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HomeMy WebLinkAbout1758 PickettPHONE: 7,17-783-1610 TOLL FREE: 1-800-932-0936 In Re: Aaron Pickett, Respondent STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 File Docket: X-ref: Date Decided Date Mailed: FACSIMILE: 717-787-0806 WEBSITE: wwwethics,oa,am 18-041 Order No. 1758 6/28/19 7/3/19 Before: Nicholas A. Colafella, Chair Mark R. Corrigan, Vice Chair Roger Nick Melanie DePalma Monique Myatt Galloway Michael A. Schwartz Shelley Y. Simms This is a final adjudication of the State Ethics Commission. Procedurally, the Investigative Division of the State Ethics Commission conducted an investigation regarding possible violation(s) of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et seg., by the above -named Respondent. At the commencement of its investigation, th—e Fnivestigative Division served upon Respondent written notice of the specific allegations. Upon completion of its investi ation, the Investigative Division issued and served upon Respondent ondent a Findings Report identified as e an "Investigative Complaint," An Answer was not fie. and a hearing was deemed waived, A Stipulation of Findings and a Consent Agreement were subsequently submitted by the parties to the Commission for consideration. The Stipulated Findings are set forth as the inclings in this Order. The Consent Agreement has been approved. That Aaron Pickett, a public official/public employee in his capacity as the Finance Administrator and/or Real Estate Manager for the �ity of Pittsburgh, AlleghenT County, violated Sections 11 ONa), 11 04(a), and 11 05(a) of the State Ethics Act (Act 9 of 199 ) when he utilized the authority his public position for a private pecuniary benefit when, as the Real Estate Manager for the City of Pittsburgh, Pickett assessed and set the sale price of real property owned/held by the City of Pittsburgh, at a time when he possessed a reasonable interest in purchasing the property for himself; andwhen, as the Real Estate Manager for the :)f Pittsburgh, Pickett executed a Proposal to Purchase agreement between the City of City and himself, concerning the sale of real proTerty, and when Pickett failed to file Statements of Financial Interests for the 2013 an 2014 calendar years, in association with his public position as Finance Administrator; and when, as the Real Estate Manager, he failed to file Statements of Financial Interests for calendar years 2015, 2016, and 2017. 111. FINDINGS: Aaron F. Pickett Pickett") has served as the Manager of the Real Estate Division, Department ( Pickett. ffinance Department"), City of Pittsburgh ("City") from January 25, 2017, to the present. Pickett was initially employed by the City in the position of Finance Pickett, 18-041 Nag—e--2 Administrator I in the Collections and Compliance Division of the Finance Department effective July 14, 2014. b. Pickett was promoted to the position of Collection Manager, Finance Department, Real Estate Division, effective January 25, 2016. 1. The Collection Manager position was reclassified/retitled to that of Real Estate Manager in January 2017. 2. The City maintained/currently maintains a o * b description for Collection Manager/Manager of the Real Estate Division (Jk/a Real Estate Manager) which detailed/details specific position summaries, duties, and job knowledge requirements as shown, in part, below: a. Collection Manager: 1 Engagement, management, and working directly to improve the activities of the collections for the organization, principally in real estate taxes but may oversee collections in other areas; 2. Review and research of delinquent accounts and analysis provision; 3. Management of the real estate collections, procedures, and policies of the Public Property file; 4, Management and coordination of the billing and collection of current and delinquent revenue; 5. Recommendation of sales programs and pricing for City properties; 6. Knowledge of real estate sales practices; and 7. Knowledge of City operating policy and setting prices on sale of City land. b. Real Estate Manager: Management of all parts of the Real Estate Division as well as oversight of the procedures and policies of the Public Property file; 2. Acting as the point person for other departments for inquiries and information in heFinance Department Real Estate Division; 3. Management and coordination of the billing and collection of current and delinquent revenue; 4. Attendance at meetings with real estate management; 5. Recommendation of sales programs and pricing for City properties; 6. Assisting in developing and updating the City's "eProperty Plus" real estate system; 7. Knowledge of City real estate taxes and property sales programs; 8. Knowledge of the "eProperty Plus" real estate system; and 9. Knowledge of assigning property values. Pickett, 18-041 P—age 3 C. The Collection Manager and Real Estate Manager job descriptions were revised in September 2015 and January 2017, respectively. 1 The City is aSecond Class City governed by a nine -Member Council and Mayor established via Home Rule Charter. a. City Council's responsibilities include proposing, debating, and voting on legislation governing and/or affecting the City as well as regulating revenues and expenses for the City. b. The Mayor maintains, among other authority, the ability to initiate and veto legislation. 1 Although City Council is responsible for legislative functions, the basic form o?government is that of a "strong mayor." 4. City Council and the Mayor conduct regularly scheduled legislative meetings each Tuesday of the month for the purpose of conducting City business. a. City Council holds Standing Committee meetings the Wednesday following each regularly scheduled legislative meeting. 5. The City maintains multiple departments, divisions, etc., through which day-to-day City administration and operations occur. a. Included within the existing City departments is the Finance Department. b. The Finance Department is physically housed within the City -County Building located at 414 Grant Street, Pittsburgh, PA 15219. 6. The Finance Department is responsible for multiple functions/tasks, including the following: a. Billing and collection of tax and fee revenue, intergovernmental payments, certain grant pa ments, lease payments, and other payments due to the City for use with budgeted expenditures; b. Managing tax abatements (including homestead and senior citizen exemptions); C. Tracking tax increment financing; d. Performing audits designed to help business taxpayers with submitting returns correctly; e. Serving as the designated tax collector for the City School District and the Carnegie Library; Selling tax delinquent property through Treasurer's Sales, selling City -owned property, tax assessmenFappeals, and City-wide cash management; 9. Performing tax audits and fair collection of money owed to the City; h. Managing City debt through bonds and borrowing, as well as managing the City's Comprehensive Municipal Pension Fund; and Facilitating City-wide annual single and pension audits. Pickett, 18-041 Page 4 7. The Finance Department consists of five separate divisions, including the Administrative Division„ Collections and Compliance Division, Financial Control Division, Real Estate Division, and Properties for Sale Division. a. The Real Estate Division maintains responsibility for all real estate tax billings and collections, including Treasurer's Sales. The Real Estate Division is a branch of the Treasurer's Office, which falls within the overall structure of the Finance Department, 2. The Real Estate Division office is located on the first floor of the City - County Building. b. The Properties for Sale Division is responsible for the management, maintenance, and marketing of properties acquired by the City through tax delinquency. & The Real Estate Division is composed of two separate subdivisions/classifications of employees which operate from the same physical location/office. a. The subdivisions include the Three Taxing Bodies classification and the Real Estate Taxes classification. The Three Taxing Bodies employees address real estate/properties acquired by the City through Treasurer's Sales and the subsequent selling of the real estate/properties to interested individuals. aa. The Three Taxing Bodies are composed of the City, the County, and the City School District. 2. The Real Estate Taxes employees are responsible for all real estate tax billing and collection for the City. THE FOLLOWING FINDINGS IDENTIFY THE PROCESS BY WHICH PRIVATELY - OWNED PROPERTY MAY BE MADE AVAILABLE FOR PUBLIC SALE BY A SECOND CLASS CITY THROUGH A TREASURER'S SALE. 9. The Treasurer of a Second Class City within the Commonwealth of Pennsylvania maintains ,the authorit to sell at public sale privately -owned property upon which the assessed and levied axes have not been paid and have become delinquent. a. The authority for such originates from the Second Class City Treasurer's Sale and Collection Act. 10. The Second Class City Treasurer's Sale and Collection Act specifically provides for, in part, the following: a. Establishment of a system for collection of municipal liens and tax claims through the sale of real property burdened with said liens and claims; b. Authorization for the City Treasurer to conduct Treasurer's Sales; C. Provision of a structure for conducting Treasurer's Sales; d, Establishment of a system where properties at Treasurer's Sales are acquired, administered, maintained, and resold for the benefit of co - jurisdictional taxing bodies; and Pickett, 18-041 page e. Creation of a means for establishing title to real property taken at Treasurer's Sales. 