HomeMy WebLinkAbout595 KregerMr. Jack Kreger
c/o Gregory H. Knight
2405 N. Front Street
P.U. Box 1265
Harrisburg, PA 17108 -1265
Re: 87 -038 -C
Dear Mr. Kreger:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 595
DATE DECIDED: August 31, 1987
DATE MAILED: September 8, 1987
The Ethics Commission has reviewed the allegation(s) that you have
violated the Ethics Act, Act 1978 -17U. The nature of the alleged violation(s)
is as follows:
I. Allegation: That you, a member of the Cranberry Township Sewer and Water
Authority, violated Section 3(a) of the Ethics Act which prohibits a public
employee's or public official's use of office or confidential information
gained through that office to obtain financial gain; Section 3(c) of the
Ethics Act which prohibits a public official, public employee or member of his
immediate family or any business in which the person or a member of the
person's immediate family or any business in which the person or a member of
the person's immediate family is a director, officer, owner or holder of stock
exceeding 5% of the equity at fair market value of the business shall enter
into any contract valued at $500 or more with a governmental body unless the -
contract has been awarded through an open and public process; and Section 3(e)
of the Ethics Act which prohibits a former public employee or public official
from representing a person, with or without compensation, on any matter before
the governmental body with which he has been associated for one year after he
leaves that body, in that immediately after resigning as a board member in
December of 1986, your firm, Oak Knoll Consultants was awarded a $48,600
contract to manage the Authority - without an open and public process.
A. Findings:
1. You served on the Cranberry Sewer and Water Authority from January, 1982
through December, 1986 and, as such, you are subject to the provisions of the
State Ethics Act.
a. You resigned from the Authority at a public meeting on December 11,
1986.
Mr. Jack Kreger
Page 2
2. You were hired as a part -time consultant to the Authority in October,
1985. Your primary functions were to be in the area of construction
management, planning and special studies.
a. You also served as temporary manager in July, 1986, when Manager
Ronald Bolam took a five week leave of absence.
b. You remained in that capacity even after Bolam returned to work.
Bolam's responsibilities were shifted as a result of a board decision
to reorganize,
3. Minutes of the meetings of the Cranberry Sewer and Water Authority
disclosed the fol owing regarding your hiring as a consultant, general
manager, participation in matters involving actions you took as an employee
and the awarding of a management contract to Oak Knoll Consultants.
a. October 10, 1985:
The board went into executive session to discuss the need for
additional administrative help.
The board discussed your education, past working experience and wage
considerations.
Your proposed primary functions would be in the area of construction
management, planning and special studies.
Motion made by Baird, seconded by Hawkins to hire you as a part -time
employee, functioning as Director of Planning under the supervision
and control of the authority manager,-at a rate compensation set
forth in wage agreement of October 13, 1985. Performance and rate of
compensation to be reviewed and adjusted quarterly. Motion carried,
you abstained from voting.
u. November 14, 1985:
You gave a report on the reservoir study which was to become part of
the Water Master Plan.
You also reported on working on the sewer and Water Master Plan as a
whole, as well as the administrative staff working on the union
contract negotiations.
In addition, you stated the developer's fee process and charges are
being looked at to see if this can be handled in a more efficient
manner. Progress report to follow at the January board meeting.
Mr. Jack Kreger
Page 3
Bolam said that the Authority will be trying to get the zoning
changed for the new water treatment plant facility in order that it
be changed for future office use. You will be working on this
project also and the Authority is currently scheduled for the
December Zoning Board meeting.
c. January 2, 1986:
You reported the main thing you had
month was the Union Labor Agreement
Union ratification today. The West
been discussed. Work is continuing
math model to determine future long
problems.
been working on for the last
Contract for which we now have a
View rate increase problems have
on the reservoir and stream flow
range answers to our water
Baird commended you for the work done on the Union contract,
providing needed data and presentation to the negotiating committee.
Mr. Hawkins added that the Board owes you a great deal for your fine
work.
SALARIED EMPLOYMENT COMPENSATION
Attachment to the minutes of wages of'salary personnel revised
January 2, 1986, reflects your salary as Director of Planning as -
$800.00/pay period effective October 13, 1985, for an average of (40)
hours per two -week period. It was noted that all part -time
employees, including you shall receive only social security and
unemployment compensation benefits.
UPON THE MOTION OF MR. BARNA AND FOLLOWING A SECOND BY MR. BAIRD, A
RESOLUTION RATIFYING THE PRIOR EMPLOYMENT OF MR. KREGER AND MR.
PANNETTE AND APPROVING COMPENSATION FOR SALARIED EMPLOYEES FOR THE
1985 -1986 FISCAL YEAR AS SET FORTH IN A SCHEDULE PRESENTED TO THE
MEETING AND TO BE ATTACHED TO THE MINUTES OF THE MEETING, WAS DULY
ADOPTED. MR. KREGER AND MR. PANNETTE ABSTAINED FROM VOTING ON THE
RESOLUTION.
REORGANIZATION
Nominations for Chairman:
Mr. Baird nominated Mr. Kreger as Chairman of the Board. There were
no other nominations.
A MOTION OF MR. PANNETTE TO CLOSE THE NOMINATIONS AND TO INSTRUCT THE
SECRETARY TO CAST A UNANIMOUS BALLOT FOR MR. KREGER AS CHAIRMAN OF
THE BOARD, SECONDED BY MR. BARNA, WAS DULY ADOPTED. YOU ABSTAINED.
Mr. Jack Kreger
Page 4
UNION LABOR CONTRACT
You said that copies of the summary letter along with the full
contract doucment had been distributed to the Board.
UPON THE MOTION OF MR. PANNETTE AND SECONDED BY MR. BAIRD, A
RESOLUTION TO AUTHORIZE THE PROPER OFFICERS TO SIGN THE UNION LABOR
AGREEMENT, WAS DULY ADOPTED BY A UNANIMOUS VOTE.
d. February 13, 1986:
INSURANCE
You reported that Blue Cross /Blue Shield have given us notice that
the deductible amount will be changed from $100 to $250. As part of
our labor contract, provisions need to be made to maintain economic
value. You said you have been discussing with alternate carriers as
well as inquiring of Blue Cross. You said yoU were optimistic this
could be worked out with an alternate carrier. It may involve some
self- insurance having coverage with higher deductibles to produce the
$100 level with the individual employees. You requested
authorization from the Board to- proceed within current premium cost
limits.
