paid for attending meetings and serving as roadmaster.
A. Findings:
1. You served as an elected township supervisor in McKean Township, Erie
County, Pennsylvania in 1984 and 1985.
2. You resigned as a township supervisor on Febuary 10, 1987.
3. McKean Township payroll ledger for the first quarter of 1985 indicates the
following regarding "administrative pay" for you:
a. 1984, 4th quarter administrative pay gross amount $435.00; net
amount $364.22.
b. January 15, 1985, administrative pay gross amount $54.00, net amount
$48.32.
4. McKean Township records indicate the following payments to you regarding
the above from the McKean Township payroll account at the Marine Bank:
Mr. Richard East
Page 2
a. Check No. 200, dated January 4, 1984, payable to you in the amount of
$364.22. (You signed this check as issuer along with the two other
supervisors)
h. Check No. 216, dated January 18, 1985, payable to you in the amount
of $48.34. (You signed this check along with another supervisor as
issuer).
5. McKean Township "bi- weekly or semi - monthly payroll report," indicates the
following regarding "administrative pay" for you:
a. Report dated September 28, 1984; payment for nine months, Gross
amount $540.00; net amount $443.19.
b. Report for period beginning November 16, 1984 through November 30,
1984, Gross amount $172.50, net amount $155.00..
6. McKean Township records indicate the following payments to you regarding
the above from the McKean Township payroll account at the Marine Bank:
a. Check No. 146 dated September 31, 1984, payable to you in the - amount
of $443.19.
b. Check No. 181 dated December 4, 1984, payable to you in the amount of
$155.00.
7. Daily time sheets for the year 1984 regarding your administrative time
indicates that you claimed 199.5 hours.
a. The time sheets do not specifically indicate the type of services
performed but only indicate - "administrative time."
8. You also earned $23,937.78, in 1985 as a township road master.
a. You received additional compensation for attending township meetings
in accordance with the township code.
9. The minutes of township supervisor meetings for 1984 do not indicate that
you were appointed to any position of employment with the township.
10. The minutes of the township supervisors' meetings indicate the following
regarding administrative pay for supervisors.
a. July 25, 1984 - Mr. Szymanowksi made a motion to solicilt and provide
interpretation from McKean Township Auditors on mileage,
administration pay, and benefits. Also, auditors may use township
building to meet and discuss this interpretation. The motion was
seconded by Mr. East and passed with all in favor.
Mr. Richard East
Page 3
b. September 11, 1984 - Janice Dennis read a letter from the Township
Auditors which was in response to questions asked by the Supervisors
in a previous letter. They responded that answers to the
Supervisors' questions are in the Auditors' final report in regard to
mileage, administration pay, and hospitalization. Mr. East asked
about administration pay and Mr. Szymanowski said he has not paid it
due to his questions regarding its legality. Mr. Szymanowski made a
motion to have township solicitor research and provide opinions of
benefits for working and non - working supervisors. The motion was
seconded by Mr. East and passed with all in favor.
c. September 26, 1984 - Mr. East motioned to instruct Treasurer to pay
administration pay to Supervisors in accordance with auditor's final
report and recommendation of $60.00 per month. Motion seconded by
Mr. Neuburger and passed by the:
Vote for : K. Neuburger, aye
R. East, aye
Abstained: J. Szymanowski
d. October 9, 1984 - We had received a reply from Attorney Schroeck
regarding Supervisor benefits. It was mentioned that pension and
insurance benefits to Supervisors would be responsibility of
auditors. A copy of this report from Attorney Schroeck is on file at
Township office.
e. December 11, 1984 - Janice Dennis read correspondence from the
Township Auditors regarding administration pay clarification. This
letter stated any hours of administrative nature over the ten hours
required monthly will be paid at $6.00 per hour to the Supervisors.
Joe Szymanowski stated paying Ken and Dick their overtime in
administration pay, but he did not pay his due to the fact he is
waiting Auditor's approval.
