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HomeMy WebLinkAbout1186 GaliziaIn Re: Stephen Galizia 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- 040 -C2 Order No. 1186 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 untimely filed and a hearing was deemed 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. §1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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 Act 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. Galizia, 00- 040 -C2 Page 2 I. ALLEGATION: That Stephen Galizia, a public official in his capacity as a Supervisor for Union Township, Lawrence County, violated the following provisions of the State Ethics Act (Act 93 of 1998) when he used the authority of his office for the private pecuniary benefit by approving payment for benefits for himself and his family without working the required number of hours under the township plan to be included in such benefits. Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). Section 1102. 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 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 Pa.C.S. §1102. II. FINDINGS: 1. Stephen Galizia has served as a Union Township, Lawrence County, Supervisor since January 1998. a. Galizia serves as the Supervisor liaison to the Planning and Zoning Hearing Boards. b. Galizia also was appointed as Assistant Roadmaster in 1998 and 1999 and Parks and Ground Supervisor in 1999. 2. Union Township is a Second Class Township and is governed by three elected supervisors. 3. Each year at reorganization meetings, the supervisors appoint individuals to fill various employment positions including roadmaster, secretary /treasurer, tax collector, zoning officer, etc. a. A wage sheet is usually attached to the reorganization meeting minutes that outlines the rates of compensation and benefits, if any, that are approved by the board for the employees. Galizia, 00- 040 -C2 Page 3 1. The wage is prepared after the meeting and after the minutes have been prepared and approved. b. The wage sheet is made available to the township auditors when setting wages and benefits for supervisors employed by the township. 4. The board of supervisors set minimum hour requirements for some township employees. a. Roadmaster hours were set at a minimum of forty (40) hours per week. 1. The roadmaster traditionally had been a township supervisor. b. The secretary /treasurer hours were set at a minimum of twenty -one (21) hours per week. c. These hour requirements are listed on the wage sheet. d. In 1999 and 2000, assistant roadmaster hours were listed at 22 hours per week. e. These hours were not voted on by the board during reorganization meetings. 5. The township contracts with Highmark Blue Cross /Blue Shield (BC /BS) for basic medical benefits and the AFSCME Health and Welfare Fund for prescription, vision and dental benefits for township employees. 6. The township is billed monthly both from Highmark and AFSCME for health care premiums for township employees. a. Health insurance premiums are not submitted to the board of supervisors for approval prior to payment being made. b. The supervisors have approved a motion authorizing the township administrative secretary to pay utility and healthcare bills when received at the township office without supervisor approval. c. Payments are made by the township for health insurance premiums in advance for an upcoming month. 7 The Labor Agreement between the Township and AFSCME, AFL -CIO, includes benefits that township employees are entitled to receive. a. The agreement covers the period of November 16, 1997, through November 15, 2001. 8. During the late summer or the fall of 1998, Galizia discussed with the other members of the board of supervisors whether Galizia could be included on the township's health insurance plans. a. In 1998 the township did not have a policy in effect authorizing supervisors not employed by the township to be included in insurance plans. b. At that time Galizia was employed by SMG Enterprises, Inc. and was covered under his wife's employer's health insurance plan. Galizia, 00- 040 -C2 Page 4 c. In September 1998 Supervisors Kevin Guinaugh and Ralph Nuzzo agreed to appoint Galizia assistant roadmaster. 1. The position of assistant roadmaster did not exist prior to 1998. 9. During the September 24, 1998, Board of Supervisors meeting Galizia was appointed to the part -time position of assistant roadmaster by a 2 to 0 vote. a. Galizia abstained from this vote. b. The position did not exist prior to this meeting. 