Loading...
HomeMy WebLinkAbout720 FerreroMr. Joseph L. Ferrero c/o Victor R. Lynch, Esq. 903 Commonwealth Bldg. 316 Fourth Avenue Pittsburgh, PA 15222 Re: 86 -123 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION Order No. 720 Before: Helena G. Hughes, Chair G. Sieber Pancoast Dennis C. Harrington Michael J. Washo Date Decided: Julv 27, 19$9 Date Mailed: August 8, 198899 Dear Mr. Ferrero: The State Ethics Commission received a complaint regarding you and a possible violation of the State Ethics Act, No. 170 of 1978, 65 P.S. 401 et. seq. You were notified in writing as to the commencement of the investigation and as to the specific allegation(s). The investigation has now been completed and a Findings Report was issued to you which constituted the Complaint by the Investigation Division of the State Ethics Commission. An Answer was filed and a hearing was held. The record is now completed. This Order of the Commission is hereby issued which sets forth the individual allegations, findings, discussion and conclusion as follows: I. Allgaation: That you, Engineer for North Strabane Township, Washington County, violated Section 3(a) of the State 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, in that as township engineer you approved the fees incurred by you while acting as consulting engineer for the North Strabane Township Municipal Authority and approved development plans for private developers who have employed you or with whom you have a business relationship. Mr. Joseph L. Ferrero Page 2 A. Fipdinas 1. You served as North Strabane Township Engineer from January 27, 1981 until January, 1987. a. You have also served as engineer for the North Strabane Township Municipal Authority and the township Planning Commission since January, 1982. 2. Records of the Pennsylvania Department of State, Corporation Bureau, disclosed the following regarding Fayette Engineering and Ferrero and Associates: a. Fayette Engineering Co., Inc., Uniontown, Pennsylvania filed for incorporation on June 4, 1985. Incorporators listed were Russell Mechling, Jr. (60) shares, Edward Myers (10) shares, Russell Mechling, III (10) shares, Garrett Mechling (10) shares and Ellen Mechling Powers (10) shares. The purpose of the business was to engage in any and all types of engineering and surveying services, as well as, any consulting on these services. b. Prior to the incorporation of Fayette Engineering you were partners with Russell Mechling operating under that name. c. Ferrero and Associates, Inc., McMurray, Pennsylvania filed for incorporation on November 26, 1984. You are listed as lone incorporator and holder of one share of common stock. The purposes of the business was to engage in any and all lawful business including professional engineering services. 3. Minutes of the North Strabane Township Supervisors' meetings disclose the following regarding your appointment as township engineer and your association with Fayette Engineering a private engineering firm: a. January 27, 1981: Supervisor Rubis placed the name of Fayette Engineering as appointee for township engineer for 1981. Passed by 4 to 1 vote. b. January 4, 1982: Motion Rubis, second Kavoulakis, to hire Fayette Engineering as township engineer for 1982. Motion passed unanimously. c. April 13, 1982: Listing of bills presented for payment including: Mr. Joseph L. Ferrero Page 3 d. May 27, 1982: . Fayette Engineering $3,816.00 Fayette Engineering $3,041.00. (from November) (Sewage Authority) - You were asked to comment on your bills. You stated what your billing entailed and how most of the money can be recouped from the various reviews of plans. You were also asked if you would bill the township for work on the Route 519 watershed. You stated the billing would go to the municipal authority. You also explained that only people involved in the watershed will be paying for these fees as they will be incorporated into the charges. You said Fayette Engineering Company's design fees are usually around 5% of the total construction costs. Upon questioning from the audience, you stated that you are co -owner of Fayette Engineering and the firm represents the township. You also stated in regards to the Christy Road Bridge Project, that your firm is advertising for bids on behalf of the township. e. January 3, 1983 Motion made to retain Fayette Engineering (Joseph Ferrero) as township engineer. Motion carried unanimously. f. January 3, 1984: Motion Hervol, second Sedmak to appoint Joseph Ferrero as engineer of North Strabane Township. Motion carried unanimously. Supervisor Krane qualified his vote by citing a conflict of interest in having the same engineer as the municipal authority. Mr. Joseph L. Ferrero Page 4 g. February 14, 1984: New supervisors Chesnik, Copeland and Husarchik appointed by the Court of Common Pleas sworn in. Motion made and seconded to retain Fayette Engineering (Joseph L. Ferrero) as township engineer. Motion passed unanimously. Motion made and seconded to amend the motion to read that the township engineer be retained at the same fee schedule of $150.00 per month plus an hourly rate predicated by who does the work. Passed unanimously. h. January 7, 1985: Motion by Chesnik, seconded by Copeland to retain Joseph Ferrero, Fayette Engineering as township engineer for 1985. Passed unanimously. i. January 6, 1986: Motion passed to appoint the firm of Ferrero and Associates as township engineer. Motion passed to set the compensation for the engineer and solicitor under the same terms as 1985. 4. Minutes of the North Strabane Township Municipal Authority disclosed the following regarding your appointment as authority engineer and agreements between your firm (Fayette Engineering) and the authority. a. January 14, 1982: Motion made and seconded to hire Joseph Ferrero, Fayette Engineering Company, as engineers for 1982. Motion carried. b. March 16, 1982: You presented annual report on sewer system which outlined a budget and schedule of user charges for the authority system and township system. Motion Mals, second Moschetta that the report be approved and a letter be directed to the supervisors requesting that the budget be approved and the schedule of user charges be adopted. Motion carried. Mr. Joseph L. Ferrero Page 5 c. April 20, 1982: Motion Mavrich, seconded by Mals to adopt a resolution entering into a management agreement with North Strabane Township to have the authority manage both the Public Utility System and the Old Strabane System. Fayette Engineering of North Strabane Township confirmed as consulting engineers to furnish any and all certifications required to support said management agreement. Motion carried. You presented the annual service agreement between Fayette Engineering and the authority. Service agreement to include: d. July 20, 1982: e. January 5, 1983: - Monthly inspection of facilities and report. - Prepare annual budget. - Attend meetings. - Give advice over the phone, all at fee of $200 /month. Motion carried. You read a letter and recommended that the municipal authority send a letter to the supervisors with the recommendations that supervisors approve the module of the Swanson Analysis System, Inc. when the corrections are made. Bills approved for payment: Fayette Engineering - Public Utility System & Strabane Sewer System $1,125.00. Fayette Engineering, Joseph Ferrero, nominated as engineer for 1983. No other nominations. f. January 10, 1984: Fayette Engineering, Joseph Ferrero, nominated as engineer for 1984. No other nominations. Unanimous vote for Fayette Engineering, Joseph Ferrero. Mr. Joseph L. Ferrero Page 6 g . January 8, 1985: Motion Tumicki, to appoint Joseph Ferrero, P.E. as engineer for the year 1985. Motion passed unanimously. Retainer for the engineer set at $250.00 /month. h. July 16, 1985: Mr. Mavrich introduced a resolution changing the name of the municipal authority engineer from Fayette Engineering Company to Ferrero and Associates, Inc. Mr. Tumicki made a motion to accept the resolution as presented by Mr. Mavrich and to have Solicitor Anthou prepare the resolution. Mr. Moschetta seconded the motion. Motion carried. i. January 7, 1986: Motion Tost to appoint Joseph Ferrero, P.E., and Associates as engineer for 1986. Motion carried unanimously. Monthly retainer for the engineer to remain at $250.00. 5. Municipal Authority records disclose that on April 20, 1982 an Annual Service Agreement was entered into between Fayette Engineering and the authority. You signed that agreement as a partner of Fayette Engineering. The agreement, which was renewed annually, provides in part, for the following services to be rendered by your firm: a. Conducting inspections regarding operation of the authority sewers and stations and providing reports thereon. b. Providing advice and recommendations in areas of operation, repair maintenance of the public utility system including estimates of expenses and revenues as well as a form of budget therefor. c. Providing advice and recommendations as to the Capital Additions that should be made during the next fiscal year and estimate of the amounts of money necessary for such purposes. Mr. Joseph L. Ferrero Page 7 d. Providing advice and recommendations as to the insurance to be carried and recommendations as to any necessary or advisable revision of sewer user charges. e. The agreement further provides for the payments of an annual fee in the amount of $2,400 to be paid in quarterly installments beginning July 31,1982 and if additional engineering work and services are required or requested by the authority, the work will be performed at fixed hourly rates. f. These hourly rates were as follows: Staff Hourly Charae PRINCIPAL $28.00 PROJECT ENGINEER $24.00 DRAFTSPERSON $16.00 - $19.00 FIELD SURVEY CORPS $45.00 INSPECTORS $18.00 TRAVEL CHARGES $0.20 /MILE 6. A review of the records of North Strabane Township disclosed that your firm prepared various sub - division plans and applications for the following private clients: a. Kenneth Bricker - Twin Gates Estates b. Joyce and Aubrey Lee - Farmstead Plan c. George and Jean Mantalis - Sub - division d. Hershey Ice Cream Company - Vandale Drive e. Curtis Machine Co. - building addition 7. Kenneth Bricker has used your services as an engineer for sub- dividing and developing various properties in North Strabane Township. a. In April of 1982 Bricker submitted sub - division plans for the DiPalma Property. Those sub - division plans bear the logo of Fayette Engineering and the signature of R.B. Mechling as the engineer who prepared the plans. The plans Mr. Joseph L. Ferrero Page 8 were noted as reviewed and approved by the Washington County Planning Commission on April 22, 1982. 8. Minutes of the North Strabane Township Planning and Zoning Commission disclosed the following information regarding the Kenneth Bricker sub - division applications: a. April 21, 1982: Kenneth Bricker came before the Commission for information on a subdivision he is proposing for the DiPalma property. b. May 19, 1982: You were present as commission engineer. You submitted the following comments relative to the Bricker Subdivision. The plan consists of dividing a 12.64 acre parcel into two lots, one to be 7.14 acres and one to be 5.5 acres. 1. The parcel is zoned R -2. It was formerly owned by Mario and Pio DiPalma. 2. The approval of the Washington County Planning Commission had been obtained. 3. An application to PennDot has been filed for an occupancy permit. 4. The existing block garage in lot #2 is located too close to the property lines. This building is designated "non- conforming." 5. The owner should be reminded that Pennsylvania Department of Environmental Resources approval will be required when and if a pipe is placed under the proposed unpaved driveway. 6. The approval on -lot sewage treatment facilities must be obtained from the sewage enforcement officer. A letter from the Washington County Planning Commission was read into the minutes. The letter noted in part, "In Mr. Joseph L. Ferrero Page 9 that North Strabane Township has adopted its own subdivision ordinance, our review of this subdivision has been limited to an environmental hazard evaluation. Our environmental analysis - which included such hazards as flood plain areas, mine subsidence prone areas, and landslide prone areas - indicates that the Bricker property does not contain any significant environmental hazards." The letter concluded by recommending approval of the plan. Motion by O'Shinski, seconded by Thompson to approve the sub - division as presented, Motion carried unanimously. This subdivision consists of Lot #1 - 5.5 acres, and Lot #2 - 7.14 acres. It is bounded on the North by the property of Concetta Ciaffoni, on the East by the property of Park Y and Marguerite Y. Rankin, on the South by State Route 519, and on the West by the property of James E. Young and Cynthia Y. Wrentmore. c. July 21, 1982: Kenneth Bricker presented a sub - division request for Twin Gates Estate. This subdivision consists of Lot #1 - 1.0560 acres, Lot #2 - 1.0200 acres, Lot #3 - 0.9558 acres, Lot #4 - 9.017 acres, and Lot #5 - 6.501 acres. it is bounded on the North by the Thrift Ranches property, on the West by the property of Harold Wilson, on the South by the properties of Neman Anesetti and Myrtle J. Christopher. You made comments regarding the Twin Gates Estate subdivision. The plan is a five -lot subdivision of the Schultise property located along Christy Road. The property is in an R -1 zoned District. Mr. Joseph L. Ferrero Page 10 1. The property has an area of 19.019 acres. 2. The subdivision consists of lots having the following areas: Lot Number Area (Acres) 3. 1.0560 2 1.0200 3 0.9558 4 9.017 5 6.501 As shown, a 50' private right -of- way has been placed between lots 3 and 4 to provide access to lot #5 from Christy Road. 3. The owner proposes to use the lots for single family detached houses. 4. Lot sizes, lot widths, building setback distances, and side and rear yard distances are all in conformance with the requirements set forth in Article 201.3. 5. The approval of on -lot sewage disposal facilities must be obtained from the sewage enforcement officer. 6. The approval of the Washington County Planning Commission is required. 