HomeMy WebLinkAbout1246 LivolsiIn Re: Lucian Livolsi
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Daneen E. Reese
Frank M. Brown
Susan Mosites Bicket
Donald M. McCurdy
Michael Healey
01- 069 -C2
Order No. 1246
9/4/02
9/25/02
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 Act, Act
9 of 1989, P.L. 26, 65 P.S. §§ 401 et seq., as codified by Act 93 of 1998, Chapter 11, 65
Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its
investi9ation, the Investigative Division served upon Respondent written notice of the specific
allegation(s). Upon completion of its investi9ation the Investigative Division issued and
served upon Respondent a Findings Report identified as an "Investigative Complaint." An
Answer was 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 Stipulation of Findings is quoted as the Findings in this Order. 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Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11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.
Livolsi 01- 069 -C2
Page 2
I. ALLEGATION:
That Lucian Livolsi, a (public official /public employee), in his capacity as Council
Person for the Borough of Canonsburg, Washington County, violated Sections 3(a)/1103(a),
3(f)/1103(f) and 4(a)/1104(a) of the Public Official and Employee Ethics Law (65 Pa.C.S.
§1101 et seq.) when he participated in actions and discussions of council resulting in a
business with which he and /or members of his immediate family is associated being awarded
contracts for the repair and maintenance of air conditioning units, furnaces and outdoor
lighting; when these contracts in excess of $500.00 were awarded without an open and public
process; and when he failed to file Statements of Financial Interests for the 1998, 1999 and
2000 calendar years.
II. FINDINGS:
1. Lucian Livolsi has served as a Councilman for Canonsburg Borough, Washington
County, since June 8, 1998.
a. Livolsi was appointed to fill an unexpired term.
b. Livolsi was elected Vice - President of Council at the January 2002 re-
organization meeting.
1. Livolsi previously held no office on Council.
2. Canonsburg Borough government consists of a nine member council and mayor.
a. Voting regarding the spending of Borough funds or other official action occurs
in roll -call fashion.
b. The board has, on occasion, taken action on matters by way of group
consensus.
c. The mayor votes on motions only in case of a tie.
3. Canonsburg Borough generally holds two Council meetings per month.
a. A workshop meeting is held on the first Monday of the month.
b. The legislative meeting is held on the second Monday of the month.
4. Alice Prokopovitch has served as the Borough Manager for Canonsburg Borough
since approximately January 1999.
a. As Borough Manager, Prokopovitch is responsible for contacting vendors when
various maintenance /repair services are required by the Borough.
b. Prokopovitch generally contacts vendors via the telephone regarding
maintenance /repair services required.
c. Prokopovitch does not publicly advertise for bids regarding services needed if
the work will not exceed the $10,000.00 bidding threshold as documented in the
Borough Code.
d. Prokopovitch generally contacts three to four vendors and obtains phone
quotes regarding work to be performed.
Livolsi 01- 069 -C2
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e. Prokopovitch discards the estimates after determining the low bidder unless the
cost of the work is significant.
1. Prokopovitch determines what is considered excessive based on the
service required.
5. Prokopovitch is authorized to approve the use of vendors for services in and around
the municipal building if costs associated with the services are not excessive.
a. Prokopovitch is authorized to determine which vendor is awarded the job.
b. Prokopovitch is not required to obtain prior approval of council before awarding
the job.
c. Approval of Council is provided after - the -fact by approving the monthly bill list
on which payment to the vendor is documented.
6. In approximately 1995, Canonsburg Borough replaced the existing HVAC system in
the municipal building.
a. The replacement was done in conjunction with the renovation of the municipal
building.
b. Controlled Climate Systems, Inc., 577 West Pike Street, Canonsburg, Pa
15317, installed the new HVAC system in the municipal building.
1. The system installed by Controlled Climate was covered by a one -year
warranty.
2. The Borough subsequently entered into service agreements with
Climate Control in 1996 and 1997 that took effect in 1997 and 1998.
7. Canonsburg Borough did not extend the warranty /maintenance agreement with
Controlled Climate after its expiration in 1998 due to the lack of satisfaction of the
quality of services provided by Controlled Climate.
8. Prokopovitch was looking to obtain a HVAC service agreement following the expiration
of the agreements with Controlled Climate.