11. Properties within the City carrying a debt in excess of $300.00 in assessed or levied taxes for a period of time in excess of one year are classified as tax delinquent. a. Individuals may contact the Real Estate Division or conduct personal research to inquire/determine if a specific property within the City is classified as tax delinquent. b. Property within the City that is determined to be tax delinquent is eligible for inclusion in a Treasurer's Sale. The City Treasurer is responsible for scheduling the dates for the sale of delinquent properties. aa, The City annually conducts approximately three Treasurer's Sales. 12. An individual interested in requesting that property be included in a Treasurer's Sale must be approved through the Real state Division as a buyer prior to the property's inclusion on the register of properties available for purchase. a. An individual is required to complete a Request to Include Tax Delinquent Property in a Treasurer's Sale Proceeding apTlication identifying, in part, the property to be included in the Treasurers "ale as well as the applicant's ownership of any other City properties. 1 The application may be obtained via the City website or at the Real Estate Division counter. 13. Once completed, the application is returned to the Real Estate Division for review and vetting to approve the applicant as a qualified buyer. a. An applicant who does not owe any outstanding taxes, does not owe any water or sewage fees, and is in compliance with City codes and policies is approved as a qualified buyer, b. An application is denied where an applicant has any outstanding taxes, water and/or sewage fees, code violations, citations, etc., associated with the applicant's ownership of any other property within the City. 1 Payment of all outstanding fees, citations, and/or taxes owed is required prior to approval of the individual's application. 14. Once approved as a buyer, the applicant remains in the Real Estate Division's Request to Purchase system as an approved buyer for a period of one year. a. Individuals approved as buyers may request that additional properties be included in upcoming Treasurer's Sales during the one-year period without needing to be reapproved. An a roved buyer is required to file a separate application with the Reaff'state Division for any additional property the applicant wants placed on property rolls for upcoming Treasurers Sales. Pickett, 18-041 Pa—g-e-G aa. A specific approved buyer must be attached to every property included on the property roll generated for a Treasurer's gale. 15. Although an approved buyer may request that a delinquent property be placed on the property roll for a Treasurer's Sale, the approved buyer is not required or otherwise obligated to actually purchase the property/properties at the Treasurer's Sale. a. Attendance at Treasurer's Sales is not limited to those individuals approved as buyers through the Real Estate Division. 1. Treasurer's Sales are open to all members of the public. b. The buying of property at a Treasurer's Sale is not restricted to only those individuals who have been approved as buyers through the Real Estate Division. 1 Any attendee is eligible to bid on and purchase property presented at a Treasurer's Sale. 16. The City follows procedure established via the Treasurer's Sale and Collection Act for the disposition of properties presented at Treasurer's Sales as follows: a. Notice is provided from the Treasurer/Treasurer's Office to parties with an ,n interest the property to inform the parties of the pending sale and to allow the parties an opportunity to defend their interests in the property. I Any property owner wishing to challenge the inclusion of his/her property in Ze sale must file a verified objection in writing with the Treasurer/Treasurer's Office within ten days after service of written notice. 2. The Treasurer's Sale and Collection Act defines an interested party as a person who has an interest of record in the property. b. The properties intended to be sold are advertised once a week for two consecutive weeks prior to the date set for the sale in a newspaper of general circulation and the legal newspaper printed and published in the City. C. A notice is posted conspicuously on, in front of, or contiguous to each parcel of land advertised for sale at least ten days prior to the sale. 1. The notice identifies that the property is to be sold at a Treasurer's Sale for delinquent claims. 2. The notice identifies the date, time, and place of the sale as well as a telephone number or address at which the owner can obtain additional information. 3. A notice of similar information is posted at the Treasurer's Office. d. The Treasurer/Treasurer's Office establishes a minimum price for each property under which no bid may be accepted. 1. The minimum price is to total an amount sufficient to pay the liened or unliened delinquent taxes, water rents, sewage service charges, and other Municipal claims. Pickett 18-041 2. Calculations of additional amounts due for other municipal claims and liens, penalties, interest, lien costs, and costs of sale are to be completed within th i rty days and transmitted by the Treasurer/Treasurer's Office to the purchaser for payment within thirty days from the date of the Treasurer's bill. e. The successful purchaser at the Treasurer's Sale, if a% issues paent to the Treasurer/Treasurer's Office in the full amount of the successful bid as soon as the property is sold. Payment for other charges of the taxing bodies is made to the Treasurer before delivery of the property deed. aa. Failure to pay the additional amounts within thirty days following the Treasurer's bill results in an invalidation of the sale, with the minimum price already paid forfeited to the City. An interested party whose vested right in the property is adversely affected by �he Treasurer's Sale must file an appeal the Court of Common Pleas within thirty days to contest the regularity of the sale procedure. 91 Any owner/interested party or person legally entitled to the property through the owner/interested party has the right to redeem the property within ninety days of the Treasurer s Sale by paying the full amount of the claims for which the property was sold, costs of the sale, costs of improvements made to the property, and current charges and current municipal claims against the property. The redeemer must also issue payment in the amount of 15% of the total purchase price to the City for subsequent payment to the divested purchaser. h. The Treasurer/Treasurer's Office presents a report to the Court of Common Pleas no less than ninety days after the Treasurers Sale, identifying information required to substantiate the regularity of the sale for eac property sold and not scheduled for resale. The Court of Common Pleas confirms the sale if the report indicates that the sale was properly conducted. 2. The report separately lists properties for which the minimum price was not met and identifies that: aa. Properties retained by the City as the agent for the coexisting taxing bodies may be put up for private sale or held for public purposes; and bb, Properties which the City has retained as an agent are to be the sub'ect of a petition to the Court of Common Pleas to clear title in Pavor of the City if necessary. The Treasurer delivers a deed for the property to the purchaser after the purchaser pays the minimum bid (and all other charges) and the Court of Common Pleas has entered an Order of Confirmation. The property purchased is taxable in the year following the purchase at the Treasurer's Sale. Pickett, '18-041 59-6 $ 17. If a property presented at a Treasurer's Sale is not redeemed or purchased by a third -party at the sale for the upset price or more, the City may take title to the property as an agent for the taxing bodies having claims against the property. a. The interests of the taxing bodies are to be fixed and determined as of the time of the filing of the report with the Court of Common Pleas. 18. If the City takes title to the pproperty as an agent for the taxing bodies, the property is laced into the Three Taxingg Bodies' inventory and entered into the City's `eProperty Plus" website(publicpgh.epropertyplus.com/landmgmtpub/app/base /landing) for potential sale to interested individuals. a. The City's "eProperty Plus" real estate system is a database which can be utilized as a resource to identify properties in the Three Taxing Bodies' inventory that are available for purchase. 19. The City does not maintain any specific policy prohibiting a City employee from purchasing property via the established Treasurer's Sale process. a. The City Ethics Code states that a City employee is permitted to bid at certain auctions as long as the employee is not receiving anything of value on terms better than what is available to the public at large. THE FOLLOWING FINDINGS ILLUSTRATE THE PROCESS BY WHICH PROPERTY HELD BY THE CITY WITHIN THE THREE TAXING BODIES' INVENTORY MAY BE PURCHASED BY PRIVATE INDIVIDUALS AND/OR ENTITIES THROUGH THE REAL ESTATE DIVISION. 20. Individuals/business entities interested in purchasing property held by the City on behalf of the Three Taxing Bodies ("City -Held Property") who were not previously qualified as buyers within one year of starting the purchase process are required to complete a Request to Purchase application to become a qualified buyer. a. Applications are available through the City property sales webpage ittsburghpa.gov/finance/property-sales/index. html) or directly from the Real state Division office. 