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HomeMy WebLinkAbout1377 ShickIn Re: George Shick, File Docket: X -ref: Date Decided: Date Mailed: Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Raquel K. Bergen Nicholas A. Colafella 04 -055 Order No. 1377 9/12/05 9/21/05 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 investigation, the Investigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investigation, the Investigative Division issued and served upon Respondent a Findings Report identified as an "Investigative Complaint." An Answer was not filed and a hearing was deemed waived. 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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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. Shick, 04 -055 Page 2 ALLEGATION: Shick, a public official /public employee, in his capacity as council person for Summerville Borough, Jefferson County, violated Sections 1103(a) and 1103(f) provisions of the State Ethics Act (Act 93 of 1998), 65 Pa.C.S. § §1103(a) and 1103(f) when he used the authority of his office for private pecuniary gain and when he and /or a business with which he is associated entered into a contract with the borough in excess of $500 without an open and public process in that Shick contracted with the borough in excess of $500 in calendar year 2004 without an open and public process; when he participated in discussions resulting in his company being selected to provide services to the Borough; and when he participated in actions of council approving payments to him and /or a business with which he is associated. II. FINDINGS: 1. George Shick has served as a council member for Summerville Borough, Jefferson County, since January 2004. a. Shick does not serve in any officer positions on the board. b. Shick has held no other elected or appointed public positions. 2. Summerville Borough is governed by a seven - member council and a mayor. a. Council serves as the legislative body of the borough. 3. In a private capacity, Shick has been retired from full -time employment for approximately three years. a. Prior to retirement, Shick operated a remodeling company known as George Shick Remodeling. 1. This business was not registered with the Pennsylvania Department of State. 2. Shick operated this business for numerous years. b. Shick currently operates this business on a part -time basis. 4. Prior to Shick's service on council, the borough owned a building that housed the borough office, the borough public library, and a rental hall. a. In an effort to reduce costs, the borough sold the building in December2003. b. The building cost the borough an excessive amount of money to operate and maintain each year, with only a small fraction being covered by income from the building. c. Due to the sale, the borough needed to vacate their office by the end of January 2004. 5. Shick was opposed to the sale of the borough building and made his position known to the other council members and the public prior to the beginning of his term on council. Shick, 04 -055 Page 3 a. After the November 2003 election, Shick and other newly elected council members attended public council meetings and expressed views on the borough building issue. 6. Borough Council President William Gatehouse was primarily responsible for the details regarding the sale of the old borough building and securing a new location for the borough office. 7 In or around early January 2004, Gatehouse chose to locate the borough office at 12772 Harrison Street. a. There was no council vote or other official action regarding the location of the borough office. b. No lease or rental agreement has been negotiated or signed between the owners of the building and the borough. 8. The building located at 12772 Harrison Street required renovations to be suitable for the borough to utilize. a. The building had most recently been used as a pizza shop and was originally a gas and service station. b. The renovations needed were primarily electrical, plumbing, and some carpentry. c. The renovations were necessary in a timely manner because the borough had to vacate its old office by the end of January 2004. d. Borough Council President Gatehouse was primarily responsible for the details regarding the renovation of the building at 12772 Harrison Street. 1. There was no council vote or other official action regarding the renovations of the property at 12772 Harrison Street. 9. On or about January 11, 2004, Gatehouse contacted Shick and another new council member, Louis Kunselman, Jr., and asked them if they would be willing to complete the renovation work for the borough. a. Gatehouse met Shick and Kunselman at the new location and asked them to do the work because he was aware that they were qualified and because the work needed to be completed in a short amount of time. b. Gatehouse advised Shick and Kunselman of the scope of the work to be completed. c. It was understood by Gatehouse, Shick, and Kunselman that the work would be substantially completed in time for the February public meeting to be held in the new building. d. No other members of council participated in the meeting. 