HomeMy WebLinkAbout623 Shugartsa .
s
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
ORDER OF THE COMMISSION
Order No. 623
DATE DECIDED:
DATE MAILED:
12/14/87
12/28/87
Mr. William Shugarts
Troutville, PA 15866
Re: 85- 119 -C'
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
t-hose conclusions- are based are as follows:
I. Allegation.: That you, a member of the Troutville Borough Council and road
superintendent, violated Section 3(a) of the State Ethics Act which prohibits
a public official's Or public employee's use of office or any confidential
information received through hording public office to obtain financial gain_
other than compensation'provided by law when you contracted with Troutville
Borough and plowed various roads.
A. Findings:
1. You currently serve as an elected Borough Councilperson in Troutville.
Borough, Clearfield County, Pennsylvania.
a,._ You have served in this position from January, 1984.
b. You also serve as the Borough Street Commissioner.
2., Minutes of the Troutville Borough Council meetings provide, in relevant
part, as follows:
July 3, 1984 - Page 56, Check No. 272 to Dorothy Shugarts, $13.40.
Motion to pay bills by Mary Shaffer, seconded by Bill Shugarts.
Motion, carried.
b. April 2, 1985 - Page 80, Jeff Frantz, visitor, discussed paying
councilmen for doing work in the borough. Joseph Kematick said that
Mr. William Shugarts
Page 2 _
there was a motion in the minutes that they could not be paid.
Councilman Monty La Borde was to call solicitor David Blakely to
determine why he told councilmen that they could not draw pay, and
now he said they can.
c. May 7, 1985 - Page 82 and 83, Pat Morgan asked about councilmen being
paid for work in the borough. A letter dated April 4, 1985 was read
from solicitor Blakely regarding councilmen being paid for doing work
in the borough.
Gentl eman:
It appears there is a question as to paying the street
commissioner, Bill Shugarts, for plowing snow when needed,
and being paid for the same. It appears that some of the
other residents of Troutvi l le plowed snow but had net
requested any payment.
In my letter of February 19, 1985, I touched upon this
question, but I was assuming that a contract was going to
be entered into between Mr. Shugarts and the Borough. This
is true if the Borough Council actually hired the street
commissioner to perform certain functions and set forth his
wages or salary.
However, I am now advised that the work that .Mr.
Shugarts was paid for was not the subject of any formal
contract or contract of employment with the Borough but
just reimbursement for plowing some snow.
if the street commissioner, is hired by council after
a resolution and :a salary is set, then I see no objections.
However, if there is no actual contract between the Borough
Council and the street Commissioner, then if [it] would be
my opinion that -he cannot be properly paid for the work he
has done. I hope this clarifies the matter.
Very truly yours,
Blakley & Jones
David E. Blakley
Mr. William Shugarts
Page - 3 -
,
Pat Byrn said an amendment should be made by council for doing work
for the borough and a rate or minimum amount should be set.
Page 84, Motion: Nancy Shaffer made a motion that any councilman
doing work in the borough should be paid a mi nimu'- , co $3.35 an
hour, seconded by Mary Shaffer. Roll call vote resulted as follows:
Dennis Knarr, William Shugarts, Nancy Shaffer, Mary Shaffer, Yes.
Motion carried.
d. June 4, 1987 - Page 86, Jeff Frantz brought issue of councilmen doing
work for the borough and accepting pay. He said he talked to the
Department of Community Affairs and the State Ethics Commission and
learned that councilmen cannot use their office to obtain payment in
the Borough. William Shugarts said he would return his money when
delinquent per capita taxes are paid. Nancy Shaffer brought up an
idea, when jobs come up they should be posted within the Borough for
people to apply for the jobs.
Motion was made by William Hilliard, to call David Blakely,
Solicitor, and ask for a letter at the next meeting concerning
whether council can hire anyone to do work within the borough for a
fee, whether a council member or not. The motion was seconded by
Nancy Shaffer.
e. December 3, 1985 - Page 99, Council persons are to receive $5.00 per
meeting attended.
f. January 3, 1986 - Page 101, Motion was made by Mary Shaffer, to
retain William Shugarts for street commissioner seconded by Denny
Knarr. Motion carried.
Page 102, check No. 112, William Shugarts, plowing snow, $112.22.