9. Shortly after beginning his service on Borough Council in June 1998, Livolsi had a
discussion with Council members Joseph Gowern and Robert Rudge, Prokopovitch
(interim Borough Manager at that time), and Solicitor Patrick Derrico regarding
Southside Heating Company performing services for Canonsburg Borough.
a. The discussion occurred in Council chambers in association with a monthly
meeting although the meeting was not officially in session.
b. The discussion occurred due to ongoing HVAC and electrical problems within
the municipal building and other Borough property.
c. Council members Gowern and Rudge initiated the discussion.
d. Livolsi was questioned during the discussion if he would consider performing
maintenance /repair type work for the Borough as necessary due to
Prokopovitch only recently being placed into the Interim Borough Manger
position.
Livolsi 01- 069 -C2
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10. Livolsi's occupation as an HVAC /electrical technician was common knowledge among
council members.
a. Livolsi's knowledge of the HVAC /electrical field was considered valuable among
council members due to ongoing maintenance /repair issues with the HVAC
system and additional borough property (i.e. street lights, wiring, etc.).
11. Livolsi is currently the sole employee of Southside Heating Company (aka Southside
Heating and Air Conditioning and /or Southside Electrical), 517 Park Avenue,
Canonsburg, Pa 15317.
a. Southside Heating Company performs heating, air conditioning, and electrical
contracting work.
b. Articles of Incorporation filed on October 2, 1956, document the owner of the
business as Louis Livolsi.
1. Louis Livolsi is Livolsi's father.
12. Livolsi began performing general HVAC and electrical repair /maintenance services for
Canonsburg Borough in approximately February 1999.
a. Southside Heating Company /Livolsi did not perform any work for the Borough
prior to Livolsi's appointment to Council.
13. Services performed by Livolsi for Canonsburg Borough were not publicly bid or
advertised by Borough Council.
a. Services performed by Livolsi were not formally approved by vote of Borough
Council prior to the service occurring.
b. Prokopovitch does not normally report maintenance /repair services performed
at or around the municipal building to Council at monthly meetings.
c. Prokopovitch provides this information only upon request by council members.
14. Livolsi was contacted to initiate services for the Borough by Prokopovitch, other council
members, and various Borough employees (i.e. the streets commissioner, the chief of
police, etc.).
a. The majority of requests for Livolsi to "look at" or "take care of" problems in and
around the Borough occurred by telephone.
1. Livolsi was occasionally requested informally in council meeting settings
to perform services for the borough.
b. No formal vote of counsel was taken approving Livolsi to address
maintenance /repair type issues.
15. Southside Heating Company/Livolsi was requested /solicited to perform services for the
Borough for a variety of reasons, including the Borough receiving a reduced rate for
services through Livolsi.
a. Livolsi charged the Borough the cost of labor only.
Livolsi 01- 069 -C2
Page 5
b. Livolsi supplied any parts necessary for repair /maintenance at cost (no price
mark -up) to the Borough.
c. Livolsi occasionally performed services for the Borough free of charge.
d. Livolsi consistently responded to service calls in a timelier manner than did
other vendors.
e. Livolsi's quality of work was considered higher by borough officials than other
local vendors that had been utilized by the borough in the past.
16. From 1999 through 2001, Livolsi, through Southside Heating Company, billed and was
paid by Canonsburg Borough for services associated with maintenance and repair as
shown below:
Invoice
Date
02/02799
05/19/99
06/02-
03/99
06/09/99
02/23/00
03/28/00
05/15/00
Check
Number
14491
Check
Date
0 /3/09/99
Check
Amount
$ 295.00
Invoice
Description
Main fire truck bay -
Troubleshoot hanging furnace.
Replace % hp blower drive
motor
03/99 14587 04/14/99 $ 1,260.00 Troubleshoot
generator. Install
lighting in building.
lights in Mayor's
basement hallway.
03/26/99 14675 05/11/99 $ 147.00 Senior Citizens Building. Clean
burner assembly, remove blower
assembly, pressure wash,
lubricate and replace burnt belt,
reassemble.
emergency
emergency
Install new
office and
14858 07/02/99 $ 72.00 Repair NC in Fireman's lounge
rm.
14858 07/02/99 $ 462.00 Repair streetlights between
PNC Bank and Jefferies Drug
Store.
14858 07/02/99 $ 151.00 Repair lights in Mayor's office
and State Representatives
office.