1. Separate applications exist for individuals interested in purchasing property as opposed to business entities interested in purchasing property. b. Property available for purchase can be identified via use of the City's "eProperty Plus" website or direct contact with an employee of the Real Estate Division. 21. Request to Purchase applications submitted for the purchase of City -Held Property require, in part, the following: a. Identification of the property the applicant is interested in purchasing; b. Identification of the end use for the property the applicant is interested in purchasing; and C. Identification of all additional properties the applicant owns within the City. 22. Request to Purchase applications submitted to the Real Estate Division are currently collected by/provided to the Real Estate Division Sales Coordinator daily for initial review and subsequent entry into an Excel spreadsheet for tracking Pickett, 1 8-041 P—ag-`67-0 purposes. a. Once per week (or more if needed the applications are entered into the Real Estate Division Request to Purchase system, organized into a Book(s), assigned a Book Number, and subsequently processed for information regarding approval or denial of the applicant as a buyer. 1. Information contained on the applications within the Book is electronically distributed to and subsequently returned by Pittsburgh Water & Sewage for identification of any outstanding payments, fees, etc., owed , the applicant on any existing City property owned. aa. Any outstandiny payments due are documented in handwriting on the pertinen application. 2. Applications in the Book are also vetted by Real Estate Division Gersonnel throh the City Permits, Licensing, and Inspection epartmentfor identification of any outstanding code citations, fines, etc., attached to any other City property owned by the applicant. aa. Any existingcode citations, fines, etc., discovered are printed andI directly to the pertinent application. 3. Applications in the Book are examined through the Real Estate Division database for any additional City properties owned by the applicant for which any taxes were owed, aa. Any outstanding taxes owed on other property owned by the applicant are documented in handwriting on the pertinent application. 23. The Sales Coordinator was not previously involved in the intake or review of Request to Purchase applications submitted to the Real Estate Division for consideration. a. Prior to the Sales Coordinator's involvement in the process, no mechanism was utilized to track Request to Purchase applications filed. 24. Request to Purchase applications devoid of any outstanding fees, code citations, taxes, etc., in conjunction with other City property owned are approved and the applicant is qualified as a buyer. a. Applicants qualified as buyers remain in the Real Estate Division system for a period of one year from the date of application approval. 25. Applications containing outstanding fees, citations, taxes, etc., in conjunction with other City property owned are denied. a. The applicant is not eligible for approval as a qualified buyer until all outstanding fees, code citations, taxes, etc., are satisfied/resolved. 1. Denied applications are eligible for approval upon satisfaction of outstanding fees, code citations, taxes, etc. 2. A new application is not required to be filed. 26. After a buyer is qualified and the desired property is determined to be available for purchase, a purchase price is generated for the property. Pickett, 18-041 P_a_g_e7 0 a. Individuals serving as Sales Coordinators for the Real Estate Division have traditionally been responsible for determining the sale prices for City -Held Properties. 1. Ed Jacobs served as a Sales Coordinator for the Real Estate Division until December 11, 2015. 2. William Waddell served as a Sales Coordinator for the Real Estate Division until May 27, 2016. aa, The position of Sales Coordinator remained vacant until Brandon Jones ("Jones") was hired for the position effective September 19, 2016. bb. Jones did not initiate pricing properties until early 2018. 27. The City Urban Redevelopment Authority ("URA'") has been involved in the process of recommending/establishing prices for the sale of City -Held Pro�erties through the Real Estate Division since approximately late 2016 or early 2017. a. The purpose of the URA's involvement in pricing is to provide a layer of expertise in land use and valuation in conjunction with the selling of City -Held Properties. b. Jones currently has the discretion to adjust/alter sale prices Fresented/recommended by the URA for City -Held Properties if determined co be necessary. From approximately late 2016 or early 2017 until early 2018, the URA set the sale prices for City -Held Properties. 28. The Sales Coordinator has access to and utilizes the City Property Analyzer program ("PropertyAnalyzer Program") to assist in the generation of prices for the sale of City -Held IropePies. a. The Property Analyzer Program is a real estate pricing program which searches for comparable properties at market rate via neighborhood, 1. Use of the program requires entry of information into the system for the subject property te0 be priced, which then identifies comparable properties in the area based on the sale date, sale price, square footage, year constructed, neighborhood, etc. aa. Comparable properties identified are subsequently entered into an Excel spreadsheet and averaged via a program algorithm to assist in determining the subject property's sale price. 29. The Real Estate Division utilizes "custom pricing" when the Property Analyzer Program is unable to identify any properties comparable to the subject property and/or when no other recent comparable property sales are readily known. a. Custom pricing of City -Held Property is generally based on a $1.00 per square foot guideline which has been utilized by the Real Estate Division for a significant number of years. b. Custom pricing is determined by physical inspection/assessment of the subject property along with consideration of multiple variables including, in Pickett, 18-041 P—ag-e-1 I part: 1 The fact that the property was not purchased during the public Treasurer's Sale; 2. The amount of time the property had not generated tax income for the City; 3. The physical condition of the property; 4. The property location/neighborhood; and 5. Potential code violations. C. Custom pricing of City -Held Property allows for more discretion and subjective analysis in generation of a sale price than does the Property Analyzer Program. 30. After the property is priced, the Real Estate Division mails the applicant correspondence identifying whether the applicant had been approved or denied buyer status and if the desired property is available for purchase. a. If approved, the correspondence identifies, in part, the following: 1. The applicant's approval as a qualified buyer and his/her status as such for a one-year period; 2. The purchase price for the desired property; 3. The amount of the deposit required to initiate the sale; aa. The amount of hand money required is the greater of 10% of the purchase price or $200.00. 4. The need to appear at the Real Estate Division office for hand delivery of a cashier's check, certified check, or money order for the deposit amount; and 5. The need to sign a Proposal to Purchase in association with the property- aa. The Proposal to Purchase is a template style document with designated areas for information to be entered, including the property to be purchased, the name of the purchaser, the purchase price of the property, and the date of execution. bb, The Proposal to Purchase provides designated areas for the signature of the purchaser and a witness. b. If denied, the correspondence identifies, in part, the following: 1. The reasonlreasons for denial of the application; and 2. The method/methods by which the denial may be cured. 31. The buyer and witness sign a total of three Proposals to Purchase at the Real Estate Division office at the time the required deposit is submitted. Pickett, 18-041 T 5 —age 12 a. Once all three Proposals to Purchase are signed, the Proposals to Purchase are forwarded to the Real Estate Manager, the Treasurer, and the Finance Department Director for signature. b. The applicant, the Real Estate Division, and City Council each ultimately receive a fully executed copy of the Proposal to Purchase. 32. Documented on the Proposal to Purchase form, immediately above the designated section for the signatures of the Real Estate Manager, the Treasurer, and the Finance Department Director, is the following: "THIS PROPOSAL meets with the approval of the Director of the Department of Finance and is hereby approved for proper submission to the City Council and the Mayor of the City of Pittsburgh." a. The signatures of the Real Estate Manager, the Treasurer, and the Finance Department Director signify that the proposal is complete, all aspects of the proposal are in order, and the application is to be submitted to City Council for consideration. b. The signatures of the Real Estate Manager, the Treasurer, and the Finance Department Director do not authorize the sale of property documented within the Proposal to Purchase. 1 The authority to sell/approve the sale of City -Held Property lies with City Council and the Mayor. 