11. Minutes of the township auditors indicate the following regarding
administrative pay for township supervisors:
a. January 5, 1982 - A motion was made by George Lemock that the
administration pay for the supervisors be reduced from $75.00 per
month to $50.00 per month seconded by Tom Coburn Jr. with all in
favor.
b. January 4, 1983 - A motion was made by Tom Coburn, Jr. to set the
administration pay for the supervisors at $50.00 per month seconded
by Colden McDowell with all in favor.
Mr. Richard East
Page 4
c. January 9, 1984 - A motion was made by Judy Obendorfer to set the
administrative pay at $60.00 per month. The administrative
activities are over and above the township productive labor duties
and do not include the activities of the administration of the
superintendent. Administrative duties will include (1) township
management, (2) attendance on committees, (3) reading the township
correspondence, (4) attendance at township related meetings, planning
commission, and board meetings, and (5) a minimum of 4 general
administrative hours per month at the township garage. This was
seconded by Nancy Veith, with all in favor.
d. March 30, 1984 - Joseph Szymanowski stated it wasn't necessary to put
the questionable administrative pay rate in the auditors' final
report. He questioned the legality of the maximum amount and minimum
hours. He wanted a set hourly rate for administrative pay.
Beverly Ferrick stated she wasn't sure of the legality of it.
Nancy Veith asked Joseph Szymanowksi who would keep track of the
hours.
Joseph Szymanowski said a time card would have to be handed in.
Joseph Szymanowski suggested that the current hourly rate paid
to working supervisors would also be a fair rate for administrative
pay.
Beverly Ferrick stated that the auditors would check into the
matter and decide on a rate for administrative pay. She asked for a
motion to submit the resolution to this matter at the next
supervisor' meeting.
Nancy Veith made the motion; Judith Obendorfer seconded it;
with all in favor.
Joseph Szymanowski stated that he would then expect a rate set
for administrative pay and a mileage rate at the next supervisors'
meeting.
12. Prior to 1980, administrative pay was fixed on an hourly basis.
a. This pay has been approved yearly since 1975.
13. The final report submitted by the auditors for 1983, (filed in 1984)
which is undated, stated in part, that Mr. Szymanowski had questioned the
administrative pay rate, and further stated, To further clarify what we
stated at the auditors' reorganization meeting the maximum amount to be paid
for administrative work is $60.00 per month with a minimum of 4 hours of
administrative duties.
Mr. Richard East
Page 5
14. In a memorandum, undated, entitled, "Continuation of Final Audit Report,"
the auditors stated that according to the Department of Community Affairs,
they had previously stated that administration pay was illegal. They then
amended the administrative rate previously set on March 30, 1984, and wrote,
"The administrative pay rate is $60.00 per month with ten hours administrative
duties to be performed per month. We recommend that a time card regarding
administrative time be handed in each month stating hours worked and duties
performed."
15. On November 21, 1984, the auditors wrote that after being questioned by
the supervisors about administrative pay, they had to further clarify their
report of March 30, 1984. They then stated that "the administrative pay rate
for 1984 is $60.00 per month with ten hours of administrative duties to be
performed each month. If a supervisor puts in more than ten hours a month in
administrative time, then he is to be paid $6.00 per hour for any, time over
and above the ten hours required.
16. Mr. Leo LaChance, of the Department of Community Affiars, confirmed that
he met with Mr. Szymanowski on numerous occasions and that he met with the
auditors and that he generally counseled the township on the compensation
allowed for supervisors. He advised that the supervisors must first create a
job description, a supervisor must be appointed to the position, records must
be kept of the time worked, money must be appropriated for the position and
the auditors must then approve the salary for the position.
a. Mr. LaChance provided various documents regarding the compensation to
be paid to township supervisors. These documents included a
"Consulting Guide on Payments to Elected Township Supervisors" and
"Compensation to Supervisors of Townships of the Second Class."
b. These documents clearly set forth the law regarding the compensation
to be paid a supervisor and indicate that a non - working supervisor
may only receive a statutory fee and working supervisors may only be
paid for serving in one of the authorized positions.
c. Mr. LaChance advised that compensation could only be paid for
performing services in relation to one of statutorily authorized
positions. He did not advise that a separate administrative pay was
allowed.
17. There is no indication that a job description was created or that the
duties were defined until February 12, 1985.
