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HomeMy WebLinkAbout1184 DonaldIn Re: Ruth Donald File Docket: X -ref: Date Decided: Date Mailed: Before: Daneen E. Reese, Chair Louis W. Fryman, Vice Chair John J. Bolger Frank M. Brown Susan Mosites Bicket Donald M. McCurdy 00- 009 -C2 Order No. 1184 2/26/01 3/12/01 This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding a possible violation of the Public Official and Employee Ethics Law, Act 9 of 1989, P.L. 26, 65 P.S. §401 et seq., by the above -named Respondent. At the commencement of its investigation, the Investigative Division served upon Respondent written notice of the specific allegation(s). Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed and a hearing was waived. The record is complete. A Consent Agreement and Stipulation of Findings were submitted by the parties to the Commission for consideration. The Consent Agreement was subsequently approved. Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11, Act 93 of 1998, which essentially repeats Act 9 of 1989 and provides for the completion of pending matters under Act 93 of 1998. This adjudication of the State Ethics Commission is issued under Act 93 of 1998 and will be made available as a public document thirty days after the mailing date noted above. However, reconsideration may be requested. Any reconsideration request must be received at this Commission within thirty days of the mailing date and must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). A request for reconsideration will not affect the finality of this adjudication but will defer its public release pending action on the request by the Commission. The files in this case will remain confidential in accordance with Chapter 11 of Act 93 of 1998. Any person who violates confidentiality of the Ethics Law is guilty of a misdemeanor subject to a fine of not more than $1,000 or imprisonment for not more than one year. Confidentiality does not preclude discussing this case with an attorney at law. Donald, 00- 009 -C2 Page 2 I. ALLEGATION: That Ruth Donald, a public official in her capacity as a member of the Beaver Meadows Municipal Authority, Carbon County, violated Section 3(a)/1103(a) of the State Ethics Act (Act 93 of 1998) when she used the authority of her position to obtain compensation not provided for by law; and when she accepted and approved payments for attending meetings of the Authority which were not set by the appointing authority, Beaver Meadows Borough Council; and when she participated in approving hours worked and wages for her husband as a part -time employee. II. FINDINGS: 1. Ruth Donald served as a member of the Beaver Meadows Municipal Authority Board from June 2, 1980, until resigning on or about September 13, 1999. a. Donald also served as Authority Secretary from June 11, 1980, until on or about September 13, 1999. 2. Donald was appointed and reappointed to the Municipal Authority Board as follows: a. Initial appointment by Council on June 2, 1980. b. Reappointed by Council on January 7, 1985; January 2, 1990; and January 3, 1995. 3. Ruth Donald's husband, Richard Donald, has been a member of Beaver Meadows Borough Council since approximately 1996, until approximately December 31, 1999. a. Richard Donald has also served as an employee of the Municipal Authority since 1980. b. Richard Donald's employment with the BMAA coincided with his wife's employment to the Authority. 4. The Beaver Meadows Municipal Authority (BMMA)was created on August 13, 1963, under the provisions of the Municipal Authorities Act of 1945 by the Borough of Beaver Meadows, Carbon County. a. A five (5) member Authority Board was created with each member appointed to a five (5) year term. b. Member terms are staggered so one position is up for appointment annually. c. Beaver Meadows Borough Council is the appointing body for the Municipal Authority Board. 5. The BMMA provides water and sewer service for the Borough of Beaver Meadows. 6. The Authority held one (1) regular meeting per month to handle Authority business. a. Issues relating to sewer and water operations were discussed during each regular meeting. b. The Authority did not hold separate regular meetings relating strictly to sewer or water issues. Donald, 00- 009 -C2 Page 3 c. Special meetings and /or work sessions were held as needed. 7 Members of the Beaver Meadows Municipal Authority have been compensated for their attendance at Authority meetings. a. The March 5, 1970, minutes of the Authority state that the Authority on that date set the amount of compensation for meeting attendance at $10.00 per month effective May 8, 1969. b. This compensation existed prior to Donald becoming a member of the Authority. c. This compensation was set by the BMMA. 8. The Beaver Meadows Borough Council is responsible for making appointments and setting compensation for Authority Board members when attending meetings. 