33. Properties for which the required deposits are made and Proposals to Purchase are executed are subsequently presented by the Real Estate Division to City Council for approval via proposed legislation in the form of a resolution. a. A copy of the proposed legislation is placed in each City Council Member's mailbox located within City Council's office, prior to the legislative meeting at which introduced. 1. Included within the proposed legislation for review are Property Fact Sheets and summaries of information obtained from the Proposals to Purchase for each specific property presented for consideration. b. The legislation provided identifies, amongother information, the name of the buyer, gi he purchase price the proposed use of the property, the property locatitn ' the date and number of the Treasurer's Sale at which acquired, and the City ward and district number for each property, 34. Legislation developed by the Real Estate Division proposing the sale of City -Held Propert( is introduced and read into the record lay �e City Clerk at a regularly schedu ed City Council legislative meeting. a. No action is taken on the legislation during the meeting at which it is introduced. 35, City -Held Properties proposed for sale via the le Tislation are specifically considered by City Council at the Standing Committee meeting held on the Wednesday of the following week. a. Real Estate Division/Three Taxing Bodies employee Connie Lee Walsh ("Walsh") is responsible for attending the Standing. Committee meeting in order to address any questions or concerns from City Council regarding the Pickett, 1 B-041 Page 13 City -Held Properties, proposed for sale. 36. CitCouncil Members have the individual authority to identify and remove any City - Held Property from the proposed legislation Kring the Standing Committee meeting. a. City Council Members wishing to remove a property or properties from the legislation need only to verbalize such at the meeting. Walsh brings all proposed legislation to the meeting at which City - Held Property for sale is listed and documents "delete" next to any property deemed by City Council Members to be removed from the proposed legislation. 2. Properties removed from the proposed legislation are no longer eligible for sale at that time. aa. City Council Members are not required to verbalize the reason for the removal of a property or properties from the proposed legislation. b. Properties remaining on the proposed legislation are ultimately granted preliminary approval by City Council at a Standing Committee meeting. 37. City Council takes action via formal vote at its regular legislative meeting the week after preliminary approval is authorized, to grant final approval to the proposed legislation documenting City -Held Property to be sold. a. The legislation is updated Frior to the meetinT in order to add or remove any properties from consideration as determine by City Council Members, 1 The removal of any property from the legislation ultimately approved results in the return of the applicable buyer's deposit. 38. After final approval by City Council, the legislation is presented to the Mayor's office for the Mayor's ratification of City Cound's approval. a. Once ratified by the Mayor, a copy of the finalized legislation is provided to the Real Estate Division for use in notifying buyers of gity Council s approval to sell the requested City -Held Properfies. 39. The Real Estate Division subsequently authors correspondence to the applicable buyer informing, the buyer of City Council's approval to sell the requested property along with additional steps to be taken in order to complete the sale process. a. The buyer is informed of his/her responsibility to purchase an insurable title report. The title report identifies the name/names of the former owner/owners, mortg agees, assignees, or other individuals possibly ti having any right, le, interest in, or claim against the identified property. 2. The title report is required to be prepared by a qualified title search company and is to follow the format of a sample enclosed by the Real Estate Division. b. The buyer is instructed to mail the title report to: Pickett, 18-041 P—age-14 City of Pittsburgh LawDepartment — Room 327-G 414 Grant Street Pittsburgh, PA 15219 c. The buyer is notified that the sale process will not progress until an acceptable title report is received. 1 The title report is utilized by the City to file a Petition to Quiet Tax Title and Approve the Sale of Real Estate ("Petition") with the Allegheny County Court of Common Pleas ("Court"). aa. The action to quiet tax title process essentially releases all debt and interests associated with the property. 40. Buyers are not required to wait for receipt of the correspondence acknowledging City Council's approval to sell the desired property prior to obtaining a title report for the property. a. Buyers may request and obtain a title report from a title company prior to receipt of the correspondence. b. Buyers obtaininy, a title report prior to receipt of the correspondence risk the potential City Councilmay not approve the property for sale. 41. Upon receipt of the title report, the City files a Petition with the Court for issuance of an Order that all individuals named in the Petition, as well as all individuals who enerally may be interested in the property, show cause why the Petition should not e granted, the title should not be adjudicated, and the sale of the property should not e approved free and clear of all claims whatsoever. a. All individuals and/or entities identified as having a possible existing interest in the property are individually notified of the Petition via the United States Postal Service if possible. b, The Petition is additionally advertised within the Pittsburgh Post -Gazette and the Pittsburgh Legal Journal for a period of thirty days. 42. Individuals/entities with a possible existing interest, and who are objecting to the sale of the property, are required to file an answer/objection with the Court within thirty days of the individual service and/or date of advertisement in order to possibly secure/retain their interest in the property. a. Any answer/objection filed beyond the thirty -day filing period is considered invalid. 43. Objectors are not limited to those individuals/entqies having a possible existing interest in the property. a. Other private individuals interested in purchasing the propert may object to the sale of the property via completion and submission o� a Request to Purchase the property to the Real Estate Division. 1. Other private individuals interested in purchasing the property must be approved as a buyer at the time the Request to Purchase is submitted or approved as a guyer prior to the end of the thirty -day advertisement period in order to objectto the sale. �Pickett, 18-041 Fa—g e_1 5 b. Ob�ectors who are already approved buyers or are approved as buyers prior to he end of the advertisement period are required to submit a deposit of 10% of their bid or $200.00 (whichever is greater) within thirty days of the newspaper advertisement. 44. Any objections filed regarding the sale of the property by other individuals wishing to purchase the property result in a Court -ordered, bid -driven auction of the property. a. All individuals/entities having filed a timely objection are notified of the time, date, and place of the Court auction. Obtectors failing to attend the auction and/or increase the sale price by id forfeit their deposit submitted. b. The successful bidder is required to de osit additional monies with the Real Estate Division in an amount equal to f(O% of the bid price, less the original amount deposited. 1 Failure to submit the balance of the deposit due results in the purchaser's default and voiding of his/her bid. 45. If no objections are filed in a timely manner, the sale of the property continues with the original proposed buyer upon issuance of an Order from the Court. a. The Order approves the sale to the buyer and authorizes the Mayor to deliver a deed for the property to the purchaser. The deed is prepared by the City Law Department and ultimately executed by the Mayor upon issuance of the Order. 2. The deed issued is free and clear of all mortgages, round rents, rights, title, and interest in or claims against the property. b. The Order directs the Allegheny County Department of Court Records to satisfy all tax and municipal liens and claims affecting the property conveyed at no cost to the City, the City School District, and Allegheny County. 46, The Real Estate Division subsequently issues correspondence to the buyer and his/her title company noting, among other information, the execution of the deed and the outstanding payment amount due. a. The purchaser submits the balance due via certified check, cashier's check, or money order payable to "Director, Department of Finance," at the first -floor office of the Finance Department through his/her title company within thirty days of the date of notification. 1. The title company records the deed immediately upon closing. 2. The property title is conveyed via special warranty deed. 3. The thirty -day payment period is not strictly enforced. aa. The City optedto permit buyers additional time for payment f the balance in an effort to r !ace the property back onthe tax rolls and avoid the need to ultimately repeat the sale process. Pickett, 18-041 Page 16 bb. Buyers are not permitted use/occupancy of or access to the property until the balance is paid and the deed is recorded. 