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HomeMy WebLinkAbout880 ShickIn Re: James R. Shick : File Docket: 92- 059 -C2 e Date Decided: Mav 6, 1993 Date Mailed: May 11, 1993 Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Roy W. Wilt Austin M. Lee Allan M. Kluger The State Ethics Commission received a complaint regarding a possible violation of the State Ethics Act, Act 9 of 1989, 65 P.S. §401 et ima. Written notice, of the specific allegation(s) was served at the commencement of the investigation. A Findings Report was issued and served, upon completion of the investigation, which constituted the Complaint by the Investigation Division. An Answer was filed and a hearing was held. The record is complete. This adjudication of the Commission is hereby issued which sets forth the individual Allegations, Findings of Fact, Discussion, Conclusionsspuf Law and Order. This ,adjudication is final and will be made available as a public document : _days after issuance. However, reconsider'ation.,may be requested,.which_will defer public release of this adjudication pending actionuon the by the Commission, A request reconsideration, however, do not •affect the finality of this adjudication.' A reconsideration, request must be received aZ this Coanmi•ssion within fifteen days- of issuance and must include a•detailed explanation of the reasons as to why reconsideration should bea: granted in conformity with 51 Fa. Code §2.38. The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. 5408(h) during the fifteen day period and no one unless the right to challenge this Order is waived, may violate Confidentiality by releasing; discussing or circulating this Order. However, confidentiality does not preclude discussing this case with an attorney at law. Any person who violates confidentiality of the Ethics:jct is guilty of a misdemeanor subject to m fine of not more than $1,000 dr: imprisonment for not more than_: one :pear, - -6.5. ;P . S . 5409 (p ) STATE ETHICS COMMISSION 308 FINANCE BUILDIN HARRISBURG, PENNSYLVANIA 17120 qhick, 92- 059 -C2 Page 2 I. ALLEGATION: That James R. Shick, a member of the Water Authority for the Borough of Newport, Perry County, violated the following provisions of the State Ethics Act (Act 9 of 1989) when he used the authority of his position to obtain compensation not provided for by law by partieipeting,in the decision to set compensation for his service on the Authority: Section 3. Restricted Activities (a) Ito public official or public employee shall engage iii conduct that constitutes a conflict of interests 65 P.S. 5403(a). fief initighe "Conf 1i t" or '' conflict of interest." t se by a public official or public employee of the suthatity of his of €iee or erip10 ittOnt or any confldehtial ififdtatien received through holding public off ice or employment for the priiiate pecuniary benefit of hi ►self j itietbet of his . immediate family or a business with Which he Of a ritetber of his iitttttediate family is asseelated. "Confiiet" Sr "conflit of Ihterest" deed het ifiditide aft action having a de fninimis economic impact or Which affects to the sate degtee a d1ass consisting of the general public or a subclass consisting of an industry, occupation or other group Which includes the public dfficial or public employee, a Meffibek of his immediate family or a business Wits which he or a member of his immediate family is associated. 65 P.S. S402. it: 2/NbiNgdt A. - gL2NOS: 1. James R. Shack has served as a member of the Newport toroiigh Water Authority for nine years. S. The meifmbers of the Newport Borough Water Authority ate appointed by the Newport Borrough Council. 4, the Newport Borough Council never approved compensation for Itieinbers of the Water Authotit_yti . In early 1991, the members of the Authority began'discutSi#tq Shick 92- 059 -C2 Page 3 the issue of compensation for Authority members. 5. The Authority Secretary was instructed to determine the average amount of each member's water bill and report back to the Authority members with the information. a. This action was not approved at any Authority meeting since the secretary was asked to determine the average amount of each member's water bill. 6. At the April, 1991 meeting of the Authority, board members decided not to pay their water bills as compensation for their work. a. The members decided to begin the compensation by not paying their second quarter of 1991 water bill. (1) Shick contends that it was the officers of the board and not the members. r, " Shick asserts. that because increasing duties, the officers' decided that some form of compensation was appropriate. 04 . Not paying the water bill was viewed as less than taking monetary compensation. 7. The discussions and'the'decision on the compensation were not recorded in thq minutes pf the Water Authority meetings. 