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HomeMy WebLinkAbout1299 KawulichIn Re: William Kawulich File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Daneen E. Reese Frank M. Brown Donald M. McCurdy Michael Healey Paul M. Henry 03 -006 Order No. 1299 12/1/03 12/15/03 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Kawulich 03 -006 Page 2 I. ALLEGATION: That William Kawulich, a (public official /public employee) in his capacity as a supervisor of Half Moon Township, Centre County, violated Section 1103(a), (f) of the Public Official and Employee Ethics Law (65 Pa.C.S. §1101 et seq.) when he participated in actions of the board of supervisors resulting in purchases being made from Heritage Electric Company, a business with which he is associated; when he participated in actions of the board to a rove payments to Heritage Electric Company; and when contracts were entered into with -1 eritage Electric Company in excess of $500 without an open and public process. II. FINDINGS: 1. William Kawulich has served as a Supervisor for Half Moon Township, Centre County since January 5, 1998. a. Kawulich served as Chairman of the Board of Supervisors from January 7, 2002 until the end of April 2002. b. Kawulich served as Vice - Chairman in 1998 and 1999. 2. A five - member board of supervisors governs Half Moon Township. a. Voting regarding the spending of Borough funds and other official actions occurs after a motion is made and properly seconded. b. The chairman of the board may make or second motions and participates in all votes of the board. 3. David Piper served as the Township Manager for Half Moon Township from August 27, 1998, through February 2002. a. As part of his duties as the township manager, Piper was responsible for contacting vendors when the township required various maintenance /repair services. 4. Piper normally contacted and utilized local vendors, when possible, regarding maintenance /repair services required at the township. a. Piper did not publicly advertise for bids regarding services needed if the work would not exceed the $10,000.00 bidding threshold required by the Second Class Township Code. b. Dependent on the work required, Piper may or may not contact various vendors for estimates on the project. 5. Piper was authorized by the board of supervisors to initiate services in and around the township municipal building and related property if costs associated with the services were not excessive. a. Piper was authorized to determine which vendor would be awarded the job. b. Piper was not required to obtain prior approval of the board of supervisors before awarding the job if the estimated cost was approximately $200.00 or less. c. Approval of the board of supervisors was provided after - the -fact by approving the monthly bill list on which payment to the vendor was documented. Kawulich 03 -006 Page 3 6. Piper did not normally report maintenance /repair services performed at or around the municipal building to the board of supervisors at monthly meetings. a. Piper presented the specific information to the board depending on the cost of the service. b. Services rendered by various vendors were documented on the monthly bill list. 7. For any services estimated at exceeding the $200.00 threshold, Piper would present the information to the board of supervisors for a determination of how to proceed. a. Piper followed the direction of the board of supervisors once a determination had been made. 8. Kawulich is the owner of Heritage Electric, an electrical business located at 201 Autumn Circle, Port Matilda, PA 16870. a. Heritage Electric performs commercial, residential and industrial electrical contracting work. 9. Kawulich filed a Fictitious Name application for Heritage Electric with the Pennsylvania Department of State on July 6, 1981. a. The company address on the Fictitious Name filing is documented as 228 S. Duffy Road, Butler, Pa. b. Kawulich is documented as the sole owner. 10. Kawulich's profession as an electrician is common knowledge among the board of supervisors. a. Kawulich's knowledge of the electrical field was considered valuable and convenient among board members in association with repairs and services needed at the township building and other township property. 11. Kawulich has been performing electrical repair /maintenance /installation services for Half Moon Township since approximately 1985, at least 13 years prior to his election to the board of supervisors. 12. As the need for electrical services developed in the township building or related property, Kawulich was often requested for his opinion on the repair /service by the remaining board members. a. The majority of requests for Kawulich to "look at" or "take care of" problems in and around the township occurred during monthly meeting settings. 