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. BARNA, A
RESOLUTION TO AUTHORIZE MANAGEMENT TO ENTER INTO AN INSURANCE
AGREEMENT WITH AN ALTERNATE CARRIER INVOLVING SOME SELF - INSURANCE,
WAS DULY ADOPTED BY A UNANIMOUS VOTE.
e. March 13, 1986:
You reported that concerning the work on the alternate
Hospitalization Insurance Plan, that after reviewing this, there is a
significant premium savings, but the Authority will have to have some
self - insuring to meet the Union Contract requirements. But it will
still save us to $20,000 in premiums. We would have to cancel
Blue Cross hospitalization and The Life Insurance with BABB. You
said that we will have to have a meeting with union members to
explain the new policy.
UPON THE MOTIN OF MR. BARNA AND SECONDED BY MR. PANNETTE, A
RESOLUTION TO AUTHORIZE MANAGEMENT TO CANCEL BLUE CROSS
HOSPITALIZATION AND LIFE : INSURANCE WITH BABB AND ENTER INTO CONTRACT
WITH GUARDIAN INSURANCE AND HAVE AN INFORMATIONAL MEETING WITF UNION
MEMBERS, WAS DULY ADPOTED BY UNANIMOLUS VOTE.
Mr. Jack Kreger
Page 5
f. April 13, 1986:
UPON THE MOTION OF MR. BARNA AND SECONDED BY MR. HAWKINS, A
RESOLUTION TO EXTEND MR. KREGER'S WORK TIME TO 112 HOURS EVERY OTHER
PAY PERIOD WITH SALARY COMPARABLE TO THE AVERAGE THAT IS CURRENTLY IN
EFFECT, WAS DULY ADOPTED.
CONSTRUCTION CHANGE ORDERS
Mr. Bolam explained that there are always situations in construction
where there is a need for change orders. In the past, the Authority
has given Mr. Bolam authorization to approve change orders up to a
certain dollar amount without needing to have formal Board approval.
He requested increase in this coverage, including Mr. Kreger, having
a limit of $10,000 maximum, without prior Board approval, but still
being subject to Board ratification.
Mr. Stewart asked what the present limit was. Mr. Bolam said the
present limit is $5,000, which was established in 1982 when the Water
Treatment Plant was built. This will be a larger project and there
have been cost increases.
UPON THE MOTION OF MR. PANNETTE AND SECONDED BY MR. BARNA, A
RESOLUTION TO AUTHORIZE MR. BOLAM OR MR. KREGER TO SIGN CHANGE ORDERS
IN AN AMOUNT NOT TO EXCEED AN AGGREGATE AMOUNT OF $10,000, BETWEEN
MONTHLY BOARD MEETINGS, TO BE RATIFIED BY THE BOARD AT THE NEXT
MONTHLY BOARD MEETING, WAS DULY ADOPTED.
You abstained from the vote.
You said you had written a memo regarding benefit assessments which
amount to 13 overdue accounts and one other account that is not
overdue. He has offered a few alternatives. One being an opportunity
to pranptly catch up, one a discount for a cash payment, one payment
schedule with a more current market rate of interest, and last,
judicial sale. You requested approval of the proposal.
UPON THE MOTION OF MR. BARNA AND SECONDED BY MR. PANNETTE, A
RESOLUTION TO SEND THIS LETTER TO THE BENEFIT ASSESSMENT CUSTOMERS,
SUBJECT TO THE SOLICITOR'S REVIEW, WAS DULY ADOPTED.
You abstained from the vote on the Resolution.
g. May 8, 1986:
HOSPITALIZATION
Mr. Jack Kreger
Page 6
•
•
You reported that concerning the new Hospitalization and Group Life
Insurance, we are at the 98% stage. There will be employee
information meetings next week and he hopes the total conversion well
be by June 1.
h. July 10, 1986:
You requested Board ratification of the agreement with United Mobile
Homes.
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. BAIRD, A
RESOLUTION RATIFYING THE ACTION OF THE AUTHORITY WITH AGREEMENT
BETWEEN UNITED MOBILE HOMES AND THE AUTHORITY, CONTINGENT UPON UNITED
MOBILE HOMES RATIFICATION SCHEDULED FOR JULY 11, AND CONTINGENT UPON
UNITED MOBILE HOMES WITHDRAWAL OF INJUNCTION PROCEEDINGS, WAS DULY
ADOPTED. YOU ABSTAINED FROM THE VOTE.
You requested authorization to adopt the proposed new water tap
fees.
UPON THE MOTION OF MR. BAIRD AND SECONDED BY MR. HAWKINS, A -
RESOLUTION TO ADOPT THE PROPOSED NEW WATER TAP FEES, SUBJECT THE
SOLICITOR'S REVIEW, WAS DULY ADOPTED. YOU ABSTAINED FROM THE VOTE.
Mr. Baird suggested the Board adopt a resolution for that
reorganization be approved as well as the salary adjustments for
1986 -1987 as attached as Exhibit "C."
UPON THE MOTION OF MR. BAIRD AND SECONDED BY MR. BARNA, A RESOLUTION
TO ADOPT THE REORGANIZATION AS FOLLOWS: JOHN C. KREGER, JR., GENERAL
MANAGER; RONALD R. BOLAM, ADMINISTRATIVE MANAGER; H. R. MEIER,
OPERATIONS MANAGER; ROBERT M. GOMOLA, STAFF ENGINEER; AND ADDITION OF
MARK C. ANDERSON, ENGINEERING TECHNICIAN, AND TO ADOPT THE SALARY
ADJUSTMENTS FOR 1986 -1987 AS ATTACHED AS EXHIBIT "B" AND REMOVING THE
RESTRICTIONS ON THE HOURS FOR MR. KREGER'S HOURS, WAS DULY ADOPTED.
YOU ABSTAINED FROM THE VOTE.
Exhibit "C" fiscal year 1986 -1987 salary personnel -wage adustments,
Effective July 1, 1986.
John Kreger, General Manager $25.00 per hour.
