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881 Amsler
• STATE ETI -HCS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 In Re: Richard L. Amsler : File Docket: 92- 058 -C2 : Date Decided: Mav 6, 1993 Date Mailed: Mav 11, k9p3 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 regArdj.ng a possible violation of the State Ethics Act, Act 9 of 1989, 65 P.S. §401 et seq.. 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 the Investigation Division. An Answer was filed and `heari r 0' Wit. hid . The record is complete. This adjudication 14 the Comm sj.Qn is hereby`.i,ssued which sets forth the individual Allegatzions, Findings of Fact, Discussion, Conclusions of Law anti" Oi`der. ,; a - -, ., This ad udicat ion is 'final and will be "made available As a public document fifteen days after is§uaiice.- However, reconsideration may be requested which will defer public release of this adjudication pending action -on the request b' tie Commission. A request for reconsideration, however, does net-:-affect the finality of th s adjudication. reconsidei request must be received at this Commission- within fifteen dayst0E. issuance and must include a detailed e *p ana'tionv- of- ea Ithe - i'Sbns ' as to why reconsideration should be granted - in ' confformity w th 51 Pa. Code S2.38. The files in this case will remain confidential in accordance with Act 9 of 1989, 65 P.S. §408(h) during the fifteen .accordance and no one unless the right to challenge. this Order is waived, may violate confidentiality by releas' ng ; cus&ing ':or ' circulating this Order. However, confidentiality =does preclude discussing this case with an attorney at law. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor subject to a fkne of not more than $1,000 ar imprisonment for not -Ynore than one year, '65 S409(e) . f± � A s1pr, .92,4058-C2 Page 2 I. ALLEGATION: That Richard I,.. ;Ams a - member of the Water Ituthbtity for the .Borough of It ..art,,, Perry County, violated the blowing pv.;isions of :the ' State :tics Act (Act 9 mss 'fin ihe need the autho ity :of his t porbitian to obtain campentatitna :nit rrovided for by law by pa tie parting in the decision '?to eat rcosigeneation for his servi re on the .Authority. Section 3. 3estricted Activities !(a) No public official or pubic emmploee shall engage in conduct that , oazistitutes a conflict of interest. 65 $.4.03(a. Section 2. Definitions "Conflict" ,or ' "conflict of intent." Use by a public official or public employee of the .authority of his office or employment o= any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his Immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" dues not include an action having a de minimis economic impact or which affects to the same •degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate fly or a business with which he or a member of his immediate family is associated. 65 P.S. 5402. II. FINDINGS: A. PLEADINGS: 1. Richard L. Amsler has served as a member of the Newport Borough Water Authority since 1989. 2. The members of the Newport Borough Water Authority ate appointed by the Newport Borough Council. 3. The Newport Borough Council never approved compensation for members of the Water Authority. 4. In early 1991, the members of the Authority began discussing Amsler, 92- 058 -C2 Page 3 the issue of compensation for Authority members. 5. The Authority Secretary was instructed to determine the average amount of each member's water bill and report back to the Authority members with the information. a. This action was not approved at any Authority meeting in that it was merely a request. 6. At the April, 1991 meeting of the Authority, board members decided not to pay their water bills as compensation for their work. a. The members decided to begin the compensation by not paying their second quarter of 1991 water bill. (1) Amsler asserts that such action occurred by officers. b. Amsler asserts that the officers of the board decided that some form of compensation was appropriate. 7: The discussions and the decision on the - 'compen$attan 'were not recorded in the minutes of the Water Authority reetis. 8 .. The minutes 'of the January 14, • 19 91; -'Water Authority meeting indicate Steve Flickinger Was elected 1 Cheirmaft, Jerry Robinson was elected Vice Chairman, and James Shick was elected Secretary /Treasurer _ _, c . .. 9. The minutes of the ' January .13,- 1992, ` Wa e<r..Authority meeting do not reflect a Chairman, Vice Chairthati j-` Secretary or any other officer being elected or appointed. 10. Minutes of the Sune''8, 1992, Water Authority li.eoting confirm that a discussion ensued among members of the Authority that since the second quarter of 1992, 'the -Vat portion of Authority members =water arid sewer bills- had been waived as an incentive to serve on the Water Authority, a. Members' discussed provisions of the Munidipal Code and indicated that borough council sets reieration for members of a working Authority, but the Authority sets remuneration for officers of the working Authority. r . b. Based on the discussion, a Amsler, seconded by Jim Shick of the Authority officers' remuneration. Motion carried - ., Y No abstentions noted. motion was Made by Dick to waive the water portion water and sewer bill as . Member Robinson present, Amsler, 92-058-C2 Page 4 c. 13. Authority Richard L. 14. Authority fol./owing Authority: TOTAL The minutes also indicate the following appointments as officers of the Authority: Chairman: Vice Chairman: Treasurer: Secretary: Assistant Secretary /Treasurer: (1) The above occurred following the resignation Of Steve Flickinger. 