18. In a letter dated October 1, 1984, Mr. George M. Schroeck, the township
solicitor, referred you to 53 P.S. Section 65515 of the Second Class Township
Code.
Mr. Richard East
Page 6
a. Mr. Schroeck did not, in this letter, advise that "administrative
pay" was appropriate.
b. Mr. Schroeck set forth verbatim provisions of the law.
19. You provided the following information in relation to the instant
situation:
a. Administration pay has been awarded to the supervisors from 1977.
b. This pay was to compensate the supervisors for time allocated to
township business including phone calls and answering questions
during private hours.
c. The auditors approved administration pay.
d. The pay was originally $75.00 per month but was later reduced to
$50.00 per month.
e. The administrative pay was terminated in 1985.
f. You were not aware of the reason that the pay was terminated.
20. You stated that you were not employed by the township in 1984 as
roadmaster or superintendent. You served as supervisor in 1984 only.
21. You stated that the auditors did authorize the administrative pay
contrary to what the five day letter you received from the Ethics Commission
stated.
a. You stated that the township code doesn't say that supervisors can or
cannot get administrative pay.
b. You stated that if the auditors give the supervisors compensation in
error then the auditors should be penalized. You were under the
impression that the auditors set pay and that you didn't know any
different.
c. You stated that you collected unemployment during the year 1984 when
you were not employed by the township as roadmaster or
superintendent.
22. You are currently employed by the township as a laborer (roadworker).
Mr. Richard East
Page 7
23. You stated that you were not aware of the compensation set by the
auditors of $60 /month for a minimum of four hours, or that the auditors
adjusted the pay for administrative time to be $6.00 per hour for at least ten
hours per month, to be paid the same rate for over ten hours per month. You
stated that -you only found this out by overhearing the secretary talking to
the auditors.
24. You stated that to your knowledge if the auditors approved it, it's
alright.
a. You also stated that you feel the Commission should be considerate of
persons who did not knowingly do something wrong, and that you did
not do anything wrong to your knowledge.
25. You stated that you are being accused of being a roadmaster•and of taking
something that wasn't authorized, and neither statement is true.
B. Discussion: Township supervisors in townships of the second class are
public officials as that term is defined in the State Ethics Act. 65 P.S.
§402. As such, their conduct must conform to the requirements of the State
Ethics Act. See, Sowers, 80 -050, Szymanowski, No. 539.
The State Ethics Act provides as follows:
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).
Within the above provision of law, this Commission has already determined
that township supervisors may not approve or accept any compensation for
themselves that is not in accordance with the compensation set forth in the
Second Class Township Code. This determination has been affirmed by the
Commonwealth Court of Pennsylvania. See McCuthcheon v. State Ethics
Commission, 77 Pa. Commw. 529,.466 A.2d 283, (1982). Compensation awarded or
received by a township supervisor that is not in accordance with the
provisions of law could constitute a violation of the above cited Section of
the State Ethics Act.
The Second Class Township Code provides that township supervisors shall
receive the following Compensation:
Mr. Richard East
Page 8
Compensation of Supervisors -- Supervisors may
receive from the general township fund, as compensation,
an amount fixed by ordinance not in excess of the
following:
Township Population
Not more than 4,999
5,000 to 9,999
10,000 to 14,999
15,000 to 24,000
25,000 to 34,999
Annual Maximum Compensation
Fifteen hundred dollars
Two thousand dollars
Twenty-six hundred dollars
Thirty -three hundred dollars
Thirty -five hundred dollars
Such salaries shall be payable monthly or quarterly
for the duties imposed by the provisions of this act. The
population shall be determined by the latest available
official census figures. The compensation of supervisors,
when acting as superintendents, roadmasters or laborers,
shall be fixed by the township auditors either per hour,
per day, per week, semi- monthly or monthly, which
compensation shall not exceed compensation paid in the
locality for similar services, and such other reasonable
compensation for the use of a passenger car, or a two
axled four - wheeled motor truck having a chasses weight of
less than two thousand pounds when required and actually
used for the transportation of road and bridge laborers
and their hand tools and for the distribution of cinders
and patching material from a stock pile, as the auditors
shall determine and approve; but no supervisor shall
receive compensation as a superintendent or roadmaster for
any time he spends attending a meeting of supervisors. 65
P.S. §65515, as amended Act 68, 1985.