10. Supervisors Nuzzo and Guinaugh believed that Galizia should work a minimum of 22 hours per week to be eligible to receive benefits. a. This requirement was not included in the September 24, 1998, motion to appoint Galizia to the Assistant Roadmaster position. 11. At a special meeting on October 2, 1998, the Township Board of Auditors set Galizia's rate of compensation at $5.15 per hour and affirmed health benefits for him to be the same as other township employees. 12. Galizia began serving as the assistant roadmaster effective October 1, 1998. 13. Galizia and his wife began receiving township paid BC /BS benefits effective November 1, 1998. a. Galizia and his wife received these benefits continuously through December 31, 1999. 14. Galizia and his wife began receiving township paid AFSCME benefits effective December 1, 1998. a. Galizia and his wife received these benefits continuously through December 31, 1999. 15. At the reorganization meeting of the board of supervisors on January 4, 1999, Galizia was re- appointed to the position of assistant roadmaster. a. A twenty -two hour per week work requirement for the position of Assistant Roadmaster was listed on a wage sheet that was attached to the 1999 Reorganization Meeting Minutes and forwarded to the township auditors. 16. At the auditors' reorganization meeting on January 8, 1999, the auditors set Galizia's rate of compensation at $5.15 per hour and affirmed health benefits for him to be the same as other township employees. 17. Galizia took a leave of absence from his position as assistant roadmaster effective April 1, 1999. a. Galizia listed his purpose for the leave of absence was "personal reasons." b. Galizia submitted his request for a leave of absence via letter. 18. By letter dated April 28, 1999, Galizia resigned from the position of assistant roadmaster. Galizia, 00- 040 -C2 Page 5 19. Galizia's letter of resignation states, in part: "My wife and I will continue to pay for our hospitalization each month so no expense will be brought upon our taxpayers, just as others have done in the past." 20. The supervisors voted to accept Galizia's resignation on June 16, 1999. 21. Galizia did not make any payments or reimbursements to the township for healthcare coverage after resigning from the position of assistant roadmaster on April 28, 1999. a. Galizia was never billed for healthcare coverage during the time period when he was not employed by the township. 22. On or about June 16, 1999, the board of supervisors discussed appointing Galizia as supervisor in charge of Parks and Recreation. a. A similar position previously existed in the township but had been held by a township union employee. b. The position had been vacant for several years. 23. On June 16, 1999, the board of supervisors appointed Galizia to the part -time position of Supervisor of Parks and Grounds and Supply Purchaser. 24. Galizia began working as the Supervisor of Park and Grounds and Supply Purchaser on June 17, 1999. 25. At a special meeting on July 22, 1999, the auditors set Galizia's rate of compensation at $5.15 per hour and set benefits such as hospitalization, dental and vision the same as other township employees. a. Galizia did not receive compensation as the Supervisor of Park and Grounds and Supply Purchaser until after the auditors set his rate of compensation. 26. Galizia was laid off by Union Township effective November 17, 1999. a. The supervisors informed Galizia of the layoff via letter dated November 16, 1999. b. Township policy permits laid off employees to continue to receive benefits until recalled or permanently furloughed. 27. Galizia continued to receive township paid health benefits in 1999 following his resignation as assistant roadmaster and after his layoff until December 31, 1999. 28. Galizia has not been employed by or received benefits from Union Township since December 31, 1999. 29. The costs for health insurance paid by the township for township employees including Galizia is as follows: a. 1998: BC /BS: $135.16/week, $608.23 /month AFSCME: Did not receive in 1998 b. 1999: Galizia, 00- 040 -C2 Page 6 a. 1999 BC /BS: $608.23 /month - 1/99 through 10/99 AFSCME: $91.45 /month 30. During the time period following Galizia's resignation from the position of assistant roadmaster effective April 28, 1999, the township paid health insurance premiums for Galizia as follows: Week 4/29 -5/5 5/6 -5/12 5/13 -5/19 5/20 -5/26 5/27 -6/2 6/3 -6/9 6/10 -6/16 1999 Totals Cost of AFSCME Per Week $ 20.96 $ 20.96 $ 20.96 $ 20.96 $ 20.96 $ 20.96 $ 20.96 $146.72 Cost for BC /BS Per Week $ 141.45 $ 141.45 $ 141.45 $ 141.45 $ 141.45 $ 141.45 $ 141.45 $ 990.15 b. The cost of AFSCME benefits was $91.45 per month during this period in 1999. c. The cost of BC /BS was $608.23 from January 1999 through October 1999. d. The cost of BC /BS was $741.51 from November 1999 through December 1999. e. Weekly premium costs were determined as follows: BC /BS - January to October $608.23 /month x 10 months /43 weeks = $141.45 per week BC /BS - November to December $741.51 /month x 2 months /9 weeks = $164.78 per week AFSCME $91.45 /month x 11 months /48 weeks = $20.96 per week 31. All three supervisors and the appointed secretary/treasurer have signature authority on township accounts. a. Township checks require the signature of two supervisors and the secretary /treasurer. 