11. The duties of the Authority members did not change following the appointments made at the June 8, 1992, , meeting. a. Amsler asserts that the Authority officers supplement the effort of regular employees. b. Amsler claims that the duties of Authority officers constantly change. 12. Authority members confirm that not paying the water bill as compensation for serving on the Authority was discussed for some time. 4. Members believe they should be compensated for attending meetings much the same as members of borough council. (1) Amsler asserts that the officers believed that they should be compensated due to the amount of time spent on Authority business in addition tc meetings. Members took the compensation in the form of waived water bills because it was better than taking a salary. Second. Quarter 1991 Third Quarter 1991 Fourth Quarter. 1991 Second Quarter 1992. $ 55.31 - $ 69.74 $ 62. - $ $225. 26 Gerald Robinson Richard Amster James Sick Daniel Steigleman New Member records indicate account t482 is in the name of Amsler, 132 N. Fifth Street, Newport, PA 170 records indicate that Amsler did not pay the bills as compensation for his service on the a. The bill for the. First Quarter of L992 was; Midi by Ais ]er, 92- 058 -C2 Page 5 B. TESTIMONY: 15. Gerald Robinson is a Member of the Newport Borough Water Authority (NBWA). a. The following arguments are made by Robinson. 1. That necuniary is defined as money exacted or money given as a reward so that no member or officer 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. Amsler. 4. That the Municipality Authorities Act may be construed to mean that the Authority may compensate officers. 5. That he, Amsler and Shick did not take money but only water. b. 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 Authority just like the current Board had the same responsibilities of issuing bonds, of deciding which water wells were needed, of deciding whether new wells were needed and of determining whether other wells should be shut down. e. The Authority officer position of Assistant Secretary/ Treasurer did not exist prior to 1992. In 1991, the Authority officer positions were Chairman, Vice-Chairman, and Secretary /Treasurer.. 1. In prior years, the position of Secretary and • Treasurer were separated. {a At that time,. there were four members. Akasler, 92- 058 -C2 Page 6 g. The new Authority position of Assistant Secretary/ Treasurer occurred at the June, 1992 Authority meeting. h. In 1991, there were five members but only three were elected to positions. i. In 1992, there were four members with five elected positions. 1. - Four members were each elected to a position. 2. The fifth position was left open for the new member to be appointed. . Each Authority member does what is necessary to get a job done irrespective of their position title. 1. The duties that the members perform are not unique to office positions. 2. The duties that are performed are as board members. C. DOCUMENTS: 16. The minutes of the Newport Borough Water Authority (NBWA) for January 14, 1991, reflect in part that Authority members were elected as officers. j a. Jerry Robinson was made Vice - Chairman upon motion by, Shick, seconded by Flickinger, which carried. b. James Shick was made Secretary /Treasurer upon motion by Flickinger, seconded by Steigleman, which carried. 17. As to the January 13, 1992 meeting of the NBWA, the minutes reflect in part that no action was taken to elect officers for the NBWA. a. The following excerpt appears on page three of the minutes: Have council re- appoint Dick Amster retroactively to the 1st of the year. 18. The following is a quoted excerpt from the minutes of the NEWA for the meeting of June 8, 1992: A motion was made by Dick Amster to nominate Gerald Robinson as Chairman sec. by Jim Shick. There were no other nominations. Motion carried. Amster, 92- 058 -C2 Page 7 pISCUS ION: A motion was made by Jim Shick sec.' -by Jerry Robinson to nominate Dick Amsler as Vice Chairman. There were no other nominations. Motion carried. Since the second quarter of 1992, the water portion of the authority members water and sewer 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 Authitty, themselves set renumeration `foil office re f' the working authority. Therefore: ' A motion was made by Dick Ams1er'sec. bye Jim Shick for waiver of the water portion of -- the 'officers of the Water `'Authority's wrater and sewer bill as renumeration.' Monet. The officers Of the, Newport Boiout $31't "r' . z" � = Authority are as follows: - :1 -1 =' - �j "% �- . •� - 7 carried. Chairman: Vice Chairman: _Vide Secretary: Assistant Sec. /Treas.: * * * Gerald Robinson Richard Aisle=' ' 14'2111 � • James Shick Daniel Steiglem'izi` ,. New Member • - ' A a'`Member of the Water Authority for the Boroiigh of Newport 'try, ;County, Richard L. Amsler, hereinafter 'Amsler, is a publl cslicia, . as that term is defined under Act 9 of 1989. 