47. If the successful bidder defaults on the property, the City has the options to: a. Offer the property to the next highest bidder(s) at their auction prices in bid order; or b. Request the City Law Department to present an Order to the Court clearing the title into the name of the City. 1. If approved, the property is to then be sold by sealed bid. 48. The City does not maintain any specific policy prohibiting a City employee from purchasing property via the established private sale process. a. The City Ethics Code states that a City employee.is permitted to bid at certain auctions as Ion as the employee is not receiving anything of value on terms better than 2at is available to the public at large. THE FOLLOWING FINDINGS RELATE TO THE SPECIFIC CIRCUMSTANCES LEADING TO PICKETT'S PURCHASE OF CITY- HELDIOWNED PROPERTY AT 1103 TROPICAL AVENUE AND PICKETT'S ACTIONS IN FURTHERING HIS PURCHASE OF THE PROPERTY. 49. Properties within the City are categorized into specific Districts, Wards, and Precincts. a. 1103 Tropical Avenue, Pittsburgh, PA 15216 ("1103 Tropical") is located in District 4, Ward 19 in the Beechview area of the City. b. 1103 Tropical bears a Lot and Block Number of 16-K-1 54. 50. The property encompassed at 1103 Tropical includes a parcel of land with an existing structure. a. The parcel of land at 1103 Tropical measures 10,720 square feet (lot dimensions 80'x 134'), b. The existing structure at 1103 Tropical is a 1,912 square foot two story, brick house with a one car garage. 51. Anthony P. Ravida ("Ravida") purchased 1103 Tropical on July 30, 2003, for the price of $30,000.00. a. Ravida was delinquent on various taxes due for 1103 Tropical in excess of $300.00 from at least the 2009 tax year through the 2014 tax year, b. 1103 Tropical was available for inclusion in a Treasurer's Sale upon request from an approved buyer as early as August 2011 at a minimum. 52. The property at 1103 Tropical was made available for purchase by an interested artyfinterested parties via inclusion on the account list for the August 14, 2015, Treasurer's Sale. a. The property at 1103 Tropical had no specific individual's name tagged to it regarding its inclusion in the August 14, 2015, Treasurers Sale, Pickett, 18-041 P —ag e_1 7 1 Information associated with the request to have 1103 Tropical placed onto the account list was limited to "CC04." b, The property at 1103 Tropical was posted on July 20, 2015, as being available for purchase at the August 14, 2015, Treasurer's Sale. C. The property at 1103 Tropical was advertised on July 29, 2015, and August P, 2015, in the Pittsburgh Post -Gazette and the Pittsburgh Legal Joumal for inclusion in the August 14, 2015, Treasurer's Sale. 53. The property at 1103 Tropical was not sold at the August 14, 2015, Treasurer's Sale. a. The pro erty at 1103 Tropical was subsequently placed within the Three Taxing Minventory Bodies' inventoand available lor private purchase effective November 13, 2015, by any individual or business with approved buyer status. 1 No individual or business entity expressed interest in or otherwise pursued the purchase of 1103 Tropical until April 21, 2016, at the earliest. 54. Pickett submitted a Request to Purchase application to the Real Estate Division on March 4, 2016, for City -Held Property located at 1637 Suburban Avenue, Pittsburgh, PA. a. Pickett's Request to Purchase application was processed and subse uently approved by Real Estate Division employees effective April 20, 201T 1. Pickett was automatically categorized as an approved buyer for a period of one year after the successful processing of his application. 55. As of approximately mid-2016, Pickett, in his position as the Collection Manager of the Real Estate Division, assumed control over the generation/setting of sale prices for City -Held Properties. a. Pickett assumed the responsibility to price City -Held Properties due to a vacancy in the Sales Coordinator position at that time. 1. Pickett was not assigned this responsibility by any supervisory person who he reported to as a City employee. 56. Although approved as a buyer for City -Held Properties, Pickett ultimately did not purchase the property at 1637 Suburban Avenue. a. Pickett considered the purchase of various City -Held Properties before ultimately initiating the purchase process for 1103 Tropical. 1. The Real Estate Division has no written application or record of the date on which Pickett formally expressed interest in the property at 1103 Tropical. aa. Pickett was not required to submit an additional written Request to Purchase application for 1103 Tropical due to the fact that he had been approved as a buyer via his March 4, 2016, application submission. bb. Pickett expressed his formal interest in purchasing the property Pickett, 18-041 P—age—_1 8 at 1103 Tropical after having assumed the responsibility of pricing for the Real Estate Division. 57. Pickett initially attempted to utilize the Property Analyzer Program to identify sales prices of properties comparable to 1103 Tropical. & The Property Analyzer Program identified no comparable properties for consideration in relation to 1103 Tropical. 58, As a result of the Property Analyzer Program failing to return any comparable properties, Pickett conducted a physical inspection/assessment of 1103 Tropical on or about August 9, 2016, to generate a sales price for the property. a. Pickett conducted the walk-through of the property with City employee William Killcrece ("Killcrece"). 1 At that time, Killcrece was the City employee responsible for securing City -Held Property, 2. Killcrece was also the City employee responsible for allowing access to City -Held Properties to potential buyers as well as representatives of the Real Estate Division when necessary. b. Pickett performed the walk-through/assessment of 1103 Tropical after he had initiated the procedure for his private purchase of the property, C. At the time Pickett considered the Property Analyzer Program and conducted the physical inspectionlassessment, he had a reasonable expectation that he would be bidding on the property. 59. On August 17, 2016, and August 18, 2016, Peter Busse � Bussey") and Daniel Hellmann ("Hellmann") each submitted separate Request 0 Purchase applications to the Real Estate Division office for property located at 1103 Tropical Avenue. a. Neither Hellmann nor Bussey was an approved buyer at the time he submitted his Request to Purchase application. 60. As the Collection Maria er of the Real Estate Division, Pickett generated a Property Value Worksheet for 1103 Tropical and assigned values to the property, including the sales price of $2,500.00, as detailed below: Sale Price of Subject Property," $12,420.00 County Assessed Value of Subject Property $102,600.00 Current Assessed Value to Sales Price Ratio 12,11% Average Value of Comparables $1,500.00 Average Square Footage of Comparables 2,500.00 Average Price Per Square Foot of Comparables $0.60 Average price Per Square Foot of Comparables, As Applied to Subject Property $1,500.00 City's Opinion of Sales Price $2,500.00 Prepared By; Aaron Pickett "Represents sale price from Treasurer's Sale plus additional year's taxes and fees Pickett, 18-041 P-a—g—e7 9 a. The sale price as listed for Treasurer's Sale is a compilation of all taxes due as of 2013 ($12,114,59) plus additional fees and a portion of the 2014 calendar year taxes due, resulting in the sale price of $12,420.00. 61. On August 9, 2016, at 1:36 p.m., Pickett emailed Walsh, informing her that 1103 Tropical had been priced and needed a letter signifying purchase approval. a. Walsh authored correspondence dated August 10 2016, on Finance u Department-Office of the Treasurer letterhead, to Pickett as the proposed buyer of 1103 Tropical. Walsh's correspondence to Pickett identified, in part, the following: aa. The approval of Pickett's Request to Purchase application; bb, The sales price of $2,500.00 for 1103 Tropical; and cc. Pickett's need to schedule an appointment to provide $250.00 in hand money for the property and to sign a Proposed Agreement of Sale (a/k/a Proposal to Purchase). 62. Pickett Submitted PNC Bank Cashier's Check Number 7508392 dated October 5, 2016, in the amount of $250.00, to Brandon Jones, Real Estate Division Sales Coordinator, at the Finance Department office on October 5, 2016, as the required deposit for the purchase of 1103 Tropical. a. Pickett's Cashier's Check was deposited by the City on October 28, 2016. 63. Pickett subsequently executed a Proposal to Purchase sales a reementon October 5, 2016, in a dual capacity as both the purchaser of 1183 Tropical and the Collection Manager of the Real Estate Division. a. Jones signed the Proposal to Purchase as the witness to Pickett's signature as the purchaser. b. The Proposal to Purchase was subsequently signed b the City Treasurer, Margaret Lanier, and the Director of the Finance DepaVent, Paul Leger, as representatives for the City. 1. Neither Lanier nor Leger questioned Pickett's dual signatures as the proposed urchaser of 1103 Tropical and the Collection Manager of the Real state Division. 64, Real Estate Division representatives ultimately penned proposed legislation in the form of a resolution ("Resolution") providing for the filing of petitions for the sale of fourteen individual properties acquired by the City at tax sales, per the Second Class City Treasurer's Sale and Collection Act. a. The Resolution included 1103 Tropical as a listed property. The Resolution documented the following description for 1103 Tropical: Aaron Pickett Purchase Price: $2,500.00 2 Sty Brk Hse & 1 Car Gar Personal Use Lot: 80 x 134 Pickett, 18-041 age 2 0 Location. 