September 11, 1986
UPON THE MOTION OF MR. BAIRD AND SECONDED BY MR. HAWKINS, A
RESOLUTION TO ADOPT THE FOLLOWING AUTHORIZING THE DESIGNATED
OFFICIALS OF THE AUTHORITY TO SIGN THE BUSINESS INFRASTRUCTURE LOAN
APPLICATION, WAS DULY ADOPTED BY A UNANIMOUS VOTE. FURTHER, THE
FOLLOWING RESOLUTION TEXT WAS SPECIFICALLY ADOPTED:
Mr. Jack Kreger
Page 7
Resolution No. 70
Be it RESOLVED, that the Municipal Sewer and Water
Authority of Cranberry Township, Butler County, hereby
requests a Business Infrastructure Development Loan of
$980,000.00 from the Department of Commerce of the
Commonwealth of Pennsylvania to be used for the
construction of 500 feet of 8 inch water line, 7,300 feet
of 10 inch water line, 4,000 feet of 16 inch water line,
the Brush Creek Intake Structure, Well No. 8 and 8,200
feet of 10 and 20 inch Raw Water Line.
Be it FURTHER RESOLVED, that the Municipal Sewer and
Water Authority of Cranberry Township, Butler County does
hereby designate John C. Kreger, Jr., Chairman, or Alex,
Barna, Vice - Chairman, as the officials to execute all
documents and agreements between the Municipal Sewer
and Water Authority of Cranberry Township, Butler County
and the Pennsylvania Department of Commerce to facilitate
and assist in obtaining the requested loan.
You attended this meeting.
Water and Sewer Connection Fees.
You explained the water and sewer connection fees to be used in
connection with expanded capacity with additional population and the
saturation 50,000 population. Also reflected is interest related to
bond issues and operating savings in terms of producing vs. puchasing
water. The Authority is recommending _a sewer connection fee of -
$1,100 per E.D.U., a water connection fee of $1,000 per E.D.U., plus
a water meter charge according to the meter size.
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. BARNA, A
RESOLUTION TO ADOPT THE RESOLUTION ESTABLISHING SEWER AND WATER
CONNECTION FEES AND ATTACHED AS EXHIBIT °A" TO THE RESOLUTION LISTED
BELOW, ALL AGREEMENTS ADOPTED AFTER SEPTEMBER 11, 1986 WITH THE
EXCEPTION OF THE ATTACHED LISTING, WAS DULY ADOPTED. YOU ABSTAINED
FROM THE VOTE.
Tampering Policy - Customers.
You discussed the recommended policy for customers for meter
tampering and recommended they become a part of the Authority Rules
and Regulations.
Mr. Jack Kreger
Page 8
J•
UPON THE MOTION OF MR. BARNA AND SECONDED BY MR. BAIRD, A RESOLUTION
TO APPROVE THE TURNPIKE RIGHT OF WAY AGREEMENT ON CONTRACT NO. 48,
CONSRUCTION OF A RAW WATER TRANSMISSION MAIN AUTHORIZING THE PROPER
OFFICERS TO EXECUTE THE AGREEMENT, WAS DULY ADOPTED. YOU ABSTAINED
FROM THE VOTE.
November 13, 1986:
You referred to the engineer's letter concerning the Master Sewer
Plan where the Authority requested the engineer consider the
implication of flow equalization which is above and beyond the -
initial scope. An increase of $1,500 was requested by the engineer.
UPON THE MOTION OF MR. BAIRD AND SECONDED BY MR. BARNA, A RESOLUTION
TO APPROVE $1,500 FOR ADDITIONAL WORK PERFORMED BY KLH ENGINEERS ON
THE MASTER SEWER PLAN, WAS DULY ADOPTED. YOU ABSTAINED FROM THE
VOTE.
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. PANNETTE, A
RESOLUTION TO AUTHORIZE THE PROPER OFFICERS TO EXECUTE CONTRACT NO,
54A, WITH PIETROPAOLO EXCAVATING, INC., IN THE AMOUNT OF $78,315.00
AND FURTHER AUTHORIZE THEM TO DELIVER THIS CONTRACT SUBJECT TO THE
CLOSING ON THE BUSINESS INFRASTRUCTURE LOAN (B.I.D. LOAN), WAS DULY
ADOPTED. YOU ABSTAINED FROM THE VOTE.
UPON THE MOTION OF MR. PANNETTE AND SECONDED BY MR. BARNA, A
RESOLUTION TO AUTHORIZE THE PROPER OFFICERS TO EXECUTE CONTRACT 50,
51, AND 54B, WITH THE LOW BIDDERS SUBJECT THAT THE THREE CONTRACT
BIDS BE WITHIN THE BUDGET LIMITS NOT TO EXCEED THE AGGREGATE AMOUNT
OF $573,000, AND THE DELIVERY OF THE CONTRACT SUBJECT TO THE CLOSING
ON THE BUSINESS INFRASTRUCTURE LOAN (B.I.D. LOAN), WAS DULY ADOPTED.
YOU ABSTAINED FROM THE VOTE.
You explained the procedure for termination notices for customers.
The first, is formal notice of past due amounts (Certified Letter),
second, a revised formal notice (Certified Letter), third, actual
physical shut off and fourth, bounced checks. The fee proposed is
$10.00 for each of these 4 items.
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. BAIRD, A
RESOLUTION TO INCORPORATE DELINQUENT CHARGES INTO THE RULES AND
REGULATIONS TARIFF RATES, SCHEDULE OF RATES AND CHARGES, WAS DULY
ADOPTED. YOU ABSTAINED FROM THE VOTE.
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. PANNETTE, A
RESOLUTION TO APPROVE THE SEPTEMBER FINANCIAL STATEMENT AS PRESENTED,
WAS DULY ADOPTED. YOU ABSTAINED FROM THE VOTE.
Mr. Jack Kreger
Page 9
UPON THE MOTION OF MR. HAWKINS AND SECONDED BY MR. PANNETTE, A
RESOLUTION TO APPROVE THE OCTOBER FINANCIAL STATEMENT AS PRESENTED,
WAS DULY ADOPTED. YOU ABSTAINED FROM THE VOTE.
k. December 1, 1986:
Item #3.
0. Barna presented the resignation of John C. Kreger, Jr., from the
Authority Board of Directors.
MOTION HAWKINS, SECOND PANNETTE, A RESOLUTION ACCEPTING THE
RESIGNATION FROM JOHN C. KREGER, JR., CHAIRMAN FROM THE BOARD OF
DIRECTORS, WAS DULY ADOPTED BY A UNANIMOUS VOTE.