9. The Beaver Meadows Municipal Authority took action setting and increasing compensation for Board members attending meetings and holding officer positions: a. December 14, 1992: "A motion by Andy Rusnock and seconded by Steve Delman to pay board members $20.00 from water and $20.00 from sewer. It was brought to our attention that both should be paying directors fee(s) since both water and sewer business is conducted at the regular meeting. Roll call - all yes. A motion to also make this retroactive to January 1, 1992, was made by Steve Delman and seconded by John Hearity. Roll call - all yes." Present: Steve Delman, Andy Rusnock, Mark Moyer, Ruth Donald, John Hearity b. December 13, 1993: Motion approved setting the compensation of the treasurer and secretary at $300.00 per quarter. c. January 15, 1996: "Meetings: to increase by $10.00 each water and sewer. Motion Mark Moyer, seconded Ruth Donald. Roll call - all yes." Present: Steve Delman, Ruth Donald, Bill Hines, Mark Moyer Absent: Andrew Rusnock d. Motion approved increasing the compensation of the secretary and treasurer by $100.00 per quarter. Abstention by Donald. 10. The Beaver Meadows Borough Council was advised of the recommended increases in compensation for Board members attending meetings of the Authority and the members of the BMMA believed the increases were approved by the Borough Council before such increases were implemented. The minutes of the Beaver Meadows Borough Council do not reflect any official action of the Borough Council approving increases in the compensation for meeting attendance of members of the BMMA. 11. Members of the BMMA have routinely been employed by the BMMA on a part -time basis. 12. Both members of the BMMA and residents of the Borough have regularly been employed by the Authority as part -time employees. Donald, 00- 009 -C2 Page 4 13. Compensation for board members employed by the BMMA has been set by the Board. a. The last increase in salary for board members employed by the BMMA was approved on January 15, 1996, raising the salary to $9.50 per hour. 14. From 1980 to on or about September 13, 1999, Donald served as secretary, Authority member and part -time employee. 15. Payments to Donald for the positions of employee, secretary and board member were included with the Authority's monthly bills. a. Donald was compensated from both the Authority's sewer and water funds. 16. The BMMA's monthly bills to be paid, including salaries, are approved during regular Authority meetings. a. Itemized bill lists are voted on in their entirety by a single motion. 17. BMMA members, including Donald, have been compensated in equal amounts from both the sewer fund and water fund for attendance at Authority meetings. a. Donald participated in approving the source of payments during the December 14, 1992, board meeting. 18. Donald's compensation for performing the duties of BMMA secretary was paid from both the water and sewer accounts. 19. Donald regularly participated in the routine payment of Authority bills which payments at times included the approval of payments to herself as an Authority member, Authority secretary and a part -time employee of the Authority, and to her husband as a part -time employee of the Authority. 20. Donald received the following payments per year from the Municipal Authority for meeting attendance as follows: 1995 TOTAL $560.00 1996 TOTAL $990.00 1997 TOTAL $540.00 21. Ruth Donald received meeting pay totaling $2,090.00 between March 13, 1995, and September 8, 1997. a. Annual totals were as follows: 1995: $ 560.00 1996: $ 990.00 1997: $ 540.00 Total: $2,090.00 22. Donald participated in Authority action taken to approve the payment of meeting pay for herself on sixteen (16) occasions between March 13, 1995, and September 8, 1997. Donald, 00- 009 -C2 Page 5 23. After Rusnock and Moyer were advised that they should not receive compensation both as members of the Authority and the Borough Council, the receipt of meeting pay by BMMA members Andrew Rusnock and Mark Moyer ceased effective December 8, 1997. 24. BMMA members Ruth Donald, Stephen Delman and William Hines continued to collect payments for attending meetings from December 1997 until their resignations in 1999. a. The Borough Council was aware of these payments, however, the minutes of the Beaver Meadows Borough Council do not reflect any official action of the Borough Council to approve this compensation. 25. Beginning on December 8, 1997, on the advice of the Authority's accountant, meeting payments made to Delman, Donald and Hines were identified in the Authority's minutes as "payroll" on monthly bill lists. The time cards presented to the Authority itemize these payments between meeting attendance, compensation to officers, and for labor. a. Prior to December, 1997, payments for meeting attendance were identified in the Authority minutes as meeting payments. b. The payments thereafter were identified in the Authority's minutes as payroll and, on the advice of the Authority's accountant, payroll taxes were deducted therefrom. c. The purpose of the payments identified in the Authority's minutes after December 8, 1997, as "payroll" were for meeting attendance, compensation to officers and labor. d. The Authority time cards under the heading "nature of work" described the work for which payments were made to Donald, Delman and Hines as for meeting attendance, compensation to officers and labor, as appropriate. 