32. Galizia signed township checks that were used to pay healthcare providers and included benefits to him and his wife during weeks that he was not employed by the township as follows: Payee Check Number BC /BS 8811 AFSCME 8812 BC /BS 8974 Check Date 03/25/99 03/25/99 06/07/99 Check Amount $6,146.80 $1,280.30 $6,146.80 Month of Coverage May 1999 April 1999 July 1999 a. Galizia did not sign all checks to the healthcare providers while he was an employee of the township. 33. Prior to Galizia being appointed assistant roadmaster, Township Solicitor, Donald Galizia, 00- 040 -C2 Page 7 Nicolls, advised supervisors regarding health benefits paid for by the township which working and non - working supervisors are entitled to receive. a. By letter dated August 26, 1998, Solicitor Nicolls advised the supervisors that a non - working or a working supervisor who took office on January 1, 1998, could be included within the township's insurance plans provided that the appropriate plan, including supervisors, was in place on or before December 31, 1997. b. Nicolls also advised that if a plan was enacted during a supervisor's term, the supervisor could not be included in the plan until the beginning of his next term of office. c. The township did not have any such plan in effect on or before December 31, 1997. 34. By letter dated December 1, 1999, Solicitor Nicolls advised the supervisors that working supervisors are entitled to the same benefits as non - supervisor employees, including benefits that an employee is entitled to receive when laid off. a. The supervisors must approve inclusion in the plan. b. A supervisor requesting inclusion in any existing township health plan must submit a letter in writing to the supervisors for their approval. c. This advice was in response to questions raised about Galizia after Galizia was laid off. 35. From April 28, 1999 through June 16, 1999, Galizia and his wife received township paid health benefits totaling $1,136.87 when he did not work for the township. III. DISCUSSION: At all times relevant to this matter, the Respondent, Stephen Galizia, hereinafter Galizia, has been a public official subject to the provisions of the Public Official and Employee 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 Galizia, as a Union Township Supervisor, violated Section 1103(a) of the Ethics Act when he used the authority of his office for township paid benefits for himself and his spouse without working the required number of hours under the township plan for the receipt of such benefits. Section 1103(a) of the Ethics Act quoted above prohibits a public official /public employee from engaging in conduct that constitutes a conflict of interest. Having noted the allegation, the applicable law and the procedural issue, we shall now summarize the relevant facts. Stephen Galizia has served as a Union Township Supervisor from January 1998, as Assistant Roadmaster in 1998 and 1999 and Parks and Ground Supervisor in 1999. At the reorganization meetings of Union Township, the supervisors appoint individuals to fill various employment positions such as roadmaster, secretary /treasurer, tax collector, and zoning officer. A wage sheet that outlines the rates of compensation and benefits approved by the board is made available to the township auditors when setting Galizia, 00- 040 -C2 Page 8 wages and benefits for supervisors employed by the township. The board of supervisors sets minimum hour requirements for some township employees. The township contracts with two different entities for basic medical, prescription, vision, and dental benefits for its employees. Health insurance premiums are not submitted to the board of supervisors for approval; the township administrative secretary pays utility and healthcare bills when received at the township office as per an authorization from the board. In the latter part of 1998, Galizia discussed with the other two supervisors whether he could be included on the township's health insurance plans. In 1998, the township did not have a policy in effect authorizing non - employee supervisors to be included in insurance plans. During