Item #11.0
11.1 Management Contract - Oak Knoll Consultants.
UPON THE MOTION OF MR. BAIRD AND SECONDED BY MR. HAWKINS, A
RESOLUTION AUTHORIZING THE PROPER OFFICERS TO EXECUTE AND DELIVER THE
MANAGEMENT CONTRACT WITH OAK KNOLL CONSULTANTS, IN THE FORM SUBMITTED
TO THE MEETING WITH SUCH CHANGES THEREIN AS MAY BE MADE WITH THE
APPROVAL OF THE OFFICERS EXECUTING THE SAME. THEIR APPROVAL AND THE
APPROVAL OF THE AUTHORITY TO BE EXCLUSIVELY EVIDENCED BY THEIR
EXECUTION THEREOF, WAS DULY ADOPTED BY A UNANIMOUS VOTE.
5. Oak Knoll Consultants Management Agreement with the Cranberry Township
Sewer and Water Authority as of December 11, 1986, contains the following:
a. Section 1.01. Employment. The Authority hereby retains the Manager
and the Manager hereby agrees to act as the manager of the Authority
and its Utility System subject to the terms and conditions of this
Agreement.
b. Section 1.02. Authority and Responsibility of Manager. Subject to
any different conditions which may be imposed by the Board from time
to time, the Manager, as manager of the Authority, shall have
authority and responsibility to conduct, supervise and manage the
day -to -day operations of the Authority. In the absence of oral or
written directions or written policies of the Board, the Rules and
Regulations of the Authority (the "Rules and Regulations ") and the
applicable provisions of the Municipality Authorities Act of 1945, as
amended (the "Act "), the Manager shall be expected to exercise
reasonable judgment in its management activities. Without limiting
the generality of the foregoing, the Manager shall:
Mr. Jack Kreger
Page 10
(1) have responsibility for the supervision and management of
all employees of the Authority and shall make recommendations to the
Board concerning the hiring and discharge of Authority employees and,
from time to time, the numbers and qualifications of employees needed
for the operation of the Utility System:
(2) supervise nad coordinate professional services engaged by
the Authority;
(3) supervise proper contact compliance with respect to all
capital additions' projects undertaken by the Authority and the _
procurement by the Authority of Equipment, supplies and materials
required for the operation of the Utility System;
(4) supervise the proper contract compliance for all water line
and sewer line extensions;
(5) have responsibility for obtaining on behalf of the Authority
all permits and licenses required by all governmental bodies and
agencies having jurisdiction over the Authority for the operation of
the Utility System;
(6) supervise compliance by the Authority with all applicable
federal, state, county and township statutes, laws, rules, orders,
regulations and ordinances affecting the Utility System;
(7) supervise the implementation of the Rules and Regulations
and policies established by the Board from time to time; and
(8) submit to the Board from time to time recommendations on-
matters relating to the operation of the Utility System and any
expansion thereof required to provide adequate and efficient water
and sewage service within the Authority's service area.
c. Section 1.03. _ Executive Director. During the term of this
Agreement, the Manager shall provide a qualified executive director
(the "Executive Director ") whose initial and continuing appointment
shall be subject to the approval of the Board. The Executive
Director shall be the chief administrative officer of the Authority
but shall be and remain an employee of the Manager. The initial
Executive Director shall be John C. Kreger, Jr. All compensation of
the Executive Director w i l l be paid by the Manager.
d. Section 1.04. Division of Authority. The Board shall retain all
authority placed in it by the Act and shall retain such other
authority as shall not have been specifically delegated by it to the
Manager pursuant to the terms of this Agreement or otherwise.
Mr. Jack Kreger
Page 11
e. Section 1.05. Management Fee. As compensation for the managemnt
services to be rendered hereunder, the Authority will pay to the
Manager the sum of $48,600 (the "Management Fee "), payable in equal
monthly installments of $4050 on the last business day of each month,
commencing with the month in which this Agreement becomes effective.
f. Section 1.06. Term of Agreement. This Agreement shall become
effective December, 1986 and, unless terminated earlier as herein
otherwise provided, shall remain in effect for one year (the
"Management Period ").
g. Section 1.07. Termination of Agreement. The Management Period shall
continue for one year from the effective date of this Agreement
unless sooner terminated as follows:
(1) the Management Period shall automtically terminate upon the
death of John C. Kreger, Jr.;
(2) in the event John C. Kreger, Jr., is unable, by reason of
illness, accident or other physical or mental incapacity,
to perform his duties as Executive Director hereunder for a
period of 90 consecutive days, the Authority may terminate
the Management Period upon not less than 10 days' written
notice to the Manager;
(3) the Authority may at any time terminate the Management
Period for cause upon not less than 5 days' written notice
to the Manager; and
(4) either the Authority or the Manager may terminate the
Management Period upon not less than 30 days' written
notice to the other party.
6. Records of Department of State Corporation Bureau disclose that on June
21, 1984, you filed a fictitious name registration of Oak Knoll Consultants.
The nature or the business was described as to engage in the business of
consulting on construction, management and contract disputes. You are listed
as the only individual with interests in this business.
7. Payroll records and times sheets of the Cranberry Township Sewer and Water
Authority confirmed the following:
a. October 21, 1985 through April 19, 1986 - $10,400.00 as part -time
Planning Director at a rate of $20.00 /hour.
b. April 22, 1986 through June 30, 1986 - $5,880.00 as part -time
Planning Director. Hourly rate of $20.00 remained constant,
the number of hours per pay period increased.
Mr. Jack Kreger
Page 12
c. July 1, 1986 through November 29, 1986 - $20,775.00 as General
Manager at rate of $25.00 /hour.
d. W -2 Statements: 1985 - $4,160.00
1986 - $$33,375.00
e. Oak Knoll Consultants invoice December 15, 1986 - $2,025.00.
f. Oak Knoll Consultants invoice December 30, 1986 - $2,025.00.
g. You were also paid $320.00 /year for serving as an authority member.