10. During the meeting, Shick and Kunselman both agreed to do the work and begin on or about January 14, 2004. 11. Shick and Kunselman agreed to charge the Borough $15.00 per hour to do the work. Date Description Hours 01 -15 -04 Work on Elect 8.0 Shick, 04 -055 Page 4 a. This was a $7.00 per hour discount from their normal labor rates. b. Shick and Kunselman advised Gatehouse of their rate of pay during the meeting of January 11, 2004. 12. Borough council did not participate in the decision to hire Shick and Kunselman to complete this work. a. There was no council vote regarding this hiring. b. This work was not publicly advertised or awarded through and open and public process. 13. At the time that Shick was hired to do this work for the Borough, Shick was serving on council for less than one month and had attended only a reorganization meeting. 14. Shick began working for payment for the Borough building renovation project on January 15, 2004. a. Kunselman also began on this date. 15. After the project began, Gatehouse became aware that the hiring of Shick and Kunselman may have been in violation of the Borough Code. a. After researching the Borough Code, Gatehouse concluded that the hiring of Shick and Kunselman was not prohibited under provisions of the Code. b. Gatehouse did not seek an opinion from the Borough solicitor regarding this matter or take the matter before council. 16. Subsequently, on or before January 29, 2004, Gatehouse became aware that the hiring of Shick and Kunselman may have been in violation of the provisions of the State Ethics Act. a. After researching the State Ethics Act, Gatehouse came to the conclusion that the hiring of Shick and Kunselman may have violated provisions of the State Ethics Act. b. Gatehouse did not seek an opinion from the Borough solicitor or the State Ethics Commission regarding this matter or take the matter before council. 17. On January 29, 2004, Gatehouse advised Shick to submit an invoice for the work completed and that he would not be able to be paid for any further work. a. Gatehouse solely made the decision to pay Shick at this time. b. Gatehouse hoped that this situation would not be raised by anyone, including council, after Shick was no longer being paid by the Borough. c. Gatehouse paid Kunselman in the same manner. 18. On January 29, 2004, Shick submitted an invoice in the name of George Shick Remodeling for his work which outlined his hours as follows: 01 -16 -04 Work on Elect Get Material 8.0 01 -19 -04 Elect Work 8.0 01 -20 -04 Elect Work Get Materials 8.0 01 -21 -04 Elect Work Get Materials 8.0 01 -22 -04 Elect Work 8.0 01 -23 -04 Elect Work 8.0 01 -24 -04 Elect Work 8.5 01 -26 -04 Elect Work Get Material 8.0 01 -28 -04 Wire 3 Way Switches Work on Gas Line 7.5 Total Hours: 80.0 Rate of Pay: $15.00 Total: $1,200.00 Shick, 04 -055 Page 5 a. Shick submitted two invoices that reflected two subtotals of $1,087.00 and $112.00, which would be a grand total of $1,199.00. The actual subtotals should have been $1,087.50 and $112.50, which is a grand total of $1,200.00. Shick was paid the correct amount. b. The invoice included labor only, as the majority of supplies were either purchased by or donated to the Borough. c. Gatehouse directed the Borough secretary /treasurer to prepare a check to Shick for the hours worked on the renovation process. d. Gatehouse and the secretary /treasurer signed the check. 19. Shick was paid by way of Summerville Borough General Fund check no. 4853, dated January 29, 2004, made payable to George Shick Remodeling in the amount of $1,200.00 for the renovation at the Borough building. a. The check was endorsed by Shick and cashed on January 29, 2004. 20. The payment to Shick was not pre- approved by council, as was the procedure for similar payments of this nature. a. Gatehouse made the decision to pay Shick without the pre - approval of council. 21. Shick continued to work on the borough building project after January 29, 2004 without compensation. a. Shick worked approximately an additional (80) hours in February 2004 without compensation. 22. The financial reports for January and February 2004 were presented and approved during the March 2004 meeting. a. This was the first public meeting in the new Borough office. 23. In or around June 2004, some borough residents, including other council members, became aware that Shick and Kunselman were paid for the renovation work. Shick, 04 -055 Page 6 a. Until this time, some members of Council believed that Shick and Kunselman had donated their services regarding the renovations. 24. During an Executive Session at the July 6, 2004 Borough meeting, Council members discussed the payments to Shick and Kunselman for the renovation project. a. All members of Council and the Solicitor were present during the Executive Session. b. During the discussion, the Solicitor provided Council with a verbal opinion that the circumstances in this situation probably violated the State Ethics Act and that if the State Ethics Commission was to investigate the matter restitution would probably be ordered. 