65 P.J. §402. As such, his conduct is subject to the provisions of the Et Tics Law and . the restrictions therein are applicable to - bin : Initially, it is noted that Section 9 of Act' 9' of - June' 2 1989 .,Provides, in part, as follows: "This amendatory act shall not apply to violations committed prior 'to the' effective date of this act, and causes of action initiated for such violations shall be governed by the prior law, which is continued in effect for that purpose as if this act were not in force. For the purposes of this Amster, 92- 058 -C2 Page 8 section, a violation was committed prior to the effective date of this act if any elements caf the violation "occurred prior thereto." Since the occurrences in this as transpired after the effective date of Act 9 (June 26, 1989), we must apply the provisions of Act 9 to determine whether the Ethics Act was violated Under Section 3(a) of Act 9 of 1989 quoted above, a public official /employee shall not engage in "conduct that constitutes a conflict of interest. The issue before us is whether Amslsr as a Member of the Newport Borough Water Authority (N'BWA) violated Section 3(a) of Act 9 of 1989 by using the authority of office to obtain a private pecuniary benefit when he voted to provide compensation to himself consisting of the forgiveness of Authority utility bills from the third quarter billing of 1991 forward. ?actually, Amster is a member of the NBWA with the Newport Borough Council as the governing body% Due to 4BWA board members performing additional duties, action was taken whereby, ": . the water portion of the authority members water and sewer bills has been waived as incentive to serve on the Water Authority." N$WA 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 Amster, argues that the duties of the Authority members have drastically changed, that the Municipality Authorities At allows the Authority to 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 Authorities Act in the context of whether such compensation is allowable under the law. If such compensation is prohibited by law, it is clear that the use of authority of office by municipal authority board members to give themselves such compensation would constitute a private pecuniary benefit. Mean, Opinion 90 -007; Snick /Amara, Opinion 91 -006. The Municipality Authorities Act provides in part as follows: Every Authority is hereby granted, and shall have and may exercise all powers necessary or convenient for the carrying out of the aforesaid purposes, including but without limiting the generality of the foregoing, the following rights and powers: Amsler, 92- 058 -C2 Page 9 53 P.S. S306B. (f) To make by -laws for the management and regulation of its affairs. (g) To appoint officers, agents, employees and servants, to prescribe their duties and to fix their compensation. 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 bre...de.terMined by the crovernina body or bodies.. of - . the municipality or municipalities, but none of such salaries shall be increased br 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 shall constitute a quorum of the board "for, purpose of organizing the Authorit,y Auld conducting the business thereof and for All other purposes, and all action may be taken by vote of a majority of the members present, unless in any case the by -laws shall.requirela larger number. The board shall have full authority to manage the properties and business of the Authority and to prescribe, amend and repeal by -laws, rules and regulations governing the manner in.which the business of the Authority may be conducted, and the powers granted to it may be exercised and embodied. The board .shall _fix _and determine the number bf-ficers, aaents_.and - employees of the Authority and their respective _powers , duties and compensation And - may , appoint:- to such Office br officesT.any member of the board with such powers i. < dut _ and ,compensation as the. board- may deetw pip sg 53 P.S. SS309B, C (Emphasis added): Section. 7 of Municipality Authoritie§. Act of 1945, 53 P.S. =5307, does ti grant an authority tii. -:aril * payers necessary or ..msler t2 Page conyenient 4kos the parrying out of the purposes of the .pct. SubA.eetipn C provides that all actions of an author . ; ;be tab= by ,a vote of the majority of the members present :mod firrther empowers an authority to fix and - determine the number of office=s, agents and' employees of the authority and the res ecttjwe pots,, duties and compensation . The board may appoint to s. urrt offIce tAr 44tces any member- of the board with such powers, d'ut ,es ,and cg nation .as the board may deem proper. Az to Itbe arise different tvfarences to the phraseology of th* !iuni.of pa:+1..' Aut ?9,rities Act, the generalized language of tke first piar405 not form a basis fora specific authorization to eppoint onatzeit to an 'authority office or position and then vote to „set the salary' fox such posit -ion. §aa, Swi /Aman, supra. As to the second phrase which authori §es sottons to be taken by a vote of the ma$ of ti Viers- present, suth language is merely a staggmen -t that a majority vote iss Sufficient to take official action . That phraseology doe§ =countenance or g *t iorize vo by sutingXity s.s.mber$ in cases _ whore they have a conf Lis . It if were the intent of the General Assembly to allow w atu ni a tthgrity Viers to vote in matters wherein they had a per fig ar intere the General Assembly would have done to with yery clear specific language. For example, the Second Class To nsh . ,e94@ as