15709 03/15/00 $ 2,100.00 Repair Main Street electrical
control panel; repair /rewire lights
15809 04/11/00 $ 615.00 Repair traffic light; install new
light in rear of office building
16034 06/14/00 $ 735.00 Repair /replace evaporator fan
drive system; replace filters, re-
program dampers &
thermostats; add R -22 gas to
system
Livolsi 01- 069 -C2
Page 6
Invoice Check Check Check Invoice
Date Number Date Amount Description
0677700 16127 07/11/00 $ 1,430.00 Install security lighting in main,
rotary, & B.P.W. pavilions;
replaced fuse block and wiring
in street lights; repair ice
machine; replace/ repair lights
and ballast in library
07/24/00 16265 08/16/00 $ 568.00 Repair drain on Fire Dept. unit;
replace belt on 2 " floor unit,
change filters on main 2 " floor,
council, & library units; move
fire siren
08/04/00 16400 09/13/00 $ 738.00 Install cooling fan in pump #3
08/04/00 VFD drive unit; install ballast
and starter in perimeter light
fixture; trouble -shoot & install
photo cell in fixture in office;
repair broken ends /replace bad
ballast and burnt bulbs in police
dept. light fixtures repair
condensate drain on library unit
10/03/00 16661 11/14/00 $ 475.00 Rewire /repair street lights in
10/26/00 plaza lot; troubleshoot and re-
program main heat control
center for 2 floor of building
12/28/00 7597 12/31/00 $ 960.00 Troubleshoot & repair belt press
polymer mixing system; trouble-
shoot explosion proof heater in
digester #3
12/28/00 16845 12/31/00 $ 1,860.00 Repair /rewire street lights &
receptacles; troubleshoot &
repair emergency exit light
packs; trouble -shoot heater in
men's room; trouble -shoot &
repair furnace in fireman's
lounge
01/30/01 16971 02/06/01 $ 770.00 Troubleshoot & install timing
relay in main truck bay fire
station; troubleshoot & repair
electric in line heater in library
basement
02/28/01 7697 03/13/01 $ 2,569.00 Remove heater from press
02/28/01 building and re- install in main
building; install 3 phase 480 vac
explosion proof heater in
digester; install 240 vac welder
outlet in garage
Livolsi 01- 069 -C2
Page 7
Invoice Check Check Check
Date Number Date Amount
03/24701 17192 04710701 $ 440.00
04/30/02 7786 05/08/01 $ 320.00
06/05/01 17410 06/12/01
$ 2,655.00
Invoice
Description
Installation of lights in State
Reps office
Troubleshoot & repair contactor
on air compressor for belt press;
troubleshoot & repair air
conditioner on main building
roof, add R -22
Repair all street lights on Main
Street of town; repair lamp post
at borough lot; repair post lamps
in center town parking lot; repair
all globe lights in Jefferson lot;
bucket truck rental; Tri -State
Supply Co. Ballast
TOTAL $18,622.00
17. None of the services provided by Southside Heating in excess of $500.00 were
publicly advertised for bid nor were quotes sought from other vendors.
18. Livolsi maintains a checking account at Three Rivers Bank (Account # 20009199) in
association with Southside Heating Company.
a. The account is documented as a business checking account.
19. All checks received from the Borough for services rendered were deposited into
Southside Heating Company's business checking account at Three Rivers Bank as
shown below:
Check Number
Check Amount Deposit Date
14491 $ 295.00 03/11/99
14587 $ 1,260.00 04/22/99
14675 $ 147.00 05/24/99
14858 $ 685.00 07/19/99
15709 $ 2,100.00 03/15/00
15809 $ 615.00 04/14/00
16034 $ 735.00 06/15/00
16127 $ 1,430.00 07/14/00
16265 $ 568.00 08/25/00
16400 $ 738.00 09/14/00
16661 $ 475.00 11/24/00
16845 $ 1860.00 01/05/01
07597 $ 960.00 01/05/01
16971 $ 770.00 02/14/01
07697 $ 2,569.00 03/14/01
17192 $ 440.00 04/11/01
07786 $ 320.00 05/24/01
17410 $ 2,655.00 06/18/01
Total $18,622.00
a. Deposited checks are endorsed, "For Deposit Only, Southside Heating Co.,
2009199."