1. The request by the board for Kawulich's input was not normally documented in the minutes. b. Kawulich would normally troubleshoot the situation and report back to the board with a price estimate. 13. Subsequent to receiving Kawulich's opinion on the service required, the board of supervisors requested Kawulich to complete the work. a. The board of supervisors viewed such requests as informal in nature. Kawulich 03 -006 Page 4 14. The board of supervisors did not consistently vote on services to be performed by Kawulich for Half Moon Township. a. Services performed by Kawulich were not formally voted on at township meetings prior to occurring unless the service was expected to exceed the $200.00 threshold. 15. Kawulich completed four services for the township which were estimated to be greater than $200.00 during the time frame of February 1998 through January 2003 as follows: Invoice Invoice Dates Number Cost Description 11/17/99 329 $1,538.27 Wire salt storage building and and 01/03/00 372 09/25/00 700 695.00 Install new heaters 11/08/02 1675 650.00 Install parking lot lights 01/14/03 1743 270.00 Install lights at ice rink a. Invoice numbers 329 and 372 reference the same service; however; two payments were made to Kawulich in the amounts of $1,218.27 and $320.00 respectively. b. Of the four services provided which totaled over $200.00, formal votes approving Kawulich's completion of the work occurred on three occasions. 16. The services provided by Kawulich in November 1999 in relation to wiring the salt storage building were not approved by official vote of the board of supervisors. a. The board of supervisors authorized Kawulich to perform the supervisors but no votes were officially recorded in township meeting minutes. 17. Minutes of the March 9, 2000, regular meeting of the board of supervisors document a motion by Supervisor James Andrews, seconded by Supervisor Christine Bracken - Piper to replace the existing meeting room heaters with new heaters that have thermal shut off switches. a. The motion passed by a vote of 3 -0 -1. b. Kawulich is documented as abstaining from the vote because he may be involved in the installation. c. Kawulich invoiced the township on September 25, 2000, in the amount of $695.00 for the costs of the heater installation. 18. Minutes of the October 10, 2002, regular meeting of the board of supervisors document discussion on the cost for two lights on poles for the parking lot if existing poles and no shields were used. a. Kawulich is documented as providing a report of an estimated price of $550.00 including tax. 19. A motion was subsequently made at the October 10, 2002, meeting by Supervisor Bradley Karch, seconded by Supervisor Timothy Tressler to move ahead with the installation of the lights in the parking lot. Kawulich 03 -006 Page 5 a. The motion passed by a vote of 4 -0 -1. b. Kawulich is documented as abstaining since he would be doing the work. c. Kawulich invoiced the township on November 8, 2002, in the amount of $650.00 for the parking lot lights. 1. The invoice included $100.00 labor costs. 20. Approval was given by the board of supervisors during the January 9, 2003, regular meeting of the board of supervisors for the installation of lights at the township ice rink. a. The ice rink project was initiated in 2002 by the board. 1. Funding was sought by the board from the state in the form of a grant. b. Lighting was the final costs associated with completing the project. c. Minutes note Roadmaster Scott Brown reporting on prices received from Allegheny Power. d. The board discussed the type of lighting desired. e. Kawulich participated in the discussion and provided pricing for lighting. 1. Kawulich estimated that the total cost for the installation, including setting the light poles; the cost of the lights and other materials; and labor would be approximately $1,500.00. 21. A motion was subsequently made during the January 9, 2003, meeting by Supervisor Tressler, seconded by Supervisor Karch to spend up to $1,500.00 for lighting at the ice rink. a. The motion passed by a vote of 3 -0 -1. b. Kawulich is documented as abstaining from the vote. c. No vote was taken authorizing Kawulich to perform the service. 1. The board verbally authorized Kawulich to perform the service. 