8. The minutes of`the January 14, 1991, Water Authority meeting indicate. Steve Flickinger was elected Chairman, Jerry Robinson was `'elected. Vice Chairman, and James Sh was elected §ecretary /Treasurer. 9. The,iinutes of the.JanuaFyt13,'1992, Water Authority meeting do not reflect a Chdirman, ' Vfice Chairman," Secretary or any other officer being elected or appointed. 10. Minutes of the June $, 1992, Water Authority meeting confirm that a discussion ensued among members of the Authority that since the second quarter of 1992, the water portion of Authority members water and sewer bills had been waived as an incentive to serve on the Water Authority. Members discussed provisions of the Municipal Code and indicated' that borough sets remuneration for members of a working Authority, but the Authority, sets remuneration for officers of the working Authority. . Based on the discussion, a motion was made by Dick 0114k, 12-0:55-C2 `fie 4 c . Amsler seconded by Jim Shick to 'waive the water p rtioh of the Authority officers' water and Sewer bill at _ remuneration . Motion carried. Membet Pbb`nsbn pent . No abstentions noted. The minutes also indicate the to .lowing appointrents as officers of the Authority Chairman: Vice Chairman: Treasurer: Secretary: Assistant Secretary /Treasurer: Gerald Rbba:nton Richard itunsler James Shitk Daniel Steigl"eman N .MelabeY' 11. The duties of the ,Authority members did it °change fb .lowing the appointments made et the June $, 1992, Meetiftg% a. Shick asserts that the off.teers go out and -help tmplitytet to repair water breaks and flood sire P rdran t. 12. Authority members confirm that not pairing the watat bill as compensation for serving on the - Authority was diStus'sed for some time. a. Members believe they should be compensated fdx attending meetings much the same as members of borbugh botlncil. (1) Shick asserts the members do other work. b. Members took the compensation in the form of waived water bills because it was better than taking a Salary. 13. Authority records indicate account #3110 is in the nails of James R. Shick, 456 N. Fourth Street, Newport, PA 17074. 14. Authority records indicate that Shick did not lay the following bills as compensation for his Service on the Authority: Second Quarter 1991 - $ 44.77 Third Quarter 1991 - $ 40.45 Fourth Quarter 1991 - $ 34.06 Second Quarter 1992 $,._. TOTAL $153.S3 a. The bill for the First Quarter of 1992 was paid by Shick. B. TESTIMONY: 15. Gerald Robinson is a Member of the Newport M r6ugh Water Shick 92- 059 -C2 Page 5 Authority (NBWA). • no a. The following arguments are made by Robinson. 1. That pecuniary is defined as money exacted or money given as a reward so that no member or oficer received a pecuniary benefit. 2. That the duties of the Authority have changed dramatically. 3. That the investigation relates to compensation that he, Amsler and Shick made available to themselves. 4. That the Municipality Authorities Act may be construed to mean that the Authority may compensate officers. . That he, Amsler and Shick did not take money but only water. . The Authority serves three municipalities. 1. Board members attend meetings of the municipalities. c. Authority Members provide -in -field assistance to permanent staff of the Authority. d. The first members of the Authbrity just: like the current Board had the same responsibilities of issuing bonds, pf deciding which water wells were needed, of deciding whether new wells were needed' acrid - of determining whether other wells should be shut down. e. The Authority officer position of Assistant Secretary/ Treasurer did not exist prior:to-1992, "`Zh 1991, the Authority officer positions were Chairman, Vice - Chairman, and Secretary /Treasurer. 1. In prior years, the posittow of Secretary and Treasurer were separated. (a) At that time, there were four members. g. "the. 'hew Authority position of - eistant Secretary/ Tts~asurer' occurred at the June, 1992 ' Authority meeting. .. f i h. In 1991, there were five members but trnly! three were elected to positions. pick, 92- 059 -C2 Page 6 i . to 1992, there were foul' members w±:t''h five elected positions 14 Four member's were each elected td a position, 2. The fifth pdsitidn 101S left open forrthenew member to be appointed. &folk ilathd 'Ltiy member does what is necessary ssary to get a job done irrespective of their position tit/e, 1. The duties that the members perform are not unique td Office positions. 2, 'Yie' dties that are performed are se board Members. e'. Zgnittini 16: The miritites 6f the litkulp6rt tdrOtigh ifarter Authority' ( WA) for Januefy 14, i f S 1, reflOdt in part that Authority members were eidOted as officers. a, Jerry kObing6n was made Vice Chairman upon motion by Shick, 5doonded by 'ficking'er, which carried. b. James Shirk was made Secretary/Treasurer upon motion by tiickinger, seconded ndeee by Steig'1eman, which carried. 