the September 24, 1998, Board of Supervisors meeting, Galizia was appointed by a 2 to 0 vote to the part -time position of assistant roadmaster, a position which did not exist prior to 1998. Galizia abstained from that vote. The other two supervisors set a twenty -two (22) hour per week minimum requirement for Galizia to work as assistant roadmaster to be eligible for township paid health benefits. At a special meeting on October 2, 1998, the Township Board of Auditors set Galizia's rate of compensation at $5.15 per hour and affirmed health benefits for him to be the same as other township employees. Galizia began serving as the assistant roadmaster effective October 1, 1998. Galizia and his spouse began receiving township paid medical benefits effective November 1, 1998, which continued through December 31, 1999. At the reorganization meeting of the board of supervisors on January 4, 1999, Galizia was re- appointed to the position of assistant roadmaster. The supervisors again set a twenty -two (22) hour per week minimum requirement for Galizia to work as the assistant roadmaster. At the auditors' reorganization meeting on January 8, 1999, the auditors set Galizia's rate of compensation at $5.15 per hour and affirmed health benefits for him to be the same as other township employees. On April 1, 1999, Galizia took a leave of absence noting personal reasons. By letter dated April 28, 1999, Galizia resigned from the position of assistant roadmaster, stating, in part: "My wife and I will continue to pay for our hospitalization each month so no expense will be brought upon our taxpayers, just as others have done in the past." Galizia did not make any payments or reimbursements to the township for healthcare coverage after resigning from the position of assistant roadmaster. On or about June 16, 1999, the board of supervisors discussed appointing Galizia as supervisor in charge of parks and recreation. On June 16, 1999, the board of supervisors appointed Galizia to the part -time position of Supervisor of Parks and Grounds and Supply Purchaser, a vacant position previously held by a township employee. At a special meeting on July 22, 1999, the auditors set Galizia's rate of compensation at $5.15 per hour and affirmed health benefits for him to be the same as other township employees. Galizia was furloughed by Union Township effective November 17, 1999. The township has a policy which permits "laid off" employees to continue to receive benefits until recalled or permanently furloughed. Galizia continued to receive township paid health benefits until December 31, 1999. From April 28, 1999, after Galizia resigned as assistant roadmaster, the township paid $1,136.87 in health care benefits for Galizia. Township checks require the signature of two supervisors and the Galizia, 00- 040 -C2 Page 9 secretary /treasurer. Galizia cosigned township checks to healthcare providers that included payments for benefits to him and his spouse. Galizia did not sign all checks to the healthcare providers while he was an employee of the township. Having summarized the above relevant facts, we must now determine whether the actions of Galizia violated Section 1103(a) of the Ethics Act. The findings establish that Galizia as a public official used the authority of office in this case. But for the fact that Galizia is a supervisor, he could not have prevailed upon the other two supervisors for his appointment as Assistant Roadmaster and then as Supervisor of Parks and Grounds and Supply Purchaser. In addition, Galizia cosigned many of the checks to the benefits providers as to the insurance benefits that he and his spouse received at township expense. Such actions were uses of authority of office. See, Julliante, Order 809. The receipt of insurance benefits at township expense is a pecuniary benefit in that Galizia had no out of pocket expenses of his own to pay such premiums for himself and his spouse. See, Dusenberry, Order 1064. The pecuniary benefit inured to Galizia and his spouse who is a member of his immediate family as that term is defined under the Ethics Act. See, 65 Pa.C.S. §1102. The only remaining question is whether the pecuniary benefit is private. We have held that a pecuniary benefit is private if such benefit is not authorized in law in that the receipt of that benefit through the use of office would be contrary to law. See, Freind, Order 800. The resolution of this case turns upon whether Galizia was entitled to receive township paid insurance benefits. The answer lies in the Second Class Township Code (Code). Sections 65606(a) and (c)(1) of the Code provide in part: A decision by the township to pay, in whole or in part, to include