8. By letter dated March 6, 1986, Attorney Franklin Kury requested the advice
of the State Ethics Commission whether a member of a municipal authority may
be employed by that authority. Advice Number 86 -532 was issued on April 13,
1986.
a. The facts presented by Attorney Kury reflect that one of the board
members was being considered for employment.
b. The letter stated that: Authority members receive compensation for
holding office employment with authority is expressly permitted by
the Municipal Authorities Act.
c. The advice concluded that the Ethics Act does not per se prohibit a
member of the authority from simultaneously serving in a position of
employment with the authority. It further advised:
Prior opinion and advices of the Commission have set forth the
general principle that individuals who serve as members of municipal
authorities, while not absolutely precluded from serving in a
position of employment with said authority are, nevertheless,
required to abstain from all participation in their appointment to
such position and the establishment of the compensation to be fixed
for such service.
In addition to abstaining from their appointment and compensation
activities, it is advised that the appointment of such member, as an
authority employee, be conducted through an open and public process.
Generally, prior advices of the Commission have determined that this
Section may be applied to contracts made between the governmental
body with which an official is associated, and the official himself.
This open and public process would require public notice of the
contracting /job opportunity to public disclosure of all applications
considered and public disclosure of the selection made. In addition
to the foregoing, and as noted above, the individual must abstain
from the entire process and his abstention must be publicly recorded
in the appropriate authority minutes.
Mr. Jack Kreger
Page 13
We note, that you have not provided any specific details as to the
position of employment in which this member of the authority will
serve. As a result, we are unable to determine the nature and scope
of his responsibilities as an employe of the authority. In any
event, it is advised that as an authority member this individual, as
a member, should abstain from participating in any matter that comes
before the authority which involves actions that he took as an
authority employee.
d. You received a copy of Kury's request of August 6, 1986.
9. Your attorney provided the following correspondence regarding your
contract with the Authority:
a. September 15, 1986 memo from you to the Authority Board re:
"Multiple Hats ":
As follow -up of our recent conversations concerning my "multiple
hat" role, I offer some observations and recommendations:
1. My present role in management requires me to abstain
voting on numerous matters (usually the most substantive) that come
before the Board. Lacking a vote, my views and experience can be
input to the deliberation process from a management perspective.
This available input is not unlike that available presently from
the Solicitor, Engineer, and Auditor. Indeed, the voting role
becomes increasingly meaningless as more and more substantive issues
are outside the propriety of voting.
2. Members of the Board have been mutually supportive of each
other's personal matters and schedule conflicts. This has, however,
become increasingly difficult when /if I must abstain from voting
combined with Bob's time out of town and Gene's inability to
participate for various reasons.
3. All of these factors are now superimposed on the busiest
times of the Authority's life history. This is a condition which
will be exacerbated rather than eased if it is not dealt with
promptly.
Simply put, I believe the best interests of the Community, the
Authority and it's operations, and development of the entire hectic
sphere that is Cranberry, are best served by the following sequence
of events.:
Mr. Jack Kreger
Page 14
A. JCK resign 3oard membership and cause Oak Knoll to offer a
proposal to the Board for "permanent" (rather than "interim)
management services of JCK. Such a contractural arrangement can have
the flexibility to provide any suitable scope of availability of time
and contribution of views that the parties desire.
B. Gene has previously sought to resign but we have refused to
accept heretofore. In view of his many pressures, I believe this
team would do Gene, his family, and the Authority a service by
allowing his resignation to become effective. In like manner to the
JCK situation, absence from the Board would be no hindrance to the
Authority availing itself of Gene's services and expertise on
computers, pensions, or any other areas of special counsel on a
reasonable, businesslike basis.
C. The Board, with JCK help as appropriate, must then recruit
strong, respected replacements so the Board can function at
undiminished strength in these critical times. My personal
suggestion for a replacement "slate" is Howard Reed and Alan Tedesco.
With additions of this caliber, the Authority will be in sound
condition for the years ahead.
Because of my conviction as to the best interests of the Authority
and the Township, I am hereby tendering my resignation from the
Board. Should you share my convictions and accept, I will follow
with a proposal for a management services retainer contract between
the Authority and Oak Knoll.
b. September xx, 1986, letter from you to the Authority Board re:
Management Services Contract Proposal. (Note from Attorney: .date
not specified as this was draft only, the subject of which was
discussed in conferences.)
We are pleased to offer this proposal to provide services to manage
the Authority afairs in a manner accountable to the Board of
Directors. Services of Oak Knoll provided hereinunder shall be
provided on a professional services contract basis by the writer as
Principal of Oak Knoll. Details of the proposal are negotiagble but
are presented here as.a suggested reasonable structure for such
services.
I. Annual Retainer of $40,000 payable quarterly at
the beginning of each quarter for scope items "A" - "C":
A. Attend regular and special public meetings of the
Board;
Mr. Jack Kreger
Page 15
B. Attend, on invitation or request of the Board, work
sessions of the Board or its subcommittees up to twelve (12) such
sessions annually:
C. Manage the day -to -day affairs of the Authority with the
advice and consent of the Board up to and including a time
commitment of approximately 300 hours /quarter and including but not
limited to:
** Supervision and coordination of professional
services engaged by the Authority;
** Management of Authority Staff and all the
related functions thereof;
** Oversee the Construction Management and
Contract Administration of all Authority capital
projects.
** See to the filing for and maintenance of all
requisite development and operating permits
by /with cognizant regulartory bodies;
** Oversee implementation of all Authority
policies, rules, and regulations;
** Recommend for Board consideration and
enactment any matters of policy or addends to the
rules and regulations needed to enhance the
orderly and prudent conduct of Authority
affairs;
** Direct the technical and commercial review
of proposed developments and related negotiation
of service agreements in keeping with Authority
policies;
II. Provide services delineated in "IC" above in excess of the
stated 300 hours /quarter retainer allowance and /or any other services
which the Board may, from time to time, request. Services in this
category will be paid quarterly upon proper presentation of Oak Knoll
invoicing following the end of each quarter. Obligation for services
in this category beyond the retainer amount shall not be undertaken
in excess of 150 hours in any quarter without prior, express
authorization of the Board. Services in this category shall be
compensated at the rate of $45 per hour.
Mr. Jack Kreger
Page 16
III. For the purpose of enhancing fiscal accountability,
management services shall receive a bonus -- or be assessed a
penalty -- of 1% of "bottom line" results of all cash flow items
except loan procees and debt principle payments (revenue funds,
capital funds, and debt service interest) based on the final audited
report for each fiscal year. In the first year, 1986 -87, a single
year's results only will apply. In later years, the 1% factor will
be applied to the composite total of two fiscal years concluding each
June 30.