7. A distance of 25 feet from the centerline of the existing paved surface of Christy Road has been shown as the right -of -way for Christy Road. It is noted that the existing property line along Christy Road is not in the centerline of the existing paved surface. This appears to be in conformance with the subdivision drawings prepared for the Thrift Ranches Plan of Lots. Mr. Joseph L. Ferrero Page 11 d. June 15, 1983: A letter from the Washington County Planning Commission was read into the minutes. The letter noted in part: In that North Strabane Township has adopted its own subdivision ordinance, our review of this subdivision has been limited to an environmental hazard evaluation. Our environmental analysis - which included such hazards as flood plain areas, mine subsidence prone areas, and landslide prone areas - indicates that the Twin Gate property does not contain any significant environmental hazards. The letter concluded by recommending approval of the plan. Motion by Molinaro, seconded by Terhorst to accept the Twin Gates sub- division. Motion unanimously approved. Bricker appeared before the Commission in reference to the Twin Gates Estate sub - division located on Christy Road. Your review letter dated June 15, 1983, as Commission engineer, was read as follows: Twin Gate Estates consists of a 5 -lot subdivision approved by the supervisors of North Strabane Township and the North Strabane Township Planning Commission in 1982. The current subdivision is a division of lot No. 4 into 4 lots, namely; lots 4 - 1 - 2.4 acres, lot No. 2 - 4.40 acres, lot No. 4 - 3 - 1.5 acres and lot No. 4 - 4 - 0.75 acre. The area is zoned R -1. We have the following comments: a. The approval of the Washington County Planning Commission is required. Mr. Joseph L. Ferrero Page 12 b. Wells are used as a source of water supply. c. The approval of the sewage enforcement officer is required. d. Adjoining property owners and exact areas must be shown. A motion was made by O'Shinski, seconded by Thompson, to recommend approval of the Plan of Subdivision for Twin Gate Estates, situate on Christy Road, Fayette Engineering Company, dated June, 1983, with the following stipulations to be completed prior to final approval: a. The approval of the Washington County Planning Commission is required. b. The approval of the sewage enforcement officer is required. c. Adjoining property owners and exact areas must be shown. d. Part of the driveway is paved and should be shown on the plan. e. Overall plan should be submitted showing the entire subdivision. Motion carried unanimously. e. January 16, 1986: You stated that in 1982, Twin Gates Estates subdivided a parcel of ground located on Christy Road into five different parcels. (parcels 1 - 5) in 1983, they subdivided parcel 4 into 5 different parcels (4 -1, 4 -2, 5 -3, 4 -4, 4 -5). Presently, Mr. Ken Bricker is requesting approval of parcel 4 -2 being subdivided into two parcels, 4 -2a and 4- 2b. You stated that Mr. Bricker has extended the 50 -foot private right of way to provide ingress and egress to lot 4 -2b. It originally provided access only to lot 5. You feel that this Mr. Joseph L. Ferrero Page 13 should be the final subdivision of this particular parcel of ground. If it is ever subdivided again, the 50 foot private right of way will have to become a public road. You also stated that all of the surrounding lots of the present subdivision will have to be shown as previously recorded on the plan. Washington County Planning Commission and DER approval have been received. You then stated that the building line is shown on the plan, but the distance is not shown. You stated for the record that you were criticized because you were working for Mr. Bricker on this subdivision. When Mr. Bricker brought suit against North Strabane Township you felt that you could possibly develop a conflict of interest by working for him on this particular subdivision, so you withdrew from doing any more work and Mr. Walter Scott picked up on it. Lou Molinaro made a motion to approve the Twin Gates Subdivision of lot 4 -2 into lots 4 -2a and 4 -2b contingent upon the distance of the building line being shown and also the previously recorded approvals being shown on the plan for the other subdivisions. Ray O'Shinski seconded the motion. Motion passed unanimously. f. September 10, 1986: Mr. Walter Scott was present regarding information on further subdivision of property known as Twin Gates estates. He submitted a letter to the Planning Commission dated September 5, 1986 which provided, in part: I am requesting for Robert Dempsey, an opinion as to whether the township would approve the enclosed subdivision of Mr. Mr. Joseph L. Ferrero Page 14 Dempsey's property under present township rules. If you have any questions or comments, please contact me. Sincerely, Walter T. Scott, Jr. The following letter was submitted by you dated October 10, 1986 and was made part of the record: Subject: Twin Gates Estates Subdivision No. 4 Subdivision of Lot No. 5 In response to the above and Walter Scott's letter dated September 5, 1986, we recommend that an additional subdivision of this property be denied. An extension of a private road is proposed. The extension will cause three lots to be served by the private road. In addition there is another private road on this property. The unorderly manner in which this property was subdivided is not good comprehensive planning and in our judgement is not fair to those who purchased the adjoining lots. It is our understanding that this was called to the attention of the developer when Subdivision No. 3 was submitted. Mark Imgrund made a motion to deny any other further subdivision of lot #5 in the Twin Gates plan of lots that is located on Christy Road. Reference is made to the Subdivision Ordinance, Page 280, Section 509, Paragraph 2. Ray O'Shinski seconded the motion. Motion carried. 9. Planning Commission records disclosed that on October 28, 1985 Twin Gates Estate Application for sub - division was submitted for Mr. Joseph L. Ferrero Page 15 approval, Block and Lot number 4 -2A (4 -25). You are listed as engineer or surveyor. Fees paid October 28, 1985. 10. Township records disclose that by letter dated November 26, 1985 you notified Kenneth Bricker as follows in regards to the sub - division lot No. 4 (Twin Gates Estate). a. This will confirm my telephone discussion with Jeff Lytle on or about October 31, 1985 and our discussion in my office on November 13, 1985. In view of the legal action you have taken against the North Strabane Township Supervisors relative to your pond along Rt. 519 and in order to avoid the possibility of my developing a conflict of interest, I cannot continue to perform work for you on the above mentioned subdivision plan. I am returning, enclosed, the original tracing. Thank you for understanding my position on this matter. 11. Minutes of the North Strabane Township Supervisors' meetings disclosed the following information regarding the Bricker sub - division request along Route 519 and Twin Gates Estate on Christy Road: a. June 8, 1982: Kenneth Bricker subdivision submitted for review and approval. This subdivision is located on Route 519 and consists of Lot #1 - 5.5 acres and Lot #2 - 7.14 acres. You stated that the Planning and Zoning Commission approved the plan on May 19, 1982. Motion passed to approve the sub- division plan subject to stipulations by you as township engineer. You stated that no stipulations were needed for this subdivision. Motion Sedmak, second Rubis to approve the proposed sub - division of Kenneth Bricker dated April, 1982, Fayette Engineering Company, Engineers. Motion carried unanimously. Mr. Joseph L. Ferrero Page 16 b. August 10, 1982: Kenneth Bricker, owner of Twin Gate Estates presents a 19.019 acres sub- division for approval. It was noted that the township planning and zoning commissions and county planning commission approved. You made comments regarding this plan via a letter of July 21, 1982. That letter was read into the minutes. c. July 12, 1983: Motion was made by Supervisor Kavoulakis, seconded by sedmak, based on information submitted to the planning commission and on the recommendation of the engineer, that the Twin Gates Estate sub - division be approved. Motion passed unanimously. A Washington County Planning Commission letter recommending approval read into the minutes. Mr. Kenneth Bricker was present. Twin Gates Estate is a four -lot subdivision located on Christy Road. IN a letter dated June 21,1 983, the Washington County Planning Commission recommended approval of this subdivision and the North Strabane Township Planning and Zoning Commission recommended approval. Mr. Bricker stated he is subdividing Lot #4 into four lots, Lot #4 -1, Lot #4 -2, Lot #4 -3 and Lot #4 -4. He stated that Lots #4 -1 and #4 -4 are vacant and Lots #4 -2 and #4 -3 have houses on them. A motion was made by Sedmak, seconded by Kavoulakis that the Twin Gates Estate subdivision, Lots #4 -1, #4 -2, #4 -3, and #4 -4, be approved. Motion carried unanimously. You were not present at this meeting. Your firm was represented by Ron Bewick. Mr. Joseph L. Ferrero Page 17 d. July 26, 1985: Twin Gates Estate Subdivision (Christy Road). You stated that this subdivision was approved at the board of supervisors July 12, 1983 meeting. He stated that this subdivision was approved by the planning and zoning commission and the Washington County Planning Commission. You stated that since the approvals were given, Mr. Ken Bricker, the owner, wants to shift the property line of Lot #4 -3, which constitutes a fraction of an acre. You stated that the Planning and Zoning Commission approved the line shift on his recommendation. You stated that there is a steel garage on the land. You stated that the line change will add approximately twenty (20) feet to Lot 4- 3, changing the total acreage of Lot 4 -2 by taking away from it. A motion was made by Sedmak, seconded by Kavoulakis to approve the revised plans for the Twin Gates Estate Subdivision, situate Christy Road. The line change will add approximately twenty feet to Lot #4 -3 changing the total acreage of Lot #4 -3 from 1.50 acres to 1.5690 acres. Motion carried unanimously. e. December 10, 1985: Re: Bricker sub - division. Mr. Kucan then asked you if in the last several months you or have you represented the Bricker's on a piece of property on or near Chubbic Road. You stated that yes you have on Christy Road. Mr. Kucan asked if this is a conflict of interest. You then stated that you have withdrawn from the project that you were working on with Mr. Bricker. You had been working for Mr. Bricker since 1981, but when he filed the lawsuit you withdrew from the project. Mr. Kucan asked the board of supervisors to look into the matter further to see if there is a conflict of interest. If so, it should Mr. Joseph L. Ferrero Page 18 be considered when reorganization comes around in January. f. February 11, 1986: Re: Twin Gates Estate: Joseph Chesnik made motion to approve the Twin Gate Estates subdivision of lot 4 -2 into lots 4 -2a and 4 -2b as per the recommendations of the township engineer. Bruce Krane seconded the motion. Motion carried unanimously. 12. Kenneth Bricker provided the following information: a. Beginning early 1982, you worked on two parcels of land that he had in North Strabane Township. He thought that you were working for Fayette Engineering, Uniontown, PA. You worked occasionally for him until 1985. b. In 1985 he began writing to the supervisors about a problem with silt in a pond on his property. He believed the township caused the silt problem. Eventually he sued the township but did not include you because you were considered a township employee. c. After he sued the township, you referred him to another engineer because you thought there might be a conflict. d. Your bills were lower, than other engineers he has used. e. When appearing before the authority, planning commission or the board of supervisors, he would be questioned about the various projects. Then you would be asked by the officials for recommendations on whether the plans should be approved or rejected. You recommended approval of the plans. 13. Records obtained from Kenneth Bricker disclosed the following payments made to you by Bricker for engineering services: a. May 20, 1982: b. September 19, 1982: c. August 30, 1983: $2,435.00 - $1,842.10 - $ 389.83 - Survey work, R.D. #1, Box 130, Canonsburg, Pa. Invoice #282 - Twin Gates Estate, May 1, 1982 through July 31, 1982. Invoice #1(4183, subdivision of Lot 44, Twin Gates Estate Christy Road. Mr. Joseph L. Ferrero Page 19 d. October 10, 1985 S 504.30 - Invoice #M8185, up to $4,171.23 September 10, 1985 Twin Gates Estate, Bails lot survey. 14. Minutes of the North Strabane Township Planning Commission disclose the following regarding sub- division plans submitted by Joyce and Audrey Lee: a. November 17, 1982: Resubdivision plans of Farmstead Plan of Lots, Parcels A -1, B -3 submitted by Aubrey Lee. You submitted comments to the Planning Commission in the form of a letter dated November 16, 1982: Your letter addressed the plans location and sewage treatment concerns. The parcels consisted of Lots A -1 -1 5.319 acres. Lots A -1 -2- 4.000 acres. Lots B -3 -1 - 16.241 acres. Lots B -3 -2 - 10.004 acres. Your letter noted that the approval of the Washington County Planning Commission was obtained. You recommended approval. Motion O'Shinski, seconded by Molinaro to recommend approval of the re- subdivision of Parcels A -1 and B -3 in the Farmstead Plan for Joyce and Aubrey Lee, Fayette Engineering dated October, 1982. Motion carried unanimously. b. July 20, 1983: Aubrey Lee appears before the Commission with a sub- division plan located on Lundley Road. The sub - division consists of (2) lots; Lot B -4 -1 10.0684 acres and Lot B -4 -2. .0459 acre. Plan dated July, 1983 and indicate prepared by Russell Mechling, Jr. surveyor. Motion O'Shinski, seconded by Molinaro to recommend approval of the Lee sub- division with (2) stipulations: 1. A letter of review must be received from the Washington County Planning Commission. Motion carried unanimously. Ur. Joseph L. Ferrero Page 20 You were not present at this meeting. 