Livolsi 01- 069 -C2
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20. Livolsi did not typically vote on bill lists to which payment to Southside Heating
Company was documented
a. Livolsi typically voted "Present" regarding bill lists documenting payment to
Southside Heating Company.
21. Canonsburg Borough Council utilizes the practice of voting "Present" to indicate that a
council member is physically present during a roll call vote but is not actively
participating in the vote.
a. Canonsburg Borough Council considers a vote of "Present" to be synonymous
with abstaining.
b. A vote of "Present" is utilized when a council member is somehow
involved /interested in a motion being voted on by Council.
22. Livolsi participated in voting to approve bill lists in which payment to Southside Heating
Company was documented as shown below:
Amount Livolsi
Meeting Livolsi Check Paid to Motion/ Livolsi Final Approved/
Date Present No. SSH Second Vote Vote Denied
03/08/99 Yes 14491 $ 295.00 No Present 7 -0 -1 Approved
04/12/99 Yes 14587 $ 1,260.00 No Present 7 -0 -1 Approved
05/10/99 Yes 14675 $ 147.00 No Yes 8 -0 -0 Approved
07/12/99 Yes 14858 $ 685.00 No Present 7 -0 -1 Approved
03/13/00 Yes 15709 $ 2,100.00 No Present 7 -0 -1 Approved
04/10/00 Yes 15809 $ 615.00 No Present 8 -0 -1 Approved
06/12/00 Yes 16034 $ 735.00 No Present 8 -0 -1 Approved
07/10/00 Yes 16127 $ 1,430.00 No Present 6 -0 -1 Approved
08/14/00 Yes 16265 $ 568.00 No Present 8 -0 -1 Approved
09/11/00 Yes 16400 $ 738.00 No Present 8 -0 -1 Approved
11/13/00 Yes 16661 $ 475.00 No Present 8 -0 -1 Approved
01/08/01 Yes 16845 $ 1,860.00 No Present 8 -0 -1 Approved
01/08/01 Yes 7597 $ 960.00 No Present 8 -0 -1 Approved
02/12/01 No 16971 $ 770.00 No 7 -0 -0 Approved
03/21/01 Yes 7697 $ 2,569.00 No Present 5 -0 -1 Approved
04/09/01 Yes 17192 $ 440.00 No Present 8 -0 -1 Approved
05/14/01 Yes 7786 $ 320.00 No Yes 8 -0 -0 Approved
17410 $ 2 655.00 - -
Total $18,622.00
a. Livolsi voted "Present" during the voting to approve 14 of 17 bill lists on which
payment to Southside Heating was documented.
b. Livolsi voted "Yes" to approve 2 of 17 bill lists on which payment to Southside
Heating was documented.
c. Check number 17410 issued to Southside Heating in the amount of $2655.00
could not be located on any approved bill list.
1. Due to lack of documentation, Livolsi's participation regarding the
approval of this payment could not be determined.
Livolsi 01- 069 -C2
Page 9
23. At no time did Livolsi disclose his relationship with Southside Heating prior to voting on
the approval of bill lists on which payment to Southside Heating was documented.
a. Livolsi's association with Southside Heating was common knowledge among
council members.
24. The Borough Manager and all members of council maintain signature authority over
Borough accounts.
a. All checks require the live signature of the Borough Manager and two council
members.
b. The Borough does not utilize signature stamps.
25. Livolsi, through Southside Heating, was issued 18 checks from Canonsburg Borough
totaling $18,622.00 as payment for maintenance /repair type services provided.
a. Livolsi's signature does not appear on any of the checks issued to Southside
Heating as an authorized signatory for the Borough.
26. Livolsi filed Federal Income Tax Returns for calendar years 1998, 1999, 2000, and
2001.
a. Included in Livolsi's income tax returns were Schedule C (Form 1040), Profit or
Loss From Business reports regarding Southside Heating for each respective
year.