26. Donald received six (6) additional meeting pay payments totaling $1,080.00 since December 8, 1997. a. The Authority's financial records were presented to Council annually at the end of each fiscal year. The fiscal year for the Authority was from September 1 to the following August 31' b. Since December 8, 1997, these payments were included under the heading payroll in the Authority's minutes and itemized on the Authority's time cards. 27. Authority time cards include the following payments for attendance at meetings to Donald since December 8, 1997: 1997 (12/08/97) $ 180.00 1998 $ 720.00 1999 $ 180.00 Total $1,080.00 28. Donald participated in Authority action to approve bill lists which included meeting Donald, 00- 009 -C2 Page 6 pay identified as payroll since December 8, 1997. 29. In her capacity as BMMA Secretary, Donald signed checks issued by the Authority for payroll and bills. 30. In her capacity as BMMA secretary, Donald signed checks issued by the Authority for payroll and bills, including checks issued to herself. All such checks also required the signature of an additional Authority member. 31. Ruth Donald and the other four members of the Municipal Authority Board resigned on or about September 13, 1999. a. Council accepted the resignation at their January 3, 2000, meeting. 32. Ruth Donald's husband, Richard Donald, was compensated by the Authority for labor on a part -time basis since 1980. a. Payments issued to Richard Donald were included in monthly Authority bill lists. 33. Ruth Donald regularly participated in Authority actions taken to approve bill lists which included payments to part -time employees of the Authority. Such payments included payments to her husband, Richard Donald, for work performed for the Authority. 34. Donald stated that at no time did she willfully or intentionally act to violate the provisions of the State Ethics Act or Public Official and Employee Ethics Law. 35. Donald stated that she believed her actions at all times were reasonable, in good faith, and permitted by the State Ethics Act and the Public Official and Employee Ethics Law. III. DISCUSSION: At all times relevant to this matter, the Respondent, Ruth Donald, hereinafter Donald, has been a public official subject to the provisions of the Public Official and Employee Ethics Law ( "Ethics Law "), Act 9 of 1989, Pamphlet Law 26, 65 P.S. §401, et seq., as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65 Pa.C.S. §1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegation is that Donald, as a member of the Beaver Meadows Municipal Authority violated Section 3(a)/1103(a) of the Ethics Act when she accepted and approved compensation for attending authority meetings which was not provided for by law as not approved by the appointing authority, Beaver Meadows Borough Council. Pursuant to Section 3(a) of the Ethics Act, a public official /public employee is prohibited from engaging in conduct that constitutes a conflict of interest. The term "conflict of interest" is defined under Act 9 of 1989 as follows: Section 2. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family Donald, 00- 009 -C2 Page 7 or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 P.S. §402. Section 3(a) of the Ethics Act prohibits a public official /public employee from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are reproduced above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Donald served as a member of the Beaver Meadows Municipal Authority (BMMA) from June 2, 1980, until her resignation on September 13, 1999. In addition, Donald was employed by BMMA in the capacity of Authority Secretary from June 11, 1980, until September 13, 1999. BMMA was created by Beaver Meadows Borough (Borough) for the purpose of providing water and sewer service to the Borough. The BMMA Board is composed of five members who are appointed by Borough Council on a staggered basis. The BMMA Board typically holds one regular meeting per month for both sewer and water operations. Under the Municipality Authorities Act, Borough Council is the appointing authority which sets the compensation for the BMMA Board members for meeting attendance. Prior to December of 1992, the compensation of Board members for attendance at BMMA meetings was $10 per month. However, on December 14, 1992, the BMMA Board, through its own purported action, passed a motion, retroactive to January 1, 1992, to increase the members' compensation by $20 from the water fund and $20 from the sewer fund. The motion passed unanimously by vote of Board Members Delman, Rusnock, Moyer, Donald, and Hearity. Subsequently, at a December 13, 1993, BMMA Board meeting, a motion passed to set the compensation of the treasurer and secretary at $300 per quarter. At a January 15, 1996, BMMA Board meeting, a motion passed to increase meeting compensation by $10 from the water fund and $10 from the sewer fund, by a vote of Delman, Donald, Hines, and Moyer. At that meeting, a motion also passed which increased the compensation of the secretary and treasurer by $100 per quarter. Donald abstained on that particular vote. Although Borough Council was advised of actions as to the BMMA Board, the minutes of Borough Council do not reflect any official action approving increases in compensation of the BMMA Board members. BMMA Board members have regularly been employed by BMMA with the salary set by the BMMA Board. Payments