15. Minutes of the North Strabane Supervisors' meetings disclosed the following regarding the Joyce - Aubrey subdivision of property on Lindley Road: a. July 26, 1983: Aubrey Lee, owner of the property was present. The subdivision consists of two lots on Ludley Road, Parcel B -4 -1, 10.0684 acres, and Parcel B -4 -2, .0459 acre. You stated that is a proposed subdivision of Parcel B -4 -1 and that Mr. Lee wants to remove the small parcel, B -4 -2 from the larger parcel because he is selling Parcel B -4 -1. You also stated that the Washington County Planning Commission letter has not been received yet. The township planning commission gave their approval on July 20, 1983. Motion Sedmak, seconded by Rubis to approve the Aubrey and Joyce Lee subdivision subject to stipulations. Motion carried unanimously. 16. Aubrey Lee provided the following information: a. He thought that all the engineering work done by you was the resubdivision of the farmstead plan of lots. He thought that this occurred in 1982. b. He was unable to locate any invoices or cancelled checks in relation to payments made to you for engineering services. c. It is his recollection that the charges for this project were reasonable. 17. Township records disclose the following regarding the Mantalis Plan of Lots, proposed subdivision. (Finding 6 C). a. This was a proposed sub- division of property owned by George and Jean Mantalis. b. The sub- division plans were submitted to the Washington County Planning Commission in June, 1981 and bore the seal of engineer Frederick Omer. On July 14, 1981 the plans were approved by the County Planning Commission. 18. Minutes of the North Strabane Township Planning Commission meetings disclosed as follows in regards to the Mantalis sub - division. a. July 15, 1981: A motion was made by Molinaro, seconded by Thompson, to approve the Mantalis subdivision plan lots 1, 2, 3 and 4 as recommended by the Washington County Planning Commission and reviewed by the township engineer, Joseph Ferrero. y Motion carried unanimously. The Commission discussed the sewerage of e the Mantalis plan of which Engineer Ferrero stated that a planning module was approved by the municipal authority with final approval to be made by the board of supervisors. 19. Minutes of the North Strabane Township Municipal authority si meetings disclosed: ►s 3E a Ec :Y C J :x :n Li .o Mr. Joseph L. Ferrero Page 21 a. July 20, 1981: Mantalis extension of sewer lines up in Plan of Lots 4 will be connected into a present sewer line upon approval and Planning Commission and Board of Supervisors that it be rezoned. b. October 19, 1981: A motion was made by Mavrich and seconded by Tumicki that Mr. Mantalis be given permission to make his tap ins. Motion carried unanimously. c. February 1, 1982: Stenographer Shirley Pierchalski read letter of December 1, 1981 received by DER with reference to the Mantalis Plan of Lots. The letter in essence states the Mantalis Plan of Lots was denied by DER of Pittsburgh, Pennsylvania. The Municipal Authority agreed to send a letter to Mr. Stephen R. Salta, Sanitarian Sewage Specialist, Pennsylvania Department of Environmental Resources, Pittsburgh, Pennsylvania in answer to the Mantalis Plan of Lots reference letter of December 1, 1981. The letter in essence will state construction of a sewer extension to Mr. Joseph L. Ferrero Page 22 serve the Mantalis Plan of Lots wa, approved by the North Strabane Tow Board of Supervisors following reci of approval of Pa DER Planning Modi by the North Strabane Township Bun. Authority. The Authority states tl have complete intentions of comply: with all provisions of the Clean Si , Laws. The Authority had met all tl requirements of the Law to date in (1) we have taken several steps to eliminate the overflowing of the Rc 19 pumping station, (2) we have fo] Pa DER requirements and submitted 1 planning modules for sewers to sere plan, and (3) we prepared and submd a Wasteload Management Report, whic report shows the pumping station ha design capacity to handle the flow the Mantalis Plan of Lots. The Authority also will state in tb letter that they will submit under separate cover, a schedule of corre measures to reduce infiltration and inflow to acceptable levels. 20. By letter dated September 8, 1981 to the North Strabane Town Board of Supervisors you advised as follows in regards to the Man Plan of Lots: We have reviewed plans of the above mentioned plan of lots. submit our comments and recommendations as follows: 1. The plan consists of four (4) lots along McGregor Avenu The area is zoned R -1. 2. The portion of McGregor Avenue in front of the lots in unimproved. This roadway section was included as part • the McClelland Highlands Plan of Lots No. 5. This roads must be improved in accordance with the township's subdivision rules and regulations. Perhaps this roadwa be paved at the same time the township paves the remain of Anderson Drive. In this case, the developer(s) gust reimburse the township for paving McGregor Avenue. Mr. Joseph L. Ferrero Page 25 d. He never spoke to you prior to being sued by the owners of the plan. There was a right -of -way problem which prompted the suit. e. He called you after being sued and was told by you that your partner, Mechling, should be responsible for one -half of the costs. f. You and he eventually paid $3,000 each to settle the suit. g. He never received any payment for signing the Mantalis Plan from anyone. He was only doing a favor for Bob Breyer. h. He never did any sub- contracting work for you or Fayette Engineering. 25. In an Answer to the Complaint you noted as follows: a. Paragraph 5: It is specifically denied that the Additional Defendant, Joseph Ferrero, prepared, designed, and constructed the sub - division plan regarding the property in dispute, identified as the George and Jean Mantalis Plan of Lots (Plan Book 19, Page 397), and strict proof of this allegation is demanded. By way of further answer to the allegations against Additional Defendant, Joseph Ferrero, the latter avers that Fayette Engineering Company, of whom the said Joseph Ferrero was a partner, prepared a sub- division drawing from sketches furnished by Additional Defendant, George Mantalis. These drawings, given to Fayette Engineering Company by the said George Mantalis, were prepared by Additional Defendants Engelhardt -Power & Associates, Inc., who performed all the survey work on said Plan of Lots as well as the First Christian Church of Canonsburg. Moreover, Additional Defendant, Joseph Ferrero, avers that Fayette Engineering Company prepared construction plans for roadway improvements, sanitary sewers and storm sewers in connection therewith, worked from property survey points and plans prepared by Additional Defendant, Engelhardt- Power & Associates, Inc. Neither Fayette Engineering Company nor Joseph Ferrero conducted any property survey work in regard to this matter. The field survey work was related to the design of the sanitary sewer, storm sewer and road system. Finally, the Additional Defendant, Joseph Ferrero, avers that since the Seal of Additional Defendant, Frederick Omer, a Registered Professional Engineer of the Commonwealth of Pennsylvania, appears on the Mantalis Sub - division Plan, the latter warrants that he surveyed and plotted the property Mr. Joseph L. Ferrero Page 26 for the owners and that the same represents the lots, land, streets, alley and roads of said plan. The Certification of Additional Defendant, Frederick Omer, was made on July 14, 1981. . Accordingly, the aforementioned Certification by Frederick Omer and the recording of said Plan by George Mantalis et ux., preclude any liability from being imposed against Joseph Ferrero or Fayette Engineering Company. 26. You provided the following information to State Ethics Commission investigators in the presence of your attorney regarding the Mantalis subdivision. a. In 1981, George Mantalis came to your office and asked you to help prepare a subdivision drawing. You declined because you were the township engineer. b. Mantalis used your office to try and prepare the plans himself, but he was not able to do so. c. You eventually prepared the drawing for him. You had a draftsman assist in preparing the drawings. d. You told Mantalis that you could not put your seal on the plans. Mantalis told you that he knew someone from South Park Township who knew someone who would get the plans dealt. The person was Fred Omer. e. You took those plans that were sealed by the other engineer and approved them for the township. 27. Records disclose that in 1985 the Hershey Creamery Company purchased property in the Washington County Industrial Park for the purpose of constructing an ice cream distribution and office facility. (Finding 6 d). a. Company records disclose that your firm, Ferrero and Associates, was chosen for preliminary survey on which decisions were made on possible purchase, final site plan and revisions, storm sewer plans, and monument construction. 28. Minutes of the North Strabane Township Planning and Zoning Commission disclosed as follows in regards to the Hershey Creamery Company: a. July 10, 1985: Mr. Jack Underwood, Washington County Industrial Development Agency, was present regarding a 3 -lot subdivision in the industrial park located in North Strabane Township off of Pike Street. Mr. Joseph L. Ferrero Page 27 b. July 10, 1985: He informed the Commission that they have a potential buyer for one of the lots (Hershey Creamery). The proposed subdivision is to divide Tract No. 3B into 3B1, 382, and 3B3. Tract No. 3B3 would be sold to Hershey Creamery. In addition, Mr. Underwood stated that Quasatronics has an option on Tract 3B1. You stated that your office prepared the site plan for Hershey Creamery, and Washington County prepared the subdivision. Your intention at this time, was to present both for approval at this meeting. You also told the Commission that the first issue that should be addressed is the abandonment of a portion of Vandale Drive, which Hershey Creamery want to purchase to be a part of Tract 3B3. You stated that the request has already gone before the board of supervisors, and they have agreed to take the necessary steps to abandon the portion that is indicated on the subdivision drawing. Mr. Underwood stated that action by the Planning Commission to abandon the portion of Vandale Drive must be taken care of first before the subdivision. Motion Wintermyer, seconded by O'Shinski to recommend to the board of supervisors to abandon .064 acres of Vandale Drive, which will become part of Tract 3B3 of the Washington County Industrial Park sub- division. Motion passed unanimously. A letter from you as township engineer to the Commission was read into the minutes regarding your review of the Hershey Creamery site plan. That letter provided as follows: Mr. Joseph L. Ferrero Page 28 c. August 14, 1985: Hershey Creamery Company is proposing the construction of an ice cream distribution and office facility at the above - mentioned industrial park. A subdivision plan of the proposed lot is submitted under separate cover. The facility would be considered an accessory use to the manufacture of a dairy product. The facility would be considered an accessory use to the manufacture of a dairy product. The site plan has been developed to meet the requirements of the township zoning ordinance. The following additional items must be obtained: (a) Grading permit. (b) Sign permit. (c) Approval of the Washington County Planning Commission. (d) Approval letter from the various utilities. (e) Approval of the Pennsylvania Department of Labor and Industry. The Commission, as well as Mr. Ferrero, agreed to wit until the next meeting to give final approval for the site plan due to all the loose ends that need to be addressed. Mrs. Terhorst also reminded Mr. Underwood to fill out the necessary applications and return them to the office. A letter dated August 14, 1985 from you (as township engineer) to the Commission was read into the minutes Mr. Joseph L. Ferrero Page 29 regarding the Hershey Creamery site plan. The letter provided as follows: As you are aware, Hershey Creamery is proposing to construct ice cream distribution center on Vandale Drive on Tract 3B in the Washington County Industrial Park, North Strabane Township. Subdivision approval was granted by the Commission and the supervisors; July, 1985. Approval of the site plan is currently being requested. Reference is made to our letters to you dated July 10, 1985; July 18, 1985; and July 26, 1985. Six (6) copies of the site plan were forwarded to the Township on July 26th. We furnish the additional information and comments: (1) A letter from Pa DER approving the sewage facilities as a supplement to the Township's Sewage Facilities Plan is enclosed. The anticipated sewage flow from the proposed building will be 25260 gallons per day. A connection permit will have to be obtained from the North Strabane Township Municipal Authority, and upon completion of a sewer connection permit application the payment of a $500 tap in fee. (2) Approval letters from the Western Pa. Water Co., the Columbia Gas Co., the Washington Co. Planning Commission, and the Pa. Dept. of Labor and Industry are enclosed. Approval from the Western Pa. Power Company is pending. Electrical services are available in the Industrial Park. (3) A site plan application and application fee of $100 is enclosed. (4) A grading permit application and application fee of $80 is enclosed. The Mr. Joseph L. Ferrero Page 30 proposed grading is in strict accordance with the requirements of the township's grading ordinance. (5) Legal steps to vacate a portion of the turnaround so it can become a part of the Hershey Property have been taken. Removal of the pavement and replacement of the concrete wedge curbing has been made a part of this application. (6) Stormwater management and control is satisfactory. Storm water will be drained off the parking area and flow to Chartiers Creek over the Hershey property. Some storm water will be collected in the storm sewer system along Vandale Dr. Roof drains are piped to a stone lines drainage sump. (7) All provisions of the zoning ordinance with respect to setback lines, parking, loading, etc., have been met. (8) A landscaping plan is provided. (9) Approval of the Pa. State Police relative to the fuel tank is required. You stated that the only thing that is needed at this point is the approval of the State Police relative to the fuel tank. Motion Molinaro, seconded by Jewell