1103 Trosical Acquired: Aug 14, 015 TB = 93 Ward: 19 Block & Lot: 16-K-154 Council IDistirict. 4 b. A draft of the Resolution was provided to each Member of City Council the Friday prior to City Councils Tuesday, November 7, 2016, regularly scheduled legislative meeting. A Property Fact Sheet for each individual property identified in the Resolution was provided to City Council along with the Resolution. 65. The Resolution was first introduced at City Council's November 7, 2016, legislative meeting. a. The Resolution was initially reviewed at City Council's November 14, 2016, Standing Committee meeting. b, The Resolution was held in committee until City Council ultimately granted preliminary approval at its December 14, 016, Standing Committee meeting. C. The Resolution received final approval from City Council at its December 20, 2016, legislative meeting under Enactment No. 781. d. Resolution Number 781 was approved by the Mayor on December 29, 2016, 66. Although City Council did not approve Resolution Number 781 until December 20, 2016, e ick% was issued correspondence on Finance Department -Treasurer's Office letterhead dated November 2, 2016, purporting City Council's approval of his purchase of 1103 Tropical. a. Pickett obtained his approval letter dated November 2, 2016, from Jones, purporting City Council's approval to sell 1103 Tropical Avenue to Pickett, in order to coincide with the approximate date of Pickett's title report. I Jones generated the November 2, 2016, correspondence and presented the correspondence to Walsh for signature before copying he correspondence to the Real Estate Division file and providing the original to Pickett. aa. Jones's direct reports at the Real Estate Division are Pickett and Walsh, bb. Jones had no cause to generate the correspondence for Pickett on November 2, 2016, absent direction from Pickett. b. Pickett's City Council approval letter was dated five days before Resolution Number 7Pwas. initially resented to City Council (November 7, 2016) and forty-eight days prior to City Council's final approval (December 20, 2016). G. Each of the remaining thirteen City Council gpiroval letters issued to buyers for the purchase of property associated with Resolution Number 781 was generated, dated, and signed on January 13, 2017. 67, Pickett retained the services of American General Services Corporation ("American General") to perform the title search for 1103 Tropical prior to his actual receipt of the approval letter. Pickett, 18-041 7EF21 a. The title report submitted in association with Pickett's purchase of 1103 Tropical documented a November 1, 2016, search date. The search date routinely represents the date the title search was completed and/or typed. b. Pickett's title search was completed and/or typed six days priorto Resolution Number 781 being introduced to City Council. 68, The City Law Department filed a Petition to Quiet Tax Title and Approve Sale of Real Estate in the Court under Docket Number GD-2017-2942 on February 24, 2017, in relation to 1103 Tropical. a. The Court granted the Petition to Quiet Tax Title and Approve Sale of Real Estate on March 7, 2017. 69. The Order associated with 1103 Tropical was advertised in the Pittsburgh Post - Gazette and the Pittsburgh Legal Journal on March 13, 2017. a. April 11, 2017, represented the last day for any individual(s,) with any existing interest to file an answer or objection to the sale of 1103 Tropical. No answer or objection was filed by the April 11, 2017, deadline by any individuals with any existing interest in 1103 Tropical. b, April 11, 2017, also represented the last day for any individual wishing to purchase 1103 Tropical to supply the required $250.00 deposit to secure is/her ability to bid on the property through Court auction. No approved buyers provided the required $250.00 deposit or otherwise objected to the sale of 1103 Tropical via submission of a Request to Purchase to the Real Estate Division by April 11, 2017. 70. On May 23, 2017, the Court issued an Order approving the private sale of 1103 Tropical to Pickett in the amount of $2,500.00. a. The Order authorized the Mayor to deliver a deed for the property to Pickett free and clear of all mortgages, ground rents, rights, title, and interest in or claims against said property. b. The Order directed the Allegheny County Department of Court Records to satisfy of record all tax and municipal liens anTIclaims affecting the property. 71. The Real Estate Division issued correspondence dated June 1, 2017, to Pickett and American General, confirming that the executed deed for 1103 Tropical had been received. a. The correspondence identified, among other information, a balance due of $2,250.00 to be paid via certified check, cashier's check, or money order payable to the Director of the Finance Department. The certified check, cashier's check, or money order was to be presented at/to the Finance Department. b. The deed was to be released to American General upon receipt of payment. 72. Although the Order approving the sale of 1103 Tropical to Pickett was dated May Pickett 18-041 0 age_ 12 23, 2017, payment of the $2,250.00 balance due was not made by American General on Pickett's behalf until or about April 13, 2018. a. American General issued Check Number 4199, dated April 13, 2018, in the amount of $2,250.00 to the Director of the Finance Department in payment of the outstanding balance due for Pickett's purchase of 1103 Tropical. 1. The City deposited the check from American General on May 2, 2018, b. Pickett failed to issue payment to American General for subsequent provision to the Real Estate Division regarding the closing of the sale of 1103 Tropical for approximately eleven and one-half months after the executed deed was received by the Real Estate Division. I The thirty -day period for payment of the balance of the purchase due is not strictly enforced. 73. The deed for 1103 Tropical was recorded in Pickett's name on April 17, 2018. a. Pickett remains the current owner of 1103 Tropical. 74. The propert located at 1103 Tropical was available for purchase by any member of the public a large via its inclusion in the August 14, 2015, Treasurer's Sale. a. The purchase price affixed to 1103 Tropical at the August 14, 2015, Treasurer's Sale was $12,420.84. 75, Although Pickett had the opportunity to purchase the property at 1103 Tropical at the August 14, 2015, Treasurer's Sale, ckett did not do so, a. Pickett did not formally disclose his interest in 1103 Tropical until April 21, 2016, at the earliest. 76. As a result of purchasing 1103 Tropical via private sale through the Real Estate Division, Pickett was able to personally control and establish the price point for the sale of 1103 Tropical. a. Pickett personally assessed the propertyand established the sale price of $2,500 . 00 after he had formally initiated the process to purchase the property. 77. Pickett, as a result of personally setting the price for 1103 Tropical in his capacity as the Collection Manager of the Real Estate Division, acquired the property for an amount approximately $9,920.84 less than the price originally established the property at the public Treasurer's Sale. a. The price set for 1103 Tropical at the public Treasurer's Sale was $1 2420.84. b. The price paid by Pickett for 1103 Tropical through the Real Estate Division was $2,500,00. THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT PICKETT FAILED TO FILE STATEMENTS OF FINANCIAL INTERESTS WITH THE CITY FOR CALENDAR YEARS 2013, 2014, 2015, 2016, AND 2017. 78, Statement of Financial Interests filing requirements for public officials and public employees are mandated by Section 1104 of the State thicsAct. Pickett, 1M41 Page 3 Section 11 04(a) mandates, in part, the following: "...Any other public employee or public official shall file a s6tement of financial interests with the governing authority of the political subdivision by which he is employed or within which he is appointed or elected no later than May 1 of each year that he 'holds such a position and of the year after he leaves such a position." 79. Pickett was required to file a Statement of Financial Interests b� May 13' each year t in which he was employed as a Finance Administrator I for e Collections and Compliance Division, and he is required to file Statements of Financial Interests as the Collection Manager/Manager of the Real Estate Division. a. Pickett was employed as a Finance Administrator I for the Collections and Compliance Division from July 14, 2014, through January 24, 2016. Pickett has been employed as the Collection Manager/Manager of the Real Estate Division from January 25, 2016, to the present. 80. On August 29, 2018, contact was made with the City during which cVes of Pickett's Statements of Financial Interests for calendar years 013 through 2017 were requested. No Statements of Financial Interests for Pickett within the requested date range were present in the City's custody. 