Motion was made by Denny Knarr seconded by Dennis Knarr, to pay' all
the bills. Vote, Jeff Frantz, No. Kenny Knarr, Yes. Dennis Knarr,
Yes. William Shugarts, Abstain. Mary Shaffer, Yes. Monty La
Lorde, No. Motion carried.
March 3, 1986 - Page 106, Jeff Frantz reported on councilmen
receiving pay for plowing snow. , Letter from Greg Williams, Bureau of
Local Government Services, recited that pursuant to Section 1104, of
Borough Code, they do not believe a borough councilman should be paid .
for any work performed for the borough beyond the compensation
provided in Section 1001. Funds expended in a manner not authorized
may be recovered through surcharge as in Section 1041, 1051 and 1196
Mr. William Shugarts
Page 4 -
r
of the Cbde. Surcharge action should be brought by the Auditors.
Council was advised to consult with the bo'rough solicitor.
h. November 3, =1986 - Page 124, Solicitor Blakely said that a councilman
collecting wages for doing work for the Borough is illegal.
i . April 6, 1987 Page 135, Solid Ben Blakely said that councilmen
can work for't'he Borough as long as their wages do not exceed $1,000
a .
'j. May = 4,-1987 - Page '137, -Check "No . 134, -$343.38, (102.5 - hours at
13:35) -to Shuga rts.
Mot ian to pay the bills by Dennis Knarr, seconded . by Nancy Shaffer..
Motion carried. Shugarts was present.
k. August 3, -1987 Page 1.43, -Check No. '275, Willi :am.Sfugarts, $33.50.
Lotion to pay 'the bills by Nancy Straffer, seconded by James Byrnes.
William Shugarts abstained from paying the bills.
3. Records of the Troutvi'lle Borough checking account No. 3 04 725 at the
Union Banking and Trust Company, DuBois, Pennsylvania, '.indicate the
following:
Check Date Payee Amount
272 7 -5 -85 ' ,Shugarts $ 13A0
112 1-14-86 William Shugarts $112.22
134 5 -8 -87 Wi 11 i am Shugarts $343.38
275 8-6 -87 Willi am Shuga its $ '33.50
4. Dorothy Shugarts is your wife.
5. Total annual payments to you or your wife were.as follows:
1984 - $13.40
1986 - $112.22
1987 - $376.88
Mr. William Shugarts
Page 5 -
6. The letter from the Department of Community Affairs, Municipal Consulting
Services Division, dated February 10, 1 which was noted in finding 2(g)
above, provided in part as follows:
The matter of a Borough councilman's employment by
the Borough is addressed by Section 1104 of the Borough
Code. We do not believe a Borough councilman should be
paid for any work performed for the Borough beyond the
compensation provided for in Section 1001 of the Code as
recept1y amended.
Funds expended in a manner not authorized may be
recovered by the Borough through the mechanism of the
surchar.c9e as discussed in Section 1041, 1051 and 1196 of
the Code. Surcharge actions are generally brought by the
Borough auditor or auditors."
7. A letter dated February 17, 1985 to the Troutville Borough Council on the
stationery of Blakley and Jones addresses, in part, the issue of a
councilperson serving as Street Commissioner and being paid therefor.
a. The opinion indicates that there is no prohibition on this activity
but the councilperson should not vote on his salary.'
8. You provided the following information in relation to this situation;
a. Prior to being paid for performing work for the Borough, you were
informed by solicitor David Blakely that he could see no objection
to a council person working for the borough.
b. Blakely advised that you should not vote on your own salary,
c. You earn about $150.00 annually for plowing the streets during the
winter.
d. No one else will do this work.
e. You take care of the borough cemetery and park free of charge.
B. Discussion: As an elected borough council person in Troutville Borough,
you area "mMlic official" as that term is defined in the Ethics Act, See
Rider, No. 490 -R; 65 P.S. §402. As such, you are subject tothe provisions of
the Act and the restrictions therein are applicable to you.
Mr. William Shugarts
Page 6
Section 3(a)•of the Ethics Act provides:
Section 3. Restricted activities.
(a) No public official or public employee shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself, a
member of his immediate family, or a business with which
he is associated. 65 P.S. 403(a).
Section 3(a) basically provides that a public official may not use his
public office or information therein to obtain a gain for himself or a member
of his immediate family other than compensation provided for by law.