to approve the site plan for Hershey Creamery contingent upon receiving approval from the State Police relative to the fuel tank. 29. Minutes of the North Strabane Township Supervisors' meetings disclosed the following regarding the Hershey Creamery Company: a. June 25, 1985: Motion Hood second by Chesnik that the township commence proceedings to vacate that portion of Vandale Drive, which is the northern portion of the turn- around adjacent to Conrail tracks as shown on WCIDA PRW. 1984 -1; DWG. 1, and to sell Mr. Joseph L. Ferrero Page 31 the same pursuant to law; provided, however, that all legal and engineering fees in connection therewith be paid or reimbursed to the township by the buyer or Washington County or Washington County Industrial Development Authority. The board has found that this road vacation is necessary motion carried. You stated that Vandale Drive is located in the industrial park that is off of West Pike Street. It begins in Chartiers Township and extends into North Strabane Township. The potential buyer of 2 1/2 acres in the park, Hershey Ice Cream Co., have requested through the Washington County Industrial Development Authority that North Strabane Township sell them the portion of Vandale Drive mentioned in the above motion. The area that they are requesting be vacated by the township is .007 of an acre. You stated that you saw no reason why the township cannot turn that section of roadway over to the Hershey Ice Cream Company. Mr. Zangrilli asked you if you knew if Hershey Ice Cream would still go through with the purchase of the 2 1/2 acres if the road is not deeded to them. Mr. Ferrero stated that he has been told that they will not purchase the 2 1/2 acres. You stated that Washington County Industrial Development Authority owns the land in the park, but they have dedicated the roadways and the utilities to the township. Mr. Zangrilli informed the board that there are four steps that must be taken in order to complete the transaction. (1) Approval of North Strabane Township Planning Commission. (2) Approval of the Washington County Planning Commission. (3) The Supervisors have to vacate the road by resolution or ordinance. (4) Go Mr. Joseph L. Ferrero Page 32 Motion Copeland, second Husarchik approved the Washington County Industrial Park Subdivision. Under discussion, Mr. Jack Underwood was present regarding the above - mentioned subdivision. He explained to the board that they proposed to subdivide lot 3B into 3 parcels and sell distribution center and office complex. It will be approximately an 11,000 sq. ft. building. Mr. Ferrero (township engineer) stated that he has reviewed the subdivision and it meets township requirements. It also received Washington County Planning Commission approval, DER approval, and North Strabane Township Planning Commission approval. Motion carried unanimously. c. August 13, 1985: The status of the Hershey Creamery distribution center to be built in North Strabane Township is moving right along. Spearheading that operation, that he has apparently resolved matters with the Redevelopment Authority. Mr. Zangrilli was waiting for that information before he submitted the advertisement to the Observer Reporter in regards to vacating a portion of Vandale Drive. Correspondence: DER approval received for Hershey Creamery Co. supplement to sewage facilities plan. d. August 27, 1985: Hershey Creamery plans proceeding, Solicitor Zangrilli reports that b. July 23, 1985: through the sale procedure, which requires advertising. Mr. Zangrilli also informed the board that the first thing that is needed is a written commitment from the buyer that he is going to undertake to pay the costs. Mr. Joseph L. Ferrero Page 33 vacation of Vandale Drive can be completed. e. September 10, 1985: Mr. Zangrilli stated that Ordinance #146, which calls for the vacation of a portion of Vandale Drive, has been duly advertised in the Observer Reporter. It is now ready for adoption by the board of supervisors. Motion Chesnik, second Husarchik to adopt and enact Ordinance $146, vacating a portion of Vandale Drive. The said proposed Ordinance was duly advertised on August 30, 1985. Motion carried unanimously. f. December 17, 1985: Motion Tumicki, second Tost to grant a tap -in to Hershey Creamery, subject to final inspection. a. Motion by Tumicki who later was hired by you and on August 6, 1986 inspected and approved the connection of the sewer line to Hershey. g. August 6, 1986: Dedication of Vandale Drive (Hershey Creamery property) Mr. Anthou stated that he has a copy of the proposed agreement between the Washington County Industrial Development Agency, the North Strabane Township and the North Strabane Township Municipal Authority. Mr. Ferrero stated that the industrial park has sold a parcel of ground across the railroad tracks, thereby requiring that the railroad crossing and the road on the other side of the railroad be dedicated to the township and accepted by the township for operation and maintenance. Last evening the township passed the necessary documents that would allow the railcrossing to be added to the township Mr. Joseph L. Ferrero Page 34 system if all the documents are filed with the P.U.C. The Authority is to accept the sewer that serves that parcel that goes under the railroad and taps into the existing sewer eventually this sewer goes into a holding tank and through an interceptor of Chartiers Township. Mr. Ferrero stated that the agreement is between the township and the municipal authority. The agreement transfers the ownership, operation and maintenance of the sewer line from the township to the authority. Mr. Ferrero stated that he has reviewed the plans and Casimer Tumicki inspected the construction of the line which he approved. Mr. Tumicki did make the contractor dig up a section of the line before his final approval. Motion Kelly, second by Stenisa authorizing the execution of the agreement between North Strabane Township Municipal Authority and North Strabane Township with regard to the authority taking over the operation and maintenance of the 166 feet of sewer line at the Houston Industrial Park that was sold by the Washington County Industrial Development Agency. Motion carried unanimously. Mr. Ferrero announced that since three additional industries have been added, all 10 sewer taps allocated in 1985 have been assigned as follows: 1- Hershey Creamery 7- Suffolk Mfg. Co. 1- August Keller Photo Labs. 1 -A Body Shop The Department of Environmental Resources has request that both the township and the authority send a letter to the Department of Mr. Joseph L. Ferrero Page 66 enforcement authority with this Commission's recommendation that a prosecution be instituted against you. Turning to the second allegation in this case, the charge concerns whether you violated the contracting restrictions of Section 3(c) of the Ethics Act as to an Engineering Service Agreement which your firm received from the Township Municipal Authority. 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. 5403(c). Section 3(c) provides, in part, 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. The facts do establish that the Authority put out for bids a project known as the 201 Grant Application which concerned a sewer extension. As to the 201 Grant Application, the minutes of the Township Authority for May 11, 1983 reflect that a representative of DER set for the parameters for the procurement of engineering services which included the requirement for advertising for bids. At that meeting, which you attended, the DER representative advised that the Authority could establish its own criteria for evaluating the bids. Your firm received authorization to prepare the grant application and was one of seven firms that submitted proposals after the Authority advertised for bids. Mr. Joseph L. Ferrero Page 35 Environmental Resources stating that they are willing to allocate these 10 taps in the manner that has been indicated. Motion by Stenisa, second by Kelly that these tap -ins be approved and a letter stating such be sent to the Department of Environmental Resources. 30. Hershey Creamery records disclose that you billed that company and were paid for services in regards to the proposed facility located at Washington County Industrial Park: a. July 15, 1985: Invoice No. M5285, Tract 3B2, Washington County Industrial Park. For Office and field work performed to set front and north side property corners, check existing ground elevations and stake core boring locations and elevations - as per Purchase Order No. 2476. 8 Hrs. Field Survey Corps @ $55/hr $440.00 2 Hrs. Design Draftsmen @ $20 /hr $ 40.00 Transportation, prints & supplies - No charge $440.00 b. September 2, 1985: Invoice No. M7485, Tract 3B2 August 1, 1985 through August 31, 1985 for preparation of final site plan, perform calculations on road abandonment, gather information on utilities and other required facilities, prepare reports and attend meetings as per Purchase Order No. 2476. 12 Hrs. Design Draftsman @ $20 /hr $240.00 3 Hrs. Project Transportation, phone calls ... Engineer $ 75.00 prints, .S 60.00 @ $25 /hr supplies and Mac. Joseph L. Ferrero Page 36 $375.00 Paid September 5, 1985 Check No. 9190 c. October 21, 1985: Invoice No. M8685, New Plant - Washington Co. Industrial Park. September 1, 1985 through October 20, 1985. For revisions to site plan and furnish information to bidders. 6 Hours Design Draftsman at $20 /hr $120.00 1 Hour Project Engineer at $25 /hr $ 25.00 Transportation, prints and phone calls 1_21191 $195.00 Paid December 9, 1985 Check No. 12757 d. July 7, 1986: Invoice No. July 6, 1986, North Strabane Plant, up to June 30, 1986. Preparation of plans of storm sewer adjacent to railroad right -of -way along Vandale Drive. 10 Hrs. Design Draftsman @$20 /hr $200.00 5 Hrs. Draftsman @$16 /hr $ 80.00 $280.00 Paid July 10, 1986 Check No. 21637 e. October 6, 1986: Invoice No. 9 -15, North Strabane Plant, Washington County Industrial Park. For labor and materials to set (4) concrete monuments on property line and preparation of drawing $400.00 Paid October 13, 1986 Check No. 2659. 31. At the October 22, 1985 township meeting a bill was approved to pay you $250.00 in relation to the Hershey Creamery project. Mr. Joseph L. Ferrero Page 37 32. Records of the North Strabane Township Planning commission disclosed that in December, 1982, Paul Fidel, owner of the Curtis Machine Company requested approval to expand his machine shop. (Finding 6 e). 33. Russell Mechling denied that the firm Fayette Engineering ever received any monies from you for engineering services performed for Curtis Machine Company. (Refer to Finding 35f.). 34. Minutes of the December 15, 1982 meeting of the North Strabane Planning Commission disclosed as follows: a. Paul Fidel, owner of Curtis Machine Company, presented plans for approval to move Curtis Machine Company. b. Fidel submitted a letter dated December 8, 1982 which outlined the company's ownership, number of plants and employees and transfer plans. He requested an extension of 6,000 square feet to a faculty located on Route 519. c. As Planning Commission engineer you submitted a letter to the Commission dated December 14, 1982 which outlined your comments regarding the curtis machine co plans. That letter was read into the minutes of the meeting and stated as follows: 1) The Curtis Machine Company is planning to expand its recently acquired facility located along Route 519. A description of the company's operation is enclosed. 2) The site of the expansion is Lot No. 2 -B of the Gregg Food Brokers Inc. Subdivision which was approved in May, 1982. The lot has a usable area of 2.3399 acres. The zoning district is I -1. 3) The use of the site will the machinery of metals. The administration offices are an accessory use. 4) Design standards are compared to design requirements as shown on the drawing. 5) The existing building is served with an approved on -lot subsurface sewage disposal system. The approval of the sewage enforcement officer is required for the addition. 6) The approval of the Washington County Planning Commission and the Soil Conservation District is required. Mr. Joseph L. Ferrero Page 38 d. 35. Paul following a. b. c . 7) Approval letters from the utility companies are required. 8) The approval of PENNDOT is required for the new curb cuts onto Route 519. 9) Storm water handling is provided by way of storm drains and ditches. 10) Outside lighting has to be provided. 11) Pennsylvania Labor and Industry approval of the building plans shall be provided. 12) Sign and grading permits are required. A motion was made by O'Shinski, seconded by Terhorst to recommend approval of the site plans for Curtis Machine Company, Building Addition Lot #2 -B, dated Dec., 1982, Fayette Engineering Co., Engineers, with the stipulation that all specifications as noted in Mr. Ferrero's review letter be met. Motion carried unanimously. Fidel, owner, Curtis Machine Tool Company, provided the information: He had Joe Ferrero do some work for him at the machine company site on Route 519 in North Strabane Township. They had a drainage problem and Ferrero was able to review some past layouts to make an extension to the current building. He had asked Ferrero if he would do the work, review the property lines and survey the site. He thought that this was in 1982. d. He guessed that the fee was about $100 to $125. e. Ferrero did not do any original surveys. 36. Records obtained from the Curtis Machine Tools Company disclosed the following in regards to payment made to Fayette Engineering for engineering services for a building addition: a. Fayette Engineering Company invoice No. M1083, dated February 7, 1983. Billing period December 1, 1982 through Mr. Joseph L. Ferrero Page 39 January 31, 1983, for engineering services relative to the preparation of site plan for building addition: 23.5 Hours Draftsman @ $18.00 /Hour 8 Hours 3 man field survey corps @ 4 Hours Principal @ $25.00 /Hour Transportation and prints TOTAL AMOUNT DUE THIS INVOICE ...$423.00 $45.00 /Hour...360.00 ...100.00 ... 21.35 ...$904.35 b. Fayette Engineering was paid by Curtis Machine Check No. 6356 dated February 10, 1983 in an amount of $904.53. The check was deposited in Fayette Engineering account on February 11, 1983. 