17, As t® the January 13, 1592 meeting of the I3A, the minutes reflect in part that ri6 action was taken to elect officers for the 10104,k, a. The following g exce rt appears on page three of the finutes$ Have council re- appoint Dick Amsler retroactively to the 1st of the year. 10, the following is a quoted excerpt from the minutes of the NBWA €or the meeting of June 9, 19923 A motion was made by Dick Amsler to nominate Oeraid Robinson as Chairman sec. by Jim *hick. There were no other nominations. Mti *n **triad. A motion was Trade by Jim Mick sec. by Jerry Robinson to nominate Dick Amsler as Mice Chairman. There were no other nominations. M tibn carried a Shick, 92-059-C2 Page 7 * * * Since the second quarter of 1992, the water portion of the authority members water and *ewer bills has been waived as incentive to serve on the Water Authority. According to Municipal Code, borough council sets renumeration for members of a working authority, however the Water Authority themselves set renumeratioh for officers of the working authority. Therefore: ■ "This amendatory act shall ildit apply to violations committed' , rptior to the effective date of this et�t, and ,dauses of action initiated for sudh Nri3Olatiolls shall be governed by the prior la, 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." A motion was made by Dick Amsler.sec. ,Jim Shick for waiver of the water portion of - *the loffiCers of the Water Authority's writer-, - iewer bill as renumeratI6A. - Motion.) pwc2. ,.: : caiiied. ) . -, -.:...1z- .4i:f . - . The officers oP the Newport'BoltAgh WattiV0vIzw I19'' Atthority are as followsve-s- c' -. ' - - - M ' r' -.-..t D 4hairman: Gerald Aftinson Vice ce Chairmaii: -" 11in 13tl Ajohafa ifiler _ , , reasurer: :Le d7tAanleig 7. -, ak '1- .L „ -367 „:...7 '" , , 1m. m ' "Secretary: --='. j a91-1—Intriel St116in e .- - - -. -'- -Assistant Se6./VAaV4 10464 Member '-' .aE.L.J.d :n III. DWCUSSI9M: 10t7i.a..1X - As - a Member of the WaterwAtthbrity f6r-the Barough - of,Newport, Perry County, James Ak: SaTok, hettleafter Shkok, is a public official as that "tezifizis de:Eihed u44t-At '9 6i 1988. 165 P.S. 5402. As such, his cOnduct1:4-te of the Ethics Law and the restrictioh% aeretw dgplimb] e to him. Initially, it is noted that Section 9 6f Act. 4 8.of June 26, 1989 provides, in part, as follOws: Since the occurrences -in case transpires after the Shick, 92- 059 -C2 Page 8 effective date of Act 9 (June 26, 199) we must apply the provisions of Act 9 to determine whether the Ethers Act `was violated. Under Section 3(a) of Act 9 of 1989 quoted abOVe; a public official /employee shall not engage in conduct that tOnstf.tttes a conflict of interest. The issue before us is whether Shirk as a NeMbeW of the Newport Borough Water Authority (NBWA) violated aatt.i (e►) of Pict 9 of 1989 by using the authority of office to obtain a ptiVate pecuniary benefit when he voted to provide compensation to hi eif consisting of the forgiveness of Authority utility bills frail the third quarter billing of 1991 forward. Factually, Shick is a member of the NEVA with the Newport Borough Council as the governing body. Due to NBWA bb td members performing additional duties, action was taken whereby, ' . . the water portion of the authority members water and *rawer bills has been waived as incentive to serve on the Water Authority." NBWA Public Meeting Minutes of June 18, 1993. The foregoing occurred by motion and vote of the NBWA board members. Robinson, on behalf of himself and Shick and I Miler, argues that the duties of the Authority members have drastically changed, that the Municipality Authorities Act allows the Aut btity t� compensate officers, and that they did not take money but (the forgiveness of) their water bills. Prior to making our determination of whether a violation occurred, we must consider and review the Municipality Aiitherities Act in the context of whether such compensation ill allowable under the law. If such compensation is prohibited by law, it is @leer that the use of authority of office by municipal authorit ► beard members to give themselves such compensation would constitiete a private pecuniary benefit. Means, Opinion 90 -007; ,$wick /.wit, Opinion 91 -006. The Municipality Authorities Act provides in part as followse Every. Authority is hereby gran, and shall have: may exercise all powers necessary or, convenient - for the ring Out of the aforesaid. purposes, including but without limiting he - generality of the foregoing, the following rights and poee►r%s (fl Tb make by 1amst tor the management ai'id regulation of its affairs. (gJ To appoint officers agents, emplOyeet Shick 92- 059 -C2 Page 9 and servants, to prescribe their duties and to fix their compensation. 