81. Pickett failed to file or otherwise maintain Statements of Financial Interests for calendar years 2014 through [2017] with the City as required by the State Ethics Act. 82, Pickett's actions in obtaining correspondence from the Real Estate Division dated November 2 2016, purporting City Council's approval of the sale of 1103 Tropical, enabled Pickett to progress with the sales process in a shortened time frame thereby limiting the time period for other interested buyers to potentially object to the sale and trigger a Court auction process. a. Other buyers approved for the purchase of City -Held Property via enactment of Resolution Number 781 did not receive their City Council sale approval correspondence until January 14, 2017, at the earliest. At least two individuals interested in the private purchase of 1103 Tropical filed Request to Purchase applications for approval as buyers on August 17, 2016, and August 18, 2016, respectively. Decreasing the overall time associated with completion of the sales process increased the potential that the individuals submitting the Request to Purchase applications would not be approved as buyers in time to lodge objections to Pickett' s purchase of the property. Ill. DISCUSSION: In his positions as, (1) a Finance Administrator I for the Collections and Compliance Division of the Department of Finance Finance Department") of the City of Pittsburgh {"City") City') Pennsylvania, from July 14, 2M', through January 24, 2016; and (2) the Collection ana'gelr/Manager of the Real Estate Division of the Finance Department of the Citr (hereinafter, the Real Estate Manager for the City") from January 25, 2016, to the present, Pickett, 18-041 P —ag-e-2 4 Respondent Aaron Pickett, also referred to herein as "Respondent," "Respondent Pickett," and `"Pickett,,` Pickett," has been a public employee Subject to the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1101 et seg. The allegations are that Pickett violated Sections 11 03(a), 1104(a), and 1105(a) of the Ethics Act. (1) when he utilized the authority of his public position for a private pecuniary benefit when, as the Real Estate Mana Manager for the City, he assessed and set the sale price of real property owned/held by the Ety, at a time when he possessed a i reasonable interest n purchasing the property for himself; (2) when, as the Real Estate Manager for the City, he executed a Proposal to Purchase agreement between the City and himself, cconcerninp the sale of real property; (3) when he failed to file Statements of Financial interests S Is") for the 2013 and 2014 calendar years in association with his r)Ljbl'Iposition2ance Administrator 1; and (4) when, as the Real Estate Manager, he failed file SIFIs for calendar years 2015„ 2016, and 2017. Per the Consent Agreement of the parties, the Investigative Division has exercised its prosecutorial discretion to nol pros the allegations under gection 1105a) of the Ethics Act. Based u onthe nol pros, we need only a dress the allegations under ection'1103(a) and Section �1 04(a) of the Ethics Act. Pursuant to Section 11 03(a) of the Ethics Act, a public official/public employee is prohibited from engaging in conduct that constitutes a conflict of interest: § 1103. Restricted activities (a) Conflict of interest. —No public official orpublic employee shall engage in conduct that constitutes a conflict of interest. 165 Pa.C.S., § 11 03(a). The term "conflict of interest" is defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public emplo ee 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. The term 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.. M.N.M.A. Section 11 03(a) of the Ethics Act prohibits a public official/public employee from using the authority of public office/employment orconfidential information received by holding such a public position for the private ecuniar benefit of the pUblicofficial/public employee himself, an member of his immeTate family, or a business with which he or a member of his immediate family is associated. 1Pickett, 18-041 7a—g T2 5 Section 11 04(a) of the Ethics Act provides that each public official/public employee must file an SF1 for the receding calendar year by May 1 of each year that he holds the position and the year after he leaves it. As noted above, the parties have submitted a Consent Agreement and Stipulation of Findings. The parties' Stipulated Findings are set forth above as the Findings of this Commission. We shall now summarize the relevant facts as contained therein. Pickett was employed as a Finance Administrator 1 for the Collections and Compliance Division of the Finance Department from July 14, 2014, through January 24, 2016. Pickett has served as the Real Estate Maria er for the City from January 25, 2016, to the resent, in a position which was initially classified/titled as Collection Manager of the Real Estate Division and later recl ass ified/retitl ed to that of Manager of the Real Estate Division. Back -ground The City is a Second Class City governed by a nine -Member Council and a Mayor. Pursuant to the Second Class City Treasurer's Sale and Collection Act, the City Treasurer maintains the authority to conduct Treasurer's Sales of privately -owned property upon which the assessed and levied taxes have not been paid and have become delinquent. for within the City that carry a debt in excess of $300,00 in assessed or levied taxes -or a period of time in excess of one year are classified as tax delinquent and are eligible for inclusion in a Treasurer's Sale. The Finance Department is responsible for selling tax delinquent properties through Treasurer's Sales and for selling City -owned properties. Treasurer's Sales are open to the public and any attendee is eligible to, bid on and purchase property. The Treasurer/Treasurer's Office establishes a minimum price for each property that is to total an amount sufficient to pay the delinquent taxes water rents, sewage service charges, and other municipal claims related to the property. if a property is not sold at a Treasurer's Sale, the City may take title to the property as an agent for the taxing bodies havingclaims against the property. A property held by the City on behalf of the taxing bodies ("City -Held Froperty") is entered into a City database that can be used by individuals interested in identifying City -Held Properties which are available for purchase. An individual who is interested in purchasing a City -Held Property is required to be approved as a qualified buyer by the Real Estate Division. If the individual was not previously as a qualified buyer as part of the Treasurer's Sale process, the individual is required to submit a Request to Purchase application to the Real Estate Division. The individual may be approved as a qualified buyer if there are no outstanding fees, code citations, or taxes attached to any property in the City that is owned by the individual. A qualified buyer remains in the Real Estate Division's Request to Purchase system for a period of one year. The Real Estate Division generates a purchase price for a City -Held Property that a qualified buyer wishes to purchase. The Sales Coordinator for the Real Estate Division has traditionally been responsible for determining the purchase price for a City -Held Property. The Sales Coordinator has access to and utilizes the City Property Analyzer program ("Property Analyzer Program") to assist in determining the p Z purchase price or a City -Held Property. The Property Analyzer Program is a real estate pricing program which searches for sales of properties comparable to the City -Held Property to be priced. The Real Estate Division utilizes "custom pricing" when the Property Analyzer Program is unable to identify any comparable properties or when no other recent comparable property sales are readily known. Custom pricing of City -Held Properties is generally based on a $1.00 per square foot guideline which has been utilized bytheRea Estate Division for a significant number of years. Custom pricing is determined by physical ins ection/assessment of the City -Held Property and consideration of multiple variables, including the fact that the property was not purchased during the Treasurer's Sale, the Pickett, 18-041 7a—g—e26 physical condition and location of the property, and potential code violations. After the City -Held Property is priced, the Real Estate Division mails the qualified buyer correspondence that identifies the purchase price for the property, the amount of the deposit required to initiate the sale of the property, and the need to sign a Proposal to Purchase in association with the property. r being signed by the qualified buyer, the Proposal to Purchase is signed by the Real Estate Manager, the City Treasurer, and the Finance Department Director, whose signatures indicate Tat the proposal is complete, all aspects of the proposal are in order, and the proposal is to be submitted to City Council for consideration, The authorit to sellAprove the sale of City -Held Properties lies with CityCouncil and the Mayor. TU Real state Division develops and presents to City Council a resolution proposing the sale of City -Held Properties for which the required deposits have been made and Proposals to Purchase have been executed. After the resolution is approved by City Council and ratified by the Mayor, the Real Estate Division informs each qualified buyer of City Council's approval to sell the requested City -Held Property. The qualified buyer is responsible for purchasing an insurable title report for the property, which the City uses to file a Petition to LIiet Tax Title and Approve the Sale of Real Estate with the Allegheny County Court of Common Pleas ("Court"). A deed for the property is executed by the Mayor upon the issuance of a Court order approving the sale of the roperty to the qualified buyer. The Real Estate Division subsequently notifies the qualified buyer and the qualified buyer's title company of the execution of the deed and the outstanding payment amount due. The qualified buyer has a thirty -day period, which is not strictly enforced, to submit the payment owed to the City through the qualified buyer's title company. The title company records the deed immediately upon closing. Re: Pickett's Purchase of -a Ci!y-Held Property A property at 1103 Tropical Avenue, Pittsburgh, PA 15216 (1103 Tropical") is located in District 4, Ward 19 of the City and bears a Lot and Block Number of 16-K-1 54. 