37. Minutes of the North Strabane Township Supervisors' meeting of December 9, 1986 disclosed the following regarding your activities as township engineer and your representation of private clients before the township: a. November 4, 1986 letter from Bruce Krane to the State Ethics Commission requesting an advisory opinion in five areas. 1. Is an engineer who is providing services simultaneously to the board of supervisors, the municipal authority, the zoning and planning commission, and is awarded an additional contract with the same municipal authority under the domain of the Ethics Act? Please note that all of the aforementioned roles are served in the same community by the same engineer. 2. Is it a violation of the Ethics Act for an engineer of a governmental body, in his official capacity, to review the work he has produced for private clients? 3. Is it proper, under the Act, for an engineer, such as described in question (1) to be awarded a contract for over $500 with the municipal authority for which there was no public notice of intent to award such a contract, nor any subsequent disclosure in public of any other bids that were considered? 4. Is it proper under the Act for the same engineer to present a certificate of advisability for a sewage project to the board of supervisors, when in fact, he had already been paid approximately $230,000 for the design phase, and has already been awarded approximately $660,000 for the construction phase of the very same project? Mr. Joseph L. Ferrero Page 40 5. Does the Act condone the activities of a board of supervisors that has knowingly and intentionally ratified all of the aforementioned situations. b. November 24, 1986: Letter from Edward Seladones, Executive Director, State Ethics Commission, to Rrane advising that the Ethics Act only permits an advisory opinion to the public employee /official where conduct is in question. c. November 26, 1986: Letter to you from the North Strabane Township Supervisors: Dear Mr. Ferrero: This letter shall be deemed notification that the North Strabane Township Supervisors voted at their November 25, 1986 meeting to give you a 30 -day notice that the board is dissatisfied with the 30 -day notice of termination clause in the present contract between North Strabane Township and Ferrero and Associates. Please make this adjustment to the contract. d. Supervisor Charlotte Courie comments: Charlotte Courie stated that at the last meeting, Mr. Schmidt was present representing Ferrero and Associates in some form or another. She stated that she had some newspaper articles and minutes of meetings with regards to what she is about to say. Mr. Zangrilli had stated that the township engineer cannot review his own work. He cannot submit plans to the planning and zoning commission and review them as the engineer for the planning commission. She went on to state that our engineer is not just Mr. Ferrero; our engineer is Ferrero & Associates. She then quoted from newspaper articles dated January, 1986 through July, 1986 where Ferrero & Associates from McMurray was appointed borough engineer of McDonald. A July article reads, "Borough engineer, Ray Schmidt of Ferrero and Associates" she went on to state that it clearly shows that Ray Schmidt does work for Ferrero and Associates. Mr. Joseph L. Ferrero Page 41 In our township's planning & zoning commission minutes of September 10, 1986 it states, "Mr. Schmidt submitted a set of site plans for Anderson Storage." Mrs. Courie said that it also states that Mr. Schmidt will make all the necessary changes and submit them to Mr. Ferrero. Mrs. Courie doesn't see how Mr. Schmidt can submit plans to Ferrero for approval and not be in violation of the opinion that Mr. Zangrilli gave. Mr. Krane then asked Mr. Zangrilli that if this is all true, wouldn't it be a gross violation of his opinion. Mr. Zangrilli stated that if Mr. Schmidt is an employee of Ferrero and Associates, it would be improper. If Mr. Schmidt is an independent contractor, his guess would be (he would want to fine -tune it) that it would also be improper. 38. Mr. Russell Mechling, Jr., owner, Fayette Engineering Company, Uniontown, Pennsylvania provided the following information regarding your interests in Fayette Engineering: a. You and he stated in partnership with Fayette Engineering in 1968. All profits were to be shared equally. Approximately five years later you opened additional offices of Fayette Engineering in Wilksburg and McMurray. b. Profits and costs were shared until approximately 1978 or 1979. He participated in the profits from work you brought into the Uniontown Office, but you brought little work to the Uniontown Office and shared equally in the profits. 1978 or 1979 was the last time you and he got together on the balancing of the share of funds that each would receive. c. Because the Uniontown Office was doing the majority of the work, he wanted to terminate the partnership, but you refused. In 1982, you agreed to pay the payroll of the Uniontown office, but you did so for only two years. d. Sometime in 1984, you wanted Mechling to buy you out, but he refused. The partnership was eventually dissolved on December 31, 1984. He opened a sole proprietorship before incorporating in June, 1985. e. The only monies he ever received from you was the payroll in 1983 and nine months in 1984. f. His firm never did any work for developments in North Strabane Township. Payette Engineering received no funds Mr. Joseph L. Ferrero Page 42 from you from Curtis Machine Company plans in 1982, the McBride subdivision in 1983 or Aubrey Lee in 1982. g. After being shown that his name appeared on the plans for these he did not authorize the use of the McBride subdivision in 1983 or that Fayette Engineering subdivisions, he stated that his name on blue prints for h. Fayette Engineering was sued because of a Ferrero survey in North Strabane Township. The case was the result of Ferrero using another engineer to sign plans to be submitted to the planning commission because Ferrero was the commission engineer. There was a problem with the right -of -way which resulted in the law suit. Ferrero asked him to take care of it and that he would make it up to him. Mechling refused, Fayette was removed from the suit and Ferrero ended up paying about $3,000. 39. Norma Wintermyer, Chairman of the North Strabane Township Planning Commission advised as follows: a. She has been a member of the commission for five years. b. On a couple of occasions, you did say that you were representing applicants appearing before the board. On one of those occasions the board may have expressed some concern about Ferrero representing people before the board. c. The board never received any comment or written advice from the township solicitor relative to Ferrero representing clients before the board. d. She expressed concern with Ferrero at one time and was unhappy with the fact that Ferrero represented H i M on Lincoln Hydraulics. She didn't think it was her place to question Ferrero because she is not an engineer. e. At no time did Ferrero make any apertures about the board passing any type of plans for anyone. 40. Diane Terhorst, former member of the North Strabane Planning Commission, advised as follows: a. She served on the commission from 1982 to 1985 and was Chairman during the last eighteen months of her term. b. She and Norma Wintermeyer talked to the township solicitor about Ferrero and he agreed that there was a possibility of a conflict of interest. Mr. Joseph L. Ferrero Page 43 c. Ray O'Shinsky, a Planning Commission member, kept saying to people who came to the board with problems, go see Joe Ferrero, he'll help you. d. The planning commission was a lay board and the members felt that Ferrero, as engineer, was there to assist them. They were not comfortable when Ferrero submitted plans for his own projects. e. She did not know that Ferrero was involved with the Hershey Creamery project or the Curtis Machinery plans. f. Henry Mavrich brought the plan for the Lincoln Hydraulics building one day before a meeting when the requirement was two weeks prior. Ferrero said he was familiar with the plans and said it would not take long to evaluate; the board still made Mavrich wait the full two weeks. 41. Raymond O'Shinsky, a member of the North Strabane Township Planning Commission advised as follows: a. He has served on the planning commission for approximately ten years. b. He has been a surveyor for over (30) years, and he has worked as a look -out for Ferrero when they wanted to plot out some lots but was not paid for that work. He and Ferrero have been friends in the engineering community. c. Ferrero never told the planning commission that he represented any of the people coming before the board. He never heard that Ferrero represented people coming before the board. d. He saw a couple of projects where Ferrero had his seal on the plans. He thought that by being an associate, it would mean that another member did the business with the clients who came before the board. •. The Hershey Creamery project was done by Ferrero because he saw Ferrero's seal on the plan. Ferrero never told the planning commission that he was representing Hershey. f. The engineer prior to Ferrero, Englehardt and Powers, did the same thing. They brought private clients before the planning commission and the members of the planning commission didn't question them either. Mr. Joseph L. Ferrero Page 44 g. He saw Ferrero's seal on the Curtis Machine Company plans but never gave a thought to questioning Ferrero about that. h. He did not know that Ferrero did work for Joyce and Aubrey Lee on the Farmstead project. 42. Louis Molinaro, North Strabane Township Supervisor and former planning commission member, advised as follows: a. Ferrero never asked him to approve any plans or give preferential treatment to any plans prepared by Ferrero. b. Ferrero has done some private work for him in the past for which he was never charged. 43. Joseph Chesnik, North Strabane Township Supervisor, advised as follows: a. He does not see any problem with Ferrero representing private individuals or firms who come before the authority, township or planning commission. b. He also saw no problem with Ferrero representing the township and the authority simultaneously. It is very common for engineers to represent the different departments. 44. You provided the following information to State Ethics Commission investigators in the presence of your attorney: a. You became a partner in Fayette Engineering with Russell Mechling in 1968 and started your own company in 1985. b. You and Mechling did not share in the profits. You had your own establishment, but you were still a partnership and had one partnership income tax return. c. Your partnership in Fayette Engineering officially terminated on December 31, 1984. d. You were appointed township engineer in January, 1981 and authority engineer in 1982. e. Your firm did do work for Kenneth Bricker, George and Jean Mantalis, Hershey Ice Cream Company, and Joyce and Aubrey Lee. f. Initially, all your firm's bills for review work were directed to the municipality worked for, but on occasion Mkt. Joseph L. Ferrero Page 45 You served your relationship with Kenneth Bricker after he sued the township. h. The Stillwagon letter (State Ethics Commission Advice 84- 600) stated that a municipal engineer may concurrently serve as private engineer for clients even when those clients may be required to submit plans to the planning commission or municipality. i. You did not review your own work. It is the municipality's job to either take your opinion as to your work being correct, or they have option to go out and get somebody to do it. g. was directed by township to directly bill the property owner. j. You never tried to hide that you did the work and no one ever said that work you did was wrong. k. You never tried to push something through. 1. Township officials look to you as their planning director and refer people with plans to you. m. You adopted a different policy between 1981 when you completed the Mantalis plan and August, 1984 when you became aware of the Stillwagon ruling. That is when you started preparing the plans and stepping back and saying that you did do it. n. There is a differentiation between a site plan and a subdivision plan. Site plans come before the planning commission and to the board of supervisors, the elected officials. Sub - divisions require approval of the board of supervisors. Most of your work in the township was site plans and this also went into your thinking when you did outside work. o. You spend twenty hours a month earning the $150.00 month retainer. Every thing was perfectly alright until the time Krane and Courie got involved. p. You did nothing unethical, you did not steal anything from the township, and you did not do any bad engineering work for the township. q. You did not see plans through because of your position, it Mr. Joseph L. Ferrero Page 46 was just the opposite. Your work was more thorough than other engineers work who came to you for approval. r. The original board of supervisors and the planning commission put you in a position of having the final say on whatever was done in the township regarding engineering work. s. You were selected by the Authority after their review of six firms. You had no role in that selection process nor did you approve your fees. The fees were part of the bidding process. The entire process was approved by the EPA. II. Alleaation: That you, North Strabane Township Engineer, violated the following provisions of the State Ethics Act (Act 170 of 1978), in that you contracted with North Strabane Township Municipal Authority for an Engineering Service Agreement without an open and public process: Section 3(c) of the Ethics Act provides: (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). A. Findings: 45. Minutes of the North Strabane Township Municipal Authority (NSTMA) meetings disclosed the following regarding the selection of an engineer for the sewer extension (201 Grant application). a. May 11, 1983: 201 Grant Application. (1) Dave Borneman of the Pennsylvania Department of Environmental Resources was present. Borneman stated that a meeting held at the Pennsylvania Department of Mr. Joseph L. Ferrero Page 48 (9) Your firm was authorized to prepare the grant application for the project and your firm later bid on that project and received the award. b. June 27, 1983: Moschetta reported that seven firms submitted proposals for the 201 facilities Planning Study. (1) Moschetta, Mals and Solicitor Anthou met on June 24, 1983 to evaluate the firms submitting proposals for the sewer extension project. (2) Moschetta stated Fayette Engineering factored the highest number of points, and the Proposal Committee recommends that the Authority begin contract negotiations with Fayette Engineering. (3) Moschetta stated that the Committee based its evaluation of the firms on the point system that follows. I. Offeror's qualifications, experience and time commitments of proposed project engineer and technical staff (45 pts.). 