supervisors not employed by the township in insurance plans, as authorized in subsection (c), shall not be implemented with regard to any nonemployee supervisor until the beginning of the next term of that supervisor. Supervisors, whether or not they are employed by the township, and their dependents are eligible for inclusion in group life, health, hospitalization, medical service and accident insurance plans paid in whole or in part by the township. Their inclusion in those plans does not require auditor approval, but does require submission of a letter requesting participation at a regularly scheduled meeting of the board of supervisors before commencing participation. The insurance shall be uniformly applicable to those covered and shall not give eligibility preference to or improperly discriminate in favor of supervisors. 65 P.S. §65606(a), (c)(1) Unfortunately, there is no case law interpreting this most recent amendment to this section of the Code. Similarly, there is no debate as to this provision in the legislative history. In Akerly, Order 976, we reviewed the prior amended version of this section of the Code; however, that version contained different phraseology from the current amendment. Galizia, 00- 040 -C2 Page 10 As a consequence, an isolated reading of the current amendment is the only available means for determining the circumstances under which a supervisor may receive township paid insurance benefits under the Code and derivatively whether Galizia violated the Ethics Act. The above section of the Code provides that supervisors, regardless of their employment status with the township, are eligible for insurance benefits provided they submit a written letter requesting participation at a regular board meeting and meet the three conditions that the plan is uniform, nondiscriminatory and nonpreferential as to eligibility. For nonworking supervisors, the plan needs to be in place before the beginning of their terms. One might argue that the grant of eligibility of supervisors as to township paid insurance benefits constitutes an unqualified right to such benefits. But such an approach might negate the three conditions imposed upon supervisors as to the receipt of such benefits. We ponder how the Code could give a seemingly unqualified right to supervisors to receive township paid insurance benefits, even if they are not employed, but qualify the receipt of such benefits by requiring uniform and nondiscriminatory application without eligibility preference to supervisors. Similarly, how can a supervisor who does not work be eligible while at the same time not be allowed to have an eligibility preference. It may very well be that the Code is inconsistent. The parties have filed a Stipulation of Findings together with a Consent Agreement wherein it is proposed to resolve the case by finding that Galizia technically violated Section 1103(a) of the Ethics Act when he received township paid health benefits from April 1999 to June 1999 totaling $1,136.87, with Galizia making payment to Union Township through this Commission of $1,136.87 within 30 days of the date of issuance of this order. In that the parties in this case, the Investigative Division and the Respondent through their counsels, have entered into the Consent Agreement following a negotiation process with each side accepting the terms, we will approve the Consent Agreement and defer interpreting the above provision of the Code. If or when that interpretation becomes necessary, hopefully there will be case law on the issue. We determine that the Consent Agreement submitted by the parties sets forth an appropriate disposition for this case, based upon the totality of the facts and circumstances. Accordingly, Galizia is directed to make payment of $1,136.87 through this Commission to Union Township within 30 days of the date of 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: 1. Galizia, as a Supervisor in Union Township, is a public official subject to the provisions of Act 9 of 1989. 2. Galizia technically violated Section 1103(a) of the Ethics Act when he received township paid benefits from April 1999 to June 1999 totaling $1,136.87. In Re: Stephen Galizia ORDER NO. 1186 File Docket: 00- 040 -C2 Date Decided: 2/26/01 Date Mailed: 3/12/01 1 Galizia, as a Supervisor in Union Township, technically violated Section 1103(a) of the Ethics Act when he received township paid benefits from April 1999 to June 1999 totaling $1,136.87. 2. Per the Consent Agreement of the parties, Galizia is directed to make payment of $1,136.87 through this Commission to Union Township within 30 days of the date of issuance of the 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