22. Kawulich invoiced the board on January 14, 2003, in the amount of $270.00 for the installation of lights at the ice rink. 23. While serving on the board of supervisors from 1998 through 2003, Kawulich, through Heritage Electric, billed and was paid by Half Moon Township for services associated with electrical installation, maintenance, and repair, a total of $3,708.27 of which $983.00 was labor. Invoice Invoice Check Check Check Date Numbe Date Numbe Amount r r Description Hook up compressor/ Maintenance Bldg. None None 02/16/98 4402 $60.00 Kawulich 03 -006 Page 6 Invoice Invoice Check Check Check Date Numbe Date Numbe Amount r r Description Hook up storage None None 07/13/98 4554 30.00 building 03/20/99 50 04/09/99 4854 35.00 Changed out bad light ballast 03/23/99 56 04/09/99 4854 35.00 05/20/99 107 06/11/99 4934 30.00 05/21/99 109 06/11/99 4934 50.00 09/05/99 226 09/10/99 5032 170.00 11/17/99 329 12/10/99 5149 1,218.27 01/03/00 372 01/14/00 5196 320.00 Changed out second ballast Added switch/ receptacle Electrical work/picnic ground shelter Remove old light and install three new Wiring salt storage building Balance of Labor -Inv. 329 08/12/00 640 09/06/00 5503 40.00 Change pole light bulb 09/25/00 700 10/13/00 5550 695.00 Install new heaters 12/12/00 798 12/15/00 5641 50.00 Fix building shed light 02/14/02 1311 03/14/02 6234 55.00 Electrical work - Igniter 11/08/02 1675 11/15/02 6546 650.00 Install new parking lot lights Electrical work - Install 01/14/03 1743 03/04/03 010 270.00 two ice rink area lighting & overhead triplex Total $3,708.27 24. Services performed by Kawulich on or about November 17, 1999; September 25, 2000; and November 8, 2002, in the amounts of $1,218.27, $695.00, and $650.00 respectively were not publicly bid or advertised by the township. a. These projects were not put out for bid because the amounts would not exceed requirements of the Second Class Township Code. b. Of the services performed, formal board votes approving Kawulich to complete the work occurred for the September 25, 2000 and November 8, 2002, work which was in excess of $500.00. 25. Heritage Electric /Kawulich was requested /chosen to perform services for the township for a variety of reasons. Kawulich 03 -006 Page 7 a. The township received a reduced rate for services through Kawulich. 1. Kawulich charged the township the cost of labor only. 2. Kawulich supplied any parts necessary for repair /maintenance at cost (no price mark -up) to the township. 3. Kawulich occasionally performed services for the township free of charge. b. Kawulich normally responded to service calls in a timely manner. c. Kawulich's quality of work was considered to be acceptable. 26. Kawulich participated in voting to approve bill lists on thirteen occasions when payments to Heritage Electric were approved. 27. The township manager and all members of the board of supervisors maintain signature authority over township accounts. a. All checks require the signature of the township manager and two supervisors. b. The township does not utilize signature stamps. 28. Heritage Electric was issued 13 checks from Half Moon Township totaling $3,708.27 as payment for maintenance /repair type services provided. a. Kawulich signed as an authorized signatory on seven of the thirteen checks issued to Heritage Electric as shown below: Check Number Check Amount 4402 $60.00 4554 30.00 4854 70.00 4934 80.00 5032 170.00 5149 1,218.27 5641 50.00 Total $1,678.27 29. The thirteen checks from Half Moon Township for services rendered totaling $3,708.27 were deposited into Heritage Electric's business checking account. 30. Kawulich's association with Heritage Electric was common knowledge among board members. 31. Kawulich believed that it was permissible to do business with the township as long as his labor costs did not exceed $500.00. a. Kawulich had discussions with former manager David Piper during which these matters were discussed. 32. Kawulich asserts that none of the business work his company did for the township exceeded $500.00 in labor costs. Kawulich 03 -006 Page 8 a. Kawulich further asserts that all parts used on township business were provided by him at cost. 33. Kawulich abstained from voting to authorize electrical work on March 9, 2000; September 25, 2000; October 10, 2002; and January 9, 2003. a. Kawulich was aware the board would use his services and abstained from the vote. III. DISCUSSION: At all times relevant to this matter, the Respondent, William Kawulich, hereinafter Kawulich, 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 se as codified by the Public Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 65Pa.C.S. § 1101 et seq., which Acts are referred to herein as the "Ethics Act." The allegation is that Kawulich, as a Half Moon Township Supervisor, Centre County, violated Sections 1103(a), (f) of the Ethics Act when he participated in board actions as to service contracts with Heritage Electric Company, a business with which he is associated, with contracts in excess of $500 not awarded through an open and public process. 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 "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 Kawulich 03 -006 Page 9 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 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. 