(Prior to the above amendment, the above provision provided
for a set fee of $25 per meeting).
in reference to the meetings for which supervisors may receive
compensation, the code further provides as follows:
The township supervisors shall meet for the
transaction of business at least once each month, at a
time and place to be fixed by the board, but they shall
not be paid for more than sixteen meetings in any one
year, except in any township where, on account of the
exercise of governmental functions other than those
relating to roads, more meetings are necessary, in which
case, the number of meetings for which the supervisors may
Mr. Richard East
Page 9
be paid may be increased to any number, not exceeding
fifty meetings in any year which shall include hearings by
aggrieved parties under the Pennsylvania Sewage Facilities
Act and other hearings by aggrieved parties hearings of a
judicial or quasi - judicial nature. Two members of any
board of supervisors consisting of three members shall
constitute a quorum and three members shall constitute a
quorum. Except as otherwise provided in this act, an
affirmative vote of a majority of the entire board of any
supervisors shall be necessary in order to transact any
business. Necessary expenses incurred in such meetings,
including office rent, stationery, light and fuel, shall
be paid out of the general township fund. 53 P.S.
§65512.
The duties that a supervisor is responsible for performing are also
regulated by statute. As can be seen from the foregoing, the compensation to
be paid for a supervisor who is not otherwise employed by the township is
strictly regulated by the Second Class Township Code. A supervisor may only
receive compensation, as set forth above, for supervisor meetings regarding
the transaction of township business. The type of meeting for which_a
township supervisor may be compensated must be one at which official township
business is transacted. Additionally, the township code provides for
compensation at the specific meetings outlined in §65512, above. The code
does not appear to permit the compensation of a township supervisor for
attending other types of meetings or for performing the administrative
functions of his office. Any such other compensation must be earned in and as
part of the services performed while serving in one of the statutory
authorized psoitions. Thus, if the township supervisors were to award to
themselves compensation for attendance at meetings that are not official -
township meetings of the board of supervisors, or for performing duties not
authorized by law such would violate the provisions of the State Ethics Act as
such payment would not constitute compensation provided by law. The above
interpretation of the Second Class Township Code is a view that has also been
expressed by the State_Association of Township Supervisors which specifically
indicated that supervisors may not be compensated for meetings with engineers,
solicitors, planning commissions, authorities, or recreation boards. See
Township News, May, 1985, Page 66.
The township code sets forth clearly when supervisors may receive
compensation other than as set forth above. Generally, township supervisors
may be employed by the township as a roadmaster, laborer, or
secretary /treasurer. 53 P.S. §65410. The compensation to be paid to
supervisors working in such positions is to be fixed by the township board of
auditors. 53 P.S. §65515; 65531; 65540. Township supervisors may not receive
any other compensation except as provided above. This concept has been upheld
by various courts in the Commonwealth. In Coltar v. Warminster Township, 8
Pa. Commw. Ct. 163, 302 A.2d 859, (1973), the Commonwealth Court of
Pennsylvania held that a second class township supervisor may not appoint
Mr. Richard East
Page 10
himself to positions other than those set forth in the township code
(roadmaster, laborer, or secretary /treasurer), and receive compensation
therefore. See also Conrad v. Exeter Township, 27 D & C 3d 253, (Berks 1
983). It is clear, therefore, that the duties for which a township supervisor
may be compensated are strictly regulated by the township code, and when
performing in the positions set forth in the code, the supervisor's pay must
be specifically set forth by the township board of auditors. The
"administrative services" for which you were compensated were not related to a
roadmaster position or a secretary /treasurer position but are related to the
office supervisor.
You, thus, received compensation that was not part of that provided for
by law.
With relation to the fact that the auditors approved this compensation,
this Commission has already held that township auditors .have no authority to
fix compensation for township supervisors who are performing duties outside of
those fixed by law or for working in positions not established in the township
code. Nanovic, 85 -005. Thus, even though the auditors may have indicated an
approval for this "administrative pay" such was of no effect as the auditors
did not have the power to fix a compensation that was not allowed bylaw and
that was regulated by statute (compensation as a supervisor).