to BMMA Board Members for their positions of employment are typically included in the list of monthly bills. Both the compensation for BMMA Board members for meeting attendance and for employment are paid from sewer and water funds. Donald, as a BMMA Board member, routinely participated in the payment of bills which included payments to herself as both a BMMA Board member and employee. Donald, 00- 009 -C2 Page 8 The Stipulation of Findings reflects that Donald, as a BMMA Board member, received $560 in 1995, $990 in 1996, and $540 in 1997, the total of which for all years equals $2,090. Donald participated on 16 occasions to approve meeting payments to herself. Donald continued to collect payments for attending BMMA meetings until her resignation in September of 1999. In December of 1997, BMMA's accountant advised Delman, Donald, and Hines that their payments in the monthly bills list might be relabeled as "payroll" instead of "meeting payments." After that time, Donald continued to receive compensation for attending BMMA meetings, which payments were under the designation of payroll; the total of such payments from that point forward amounted to $1,080. Donald participated in BMMA Board action to approve bill lists which included the meeting pay that was identified as payroll beginning from December 8, 1997, forward. Lastly, Donald states that at no time did she willfully or intentionally act to violate the Ethics Act and further that she believes that her actions at all times were reasonable, in good faith, and permitted under the Ethics Act. Having highlighted the Stipulated Findings and issues before us, we shall now apply the Ethics Act to determine the proper disposition of this case. The parties' Consent Agreement sets forth a proposed resolution of the allegations. The Consent Agreement proposes that this Commission find that Donald, as a member of the Beaver Meadows Municipal Authority, unintentionally violated Section 3(a) of the Public Official and Employee Ethics Law when she obtained compensation not provided for by law by participating in actions of the Authority to increase the meeting pay for members of the Authority without prior recorded formal approval of the Beaver Meadows Borough Council. Further, Donald agrees to make payment, to the Borough of Beaver Meadows, in the amount of $2,660 through this Commission within thirty (30) days of the issuance of the Order. In applying Section 3(a)/1103(a) of the Ethics Act to the instant matter, it is clear that there were uses of authority of office on the part of Donald. As a BMMA Board member, Donald participated in actions to increase the monthly meeting pay for the board members. In addition, Donald participated in BMMA Board action to approve bills lists which included payments to herself for meeting pay. Such actions were uses of authority of office. See, Juliante, Order 809. Such uses of authority of office resulted in a pecuniary benefit to Donald consisting of the meeting pay which Donald received. The pecuniary benefit was private because the BMMA Board does not have the authority to increase the compensation for board members which must be set by the appointing authority of the BMMA Board, that is, Borough Council. Such action by Donald in setting her own compensation was contrary to law, in particular, the Municipality Authorities Act of 1945. Lastly, the private pecuniary benefit inured to Donald. Accordingly, we find that Donald unintentionally violated Section 3(a)/1103(a) of the Ethics Act when she as a BMMA board member participated in actions of the board to increase the meeting pay for BMMA members without the approval of Borough Council. We determine that the Consent Agreement submitted by the parties sets forth the proper disposition for this case, based upon our review as reflected in the above analysis and the totality of the facts and circumstances. Accordingly, Donald is directed to make payment to the Borough of Beaver Meadows in the amount of $2,660 through this Commission within thirty (30) days of the issuance of the Order. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. Noncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: Donald, 00- 009 -C2 Page 9 1. Ruth Donald, as a member of the Beaver Meadows Municipal Authority, was a public official subject to the provisions of Act 9 of 1989. 2. Donald unintentionally violated Section 3(a)/1103(a) of the Ethics Act when she, as a BMMA Board member, participated in actions of the Board to increase the meeting pay for BMMA members without the approval of Borough Council. In Re: Ruth Donald ORDER NO. 1184 File Docket: 00- 009 -C2 Date Decided: 2/26/01 Date Mailed: 3/12/01 1 Donald, as a member of the Beaver Meadows Municipal Authority, unintentionally violated Section 3(a)/1103(a) of the Ethics Act when she, as a BMMA board member, participated in actions of the board to increase the meeting pay for BMMA members without the approval of Borough Council. 2. Per the Consent Agreement of the parties, Donald is directed to make payment to the Borough of Beaver Meadows in the amount of $2,660 through this Commission within thirty (30) days of the date of issuance of this Order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, DANEEN E. REESE, CHAIR