Inasmuch as services hereunder do not constitute a full time commitment
for JCK, Oak Knoll shall be free to undertake additional assignments on
JCK's behalf from time to time. The Cranberry assignment shall be given
priority attention at all times, however.
This commitment shall be annual in duration but shall be due for review
and renewal three (3) months prior to the anniversary date hereof. We
look forward to serving the Authority.
Very truly yours,
OAK KNOLL CONSULTANTS
John C. Kreger, Jr.
C. November 12, 1986, memo from you to the Authority Board re: Proposed
General Management Arrangements:
I have heard your offer and suggest a further proposal to converge .
differences as follows:
1. Full time employee status:
2. Compensation at an hourly rate of $30;
3. As an employee, waive out of coverage for the most expensive
fringe benefits -- (maintain others as a full time employee) --
A. All hospital /dental /vision coverages;
B. All paid time off -- pay only for time actually worked;
4. Use of "Bronco #2" utility vehicle for JCK commuting
purposes. The unit would remain available for general workday use by
all hands;
Mr. Jack Kreger
Page 17
5. Have a compensation adjustment understanding whereby
annually, promptly upon receipt of the formal audit, the sum of
"gross operating revenue" plus "operating expense reimbursement from
Marshall Township" plus "interest income" (all terms as defined by
the audit document) shall be combined to represent a measure of total
gross revenue exclusive of capital and debt service
transactions - and, a representation thereby, of the scope and
responsibility level of the General Manager's position. The
resulting total shall then be compared to the comparable date of one
year previous and the two values shall be utilized to adjust hourly
compensation by a factor equal to the percentage growth in the gross
revenue as herein defined. (As a point of information, this formula,
if being applied recently to date from the last audit to determine
adjustment for the 1986 -87 year, would call for a very modest
increase of 1.192 %).
1 look forward to reviewing this revised proposal with you on
November 13.
10. Authority Board Member Alex Barna stated as follows:
a. You served as temporary manager during Ron Bolam's absence and
remained once Bolam returned and became financial liaison.
b. The first discussions regarding a management contract with Oak Knoll
Consultants occurred in October or November, 1986. The board
realized a need for a manager, you were a logical choice since you
were already serving in that capacity.
c. The board decided against advertising_fo r the position because they
did not want to hire permanently, and with Oak Knoll they had only a
one -year deal.
d. The hiring of Oak Knoll took a lot of extra work off the board. The
board actually_got the better end of the deal.
e. The December meeting during which you resigned from the board and Oak
Knoll hired was prearranged. He could not remember whether these
discussions were public or private.
f. Solicitor Stewart was consulted and saw no problems as long as you
first resigned.
11. Authority Board Member Robert Baird advised as follows:
a. You served as temporary manager during a leave of absence of Ron
Bolam and remained after Bolam returned.
Mr. Jack Kreger
Page 18
b. The board recognized the conflict with having the same person serving
on the board and as manager. Solicitor Stewart was consulted. The
situation was possibly discussed at an open meeting.
c. Your resignation was discussed at the November, 1986 meeting but was
not submitted until December, 1986. The board talked with you in
November, 1986 about submitting a proposal.
d. Solicitor Stewart negotiated the contract with Oak Knoll Consultants.
e. He was not aware of the Ethics Act's one -year restriction.
f, He felt the authority got a bargain for your services.
g. You did not participate in the board discussions regarding the
contract with Oak Knoll.
12. Authority Board Member Charles Hawkins stated as follows:
a. You were hired as a consultant in October, 1985, and the board saved
money by your hiring.
b. You filled in temporarily when the manager was on leave.
c. Prior to December, 1986 the board discussed the need for a manager.
d. It was his understanding that the State Ethics Commission was
contacted regarding the contract with Oak Knoll.
e. He was not pressured to award the contract to Oak Knoll. The -
contract was not awarded because of your position. He felt they were
doing what was best for the authority.
A. Authority Member Eugene Pannette advised as follows:
a. You served as temporary manager while Ron Bolam was on leave and
remained.
b. The board consensus was that enhanced management capabilities were
needed, and you were familiar with the situation.
c. He disagreed with the board on the hiring of Oak Knoll and voted
against paying the bills in January, 1987.
d. Bolam worked out the compensation for you which was approximately
what Bolam was earning.
e. He was not certain if the hiring of Oak Knoll was discussed at a
public meeting. It was discussed one -on -one and in work sessions.
Mr. Jack Kreger
Page 19
f. No proposals other than yours were considered. The idea probably
came up before November, 1986. The original proposal, which was the
same as the contract, was first proposed in November, 1986.
g. The normal hiring process would be to appoint a committee and review
applications received in response to an advertised position.
h. There was no pressure or coercion to hire Oak Knoll. You were the
obvious choice.
i. The entire board was concerned with legalities of hiring Oak Knoll.
The solicitor advised there would be no problems.
j. The question of the hiring was raised in January, 1987 at a township
meeting. After that the solicitor issued a letter confirming his
opinion the contract was legal. . -
14. Correspondence dated February 4, 1987 from Solicitor Leonard Stewart to
board member Alex Barna confirms his earlier advice to the board as follows:
a. This letter will confirm my earlier advice to the Board of ih6
Authority to the effect that, in my opinion, the Management Agreement
dated as of December 11, 1986 between the Authority and Oak Knoll
Consultants does not contravene existing Pennsylvania ethics
legislation applicable to public officials, commonly known as the
State Ethics Act.
15. During an interview with Ethics Commission investigators you provided the
following information:
a. You served on the Authority from 1982 through 1986 and were appointed
by the Cranberry Township Board of Supervisors.
b. Prior to October, 1985 you worked as consultant to the Authority
without compensation.
c. You could not recall participating in the discussions leading to a
vote on your appointment as part -time planning director. You did not
recall if you knew you had the job prior to October, 1985 meeting.
d. The board had discussed on various occasions the need for experienced
help due to situations in the township, particularly growth.
e. Prior to October, 1985 board meeting, Manager Bolam told the board he
needed help. The board was aware of your philosophy (experienced
help versus bodies) and your availability. You believed the board
considered these items prior to hiring you.