t9 t free der boards makes it clear that i the e ere PI th©se board$ stay specifically vote for themselves to enumerated township eompea§atAn positions, S, 53 p,S, 05514. Thus, if the Gs' P41— 4e§eMbly had thg intent for municipal author member@ to vete in all instances through a majority vote of the members presann $peei €ic language would have been utilized ' fq Vie)? purpose A s noted above, the instant phraseology merely aiseotz that .gf f p a action our by a vote of the majority of the members present but does not sendene a blanket voting in cases AerQ conflict$ would exist as to the individual member so voting. AA to the t iir_ 4 referenced phrase concerning the fixing of offioers agents and employees with compensation and appointments to those ipaitigns by board members, we must once again note the express aljsence of nay language which would authorize an individual member gf a municipal board to vote for his own appointment or to vote for the setting of the compensation for his own position. Absent such an express author gatigh; we have concluded that it is cor}trary tg the Ethics Law €or a. municipal authority board member to v €or his own appeintie }t and CeMpenSation. Syick /man, supra. It is important to ante that tho _ Municipality Authorities Act, 53 P.S. 530914, does ;'ecquire that the oompeneet3.on o f an authority board member must be determined by the appointing autho As we noted in Swick /Aman, we age pay concerned about those instances where a muhzo441 beard attests to create so called officer positions and set the compensation for those Amsler, 92- 058 -C2 Page 11 positions and appoint board members as a means of circumventing the statutory limitations that the compensation for a municipal authority board member be set by the governing body. In applying the provisions of Section 3(a) of Act 9 of 1989 quoted above to the instant matter, we find that Amsler 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 Amsler in voting. As a result of such use of authority of office, Amsler 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. S305B(g)), 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 /Arran, supra. Finally, the setting of the compensation for the board members themselves must be set by the governing authority as per 53 P.S. S309B. In the context of the NBWA, it is clear that the iaoard members were "trying to fix their compensation as board members. 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 compensation and in order to achieve that result the NBWA board used officer positions. Thus, although the form of the transaction was the utilization of the officer positions, the substance was the-NBWA board compensating its board - members in derogation of the Municipality Authorities Act which requires that such action be done by the governing authority. Having found that the substance of the NBWA board action was to compensate authority members through officer positions it is clear that such is contrary to the Ethics Law. In fact, such compensation is strictly prohibited by the Municipality Authorities Act, 53 P.S. §309B. Therefore, Amsler did use public office by voting to obtain a private pecuniary benefit which was in violation of Section 3(a) of Act 9 of 1989. We do not need to question whether the duties of the NBWA board - inembiers have =hanged .s ince that ks -fit - material to our determination. As to the issue of whether such forgiveness ,of the utility bills is not - pecun ary:beneit the fact that an out -of- Page 1 b OOket expense does not have to be paid is a private pecuniary enefit. - See, Szymanowski, Opinion 87 - 002. Lastly, as to the argument that such compensation is allowed by the Municipality Authorities Act, we considered and rejected that Argument for the reasons noted 4b9ve,_ In reaching the above result we do not believe that Amsler gcted with ail intent to violate the Ethics Law or with any improper potl.vo, We likewise do net need to question or dispute that edditionel w9rk was perf=led. In any event, any such work was not 4s e f fiGerP but as beard members. A$ such, . the additional aompensatiQh must be obtained from the governing body and not the g4tbority beard as was dove in this ease. Given the totality of the eireemetences in this case, we will take no further action. Ammer le reminded as to future ° action that the appropriate and legal meehenisie for authority board members seeking additional 9?mpensstion is through ,action by the governing body. TV, cc eL.. iO JL9L. M ; 1, RioAr4 ,: A aier alp a Member of the Newport Borough Water Alit/levity, is a public official subject to the provisions of Aet Af 1989. 2 . Amai @r visigtod Sectien 3(a) of Act 9 when he used the authority Of Office to obtain a private pecuniary benefit for himself where he artici.pated in obtaining compensation eeflsiatiftq of the forgiveness of his own authority utility bill *, 92=058. -C2 In Re: Richard L. Amsl,er File .Docket: 92- 058 -C2 Date Decided: May 6( 19 - 93 : Date Mailed: (av 11, 1993 ORDER NO. 881 1. Richard L. Amsler, as a Member of the Newport Borough Water Authority, violated Section 3(a) of Act. -$1 wh 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, JAMES M. HOWLEY Commissioner Allan M. Kluger did not participate in the final decision of this case because he presided at the hearing,. as ortg Commissioner and recused himself.