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. Since January of 1998, Kawulich has served as a supervisor on the five-member board of supervisors in Half Moon Township. In a private capacity, Kawulich owns Heritage Electric which performs commercial, residential and industrial electrical contracting work. The other supervisors know that Kawulich is an electrician and considered his knowledge as valuable and convenient as to repairs and services needed in the municipal building or other township property. Kawulich had performed electrical repairs, maintenance, and installation services for the township since approximately 1985 which is 13 years prior to his election to the board. The township manager, David Piper, has general responsibilities which include contacting vendors when the township requires maintenance or repair services. For services under the $10,000 bidding threshold provided in the Second Class Township Code, Piper does not publicly advertise for bids. As to other services, depending upon the work required, Piper might contact various vendors for project estimates. Such services rendered by various vendors are documented in the monthly bill lists. If the estimated services exceed $200, Piper would present the information to the board of supervisors and seek direction on how to proceed. The board of supervisors authorized Piper to initiate services for the township building and related property if the costs associated would not be excessive. Other board members often requested Kawulich for his opinion regarding a repair or service and at times the board members requested Kawulich to do the work. Such services performed by Kawulich were typically not voted on at board meetings unless the service might exceed the $200 threshold. During the period between February 1998 and January 2003 there were four instances when Kawulich performed services for the township that exceeded the $200 threshold. On three occasions, formal votes were taken to approve Kawulich's completion of the work. As to the fourth repair in November 1999 as to the wiring of a salt storage building, there was no approval by official vote of the board although Kawulich was authorized to perform such services. Kawulich 03 -006 Page 10 The minutes of the board of March 9, 2000, reflect a vote to replace existing boardroom heaters with new models that contained thermal shut -offs, which motion passed on a 3 -0 -1 vote with Kawulich abstaining. At an October 10, 2002, meeting of the board, discussions occurred about installing two lights on existing poles in a parking lot with Kawulich estimating the price of the project to be $550 plus tax. A motion was then made to install the lights which passed on a 4 -0 -1 vote with Kawulich abstaining. After the board of supervisors in a January 9, 2003, meeting determined that the township's ice skating rink should have lights installed, a motion was made to spend up to $1,500 for that purpose, which motion passed on a 3 -0 -1 vote with Kawulich abstaining. Heritage Electric performed the electrical service on all the contracts. The billings and payments as to Heritage Electric from 1998 through 2003 for performing various services for the township are delineated in Fact Finding 23. Of the services provided there were three instances where the contracts were in excess of $500 but not awarded through an open and public process. See, Fact Finding 24. As to the services performed by Kawulich, he provided reduced rates to the township, charged the township for the cost of labor only, supplied parts at cost without any mark -up, and occasionally performed services free of charge. In addition, Kawulich typically responded to service calls in a timely manner and performed an acceptable quality of work. As to the invoices submitted by Heritage Electric to the township, Kawulich participated in voting to approve bills lists on 13 occasions which contained invoices from Heritage Electric. In addition, Kawulich cosigned 7 of the 13 checks of the township issued in payment to Heritage Electric for the various electrical services that were provided. 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 in the Consent Agreement set forth a proposed resolution of the allegations: an unintentional violation of Section 1103(a) of the Ethics Act when Kawulich voted to approve bill lists and signed checks as to his business, Heritage Electric; and no violation of Section 1103(f) when the township awarded contracts to Heritage Electric without an open and public process on the basis that Kawulich abstained from voting. In addition, Kawulich agrees to make payment in the amount of $150.00 to the Commonwealth of Pennsylvania through this Commission within 30 days of the issuance of this order. In applying Section 1103(a) of the Ethics Act to the instant matter, we note that there were uses of authority of office on the part of Kawulich as to voting on bill lists of the township which