Mr. Jack Kreger
Page 20
f. You did not vote on your appointment but could not recall if you
participated in discussions leading to your hiring. You also could
not recall if the October, 1985 vote was a formality approving a
decision made at an executive session several months earlier.
g. In July, 1986 the board appointed you general manager during Bolan's
absence. The pay was modest given the duties. Bolam was made
Administrative Manager when he returned. It was the understanding of
all involved that Bolam would have a job upon return, not necessarily
the job of manager.
h. You tendered your resignation from the board in September, 1986
because you felt the board was entitled to have a board member who
was not restricted by voting.
i. The management contract with your firm, Oak Knoll Consultants, was
brought up because of economics. You would receive no benefits
except social security. This was the best economic agreement for
you.
j. The solicitor informed the board there would be no conflict _since
there was no change in status.
k. Oak Knoll Consultants was formed by you after leaving your full -time
employment.
1. There was no real change when Oak Knoll was hired by the board in
December, 1986. It was the same job in the form of a contract.
r. :.
Your company previously did business with the board in 1984. This-
was the leased Apple Computer from October, 1984 to February, 1985.
B. Discussion: As a member of the Cranberry Township Sewer and Water
Authority, hereinafter Authority, you are a "public official" as that term is
defined under the Ethics Act. Accordingly, your conduct is subject to the
provisions of the Ethics Act and the restrictions 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)r.
Mr. Jack Kreger
Page 21
The facts in this case clearly establish that you have used your public
position to obtain financial gain other than that provided for by law in that
you as a member of the Authority negotiated a contract for management services
with Oak Knoll, a business in which you are the principal and sole owner. See
Finding No..6. It is not a matter of factual coincidence that you resigned as
Authority member on the very same day that your company, Oak Knoll, was
awarded the management agreement. The minutes of the Authority reflect that
your resignation as Authority member was submitted at the December 1, 1986
meeting which was followed by a resolution of the Authority at that same
meeting to execute the management contract with Oak Knoll. The contract for
Oak Knoll was negotiated and agreed to prior to the your resignation from the
Authority. The foregoing is amply supported by the findings in this case.
Thus, in your memo to the Authority dated September 15, 1986, you made an
offer to the Authority whereby you would resign your Authority
membership in conjuction with a proposal offer by Oak Knoll for "permanent"
management services. It is noted that this memo was sent approximately two
and a half months prior to your resignation as Authority member. Further, in
a proposed letter draft to the Authority in September of 1986, the terms of an
arrangement between the Authority and Oak Knoll are set forth in detail
specifying such matters as the annual retainer, your services, the aspects of
your management, etc. You also sent a memo to the Authority dated Noveinber
12, 1986 wherein you attempted to firm up the proposal by attempting to
resolve certain remaining differences in the agreement between Oak Knoll and
the Authority.
The fact that you used your position as Authority member to obtain the
management contract for your business, Oak Knoll, is also established by other
Authority members. Authority member Barna stated that it was pre- arranged
prior to the December meeting that you would resign followed by the immediate
hiring of Oak Knoll. Similarly, Authority member Baird stated that both your
resignation and a proposal submission were discussed with the Authority before
it occurred. Likewise Authority member Pennette advised that the Oak Knoll
hiring was discussed in work sessions prior to your resignation and that no
other proposal was considered. Based upon the above, it is clear that you
have violated Section 3(a) of the Ethics Act. This finding is based not only
upon the statements of Authority members but also upon the documents which you
have authored and which implicate you in that they establish that while you
were an Authority member, you used your position to obtain the management
contract for your business, Oak Knoll. As an Authority member, you personally
negotiated, the terms of that management agreement which resulted in a
substantial financial gain to you. But for your position as Authority member,
your business, Oak Knoll, would not have obtained the management contract. It
was expressly through the use of your public position that the foregoing was
accomplished. This is a violation of Section 3(a) of the Ethics Act. See
Nye, No. 435 -R.
Mr. Jack Kreger
Page 22
Section 3(c) of the Ethics Act provides:
Section 3. Restricted activities.
(c) No public official or public employee or a member of
his immediate family or any business in which the person
or a member of the person's immediate family is a
director, officer, owner or holder of stock exceeding 5%
of the equity at fair market value of the business shall
enter into any contract valued at $500 or more with a
governmental body unless the contract has been awarded -
through an open and public process, including prior public
notice and subsequent public disclosure of all proposals
considered and contracts awarded. Any contract made in
violation of this subsection shall be voidable by a court
of competent jurisdiction if the suit is commenced within
90 days of making of the contract. 65 P.S. 403(c).
Section 3(c) basically provides that no public official shall enter into a
contract valued at $500 or more with his governmental body unless the contract
was awarded through an open and public process. In the instant case, y`ou, as
an Authority member, negotiated a contract with the Authority for your
business Oak Knoll. The management fee of $48,600 is in excess of the $500
threshold of Section 3(a). Not only was the contract in excess of $500, but
the contract was not awarded through an open and public process. This
contract was negotiated between you as Authority member and the Authority
privately through correspondence or private negotiation. There was no
advertisement for bids for a management agreement, and hence there was no
possibility of competition. What exists in this case is a pre - arranged
agreement whereby you would resign as of December 1, 1986 followed immediately
by the hiring of your business, Oak Knoll as manager of the Authority. The
contract was in excess of $500 and was not made in an open and public bidding
process. This clearly violates Section 3(c) of the Ethics Act. See Donati,
No. 204, wherein this Commission found a violation 3(c) of the Ethics Act in a
situation where a school director's spouse contracted with the School District
in an amount over $500 where there was not an open and public process. See
also Martzall, No. 528 and Gerhart, No. 530.
Lastly, Section 3(e) of the Ethics Act provides:
Section 3. Restricted activities.
(e) No former official or public employee shall represent
a person, with or without compensation, on any matter
before the governmental body with which he has been
associated for one year after he leaves that body.
65 P.S. 403(e).
Mr. Jack Kreger
Page 23
Section 3(e) provides that no former official or employee shall represent a
person before his governmental body within one year after he leaves public
employment. This Commission has construed the term representation of a
"person" to include the former public official or employee. Thus, personal
appearances by a former official before the former governmental body are
deemed to come within the purview of the restrictions of Section 3(e) of the
Act. You, through your business, Oak Knoll, in appearing before your former
governmental body as a management consultant from the date of your resignation
violated Section 3(e) of the Ethics Act. See Wolpert, No. 169, wherein this
Commission found that a school director violated Section 3(e) of the Ethics
Act when he contracted with his school district within one year after he
terminated his service.