1. Demonstrated ability of the project engineer to carry out the required services in a timely manner (20 points). 2. Demonstrated ability of other specifically named key personnel to carry out assigned responsibilities (20 points). 3. Knowledge of Pennsylvania Department of Environmental Resources and EPA regulations as they related to the firm's responsibility for projects of this type (5 points). 1I. Work Plans (25 points). 1. Quality of firm's work plans, including but not limited to allocating resources and personnel, and ability to provide continuity over the course of this project (15 points). 2. Availability and responsiveness of firm and it's staff (10 points). Your firm received the maximum number of points in all Mr. Joseph L. Ferrero Page 47 Environmental Resources on Tuesday, May 10, 1983 at 10:00 a.m. was attended by Fred Tost, Joseph Ferrero and George Elish. The purpose of this meeting was to go over the 201 Grant application. It was determined that the procurement of engineering services for the design of the new sewer must be addressed immediately by the Authority. (2) Borneman stated that in reference to the 201 Grant the Authority must follow the current Federal Regulation of the EPA to procure money for any contract, sub - agreement, architectural or engineering services through competitive negotiations or formal advertisements. The only exemption to this rule is to retain the firm that did the first step of the 201 Study. (3) Borneman stated that the Authority can establish its own criteria for hiring an engineering firm, however, Borneman recommended specific criteria to use: (4) Borneman stated that the 201 Grant application must be submitted to the Pennsylvania Department of Environmental Resources by July 18, 1983. (5) Borneman stated that he wanted to see what will be put in the paper before it goes in. He also stated that the Authority can proceed with the Grant Application and that any right of way or land acquisition assisted by the Engineer before the design phase is an ineligible item. (6) Borneman recommended that the Authority advertise in the legal section of The Pittsburgh Press and the Observer- Reporter on time, thirty days prior to the closing of bids. (7) Motion Mals, seconded by Moschetta to place a legal notice in the Pittsburgh Press and possibly the Washington Observer for either competitive bids or competitive negotiations for an engineering firm for the proposed sewer design for the sewer extension in the township. Motion amended to eliminate competitive bids. Motion carried unanimously. (8) Motion Moschetta, second by Tunucki for the 201 Grant Application to be proceeded with, forthwith, by Fayette Engineering Company. Motion carried unanimously. Mr. Joseph L. Ferrero Page 49 of the above categories even though your firm had no full -time support staff. III. Participation by small, minority, women and labor surplus area firms (12 points). Any offeror who meets one or more of the following factors shall receive three (3) points for each factor met: a. Small business firm. b. Minority owned business firm. c. Women owned business firm. d. Labor surplus area business firm. e. Your firm received all 12 points in this category even though you only met the small business firm qualifications. (4) Mr. Anthou stated that Fayette Engineering was evaluated sixth. (Best qualified). (5) Mr. Tost made a motion that the authority begin contract negotiations with Fayette Engineering since they were the engineering firm that received the highest total of points (82 points) for the Step 2 Design for North Strabane Township. Mr. Tumicki seconded the motion. Motion unanimous. (6) Mr. Anthou recommended that the authority prepare a letter to be sent to the six firms not chosen for contract negotiations. Mr. Anthou also recommended that the letter of June 27, 1983 from Joseph Mals, as well as the proposal tally sheet, be part of the minutes. (7) Joseph Mals letter to the NSTMA dated June 27, 1983 was read as follows: On Friday, June 24, 1983 at 4:00 p.m., James Moschetta, Solicitor Anthou and I met to review the Engineering Proposals submitted for the North Strabane Township sewer extension project. Listed below are the engineering firms name and point total in accordance with the 1) Federal Register Mr. Joseph L. Ferrero Page 50 (Monday, March 28, 1983), Part II, Environmental Protection Agency, Procurement Under Assistance Agreements and the 2) Request For Proposals Architectural /Engineering Services, Step 2 Design, Sewerage Facilities, May, 1983. Number Name Point Total 6 Fayette Engineering Company 82 5 C D Applied Research & Eng. Inc. 67 3 Gannett Fleming 66 4 Bankson Engineers, Inc. 64 7 Green International, Inc. 64 2 Frank Moolin & Associates 60 1 McDonald Associates Engineering 25 Note: (Gannett Fleming, one of the largest engineering firms in the commonwealth, scored 16 points below your one man operation). It is our recommendation that the Authority begin contract negotiations with Fayette Engineering Company since they factored the highest number of points according to the Federal Register and the Request for proposals. (8) Evaluation sheet signed by Joseph Malls, Secretary - Treasurer, George Anthou, Solicitor and James Moschatta member. Meeting then recessed until June 30, 1983. c. June 30, 1983: Continuance of June 27, 1983 meeting. (1) Mr. Ferrero went over the Step II Design Engineering Service contract with the Authority Board. Mr. Ferrero stated that if the authority agreed to the contract the EPA would have the final say. (2) After the board discussed the contract the following motion was made: (3) Mr. Mais made a motion to accept the contract of Fayette Engineering for $209,500 for Step II Design Engineering Services subject to approval of State and Mr. Joseph L. Ferrero Page 51 Federal Agencies. Mr. Tunicki seconded the motion. Motion carried. Unanimously. d. October 18, 1983: Mals presented a resolution: (1) The North Strabane Township Municipal Authority authorizes the execution of the Engineering Agreement between itself and the Authority's Engineering Firm, Fayette Engineering Company, concerning the 201 Facilities Planning Study for the Township of North Strabane and issues formal notification to the Engineering firm to begin the preparation of engineering work and services in accordance with the contents of said agreement. (2) Motion Tost, seconded by Moschetta to adopt the resolution. Motion carried unanimously. Motion Tost, seconded by Moschetta to execute the Step II Design Engineering Services, Engineering agreement. Motion carried unanimously. (4) Motion Mals, second Moschetta to adopt the Sanitary Sewer service connection as prepared by Fayette Engineering dated January, 1983. Motion carried. e. December 20, 1983: You reported that 15% to 20% of design work was completed. (1) Motion Tunicki, second by Tost to authorize payment of requisition September, 1983, in an amount of $20,950.00 to Fayette Engineering, Invoice No. NSTMA 2083. II (1), including December 10, 1983, EPA Project C- 420805- 2. Motion Carried. (3) f. February 14, 1984: Engineer's report - sewer extension. (1) Mr. Ferrero stated that Dave Borneman, Pennsylvania Department of Environmental Resources is meeting with Fayette Engineering Company on Friday, February 17, 1984 at 11:00 a.m. to determine if 50% of the work is completed on the sewer project. Mr. Ferrero invited all Board Members to attend this meeting. (2) Mr. Ferrero stated that one item to be discussed on Friday is the construction of the Route 519 sewer prior to the beginning of the overall project. Mr. Ferrero stated that Mr. Borneman indicated that the Pennsylvania Department of Environmental Resources Mr. Joseph L. Ferrero Page 52 would approve this construction so that service can be given to the Nursing Home and the Professional Building. g. June 19, 1984: You reported that on July 1, 1984, Fayette Engineering will submit to Pennsylvania Department of Environmental Resources a permit for construction of the sanitary sewerage system. (1) You reported that Fayette Engineering has selected eight archaeologists who are to submit proposals to Fayette by July 15, 1984 regarding the excavation for the sewer project. h. June 19, 1984: Motion Moschetta, second by Tumincko to pay requisition 4 -84 to Fayette Engineering in amount of $20,950, for invoice No. NSTMA 2083 -IC L5, May, 1, 1984 to May 31, 1984, Project No. C -420 805. Motion carried. i. July 17, 1984: Motion Tumicki, second by Tost to pay requisition 5 -84 to Fayette Engineering in amount of $20,950 for invoice #NSTMA 2083 II (6) June 1, 1984 to June 30, 1984. Project No. C- 420805 -2. Motion carried. August 21, 1984: Motion Moschetta, seconded by Tumicki to pay requisition June, 1984 to Fayette Engineering in an amount of $21,450.00, for invoice # NSTMA 2083 II, EPA Project No. C- 420805 -2. k. January 8, 1985: Annual retainer set at $250.00 /month for authority engineer. 1. April 16, 1985: You reported that the initial grant for the sewer extension was $4.1 million. You estimated the construction costs to be 3.9 million. m. July 16, 1985: Mavrich introduced a resolution changing the name of the authority engineer from Fayette Engineering Company to Ferrero and Associates. Motion carried. n. December 17, 1985: You presented to the board the annual report on the Public Utility System for December, 1985. (1) You presented the Consulting Engineers Annual Service Agreement between North Strabane Township Municipal Authority and Ferrero and Associates, Inc. You stated that the wording in the agreement is identical to the present service agreement. This agreement changes the Mr. Joseph L. Ferrero Page 53 name of the engineer from Fayette Engineering Inc. to Ferrero and Associates, Inc. (2) Mr. Tunicki to sign the Associates, Authority. carried. made a motion authorizing the Vice chairman agreement appointing Ferrero and Inc. the consulting engineer for the Mr. Moschetta seconded the motion. Motion (3) You presented an Engineering Agreement for Step III, General and on the job inspection and other engineering Services for EPA grant project No. C- 420805 -3. The general engineering services would include assistance in receiving and tabulating bids and awarding construction contracts, periodic visits to work sites, checking and passing upon subcontractors, shop drawings, materials and equipment, checking and approving estimates for payment to contractors and prescribing and reviewing contractors' performance tests, etc. (4) The on- the -job inspections would be any inspections needed at construction sites which would be charged on the basis of cost plus or approximately $20.00 /hour per man. (5) Mr. Moschetta made a motion to accept and authorize the signing of the Engineering Agreement for Step III, General and on- the -job inspection and other engineering services. Mr. Tumicki seconded the motion. Motion carried. n. February 19, 1986: You reported that GAI consultants did the archeological work for the sewer project and recommended that the board pay GAI $3,700. (1) Mr. Ferrero stated that currently the sewer extension project advertised on February 8, 1986. Bids are called tor on March 31, 1986. Mr. Ferrero also stated that this week changes have been made on the project documents which are now being printed. At the present time, there are ten requests for plans and specification which are being issued from the engineering office. (2) You stated that the Authority signed an agreement with your firm with regard to the Step III general and on the job inspection and other engineering services. You stated that the Pennsylvania Department of Mr. Joseph L. Ferrero Page 54 q. Environmental Resources has recommended some changes to the agreement which would be beneficial to the authority. You distributed a revised agreement and stated that most of the changes pertain to the engineering fees being estimated. These estimates are on EPA form 5700 -41 and are part of the revised agreement. You explained the engineering fees. You stated that 95% of the engineering fees would be grant eligible. The board held a brief discussion with regard to the sewer project and specifically the inspection work to be performed. (3) Motion tost, seconded by Strnisa authorizing the chairman to executive the agreement (Step III General and on the job inspection and other Engineering Services) with Ferrero Associates. Motion carried 3 to 1 vote. (4) Kelly requested that you submit a report by the next meeting of what has been expended to date on engineering fees for the sewer project. April 15, 1986: You stated that you had prepared a breakdown of the engineering fees, as follows: Studies and reports $45,000. (These fees were incurred prior to you becoming the Authority Engineer). Design and preparation of plans and specifications - $250,000, General inspection and special reports - $173,000, on the job inspection of construction $472,000, operation and maintenance manual $8,000 and a one year operation instruction - $13,800. (1) Moschetta asked if any of the engineering fees are grant eligible. You stated that 93% of the fees are grant eligible. Moschetta asked if the fees are in line with fees charged by other firms in relationship to a sewer project of the size of North Strabane Authority has undertaken. You stated that they are comparable to other firms in that Ferrero and Associates developed the fees with the assistance of the Pennsylvania Department of Environmental Resources. You also stated that his firm's fees are based on the recommended fees of the Pennsylvania Society of