27. Southside Heating realized profit percentages from gross income reported for years
1998 through 2001 as shown below:
Gross Net Profit Percentage from
Year Income Profit Gross Income
1998 $104,188.00 $16,580.00 15.9
1999 $121,476.00 $12,952.00 10.7
2000 $112,331.00 $17,577.00 15.6
2001 $131,139.00 $17,491.00 13.3
28. Southside Heating realized yearly profits as a result of receiving payment from the
Borough for services performed as shown below:
Gross Profit Profit
Year Payment Percentage Realized
By Borough
1998 $ 0.00 15.9% $ 0.00
1999 $ 2,387.00 10.7% $ 255.00
2000 $ 9,481.00 15.6% $ 1,479.00
2001 $ 6,754.00 13.3% $ 898.00
Total $ 2,632.00
29. Southside Heating realized a profit of $2,632.00 as a result of performing
maintenance /repair type services for the Borough in 1999, 2000, and 2001 while
Livolsi served as a Borough Councilman.
30. On October 31, 2001, a Statement of Financial Interests Compliance Review was
conducted at the Canonsburg Borough municipal building.
Livolsi 01- 069 -C2
Page 10
a. No Statements of Financial Interests were on file for Livolsi in his position as a
Borough Councilman.
31. On December 6, 2001, Livolsi was mailed notification by the Commission of an
investigation being conducted regarding allegations of violations of the State Ethics Act
of which he was the subject.
a. The allegations included Livolsi's failure to file Statements of Financial Interests
in his position as a Borough Councilman.
32. Livolsi filed Statements of Financial Interests at the Borough building for calendar
years 1998, 1999, 2000, and 2001 on January 8, 2002.
a. Livolsi filed the Statements of Financial Interests for calendar years 1998,
1999, and 2000, as a result of receiving the notification letter dated December
6, 2001.
b. Livolsi disclosed ownership of Southside Heating Company on each SFI filed.
c. Livolsi disclosed income from Canonsburg Borough on each SFI filed.
33. During the years when he failed to file Statements of Financial Interests, Livolsi was
compensated as follows by Canonsburg Borough.
1998 $0.00
1999 $2,499.64
2000 $2,499.64
III. DISCUSSION:
At all times relevant to this matter, the Respondent, Lucian Livolsi, hereinafter Livolsi,
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 Livolsi, as a Canonsburg Borough Council Member, violated
Sections 3(a)/1103(a), 3(f)/1103(f) and 4(a)/1104(a) of the Ethics Act when he participated in
actions of council resulting in the award of borough contracts to a business with which he is
associated for services as to air conditioning units, furnaces and outdoor lighting; when the
borough awarded contracts in excess of $500.00 to that business without an open and public
process; and when he failed to file Statements of Financial Interests for the 1998, 1999 and
2000 calendar years.
Pursuant to Section 3(a)/1103(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/Act 93 of 1998 as follows:
Section 2/1102. 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
f
of ce 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
Livolsi 01- 069 -C2
Page 11
"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. § 402/65 Pa.C.S. § 1102.
Section 3(a)/1103(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.
Section 3(f)/1103(f) of the Ethics Act provides:
Section 3/1103. Restricted activities
(f) No public official or public employee or his spouse
or child or any business in which the person or his spouse or
child is associated shall enter into any contract valued at $500 or
more with the governmental body with which the public official or
public employee is associated or any subcontract valued at $500
or more with any person who has been awarded a contract with
the governmental body with which the public official or public
employee is associated, 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. In such a case, the public official or public
employee shall not have any supervisory or overall responsibility
for the implementation or administration of the contract. Any
contract or subcontract made in violation of this subsection shall
be voidable by a court of competent jurisdiction if the suit is
commenced within 90 days of the making of the contract or
subcontract.
65 P.S. § 403(f)/65 Pa.C.S. § 1103(f).
Section 3(f)/1103(f) of the Ethics Act specifically provides in part that no public
official /public employee or spouse or child or business with which he or the spouse or child is
associated may enter into a contract with his governmental body valued at five hundred dollars
or more or any subcontract valued at five hundred dollars or more with any person who has
been awarded a contract with the governmental body with which the public official /public
employee is associated unless the contract is awarded through an open and public process
including prior public notice and subsequent public disclosure.
§4/1104. Statement of financial interests required to be filed
(a) Public official or public employee. - -Each public official
of the Commonwealth shall file a statement of financial interests
for the preceding calendar year with the commission no later than
May 1 of each year that he holds such a position and of the year
after he leaves such a position. Each public employee and public
official of the Commonwealth shall file a statement of financial
interests for the preceding calendar year with the department,
Livolsi 01- 069 -C2
Page 12
agency, body or bureau in which he is employed or to which he is
appointed or elected no later than May 1 of each year that he
holds such a position and of the year after he leaves such a
position. Any other public employee or public official shall file a
statement of financial interests with the governing authority of the
political subdivision by which he is employed or within which he is
appointed or elected no later than May 1 of each year that he
holds such a position and of the year after he leaves such a
position. Persons who are full -time or part -time solicitors for
political subdivisions are required to file under this section.
