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HomeMy WebLinkAbout596 NeuburgerMr. Kenneth Neuburyer 870U Neuburyer Road Fairview, PA 16415 Re: 86 -185 -C Dear Mr. Neuburyer: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 596 DATE DECIDED: August 31, 1987 DATE MAILED: September 8, 1987 The Ethics Commission has received a complaint reyarding 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 also served as the superintendent of McKean Township. a. On January 3, 1984, at the re- oryanization meeting of the township supervisors, you proposed a resolution that the entire township be established as one road district. b. This resolution passed by a vote of 2 to 1 and you voted in the majority. c. On that same day, you moved to employ yourself as superintendent of the township. d. This motion passed by a vote of 2 to 1 and you voted in the majority. Mr. Kenneth Neuburger Page 2 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 $120.00; net amount $107.40. b. January 15, 1985, administrative pay gross amount $216.00, net amount $193.32. 4. 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. 202, dated January 4, 1984, payable to you in the amount of $107.40. (You signed this check as issuer along with the two other supervisors). b. Check No. 221, dated January 18, 1985, payable to you in the amount of $193.32. 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 $485.19. b. Report for period beginning November 16, 1984 through November 30, 1984, Gross amount $127.50, net amount $114.55. 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. 144 dated September 28, 1984, payable to you in the amount of $485.14. b. Check No. 186 dated December 4, 1984, payable to you in the amount of $114.55. c. You signed both of the above checks as issuer along with another township supervisor. . 7. Daily time sheets for the year 1984 regarding your administrative time indicates that you claimed 179.75 hours. a. The time sheets indicate the type of services performed and include: reading publications, phone calls, opening doors for workers, budget reports, minutes review and attending outside meetings. Mr. Kenneth Neuburger Page 3 The foregoing activities are part of the mandated duties of an elected township supervisor. 8. You also earned $21,770.90, in 1984 as a township superintendent. a. You also earned $15,324.00 as roadmaster in 1985. 9. The minutes of township supervisor meetings for 1984 do not indicate that you were officially 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 solicit.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. 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. Mr. Kenneth Neuburger Page 4 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. 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 Szymanowkki 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. Mr. Kenneth Neuburger Page 5 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. 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. The final report of the township auditors for 1984 adopted on March 4, 1985, noted as follows in relation to your administrative pay: Kenneth Neuburger also charged the township eleven hours administrative pay for supervisors meetings on April 3, May 8, June 12, and July 10; 4.5 hours administrative pay for conditional use hearings held on May 29 and July Mr. Kenneth Neuburger Page 6 25 and two hours administrative pay for special meetings held on April 14 and June 22. Supervisors are already compensated for meetings at a rate of $25 per meeting. It was noted by the treasurer on Mr. Neuburger's 2nd quarter administrative time card that meetings aren't paid for under administrative pay. Yet the treasurer still compensated him. Since his July administrative time card contains 12 1/4 hours and 3.5 hours are in question, he would still be able to collect $60 for 10 hours of work as stipulated in the auditors compensation rate for 1984. Therefore, July's 3.5 hours are not surchargeable. - However, the remaining 14 hours at $6.00 per hour are surchargeable at a cost of $84.00 to Mr. Neuburger. a. Minutes of the board of township supervisors dated March, 12, 1985 indicate that you made payment to the township for the above surcharged item. 17. 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 Clasp." - b. These documents clearly set forth the law regarding the compensation to be paid a supervisor and indicate that a nonworking 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. 18. There is no indication that a job description was created or that the duties were defined until February-12, 1985. 19. 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. Kenneth Neuburger Page 7 a. Mr. Schroeck did not, in this letter, advise that "administrative pay" was appropriate. b. Mr. Schroeck set forth verbatim provisions of the law. 20. You provided the following information in relation to the instant situation: a. You have stated that you were overwhelmed with the amount of work as a newly appointed Superintendent and Supervisor. As a result, you and another supervisor, Szymanowski, delegated responsibilities: Szymanowski took care of the office and his responsibilities as secretary /treasurer and looking into the administrative pay issue, and you handled the roads, employees and equipment. b. You stated that, at first, Szymanowski kept you informed about things and, in particular, on the administrative pay issue. You stated that things between you and Szymanowski started going downhill in April 1984, and really fell apart in July 1984. He began stating that you keep him informed but not vice - versa. c. Szymanowski came up with a definition of administrative pay which he mostly got from DCA: time spent on anything other than work associated with the roads. d. You stated that you always had a question in your mind, but that you thought it was alright since the auditors authorized it. e. Szymanowski told you that the solicitor had said that there was no problem with administrative pay. You stated that you never challenged or questioned the solicitor because you were so busy dealing with the superintendent duties and the supervisors office which were all very new to you. You also stated that you had no reason to distrust Szymanowski, and it was agreed that he was in charge of looking into the administrative time issue. f. You have stated that you attended meetings directed by DCA for newly elected supervisors, and that the administrative time issued did not come up until much later in the year, but from earlier meetings which several of the auditors attended with you, everyone was in the same mentality on the administrative pay issue. g. You stated that you went along with the administrative pay because it had been an ongoing process with past auditors who felt it was a way of establishing compensation for lowly compensated supervisors. You really didn't have a problem with it until Szymanowski really started pursuing it. Mr. Kenneth Neuburger Page 8 h. You have stated that while you have a working knowledge of the Second Class Township Code, you felt that if the auditors establish the rate of compensation then that's what you get paid. 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: 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 Mr. Kenneth Neuburger Page 9 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 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. Mr. Kenneth Neuburger Page 10 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. Comm. Ct. 163, 302 A.2d 859, (1973), the Commonwealth Court of Pennsylvania held that a second class township supervisor may not appoint 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. While you, as superintendent, were eligible to be compensated for the administrative aspects of that position, this should have been part of that pay. The "administrative services" for which you were compensated were not related to your position but were related to the office supervisor. You, thus, received compensation that was not part of that provided for by law. Mr. Kenneth Neuburge r Page 11 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. rlanovic, 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 by law 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 compensation 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 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). Mr. Kenneth Neuburger Page 12 (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 $107.40 2. 1984 $485.19 3. 1984 $114.55 4. 1985 $193.22 It is noted that you reimbursed the township in the amount of 84.00 from the funds that were received in 1984. Thus, any financial gain received would be reduced by the reimbursement of 1984. You, thus, received $816.36 in financial gain that was not part of the compensation authorized by law. The foregoing total amount plus 10% equals $897.99. Upon return of this financial gain to ticKean Township, no further action will be taken in this matter and the files will be closed. Mr. Kenneth Neuburger Page 13 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 $897.99. You are hereby ordered to remit to the State Ethics Commission, within thirty (30) days of the date of this order, the amount of $897.99 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 further 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, 4).am v G. Sieber Pancoast Chairman