Professional Engineers. May 20, 1986: Inspection for sewer project. (1) You reported that you were prepared to handle the inspection work of the sewer project unless the board directed otherwise. Mr. Joseph L. Ferrero Page 55 (2) You stated that in your contract with the authority, there were two categories of inspections, general and on- the -job inspections. The on- the -job inspection is $472,000 while the general inspection is $172,000. You said the authority would be billed at the rate established in the contract and the number of hours. You also said the Department of Environmental Resources approved the inspections, and that you have a fee schedule recommended by the Pennsylvania society of engineers. (3) Kelly made a motion authorizing Ferrero and Associates to proceed with the terms of the Engineering Agreement, Step III General and on the job inspection and other Engineering Services with regard to the hiring of inspectors for the sewer extension project. A letter is to be sent to Ferrero and Associates. Strnisa seconded the motion. Motion carried unanimously. r. June 17, 1986: Letter of June 6, 1986 from Ferrero & Associates read by Chairman Moschetta. This letter compares engineering fees and inspectors and manager salaries if the authority did the hiring as opposed to Ferrero Associates doing the hiring. (1) Inspectors - 8 hours per day at $8 /hour times 400 days would be $76,800 whether the Authority or Engineer did the hiring. (2) Manager - 1.1 years or 400 days at $25,000 /year. Ferrero and Associates would have no cost, the authority would have a cost of $27,500. (3) Payroll burden - Ferrero and Associates payroll burden is 20% or $15,360 if the Authority hired the inspector the payroll burden would be 12% or $12,516. (4) Overhead - Ferrero and Associates' overhead is 100% of the payroll or $76,800. The Authority's overhead to compile payroll records, submit monthly payment requests and grant application, and prepare the records for audit would be 10% or $10,430. (5) Profit - Ferrero and Associates profit margin is 14.74% or $24,904.70 if Ferrero and Associates hired the inspectors the total bill to the authority would be $193,864.70, if the authority hired the inspectors the cost would be $127,246. Mr. Joseph L. Ferrero Page 56 (6) June 17, 1986: Correspondence dated June 3, 1986 from Tim Drier, Pennsylvania Department of Environmental Resources, Grants Section, Southwestern Region read into the minutes. The letter stated, in part, a number of issues were raised that required our additional comment. (a) Engineering service procurement: A question was raised relative to the project design being completed by Fayette Engineering and the engineering services during construction being handled by Ferrero and Associates when no open and advertised procurement procedures for construction services were followed. We believe that considering Mr. Ferrero was your engineer during design, was a partner in Fayette Engineering and due to the dissolution of the partnership and your desire to continue using Mr. Ferrero's services; no additional procurement procedures had to have been followed. (b) Indirect costs for field inspectors: A reference was made to 41 CFR Section 1- 15.403 -3 of the federal regulations which indicates that the wages of field personnel should not generally be burdened with all the indirect costs of the contractor's central office. This section of the regulations was replaced on October 2, 1984 with 48CFR Part 31 which under Section 31.203(d)(3) indicates the contractor's (in this case your engineer's) accounting principles may require examination when indirect cost groupings developed for a contractor's primary location are applied to off -site locations. We're, therefore, anticipate that upon final EPA audit, the auditor will, as is normal, examine the overhead applied to field personnel as well as to all the engineering services and determine what is justifiable. Upon audit examination, the overhead factor could be more or less than the 100% presently utilized by your engineer. 8. June 17, 1986: Excessive total engineering costs: (1) Questions have been raised with respect to the engineer's costs being excessive. The base used, by Mr. Joseph L. Ferrero Page 57 those raising the questions, was the engineering costs as a percentage of the construction bid cost. A review of our files indicates that the engineering costs for design and construction services is a percent of bid cost range from 14.5% to 23.1% on five recently funded EPA projects. You project reflects an engineering cost of 18.4% well within the range of the other projects. (2) Excessive time estimates for on -site inspection: We can agree that the estimated inspection time is more than one would expect to be needed should the project proceed without significant unforseen problems. We do believe that a high estimate for inspection services is preferred to a low estimate that ultimately proves too low and adversely impacts the quality of the project inspection. The inspector's cost as well as the other engineering services during construction with the exception of the operation and maintenance manual preparation are to be charged on a cost basis. Therefore, if the inspection time is not needed to the extent presently estimated, there should be no related cost or charge for the excess. It is as you know, incumbent upon your authority to monitor all project costs to assure that they are justifiable. However, in light of the present controversy surrounding the inspection time estimate, it may be wise to emphasize your monitoring of the inspection portion of the engineering work. t. July 15, 1986: Solicitors Report. (1) Mr. Anthou stated that relative to the engineering contract between the Municipal Authority and Ferrero and Associates regarding the question as to whether Mr. Ferrero is a public employee or public official his research indicates, according to the code, that Mr. Ferrero is neither an employee or public official, therefore, there is no violation or conflict of interest. (2) Citizens Comments. Mr. Kane wanted to know the actual cost of Mr. Ferrero's overhead is. Mrs. Courie stated that at the June meeting Mr. Kelly requested an itemized statement from Mr. Ferrero and Mr. Anthou saying what has been spent on the project, what was budgeted and what the balance is. Mr. Kelly stated that he has not received Mr. Joseph L. Ferrero Page 58 anything yet, however, neither Mr. Ferrero nor Mr. Anthou have submitted a bill since that meeting. Mr. Krane wanted to know if the Board would be receiving proof of Mr. Ferrero's out of pocket expenses. Mr. Ferrero stated that the information would be available to the board as long as it does not go into how he does business and profits. I will have breakdowns of all those numbers as they pertain to the project. Mr. Moschetta asked if the costs were reviewed by the Pennsylvania Department of Environmental Resources. Mr. Ferrero stated that the percentages were scrutinized by the Pennsylvania Department of Environmental Resources. Mr. Krane asked why we have to pay Mr. Ferrero $8,000 for marketing. Mr. Ferrero stated that possibly in this job there will be no money spent for marketing. Mr. Krane stated that the contract should reflect that. Mr. Ferrero stated that at the end of the job it would. Mr. Kelly stated that any contract he has been involved with was written in a similar manner. u. July 29, 1986: Citizen's Comments. (1) Bruce Krane: Section 806 "Engineers and Architects Not to Be Interested in Contracts" It shall be unlawful for any engineer in employ of the township and engaged in the preparation of plans, specifications or estimates to bid on any public work and any letting of work in such township. It also shall be unlawful for the officers of the township charged with the letting of any public work to award any such contracts to any such engineer in the employ of the township. It shall be unlawful for any engineer in the employ of the township to have any interest in any contract or public work in such township, or receive any remuneration in such contract. Any person who violated any provisions of this section shall be guilty of a misdemeanor and conviction thereof shall be sentenced to pay a fine not exceeding $500 or undergo imprisonment of not more than 6 months or both in the discretion of the court and shall forfeit his office. Mr. Krane stated that I would submit, as a lay person reading this, this section definitely covers what we are talking about. (2) Mr. Moschetta deferred this matter to the legal opinion of the Boards respective solicitors. Mr. Anthou stated that the Board has already discussed this matter. Mr. Mr. Joseph L. Ferrero Page 59 Ferrero is not a public employee, generally he is, but there are no deductions to his pay for social security, etc. He was appointed by the Board of Supervisors. 46. Environmental Protection Agency, Procurement Under Assistance Agreements, 40 CFR Part 33, Vol. 48, No. 60, March 28, 1983 provides in part: 633.270 Code of Conduct. (a) Recipients shall maintain a written code or standards of conduct which shall govern the performance of its officers, employees, or agents engaged in the award of administration of sub agreements supported by EPA funds. No employee, officer or agent of the recipient shall participate in the selection, award or administration of a subagreement supported by EPA funds if a conflict of interest, real or apparent, would be involved. (b) Such a conflict would arise when: (1) Any employee, officer or agent of the recipient, any member of their immediate families, or their partners have a financial or other interest in the firm selected for award, or (2) An organization which may receive or has been awarded a subagreement employes, or is about to employ, any person under paragraph (b)(1) of this section. (c) The recipient's officers, employees or agents shall neither solicit nor accept gratuities, favors or anything of monetary value from contractors, potential contractors or other parties to subagreements. (d) Recipients may set minimum rules where the financial interest is not substantial or the gift is an unsolicited item of nominal intrinsic value. (e) To the extent permitted by State or local law or regulations, the recipient's code of conduct shall provide for penalties, sanctions or other disciplinary actions for violations of the code by Mr. Joseph L. Ferrero Page 60 the recipients's officers, employees or agents or by contractors or their agents. 47. As authority engineer you were responsible for insuring that all authority projects were completed in accord with awarded contracts: a. In the case of the sewer project, you thus were responsible for inspecting your own work as the prime contractor. 48. By letter dated August 1, 1986, George Anthou wrote to James Mochetta, authority chairman, in response to a request regarding the legality of the contract between the Authority and Joseph Ferrero for the sewer extension project (Grant Project No. P- 420 - 805 -02) Anthou's letter provided, in part, the following legal opinion: a. Mr. Ferrero, who is appointed by the authority board, is not an employee of the Township, rather an independent contractor accountable to the authority board. There is no provision in the Municipality Authorities Act which preclude Mr. Ferrero from being retained by the Authority as its project engineer. b. Mr. Ferrero's contract is questioned under Section 65806 of the Second Class Township Code which states: "It shall be unlawful for any architect or engineer, in the employ of the township, and engaged in the preparation of plans, specifications or estimates, to bid on any public work or any letting of such work in such township." c. Mr. Ferrero is not a township employee and therefore, is not in violation of the aforementioned Statute. d. Since this appointive position is one that is exercised at the discretion of the Board of Supervisors, the engineer is retained at the will of said board. In this context, he is not an employee of the township as defined in section 65806. e. The legality of the engineer's contract is not voidable because said contract was not subjected to a bidding process. There is no such bidding requirement in the Municipality Authorities Act, hence this contention fails. Additionally contracts involvina wrsonal or Drofeseiona) services are not subiect to bidding. Mr. Joseph L. Ferrero Page 61 f. The federal agency funding the grant, The United States Environmental Protection Agency and the governmental entity overseeing said project, The Pennsylvania Department of Environmental Resources, have reviewed subject contract in depth and determined that it is valid and reasonable. 49. Your attorney provided the following information during the course of your interview with State Ethics Commission investigators: a. The Ethics Act was passed in 1978, and prior to that time there were no problems in dealing with matters in the manner as involved here. The engineers should not be required to have known the intracourse of the State Ethics Act. b. Engineers have always been in a difficult position, and the Ethics Commission's position on such issues would prohibit engineers from being employed by any private party if the engineer serves on a municipal entity. c. The Ethics Commission is now imposing new standards on the relationship between the consultant engineers and their governmental clients which never existed before 1978, and those standards are much stricter than they were either according to the practice in the trade, or according to the Professional Engineers Code of Ethics. It's very difficult to see how that strict interpretation being put out by the Ethics Commission is necessarily the one to be followed. d. Mr. Ferrero had no criminal intent or self aggrandizement regarding his relationship with either the township or the Authority. Mr. Ferrero had no intention to hide his representation of private clients. Mr. Ferrero had no idea exactly how far the Ethics Commission was going to carry their interpretation of what engineers should do and how they should operate. There was never any conflict, and Mr. Ferrero wasn't trying to deceive either party and the fact that he had those contracts with private clients were incidental to his trying to make a living and they didn't have anything to do with his being the township engineer. e. The municipal authority is an entity separate and apart from the township. When the Authority hires Mr. Ferrero, the fees were established, by the Municipal Authority. Mr. Ferrero has nothing to do with approving his own fees. f. Mr. Ferrero's fee of $150 a month is minimal. North Strabane is a small township, the amount of work involved in being the township engineer won't sustain an engineer, he Mr. Joseph L. Ferrero Page 62 g. must obtain some other work. So he does enter into contractual relationships with private clients. Mr. Ferrero is not a governmental employee in his capacity with the Authority. He is therefore, not subject to the Ethics Act. i. Regarding Mr. Ferrero's contract to perform work for the township, there was an open and public process by which he was employed. The process used by the Authority, in employing Mr. Ferrero, was exactly what they were required to do by the Environmental Protection Agency and the Department of Environmental Resources. B. Discussion: As the Engineer for North Strabane Township, you are a "public employee" as that term is defined under the Ethics Act and Regulations of the State Ethics Commission. 