Finally, this Commission has reviewed the advice of your township
solicitor and Community Affairs regarding "administrative pay." A review of
the information provided from your solicitor indicates that nowhere did he
indicate at any time that the administrative pay that you received was
authorized by law. In fact, in a letter dated October 1, 1984, the township
solicitor referred you to the pertinent sections of the Second Class Township
Code. Nowhere in this letter did this solicitor advise that administrative
pay was appropriate. Additionally, the information supplied to you by the
Pennsylvania Department of Community Affairs specifically sets for the the law
in relation to the compensation that is to be paid to township supervisors.
The packet of information and documents supplied to you clearly indicates that
a township supervisor may only receive compensation as set forth in this
order. There is no indication in any of the materials that have been provided
to you by the Department of Community Affairs that "administrative pay" was
authorized by law. It is also noted, that the individuals you dealt with at
the Department of Community Affairs were technical advisors and not advisors
regarding statutes or issues of law.
Lastly, prior judicial decisions have clearly determined that the receipt
of unauthorized compensation by a township official, even though such is
received on the advice of his solicitor or association, does not become
legitimate canpensation simply because of that advice. See McCutcheon v.
State Ethics Commission, 77 Pa. Commw. Ct. 529 466 A.2d 283, (1982). Clearly,
even good faith reliance upon the advice of such individuals does not permit a
Mr. Richard East
Page 11
public official to retain public funds, to which he was not entitled. Kestler
Appeal, 66 Pa. Commw. Ct. 1, 444 A.2d 761, (1982) As a result, this Commission
finds that you received compensation in the form of administrative pay that
was not in accordance with that set forth by law. Generally, the State Ethics
Act provides as follows:
Section 9. Penalties.
(a) Any person who violates the provisions of Section 3(a)
and (b) is guilty of a felony and shall be fined not more
than $10,000 or imprisoned for not more than five years,
or be both fined and imprisoned. 65 P.S. 409(a).
(c) Any person who obtains financial gain from violating
any provision of this act, in addition to any other
penalty provided by law, shall pay into the State
Treasury a sum of money equal to three times the
financial gain resulting from such violation. 65 P.S.
409(c).
Additionally, this Commission may make recommendations to appropreiate
law enforcement authorities for the initiation of criminal charges or the
dismissal of such charges rising out of violations of the State Ethics Act.
Prior judicial decisions have also determined that this Commission may offer
an individual who has obtained a financial gain in violation of the law the
opportunity to divest himself of financial gain prior to the issuance of a
recommendation to a law enforcement authority. See, McCutcheon v. State
Ethics Commission, supra; 65 P.S. Section 407(9)(ii). In the instant
situation, upon a review of all of the facts, the latter course may be
appropriate. Thus, if the financial gain obtained in violation of the State
Ethics Act plus 10% is returned to the governmental body from which it is
obtained, you will have removed yourself from a violation of the Act without
having received a financial gain. In this respect, the following calculations
of this Commission indicate that you received financial gain in the form of
administrative pay as follows:
Year Amount
1. 1984 $364.22
2� 1984 $443.19
3. 1984 $155.00
4. 1985 $ 48.32
You, thus, received $1,010.73 in financial gain that was not part of the
compensation authorized by law. The foregoing total amount plus 10% equals
$1,111.80. Upon return of this financial gain to McKean Township, no further
action will be taken in this matter and the files will be closed.
Mr. Richard East
Page 12
C. Conclusion and Order: As a township supervisor in a township of the
second class, you are a public official and subject to the provisions of the
State Ethics Act.
Your receipt of "administrative pay" in and through that position was a
violation of the State Ethics Act. As such, you used your public office to
receive a financial gain other than the compensation provided by law.
The amount of gain received total $1,111.80.
You are hereby ordered to remit to the State Ethics Commission, within
thirty (30) days of the date of this order, the amount of $1,111.80 made
payable to McKean Township as restitution for the financial gain that you
received. Failure to comply with the provisions of this order will result in
a referral of this matter to the appropriate authority for furthgr civil or
criminal proceedings.
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