Immediate family is defined under the Ethics Act as follows:
Section 2. Definitions.
"Immediate family." A spouse residing in the person's
household and minor dependent children. 65 P.S. 402.
In this case, you used your public office through making motions or
voting to approve salaries for yourself and your wife who, as your spouse, is
a member of your "immediate family." In Jul 1984
July, , you seconded a motion to
pay a bill for your wife; in May, 1985, you , voted in favor of a motion that
would provide a minimum wage of $3.35 an hour to .councilmen who would be doing
work for the borough; in January, 1986, you specifically voted to approve
payment of your own trill for snow plowing. Lastly, in a May 1987 ..meeting, you
were present when a motion was made to pay the bills although it is unclear as
to whether you actually voted in that particular instance.
This Commission has determined that as public official use of his
office, "through voting or participation, which results in .a benefit o.r gain to
that individual when said benefit or gain is not provided far in law, is a
violation of Section 3(a) of the Ethics Act because the public official has
used - his :office .to receive something which is a "financial gain other than
compensation provided by law." These determinations have been appealed to
Commonwealth. Court which affirmed the orders of the State Ethics Commission.
See McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529 (1983). See also
Yacabet v. State Ethics Commission, Pa. Commw. , 531 A.2d 536 (1987).
In order to determine whether the payments you received for your
snowplowing and the payments which your wife received are authorized in law,
Mr.. William Shugarts
Page 7 -
it is necessary far this Commission to review the appropriate provision of the
Borough Code. Section 1001 of the Borough Code provides in part:
Councilmen may receive compensation to be fixed by
ordinance at any time and from time to time as follows:
In boroughs with a population of less than five thousand,
a maximum of fifteen hundred dollars ($1500) a year; in
boroughs with a population of five thousand or more but
less than ten thousand, maximum of two thousand dollars
($2000) a year; in boroughs with a population of ten
thousand or more but less than fifteen thousand, a maximum
of twenty -six hundred dollars ($2600) a year; in boroughs
with a population of fifteen thousand or more but less
than twenty -five thousand, a maximum of thirty -three
hundred dollars ($3300) a year; in boroughs with a
population of twenty -five thousand or more but less than
thirty -five thousand, a maximum of thirty -five hundred
dollars ($3500) a year; and in boroughs with a population
of thirty -five thousand or more, a maximum of four
thousand dollars ($4000) a year. Such salaries shall be
payable monthly or quarterly for the duties imposed by the
provisions of this act. 53 P.S. §46001.
It is clear from the above cited Section of the Borough Code that the
compensation for a council person is fixed depending upon the given size of
the borough. There does not appear to be any other provision in the law or an
exception which would supersede the limitation in the above provision.
Accordingly, any gain which a council person would receive in excess of the
above .provided maximum amount would not be authorized in law.
Similarly, Section 1104 of the Borough Code appears to preclude a
councilman from receiving compensation for service on any board, commission,
bureau or agency created by the borough:
"Unless there is incompatibility in fact, any elective
or appointive officer of the borough shall be eligible to
serve on any board, commission, bureau or other agency
created by or for the borough, or any borough office
created or authorized by statute and may accept
appointments thereunder, but no mayor or councilman shall
receive compensation therefor." 53 P.S. §46104.
The payments which you received for your snow plowing, are without
statutory authorization in the Borough Code; the foregoing payments constitute
a gain other than provided for by law in violation of Section 3(a) of the
Mr. William Shugarts
Page 8 , -
Ethics Act. In addition to the above, you were instrumental in receiving this
gain by your participation, motion making and voting to approve bills for
yourself and your wife. This Commission has determined that when a public
official uses his public office through participation or voting which results
in a gain for himself or a member of his immediate family, such conduct or
activity constitutes a violation of Section 3(a) of the Ethics Act. In
Rockovich, 356 -R, this Commission considered the question of whether the mayor
of a borough violated Section 3(a) and 3(c) of the Ethics Act when he voted to
appoint his wife as building inspector and also voted against limiting her
salary. This Commission found that a financial gain was realized when the
mayor voted against limiting the salary of his wife and as a result directed
the mayor to remit that financial gain to the borough. Your use of your
public office through making or seconding motions and approving bills for
yourself and your wife, constitutes a use of your office to obtain a financial
gain which is not compensation provided for by law.