53 P.S. 5306B. The Municipality Authorities Act further provides: B. Members shall hold office until their successors have been appointed, and may succeed themselves, and, except members of the boards of Authorities organized or created by a school district or school districts, shall receive such salaries as may be determined by the aovernina body or bodies of the municipality or municipalities, but none of such salaries shall be-increased or diminished by such governing body or bodies during the term for which the member receiving the same shall have been appointed. . . . C. A majority of the members s constitute a quorum of the board . fgF. purpose of organizing the Authoriy ',.conducting the business thereof :,.and. .other purposes, and all actigi taker4, ,, -z vote of a majority of the mb pgeseAt� unless in any case the . by- -la4ws �,sha1 =.requi.r a, ; urger number. The,,, board. s;b all have I . ul�.,. authority ': q manage the: , properties ,and business of the Authority and to prescribe, ,amend and. . repeal by-laws, rules and regulations ; ;Qyerning the meaner in the' . business of ,.the Authority nay be conducted, and%:the hors granted to- Lt may be exe',c}sed and embodied, !<,- The beard sham :fix and - o f _ determinet�i'the, cumber officers, 4 _�agents and , employees of the Authority „and:. the�,r , respeetbtve , - duties • and compOnsa:eloxi. an may 'appoi 1 t. to , such of r 4r �pf ic.�es' ".any, member . oI : .the board wittI uch powers,, . flut e and csu►pensatieA .as "the Pe may divallt'$roper. • 53 P.S. §S309B, C ('Emphasis added). _ - .� is 1. ". ►'_i -4 ' i ,- 3 1 ' •;. c... , n,t:, - Section 7 Qtr.. itsipa1ity A-ntbpritie ✓::A,ct of 1945, 53 P.S. f3Q7, does grant.. an as tliority =Tfiltth , ..lT 4rers� necessary or convenient for. the ': parrying ;:out -, -- the pur of the ' Act . Subsection : C provides that all actions of an 4 au` _ �ority may ibe taken by a vote of the , rity of the, *embers present and further empowers an authority to fix and determine the -number of of fice: s,' Snick; 92- 059 -C2 Page 10 agents and employees of the authority and the respective powers, duties and compensation. The board may appoint tO euCh Off iCe Or offices any member of the board with sudh paireitrs, duties and c©irtpensation as the board may deefif proper. As to the three different references to the phf&Seelogy of the Municipality A4tior-ities Act, the generalized language of the first phrase does n it font a basis for a specific authorization to appoint oneself to an authority office or position and then vote to set the salary for such position. See, Swick /Aman, sui5ra. As to the second phrase which authorizes all actions to be taken by a dote of the majority of the mefttbers present, such language it itietel a statement that a majority tote ie suffix ient to take officiai action. That phfasediogy aces 4Al countenance of authorize votes by adthor-ity meffthers in cases where they have a c©nfi et. It if were the intent of the General Assembly to allow municipal: authority members to vote in matters wherein they had a personal financial interest, the General Assembly would have done so with very clear specific language. For example, the Second Ciass township Cod& as to three netflb t boards makes it clear that the touters of those hoards may specifically vote for themselves to enumerated township cotpens°atidn positions. Aga 53 P.S. 565514. Thus, if the General Asseiy had the intent for municipal authority members to vote in all instances through a majority vote of the members ptesetit, speci €ie language would have been utilized fgt such pu pOte. As doted above, the ift tant phraseology merely ditedtt that df fieiai .action bOdUr by a vote Of the majority of the mdithers pretent but does net c endOne a blanket voting in cases Where cbrifliets would exist as to the individual member SO voting. As to the third referefteed phrase concerning the fixing of officers, agents and ettpioyees with compensation and appointments to t tbse pbsiti.ons by bOatd MaffflberS, vie mist once again note the ekprett abieiice of any language which would authorize an individual member of a #hunicipal hoard to 30te for his own appointment or to vote for the setting of the compensation for his own position. Absent such an express atithof'isa €ion, we have concluded that it is contrary to the Ethics Law for a nttinicipal authority board member to vote for his own appoihtment and compensation. See, SwiCk /Amat, supra. It is important to not that the Municipality Authorities Act, 53 P.S. 0309B, does require that the compensation of an authority board member Utt be determined by the appointing authority. As we noted in aitymhca we at particularly concerned about those instances Where a Tufti@iial board attempts to create so talied officer potitieftb and get the compensation for those bsitions and appoint board meit't iers as a means of C -irct ttventing the 'statutory limitatiohe that the cd pehaatibn for a municipal authority