Parenthetically, it is noted that the solicitor for the Authority indicated
that there would be no problem in your arrangement with the Authority as long
as you first resigned. However, prior judicial decisions have determined that
the reliance on such advice by a public official /employee is of no avail.
McCutcheon v. State Ethics Commission, 77 Pa. Cmwlth. 529, 466 A.2d 283
(1982). See also Kestler Appeal, 66 Pa. Cmwlth. 1, 444 A.2d 761 (1982).
Various criminal penalties are imposed by the Ethics Act.
Section 9 of the Ethics Act provides, in part:
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).
(b) Any person who violates the provisions of Section 4 is
guilty of a misdemeanor and shall be fined not more than
$1,000 or imprisoned for not more than one year, or be
both fined and imprisoned. 65 P.S. 409(b).
Additionally, this Commission may make recommendations to appropriate law
enforcement authorities for the initiation of criminal charges or the
dismissal of such charges rising out of violatios of the State Ethics Act.
Accordingly, this Commission w i l l refer this matter to the proper law
enforcement authority for review and appropriate action.
C. Conclusion and Order:
1. As a member of the Cranberry Township Sewer and Water Authority, you are a
"public official" subject to the provisions of the State Ethics Act.
Mr. Jack Kreger
Page 24
2. You violated Section 3(a) of the Ethics Act in that you used your position
as Authority member to negotiate and obtain a consulting contract with your
business, Oak Knoll.
3. You violated Section 3(c) of the Act in that you, through your business.
Oak Knoll, entered into a contract with the Authority which was in excess of
$500 and which was not awarded through an open and public process.
4. You violated Section 3(e) of the Act in that within one year after you
resigned as Authority member, you appeared before your former governmental
body through your business, Oak Knoll.
It is hereby ordered that this matter be referred to the proper law
enforcement authority for review and appropriate action.
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
4 .s guilty of a misdemeanor and shall be fined not eiore 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
VJD /rda
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PA 11470
TELEPHONE: (717) 78:5 -lbuu
Mr. Gregory H. Knight
2405 North Front Street
Harrisburg, Pennsylania 17110 -1110
Re: Order No. 595
87 -038 -C
September 22, 1987
Dear Mr. Knight:
This acknowledges you letter of September 18, 1987, wherein
you set forth certain facts relating to the above referenced
matter and advise that you will not request reconsideration.
In light of the above, your letter of September 18, 1987,
will be made part of the public record in this matter and a copy
thereof, along with this correspondence, will be appended to
Order No. 595.
Sincerely,
Vincent J._-Dopko
General Counsel
RALPH D. TIVE
CHARLES E. ZALESKI
JEFFREY A. ERNICO
NORMAN P. HETRICK
JOSEPH K. PIERCE
RONALD M. LUCAS
LJNUS E FENICLE
GREGORY H. KNIGHT
KATHY W. MORRISON
TIVE, HETRICK & PIERCE' S p .11
A PROFESSIONAL CORPORATION
E
ATTORNEYS AT LAW , y
.41 • •
OF446
ROBERT D. CHAWIJSERLAIN. JR.
2405 NORTH FRONT STREET
HARRISBURG. PENNSYLVANIA 17110
POST OFFICE Box 1265
HARRISBURG. PENNSYLVANIA 17108
(717) 236-9581
September 18, 1987
Vincent J. Dopko, Esquire
General Counsel
State Ethics Commission
P.O. Box 11470
Harrisburg, Pennsylvania 17108 -1470
RE: John C. Kreger, Jr.
Dear Mr. Dopko:
On Thursday, September 17, 1987, you and I talked
about the Ethics Commission Order concerning Mr. Kreger.
In particular, we discussed the status of the Order and
the status of this case. Since that time, I have had an
opportunity to counsel with my client and to discuss with
him the Findings of Facts and Conclusions of Law. Based
on those conversations and by this letter, I am informing
you as counsel for the Commission that there were two
minor factual discrepancies in the Commission's Find-
ings of Fact. In bringing these matters to your atten-
tion, we are not requesting reconsideration of the
Commission's Order. While my client and I continue to
feel that every step that was taken by Mr. Kreger was
taken on reasonable reliance of a legal interpretation of
your responses to attorneys working for and /or with the
local authority, we see no reason to delay the final
resolution of this matter.
In accordance with the obligation of confidentiality,
we have also refrained from contact with any other per-
sons concerning this Order and its contents. On passage
of the fifteen day period for filing a request for recon-
sideration, a step which we will not be taking, we under-
stand that this Order will become a matter of public
record and that you will be referring this matter to
local law enforcement agencies. I respectfully request
that you provide me with notice of the date of referral
LEGISLATIVE CONSULTANTS
(NON
R. DAVID TIVE
JOHN V. KuLIK
Vincent J. Dop. , Esquire
September 18, 1987
Page 2
and the law enforcement person to whom the Order has been
referred.
The two minor factual corrections which we want to
call to your attention concern items found on pages 10
and 11 of the Order. Specifically, at Section 5.c. on
page 10, Section 1.03 of the Oak Knoll Consultants Manage-
ment Agreement is quoted. As that Agreement was finally
implemented, all references to an "Executive Director"
should be replaced with the term "General Manager." The
second item concerns Section 5.e., found at the top of
page 11 of the Order. There Section 1.05 of the Agree-
ment is quoted. The change to this Section concerns the
method of payment. Instead of equal monthly payments of
$4,050.00, each of which is due on the last business day
of each month, Mr. Kreger is being paid in equal semi-
monthly payments of $2,025.00, the first payment due on
or about the fifteenth of each month and the second pay-
ment due on or about the last business day of each
month.
We believe that neither the first nor second change
is of any major significance. However, we want to make
the record as complete and as accurate as possible. When
we pursue our case with the appropriate law enforcement
authorities, we believe that an accurate and complete
record will show that the Cranberry Sewer and Water Au-
thority clearly wanted Mr. Kreaer's services and that the
Authority, not Mr. Kreger, has been the main beneficiary
of the Agreement between the Authority and Oak Knoll
Consultants.
GHK /bjm
cc: John C. Kreger, Jr.
Sincerely,
(5
GREGORY H. N
IGHT