25. As a result of the discussion, it was the general consensus of council that Shick and Kunselman should repay the money to the Borough in monthly payments. a. The general consensus of council was that repayment of all but $500 should be made by both Shick and Kunselman. b. This agreement was not put into writing or voted on by council. c. Shick who was present at the meeting did not object, but did not believe that any repayment should be made. 26. No repayment has been made by Shick. 27. In an interview with a Commission investigator on June 13, 2005, Shick provided, in part, the following information: a. Summerville Borough President William Gatehouse approached him and Kunselman and asked them if they would be willing to do the work for the Borough. b. Other members of Council or the Solicitor should have advised him on this situation and not allowed it to happen if it violated any laws. c. Shick and Kunselman were "greenhorns" on Council and not aware of the procedures at the time they agreed to do the work. d. Shick and Kunselman gave the Borough a discount on the rate charged and donated numerous items and supplies used on the renovation of the Borough building. e. Shick questioned why no one on council had an issue with this situation until months after the work occurred and the payments were issued. f. Shick was not aware that the 2005 Borough budget included a line item reflecting his repayment of money to the Borough. g. Shick and Kunselman were not trying to make a "windfall" from the Borough from this work. 28. Shick donated the following items to the Borough for the renovation and improvements to the Borough building: Donated Item Amount Discount on hourly rate of $7.00 /Hr for entire project. (130 Hrs x $7.00 /Hr) (Normal rate $22.00) $910.00 8 Hours labor on 01/14/04 to pick -up materials for renovation. (8 Hrs x $15.00/ Hr) $120.00 80 Hrs labor to finish office, plumbing, and electrical work. (80 Hrs x $15.00) $1,200.00 Window $300.00 Door $150.00 Kerosene for heater to heat space while project was on- going. $45.00 Total: $2,725.00 Shick, 04 -055 Page 7 a. With the exception of the donation of labor to pick -up materials and the discount on his rate charged, all of the items listed above were in addition to and did not occur during the work that Shick performed and was paid by the borough. b. Although the amounts were estimated by Shick (after- the -fact) and cannot be specifically verified, other council members have verified that Shick did provide these items or services at no cost to the Borough. III. DISCUSSION: At all times relevant to this matter, the Respondent, George Shick (Shick), 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 allegations are that Shick violated Sections 1103(a) and 1103(f) of the Ethics Act when he or a business with which he is associated entered into a contract with the Borough in excess of $500 without an open and public process; when he participated in discussions resulting in his company being selected to provide services to the Borough; and when he participated in actions of council approving payments to him or a business with which he is associated. Pursuant to Section 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. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" does not Shick, 04 -055 Page 8 include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. 65 Pa.C.S. § 1102. Section 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 1103(f) of the Ethics Act imposes certain restrictions as to contracting. Section 1103(f) of the Ethics Act provides: Section 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 Pa.C.S. § 1103(f). Section 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. Shick has served on the seven - member Council of Summerville Borough since January 2004. In a private capacity, Shick owned and operated a remodeling business Shick, 04 -055 Page 9 known as George Shick Remodeling. Shick currently continues to operate the business on a part -time basis in that he is partially retired. Before Shick served on Council, a decision was made to sell the Borough building that contained the Borough offices, public library and rental hall. Although the sale was contemplated due to the excessive operational and maintenance expenses for the building, Shick opposed the sale of the Borough building even before he began his term on Council. Borough Council President William Gatehouse (Gatehouse) took the initiative as to the sale of the old Borough building and secured a new location for the Borough offices. Gatehouse chose to locate the Borough office at 12772 Harrison Street, even though Council neither took official action nor entered into a lease or rental agreement with the owner of that building. The Harrison Street building required renovations before