65 P.S. § 404(a)/65 Pa.C.S. §1104(a).
Section 4(a)/1104(a) of the Ethics Act requires that each public official /public employee
must file a Statement of Financial Interests for the preceding calendar year, each year that he
holds the position and the year after he leaves it.
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.
Livolsi has served as a Canonsburg Borough Councilman since1998. In a private
capacity, Livolsi is the sole employee of Southside Heating Company, a.k.a., Southside
Heating and Air Conditioning or Southside Electrical (Company), a business owned by his
father.
Canonsburg Borough consists of a nine member council, a mayor and a borough
manager, Alice Prokopovitch. For a vendor to provide service to the borough, Prokopovitch is
responsible for contacting three or four vendors by telephone to obtain quotes. Prokopovitch
does not publicly advertise for bids unless the contract exceeds the $10,000 threshold of the
Borough Code. Prokopovitch is authorized to utilize the services of vendors provided the
services are not excessive. Prokopovitch awards jobs to vendors and does not obtain prior
approval of council which gives an after the fact approval by authorizing payment.
In 1995, the borough replaced the existing HVAC system by utilizing Controlled Climate
Systems, Inc. (CCS). One year service agreements for the calendar years 1997 and 1998
were also obtained from CCS. Because of dissatisfaction with CCS services, Prokopovitch
began searching for a replacement service provider. Since council members knew that Livolsi
was an HVAC /electrical technician, there were discussions in council chambers regarding
Livolsi performing such maintenance and repair work for the borough.
The Company, through Livolsi, began providing general HVAC and electrical
repair /maintenance services for the borough in February of 1999. Such services were not
publicly bid or advertised. Even the services provided by the Company which were in excess
of $500 were not publicly advertised for bid. No quotes were sought from vendors other than
the Company. Service contracts by the Company were not formally approved by a vote of
council prior to the provision of such services. Livolsi was contacted to provide services for
the borough by either Prokopovitch, other council members, or borough employees. The
Company was solicited to provide such services through Livolsi because: charges were for
labor only, parts were supplied at cost, some labor was performed free of charge, services
were performed in a timely manner, and services were done with a high quality of work. A
listing of the services performed, together with the charges, check numbers and dates are
detailed in Fact Finding 16.
As to the Company bills that were submitted to council for approval, Livolsi typically did
not vote on such bill lists but only said "present ". In Canonsburg Borough, a "present" vote is
only indicative of physical presence but not active participation; in fact, "present" is considered
Livolsi 01- 069 -C2
Page 13
synonymous with abstention. As to the 18 bills (one bill is undocumented) that were submitted
by the Company to borough council, Livolsi voted present except for two bills where he voted
yes, one in the amount of $147.00 and the other $320.00. As to the borough checks that
were sent to the Company, Livolsi's signature does not appear on any of the issued checks.
For the calendar years 1999 -2001, the profit realized by the Company as to borough contracts
totaled $2,632.00.
In an October 2001 compliance review for Statements of Financial Interests (SFI's) at
the municipal building, no SFI's were on file for Livolsi. After being mailed a notification of
investigation in December of 2001, Livolsi filed SFI's at the borough building on January 8,
2002, for the calendar years 1998 through 2001 wherein he disclosed his ownership in the
Company and income from the borough.
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 that Livolsi: did not
violate Section 3(a)/1103(a) of the Ethics Act in that he did not participate in the actions of
council to award borough HVAC equipment repair and maintenance contracts and electrical
work and did not approve contract payments made to a business with which he is associated;
violated Section 3(f)/1103(f) of the Ethics Act when a business with which he is associated
entered into severa contracts with Canonsburg Borough for the repair and maintenance of
Borough HVAC equipment and electrical work when those contracts which were in excess of
$500 were awarded without an open and public process; violated Section 4(a)/1104(a) of the
Ethics Act when he failed to timely file his SFI's for the 1998, 1999, and 2000 calendar years;
and pay $500 through this Commission to the Commonwealth of Pennsylvania within 30 days
of the mailing date of this Order.