Although you may argue that you were unaware that such activity could be
in violation of the Ethics Act, such an argument would be unavailing
considering the facts in this case. You were put on notice as early as April
of 1985 that a council person could not receive payment for outside work.
This concern was also raised in May of 1985. Further, the solicitor for the
borough questioned your payment for outside services although he did so in the
context of whether there was a contract. You were also on notice in March of
1986, relative to the letter from the Bureau of Local Government Services
which, after reciting the pertinent provisions of the Borough Code, concluded
that a borough councilman could not be paid for work performed for the borough
beyond the compensation provided in said Borough Code. Also, in November,
1986, the borough solicitor specifically advised that it was illegal for a
councilperson to collect wages for doing work for the borough. Lastly, in May
of 1987, advice was given both by the Department of Community Affairs and this
Commission that council persons could not receive financial gain for
performing work for the borough.
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
Mr. William Shugarts
Page 9
penalty` provi ded 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).
In addition to the above, the State Ethics Act provides that the
Commission may forward the results of an investigation to the appropriate
prosecuting authority unless the alleged offender removes himself from the
conflict of interest by divesting himself of any financial gain received in
violation of the State Ethics Act. 65 P.S. §407(9)(iii). See McCutcheon v.
State Ethics Commission, supra; the Commission may order restitution of
financial gains received in violation of the law.
The foregoing principle was recently reaffirmed by Pennsylvania
Commonwealth Court in Yocabet v. State Ethics Commission, supra. In the
cited case, the Court held inter aria that a township supervisor violated
Section 3(a) of the Ethics Act when he received a salary for the position of
secretary /treasurer which had not been set by the auditors. The Court, in
affirming the Order of the Ethics Commission which required a restitution of
the financial gain, noted on page 5 cyc its Opinion:
"Section 7 of the Ethics Act instructs the Commission to investigate
situations where there is a reasonable belief that financial conflict may
exist, and if conflict is found, to require the offender to remove himself
from the conflict without gain."
Commonwealth Court of Pennsyl vania has also upheld the right to institute
a collection suit for the recovery of restitution ordered by this Commission.
See Commonwealth of Pennsylvania and Union Township v. James Fee, Pa.
Commw. (1987) filed on December 1, 1987 at 1932 C.D. 1987.
In this case, the total payments which have been received
by you and your wife for the years 1984, 1986 and 1987 total $502.50.
Said sum must be returned to the governmental body from which it was received,
the Borough of Troutvi 1 le.
Under these facts and circumstances, you have violated Section 3(a) of
the Ethics Act both by receiving a gain which was not provided for in the
Borough Code and hence, is a financial gain other than compensation provided
by law and secondly, you also violated Section 3(a) of the Ethics Act by
participating, making motions and voting to approve payments, for yourself and
your wife.
Mr. William Shugarts
Page 10 -
C. Conclusion arid Order:
1. As a borough council person, you are a public official subject to the
restrictions of the Ethics Act.
2. You violated Section 3(a) of the Ethics Act when you received payments for
snow plowing for the borough which is not authorized by the Borough Code and
which is a financial gain other than compensation provided by law.
3. You violated Section 3(a) of the Ethics Act when you participated, made
motions, and voted for approval of payments to yourself and your wife.
4. You are hereby directed, within 30 days of the date of this Order, to make
restitution of the financial gain in the amount of $502.50 by sending a check
to this Commission payable to Troutville Borough.
5. If the restitution referenced in paragraph No. 4 above is not received
within 30 days of the date of this Order b y this Commission, this matter w i l l
be referred to the appropriate law enforcement authority for either
appropriate civil or criminal 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 proceedi ng
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
Mr. William 0. Shugarts
Troutville, PA 15866
Re: Order No. 623
Dear Mr. Shugarts:
JJC /na
cc: Public Binder
STATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
January 22, 1988
The State Ethics Commission has received your payment for reimbursing
Troutville Borough as required by Order No. 623.
We have forwarded your check No. 4548 dated January 8, 1988, in the
amount of $500.50 to Troutville Borough.
This letter will be part of the Order and a public record as such.
Sinc
n J
Execut
41.
1 0"
nt no
ve Director