the Borough could occupy the premises. Renovations, consisting of electrical, plumbing and carpentry work, had to be accomplished in a timely manner, given that the Borough had to vacate its existing office building by the end of January 2004. Gatehouse contacted Shick and another Council member, Louis Kunselman, and asked if they would be willing to complete the renovation work for the Borough. Gatehouse chose Kunselman and Shick because he was aware that they were qualified to do the work that needed to be completed in a short period of time. Kunselman and Shick began work in mid January at a rate of $15.00 per hour, which was at a $7.00 discount from their normal labor rate. At that time, Shick had been on Council for less than one month. Borough Council did not participate in the decision of Gatehouse to hire Kunselman and Shick, which was done without an open and public process. After Kunselman and Shick began working on the project, Gatehouse became aware that the hiring of the two Council members might have been contrary to the Borough Code. Gatehouse then researched the Borough Code and concluded that the hiring of Kunselman and Shick was not prohibited. Gatehouse reached his conclusion without consulting the Borough Solicitor or Borough Council. Shortly thereafter, Gatehouse became aware that the hiring of Kunselman and Shick might have been in violation of the Ethics Act. Once again, Gatehouse researched the matter, this time concluding that the hiring of Kunselman and Shick may have violated the Ethics Act. Gatehouse neither consulted with the Borough Solicitor nor sought an advisory from this Commission. Gatehouse then contacted Kunselman and Shick and advised them to submit invoices for the work completed. Gatehouse also informed Kunselman and Shick that he would not be able to pay them for any additional work. On January 29, 2004, Shick submitted invoice(s) for his work hours in the amount of $1,200.00. A Borough check in the amount of $1,200.00 was issued to Shick at the direction of Gatehouse to the Secretary /Treasurer of the Borough. In addition, Gatehouse and the Borough Secretary /Treasurer co- signed the check. The payment to Shick was not pre- approved by Council. Shick then endorsed and cashed the check that was made payable to George Shick Remodeling. Shick continued to work on the Borough building project after January 29, 2004 without compensation. Shick spent approximately 80 hours working on the building renovation in February without any payment. After some Borough residents and Council members became aware that Kunselman and Shick received payments for the renovation work, the issue was discussed at a July 2004 Borough Council meeting. At that meeting, the Solicitor opined that the Ethics Act was probably violated as a result of the work performed by Kunselman and Shick on the building renovations. There was a general consensus on Council that Kunselman and Shick, 04 -055 Page 10 Shick should repay the money to the Borough in monthly installments. Although the view was that both Shick and Kunselman should each pay $500 to the Borough, no action or agreement was effectuated. Shick did not make any payment to the Borough. Shick notes that it was the Borough Council President who approached him and Kunselman to do the work, that no members of Council or the Solicitor advised that there would be a violation of any laws, that he and Kunselman gave the Borough a discount on the rate charged, and lastly, that no one on Council had an issue with the matter until months after the work occurred. Shick estimated that he donated labor and materials valued at $2,725.00 to the Borough for the renovations at the Borough building. Although the foregoing amount cannot be verified, other Council members have stated that Shick provided those items and performed the services at no cost to 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 of the allegations. "3. The Investigative Division will recommend the following in relation to the above allegations: a. That an unintentional violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Shick participated in discussions resulting in his company being selected to provide services to the Borough; b. That an unintentional violation of Section 1103(a) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(a) occurred when Shick approved payments to himself and /or a business with which he is associated; c. That an unintentional violation of Section 1103(f) of the Public Official and Employee Ethics Law, 65 Pa.C.S. §1103(f) occurred when Shick, and /or a business with which he is associated, entered into a contract with the borough in excess of $500 without an open and public process, in that Shick contracted with the borough in excess of $500 in calendar year 2004 without an open and public process. 