65 P.S. 402; 51 Pa. Code 1.1. As such, you are subject to the Ethics Act and the restrictions therein are applicable to you. Initially, it is noted that Section 5 of Act 9 of June 26, 1989 provides, in part, as follows: "This amendatory act shall not apply to violations committed prior to the effective date of this act, and cause of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this section, a violation was committed prior to the effective date of this act if any elements of the violation occurred prior thereto." Since the occurrences in this case transpired prior to the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 170 of October 4, 1978, P.L. 883 to determine whether the Ethics Act was violated. 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 Mr. Joseph L. Ferrero Page 63 of his immediate family, or a business with which he is associated. 65 P.S. 5403(a). Under Section 3(a), this Commission has determined that use of office by a public official to obtain a financial gain for himself or a member of his immediate family or a business with which he is associated which is not provided for in law transgresses the above provision of law. Thus, use of office by a public official to obtain a financial gain which is not authorized as part of his compensation is prohibited by Section 3(a): Hoak /McCutcheon, Orders No. 128, 129, affirmed McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983); Yacobet, Order No. 412 -R, affirmed Yacobet v. State Ethics Commission, Pa. Commw. Ct. , 531 A.2d 536 (1987). Similarly, Section 3(a) of the Ethics Act would prohibit a public official /employee from using public office to advance his own interests; Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, 116 Pa. Commw. Ct. 19, 540 A.2d 1374 (1988). Likewise, a public official /employee may not use the status or position of public office for his own personal advantage; Huff, Opinion 84 -015. In the instant matter, the allegation relates to whether you violated Section 3(a) quoted above regarding preparing plans for private clients and then passing upon those same plans for review or a recommendation for approval as municipal engineer. Factually, you hold the positions of Engineer for the Township, the Municipal Authority, and the Planning Commission. In these roles, you were asked to review, approve or recommend for approval plans which you, the Firm of Fayette Engineering, or the firm of Ferrero & Associates had performed services in a private capacity. You were a 50% partner in Fayette Engineering, and the sole owner of Ferrero and Associates. In certain matters that came before the above municipal bodies, you performed services both as a representative of the township and for private clients. Your relationship with the following clients will be discussed: Kenneth Bricker, Joyce and Aubrey Lee, George and Jean Mantalis, Hershey Creamery Company and Curtis Machine Company. Mr. Bricker employed you or your firm Fayette Engineering to make plans to subdivide several properties in North Strabane Township. The DiPalma property and the Twin Gate Estates subdivision plans were drawn by Fayette Engineering and signed by R.B. Mechling Jr., partner. In your role as Planning Commission Engineer, you reviewed and provided comment for both of these plans. You recommended the Twin Gates approval to the township. When Mr. Bricker sued the township over an unrelated matter, you ceased to further represent him. You did receive over $4,000.00 from Mr. Bricker for the services you performed for him. Mr. Joseph L. Ferrero Page 64 Fayette Engineering surveyed the Lee's property for subdivision. The plans for subdivision were submitted for the approval of the Planning Commission, and in a letter to the Commission, you recommended approval. The plans were prepared by Mr. Mechling, and the Planning Commission gave its approval. The Mantalis' submitted a proposal for subdividing their land. The proposal required the approval of the Township Supervisors, the Municipal Authority and the Planning Commission. You reviewed the plan for the Planning Commission and recommended approval to the Township. The facts are in dispute as to who prepared the Mantalis plans. The plans were signed by Frederick Omer; however, Mr. Omer claims he was acting as principal and you were the agent. You however, claim Fayette Engineering did not prepare the plans, but allowed Mr. Mantalis to use your draftsman to assist in preparing the drawings. You claim you told Mantalis he should seek someone else's seal for the plans since you were the Township Engineer. Ferrero Associates planned and surveyed the site for a building the Hershey Creamery Co. wanted to build; however, you took no action to recommend the site plan before the Township Supervisors, since you were involved in preparing it. You did review the matter as Engineer for the Planning Commission and wrote several letters to that Commission; you reviewed the matter for the township board of supervisors and you reviewed plans as to sewer lines in which Hershey and other corporations would tap in lines. You did review the proposed subdivision before the Township Supervisors as their engineer and advised that it met township requirements. In addition, the subdivision required the Township Planning Commission to abandon a small amount of property. Although you made no formal recommendation for approval, you stated you "saw no reason the Township shouldn't vacate the road ". Finally, you were paid $250 by the Township to review the subdivision and the vacation plans for the project. You also billed and received payment from Hershey Creamery for the services you performed in connection with their proposed facility in the industrial park. Ferrero Associates performed some work in planning a drainage system for the Curtis Machine Company. Later, Curtis Machine submitted a plan to move the company to a new site. As Planning Commission Engineer, you reviewed the matter as Planning Commission Engineer and the site plan was approved subject to your stipulations. Fayette Engineering received approximately $900.00 from Curtis Machine Company for engineering services in preparing the site plan. Your actions in simultaneously representing the municipal bodies and clients on the same matters is indicative of the type of conflict that the Ethics Act was designed to prohibit. Although public office is a public trust (65 P.S. 401), you have used public office for your Mr. Joseph L. Ferrero Page 65 own personal financial gain by privately working on plans for compensation which thereafter would come before you as municipal engineer for your review /approval. Such action on your part reflects the highest level of insensitivity and total disregard for public office. In several instances, there is no way of knowing whom you are representing in your work or action - the municipal body or the private client. One thing is clear in all of these instances - you are ultimately representing yourself and the advancement of your own financial aggrandizement at the expense of the public trust. It is obvious to this Commission that you have developed a financially secure relationship whereby a private client can come to you for engineering services with an implicit self- assurance that the work which you perform for them will be later reviewed by you in your official capacity with a future approval guaranteed. Such actions on your part constitute a violation of Section 3(a) of the Ethics Act. All of the component elements of Section 3(a) have been implicated in these circumstances. As a public employee, you have used public office through the review /or recommendation for approval of plans as to which you also performed private engineering services. You obtained a financial gain in two respects: the private fees and that portion of your municipal compensation wherein you reviewed /recommended for approval your own private engineering work. The gain is other than compensation provided by law because no authorization exists for you to be paid for reviewing /approving your own private work. You, however, argue that you were not trying to deceive either side (municipal /private clients) and your action, except with respect to the Lee sub - division plan, was in accord with an 1984 Advice of Counsel. Although you do not specify the advisory by name, it appears that you are referring to Hartman, Advice 84 -627. The cited advisory is unavailing. First, you admit that you failed to follow its directives as to the Lee sub- division plan. Secondly, the advisory directs public disclosure and recusal which was not done in your case. Thirdly, the advisory was not directed to you and is not a good faith defense under 65 P.S. 407(9)(ii). Lastly, the advisory, being an Advice of Counsel, was not a formal Opinion of the Commission and thereby does not have the precedential force that you attribute. As to your other argument that you did not intend to deceive, two points must be made. First, intent is not a requisite element for a violation of the Ethics Act. Yacobet v. State Ethics Commission, supra. Secondly, it is clear to this Commission that you were intent upon and driven by the desire to advance your own personal financial interest in callous disregard of the public trust. For the above reasons this matter will be referred to the appropriate law Mr. Joseph L. Ferrero Page 67 Since the process was an "open and public" one, it can not be said that you have violated Section 3(c) of the Ethics Act. However, this Commission has, when warranted, referred a case to the appropriate law enforcement authority for further review. Julian,, Order 472 -R; Widmer, Order 608 -R. Commonwealth Court has upheld such practice by this Commission. See Widmer v. State Ethics Commission, filed at 2621 C.D. 1988 on February 13, 1989. We believe that there are substantial questions as to this aspect of the case which compel us to take such action. Of concern to this Commission is how your firm received the highest score as to the criteria for awarding the bid. In particular, one of the three categories for evaluation of the submitted bids involved participation by small, minority women or labor surplus area firms. Your firm received a maximum score in that category even though the firm is not minority, women or labor surplus. Considering the circumstances that other firms, some of major renown such as Gannett Fleming, received significantly lower scores, serious questions arise as to the selection process for the project. Accordingly, although we find no violation of Section 3(c) of the Ethics Act under these circumstances, the matter will be referred for further review. C. Conclusion and Order: 1. An Engineer for North Strabane Township, you are a public employee subject to the provisions of the Ethics Act. 2. You violated Section 3(a) of the Ethics Act when you as a municipal engineer reviewed or approved plans for persons who employed you or with whom you had a business relationship. 3. The finding of a violation of Section 3(a) of the Ethics Act will be referred to the appropriate law enforcement authority with this Commission's recommendations that a prosecution be instituted against you. 4. You did not violate Section 3(c) of the Ethics Act when North Strabane Township Municipal Authority awarded a contract to you through an open and public process. 5. As to the finding in paragraph 4, this Commission believes that questions exist which warrant referral for further review by the appropriate law enforcement authority. This Order is final and will be made available as a public document fifteen days after issuance. However, you may request reconsideration which will defer public release of this Order pending Mr. Joseph L. Ferrero Page 68 action on your request by the Commission. A request for reconsideration, however, does not affect the finality of this Order. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of your reasons as to why reconsideration should be granted in conformity with 51 Pa. Code 52.38. This Order is final and will be made available as a public document fifteen days after issuance. However, you may request reconsideration which will defer public release of this Order pending action on your request by the Commission. A request for reconsideration, however, does not affect the finality of this Order. A reconsideration request must be received at this Commission within fifteen days of issuance and must include a detailed explanation of your reasons as to why reconsideration should be granted in conformity with 51 Pa. Code 52.38. The files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a) during the fifteen day period and no one, including yourself, unless the right to challenge this Order is waived, may violate confidentiality by releasing, discussing or circulating this Order. However, confidentiality does not preclude you from discussing this case with your attorney at law. Any person who violates 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, 65 P.S. 409(e). By th Commission 4 A elena G. Hughes Chair G. Sieber Pancoast did not participate in this matter.