In applying Section 3(a)/1103(a ) of the Ethics Act to the instant matter, our focus must
be on what, if any, uses of authority of office were taken by Livolsi. The facts establish that
the Company is a business with which both Livolsi, as an employee, and his father, as owner,
are associated. Further, there were private pecuniary benefits in that the Company made
profits on the various borough service contracts. However, the Stipulated Findings reflect that
it was either Prokopovitch or other council members who sought to utilize the services of
Livolsi. After such services were performed and the borough was billed, Livolsi was listed as
"present" for all but two of the bills submitted by the Company. As noted above, "present" is
synonymous with abstention in Canonsburg Borough. As to the two bills that Livolsi voted to
approve, such bills were small and the net profit would therefore be de minimis. Accordingly,
Livolsi did not violate Section 3(a)/1103(a) of the Ethics Act regarding various service
contracts that were solicited by the borough manager or other council members for the
Company to provide services to the borough when Livolsi did not participate or approve
payment in such matters, except for two instances when he voted to approve payment as to
two small contracts which actions were de minimis.
Regarding Section 3(f)/1103(f) of the Ethics Act, a review of the 18 contracts that the
Company performed for the borough reflects that many of those contracts were in excess of
$500.00 but were not awarded through an open and public process as required by the Ethics
Act. Accordingly, Livolsi violated Section 3(f)/1103(f) of the Ethics Act when the Company, a
business with which he and a member of his immediate family are associated, entered into
contracts in excess of $500.00 with the Canonsburg Borough when such contracts were not
awarded through an open and public process. See; Gallagher, Order 1059.
Finally, regarding the SFI allegation, the record reflects that Livolsi did not file his SFI's
for the calendar years 1998 through 2000 until after he received notice of this investigation.
All three of those SFI's were filed after the due dates. Accordingly, Livolsi violated Section
4(a)/1104(a) of the Ethics Act in each instance when he failed to timely file SFI's for the
calendar years 1998, 1999, and 2000.
Livolsi 01- 069 -C2
Page 14
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, Livolsi is directed to make payment in
the amount of $500 to the Commonwealth of Pennsylvania through this Commission within 30
days of the mailing of this 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. Livolsi, as a Canonsburg Borough Council Member, is a public official subject to the
provisions of Act 9 of 1989 as codified by Act 93 of 1998.
2. Livolsi did not violate Section 3(a)/1103(a) of the Ethics Act regarding various service
contracts that were solicited by the borough manager or other council members for a
business with which he is associated to provide services to the borough where Livolsi
did not participate or approve payment in such matters, except for two instances when
he voted to approve payment as to two small bills where his actions were de minimis.
3. Livolsi violated Section 3(f)/1103(f) of the Ethics Act when a business with which he is
associated entered into several contracts with Canonsburg Borough for the repair and
maintenance of Borough HVAC equipment and electrical work when those contracts in
excess of $500 were entered into without an open and public process.
4. Livolsi violated Section 4(a)/1104(a) of the Ethics Act when he failed to timely file his
Statements of Financial Interests for the 1998, 1999, and 2000 calendar years.
In Re: Lucian Livolsi
ORDER NO. 1246
File Docket: 01- 069 -C2
Date Decided: 9/4/02
Date Mailed: 9/25/02
1. Livolsi, as a Canonsburg Borough Council Member, did not violate Section
3(a)/1103(a) of the Ethics Act regarding various service contracts that were solicited by
the borough manager or other council members for a business with which he is
associated to provide services to the borough where Livolsi did not participate or
approve payment in such matters, except for two instances when he voted to approve
payment as to two small bills where his actions were de minimis.
2. Livolsi violated Section 3(f)/1103(f) of the Ethics Act when a business with which he is
associated entered into several contracts with Canonsburg Borough for the repair and
maintenance of Borough HVAC equipment and electrical work when those contracts in
excess of $500 were entered into without an open and public process.
3. Livolsi violated Section 4(a)/1104(a) of the Ethics Act when he failed to timely file his
Statements of Financial Interests for the 1998, 1999, and 2000 calendar years.
4. Per the Consent Agreement of the parties, Livolsi is directed to make payment of
$500.00 to the Commonwealth of Pennsylvania through this Commission within 30
days of the mailing date 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,
Louis W. Fryman, Chair