board member be set by the governing body. Shick, 92- 059 -C2 Page 11 In applying the provisions of Section 3(a) of Act 9 of 1989 quoted above to the instant matter, we find that Shick violated the Ethics Law by voting to provide compensation for the members. See, Abraham, Order No. 827; Koelsch, Order' No. 828; and Abbott, Order No. 829. It is clear that there has been a use of authority of office by Shick in voting. As a result of such use Of authority of office, Shick received a private pecuniary benefit consisting of the compensation consisting of the forgiveness of his NBWA utility bills. As to the private pecuniary benefit, we need only summarize our review of the Municipality Authorities Act as to whether the compensation was authorized in law. As noted above, although it is true that the Municipality Authorities Act does allow a municipal authority board to fix and determine the number of officers and appoint board members to those offices (53 P.S. §309C) and further provides that the authority may appoint officers and fix their compensation (53 P.S. 53058 a board member may not vote to set the salary for his officer position, even assuming the 'officer positions are bona fide positions. See, Swick /Aman,, supra. Finally, the setting of the compensation for the board members themselves must be set by the governing authority as per 53 P.S. 5309B. In the context of the NBWA, it is clear that the board members were trying to fix their compensation as board 3ne fibers In this context we must look at the substance over form. Baehr _Brothers v. Commonwealth of Pennsylvania, 487 Pa. 233, 409 A.2d 326 (1977): It is clear as to the record before us that the substance of this transaction was for the NBWA board members to receive cafltpensation and in order to achieve that result the NBWA board used officer positions. Thus, although the form of the transection was the utilization of the officer positions, the substaft a tags the NBWA board compensating its board members in derogation Of the Municipality Authorities Act which requires thet such action be done by the governing authority. Having found that the substance bf the NBWA board action was to compensate authority members through officer positions, it is clear that such is contrary to the :thics Law, In fact, such compensation is strictly prohibited by the Municipality Authorities Act, 53 P.S. §309B. Therefore, Shick did use publ office by voting to obtain a private pecuniary benefit which WAS in iiolatian of Section 3(a) of Act 9 of 1989. We do not need to question whether the ddities Of the NBWA board members have changed since that is not material to our determination. As to the issue of 4thether such forgiveness of the utility bills is not a pecuniary benefit, the fact that an out pocket expense does not have to be paid is a private pecuniary benefit. See, Szvmanowski, Opinion 87402. Lastly, as to the argument that such compensation is allowed by the Municipality Authorities Act, we considered and rejected that argument for the a, 92- 059 -C2 Page 12 reasons noted above. In reaching the above result we do not believe that Shick acted with an intent to violate the Ethics Law or with any improper motive. We likewise do not need to question or dispute that additional work was performed. In any event, any such worts was not as officers but as board members. As such, the additional compensation must be obtained from the governing body and not the authority board as was done in this case. Given the totality of the circumstances in this case, we will take no further action. Shick is reminded as to future action that the appropriate and legal mechanism for authority board members seeking additional compensation is through action by the governing. body. IV. CONCLUSIONS OF LAW: 1. James A. Shick, as a Member of the Newport Borough Water Authority, is a public official subject to the provisions of Act 9 of 1989. 2. Shick violated Section 3(a) of Act 9 when he used the authority of office to obtain a private pecuniary benefit for himself when he participated in obtaining compensation consisting of the forgiveness of his own authority utility bills. In Re: James R. Shick ', .le .Docket: 92 -059 -C2 Date Decided: May 6, 1993 Date Mailed: May 11, 1993 ORDER NO. 880 1. James R. Shick, as a Member of the Newport Borough Water Authority, violated Section 3(a) of Act 9 when he used the authority of office to obtain a private pecuniary benefit for himself when he participated in obtaining compensation consisting of the forgiveness of his own authority utility bills. 2. Based upon the totality of the facts and circumstances, no further action will be taken. BY THE COMMISSION, Aoswe JAMES M. HOWLEY, Commissioner Allan M. Kluger did not participate in the final decision of this case because he presided at the hearing as one Commissioner and recused himself.