4. No restitution or other payment in settlement of this matter is required due to Respondent's donation of labor and materials to the borough project." Consent Agreement, ¶3, ¶4. As to §1103(a) of the Ethics Act, there was a use of authority of office on the part of Shick. But for the fact that Shick was a Borough Council Member, he would not have been in a position to have discussions with Council President Gatehouse concerning the renovation work on the building that would house the Borough offices. Such actions constitute a use of authority of office. See, Juliante, Order 809. The use of authority of office resulted in a private pecuniary benefit consisting of the payment that Shick received for providing the services to renovate the building for Borough occupancy. Lastly, that private pecuniary benefit inured to Shick or George Shick Remodeling, the business with which he is associated. Accordingly, Shick unintentionally violated §1103(a) of the Ethics Act when he participated in discussions resulting in his business being selected to provide renovation services for the Borough. Goldinger, Order 1340. As to the allegation regarding Shick approving payments to himself or his business, the stipulated findings do not reflect any instances of Shick approving such payments. The Shick, 04 -055 Page 11 facts of record reflect that when Shick completed a series of services, Gatehouse, on his own initiative, directed the Borough Secretary /Treasurer to issue a check that Gatehouse and the Secretary /Treasurer co- signed. There was no action by Council, the members of which were unaware of the actions of Gatehouse in hiring Kunselman and Shick to do the renovation services. Without a use of authority of office, there can be no violation of the Ethics Act. See, Dixon, Order 1297. Although the parties in the Consent Agreement propose an unintentional violation as to this particular allegation, we believe that the proper disposition is no violation given that there was no use of authority of office by Shick in approving the payment to himself. Although we are deviating from the Consent Agreement, Shick may not impose any objection in that we are finding no violation as to this particular allegation. Accordingly, Shick did not violate §1103(a) regarding approval of payments to himself in that such action was taken by Council President Gatehouse without any use of authority of office on the part of Shick. As to §1103(f) of the Ethics Act, this provision allows a public official, spouse or child or business with which associated to contract with the governmental body, but if the contract is $500.00 or more, it must be awarded through an open and public process. In this case, the services that Shick performed for the Borough were in excess of $500.00 but the contract was awarded without an open and public process. Accordingly, Shick unintentionally violated §1103(f) of the Ethics Act when he or the business with which he is associated entered into a contract with the Borough in excess of $500.00 without an open and public process. See, Zepp, Order 1324. We determine that the Consent Agreement submitted by the parties, with the exception of Section 3(b) of the Consent Agreement, 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. No restitution or other payment in settlement of this matter is required due to Shick's donation of labor and materials to the Borough project. We will take no further action in this case that is closed. IV. CONCLUSIONS OF LAW: 1. George Shick (Shick), as a Council Member for Summerville Borough, Jefferson County, is a public official subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998. 2. Shick unintentionally violated Section 1103(a) when he participated in discussions resulting in his company being selected to provide services to the Borough. 3. Shick did not violate Section 1103(a) regarding approval of payments to himself in that such action was taken by the Council President without any use of authority of office on the part of Shick. 4. Shick unintentionally violated Section 1103(f) when he or a business with which he is associated entered into a contract with the Borough in excess of $500 without an open and public process. In Re: George Shick ORDER NO. 1377 File Docket: 04 -056 Date Decided: 9/12/05 Date Mailed: 9/21/05 1 George Shick (Schick), as a Summerville Borough Council member, unintentionally violated Section 1103(a) when he participated in discussions resulting in his company being selected to provide services to the Borough. 2. Shick did not violate Section 1103(a) regarding approval of payments to himself in that such action was taken by the Council President without any use of authority of office on the part of Shick. 3. Shick unintentionally violated Section 1103(f) when he or a business with which he is associated, entered into a contract with the borough in excess of $500 without an open and public process. 4. Per the Consent Agreement of the parties, no restitution or other payment in settlement of this matter is required due to Shick's donation of labor and materials to the Borough project. We will take no further action in this case that is closed. BY THE COMMISSION, Louis W. Fryman, Chair