included payments to Heritage Electric and, in some instances, as to co- signing township checks to Heritage Electric. There were also private pecuniary benefits consisting of the contracts that Heritage Electric received which inured to Kawulich as the sole owner. Since Kawulich owns Heritage Electric, it is a business with which he is associated as that term is defined under the Ethics Act. However, we also note that Kawulich only charged the township for labor costs without any price mark -up for parts and occasionally worked free of charge in a timely manner with an acceptable quality of work. Accordingly, we find an unintentional violation of Section 1103(a) of the Ethics Act when Kawulich voted to approve bill lists and co- signed some checks payable to his business, Heritage Electric. See, Futules, Order 1231. Turning to the Section 1103(f) allegation, that provision of the Ethics Act allows a public official, child, spouse, or business with which associated to contract with the governmental body but if the contract is $500 or more, it must be awarded through an open and public process. In Half Moon Township, the existing practice is to award contracts without an open and public process unless the contract exceeds the $10,000 threshold set forth in the Second Class Township Code. The record reflects that there were three contracts between Heritage Kawulich 03 -006 Page 11 Electric and the township which exceeded the $500 threshold of the Ethics Act but the township awarded the contracts without an open and public process. As to the contracts with Heritage Electric, the board knew of Kawulich as an electrician and knew of his business. Typically, when there was a need for electrical service in the township, it was discussed by the board members who sought input from Kawulich. When the vote was made to award the contract, Kawulich did not participate. Participation or voting is not a prerequisite or element to establish a transgression of Section of 1103(f) of the Ethics Act. In this case the parties have proposed no violation of Section 1103( on the basis of no participation. Since we do not agree with the analysis of the parties, we will find that there is no violation of Section 1103(f) of the Ethics Act as to the three contracts that were in excess of $500 between Heritage Electric and Half Moon Township on the basis of a non pros by the Investigative Division through the exercise of its prosecutorial discretion. Accordingly, Kawulich did not violate Section 1103(f) of the Ethics Act regarding three contracts between his business, Heritage Electric, and the township that were in excess of $500 and awarded without an open and public process based upon a non pros by the Investigative Division. In addition, Kawulich's agrees to make payment of $150.00 within 30 days of the issuance of this final adjudication through this Commission to the Commonwealth of Pennsylvania. 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, Kawulich is directed to make payment of $150.00 to the Commonwealth of Pennsylvania through this Commission within 30 days of the issuance 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. Kawulich, as a supervisor of Half Moon Township, is a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. Kawulich unintentionally violated Section 1103(a) of the Ethics Act when he voted to approve bill lists and co- signed some checks payable to his company, Heritage Electric, for electrical services provided to the township. 3. Kawulich did not violate Section 1103(f) of the Ethics Act regarding three contracts between his business, Heritage Electric, and the township that were in excess of $500 and awarded without an open and public process based upon a non pros by the Investigation Division. In Re: William Kawulich ORDER NO. 1299 File Docket: 03 -006 Date Decided: 12/1/03 Date Mailed: 12/15/03 1. Kawulich, as a supervisor of Half Moon Township, unintentionally violated Section 1103(a) of the Ethics Act when he voted to approve bill lists and co- signed some checks payable to his company, Heritage Electric, for electrical services provided to the township. 2. Kawulich did not violate Section 1103(f) of the Ethics Act regarding three contracts between his business, Heritage Electric, and the township that were in excess of $500 and awarded without an open and public process based upon a non pros by the Investigation Division. 3. Per the Consent Agreement of the parties, Kawulich is directed to make payment of $150.00 to the Commonwealth of Pennsylvania through this Commission within 30 days of the issuance of this order. a. Compliance with the foregoing will result in the closing of this case with no further action by this Commission. b. Non - compliance will result in the institution of an order enforcement action. BY THE COMMISSION, Louis W. Fryman, Chair