1103 Tropical includes a 10,720 square foot parcel of land and a 1,912 square foot brick house with a one car garage. At a Treasurer's Sale on August 14, 2015, 1103 Tropical was available for purchase at the price of $12,420.84. 110TTropical was not sold at the Treasurer's Sale, and effective November 13, 2015,1103 Tropical was available for private purchase as a City -Held Property. On March 4, 2016, Pickett submitted a Request to Purchase application to the Real Estate Division for a City -Held Property located at 1637 Suburban Avenue, Piftsburph, PA. i Pickett's Request to Purchase application was approved by Real Estate vision e effective April 20, 2016. Although Pickett was approved as a qualified buyer, he to m enecst purchase the property at 1637 Suburban Avenue, and he considered the purchase of other City -Held Properties. As of approximately mid-2016, Pickett, in his position as the Real Estate Manager for the City, assumed the responsibility of setting the sale prices for City -Held Properties due to a vacancy in the Sales Coordinator position. After Pickett assumed the responsibility of pricing City -Held Properties, he initiated the process to purchase 1103 Tropical. Pickett initially attempted to utilize the Property Analyzer Program to identify the sale 0 'ailed to identify pricer f properties comparable to 1103 Tropical. After the Property Analyzer Program rolify any comparable properties for consideration, Pickett conducted a physical sp in ectionlassessmentof1103 Tropical on or about August 9, 2016, in order to generate a I sale for the property. Pickett performed the physical inspection/assessment after he had price initiated the process for his private urchase of the property. A Property Value Worksheet that Pickett completed for M3 Tropical assigned a sale price of $2,5100.00 to the Iprolperty. On August 9, 2016, Pickett informed Real Estate Division employee Connie Walsh Pickett, 18-041 Fa—g-e-2 7 ("Walsh") by email that 1103 Tropical had been priced and needed a letter signifying purchaseapproval, h subse en ' authored correspondence to Pickett, in his ro, ical, which noted the approval of Pickett's price of $2,500.00 for 1103 Tropical, and the to provide provide $250.00 in hand money for 1103 eproposedapplication, buyer iot '0 sPurchase 1 on, he ale capacity a aca t p t a a s t 0 Proposal p c ity Request for Pickett to schedule e an appointment Tropicd Tropical an 8Ign a Pro sa I to Purchase. rchase. On October 5, 2016, Pickett submitted a check in the amount of $250.00 to the Finance Department as the required deposit for the purchase of 1103 Tropical. Pickett additionally executed a Proposal to Purchase in a dual capacity as both the purchaser of 1103 Tropical and the Real Estate Manager for the City. Pickett subsequently retained American General Services Corporation ('American General") to perform a title search for 1103 Tropical. Brandon Jones ("Jones who had been hired as the Sales Coordinator for the Real Estate Division in September 2016, generated correspondence to Pickett dated November 2, 2016, which purported that City Council had approved the sale of 1103 Tropical to Pickett. Jones, who reports to Walsh and Pickett, had no cause to generate the correspondence to Pickett absent direction from Pickett. Jones presented the correspondence to Walsh for signature before he rovided the correspondence to Pickett. Jonescorrespondence was dated five days beAre a resolution (the "Resolution") that provided for the sale of 1103 Tropical and other City -Held Properties was introduced at a meeting of City Council on November 7, 2016, The Resolution was approved by City Council ratified b� the Mayor in December 2016, and a Petition to Quiet Tax Title and Approve Sale of Rea Estate in relation to 1103 Tropical was subsequently filed with the Court. On May 23, 2017, the Court issued an Order that approved the sale of 1103 Tropical to Pickett for the amount of $2,500.00 and authorized the Mayor to deliver a deed for 1103 Tropical to Pickett. The Real Estate Division subsequently issued correspondence to Pickett and American General which confirmed that the executed deed for 1103 Tropical had been received and that the deed was to be released to American General upon payment of the balance due in the amount of $2,250.00 to the Director of the Finance Department. Approximately eleven and one-half months later, Pickett issued payment to American General for the balance due. On or about April 13, 2018, American General made payment of the balance due on behalf of Pickett, and on April 17, 2018, the deed for 1103 Tropical was recorded in Pickett's name. Pickett remains the current owner of 1103 Tropical. As a result of purchasing 1103 Tropical via private sale through the Real Estate Division, Pickett was able to personally control and establish the price or the sale of 1103 Tropical. By personally setting the price for 1103 Tropical in his capacity as the Real Estate sta� e.Manager for the City, Pickett acquired 1103Tropicalfor a rice that was approximate�l $9,920.84 less than the price originally established for 1103 Tropical at the Treasurer's ale. Re: PicketVs SFIs Pickett was required to file an SFI for the preceding calendar year b May 1 of each year in which he was employed as a Finance Administrator 1 for the by and Compliance Division. Pickett was employed in the aforesaid position from July 14, 2014, through January 24, 2016. Pickett additionally has been required to file an SFI for the preceding calendar year by May 1 of each year in which hehasbeen employed as the Real Estate Manager for the City. Pickett has been employed as the Real Estate Manager for the City from January 25, 2016, to the present. On August 29, 2018, the InvestYative Division of the Commission requested copies of Pickett's SFIs for calendar years 2013 through 2017 from the City. No SFIs for Pickett Pickett, 18-041 7a—g-e--2 8 within the requested date range were on file with the City. 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 as follows: The Investigative Division will recommend the following in relation to the above allegations: That a violation of Section I 103(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S § 1103a), occurred when Aaron Pickett, as the Real Estate Manager for the City of Pittsburgh, assessed and set the sale price of real property owned/held by the City of Pittsburgh, at a time when he possessed a reasonable interest in purchasing the proper for himself; and when, as the Real Estate Manager for the City of Pittsburgh, Pickett executed a Proposal to Purchase agreement between the City of Pittsburgh and himself, concerning the sale of real property. b. That a technical violation of Section 1104 (a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 11 04(a), occurred when Aaron Pickett failed to file a Statement of Financial Interests for the 2014 calendar year, in association with his public position as Finance Administrator 1, and when, as the Real Estate Manager, he failed to file Statements of Financial Interests for calendar years 2015, 2016, and 2017. In that Mr. Pickett asserts that he was not informed by his superiors that he was required to file Statements of Financial Interests. 0. That no violation of Section 11 04(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 11 04(a), occurred when Aaron Pickett failed to file a Statement of Financial Interests for the 2013 calendar year, in that he did not initiate his emplo cent as Finance Administrator I in the Collections and Compliance Division of the Department of Finance until July 14, 2014. d. That no further action be taken concerning allegations arising [under] Section 11 05(a) of the Public Official and Employee Ethics Act, 65 Pa.C.S. § 1105(a). Pickett agrees to make payment in the amount of $5,000,00 in settlement of this matter payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission within thirty (30) days of the issuance of the final adjudication in this matter. Pickett, 18-041 age-2 9 a. Pickett further agrees that any profit (defined as the greater of either the sale price or fair market valUe/a raised value at the time of sale minus the $5100.00 settlement amount reflected herein and cost for any documented improvements) resulting from the sale of 1103 Tropical Avenue, War 19 Block & Lot: 16-K- 54, Pittsburgh, Pennsylvania, occurring within the time period of the date of execution of the Consent Agreement and five (5) years henceforth, shall be forfeited to the Commonwealth of Pennsylvania. 5. Pickett agrees to file complete and accurate Statements of Financial Interests with the City of Pittsburgh, through the Pennsylvania State Ethics Commission, for calendar years 2014, 2015, 2016, and 2017 within thirty (30) days of the issuance of the final adjudication in this matter. 6. Pickett agrees to not accept any reimbursement, compensation or other paympnt from the City of Pittsburgh representing a full or partial reimbursement of the amount paid in settlement of this matter. 7. The Investigative Division will recommend that the State Ethics Commission take no further action in this matter; and make no specific recommendations to any law enforcement or other authority to take action in this matter. Such, however, does not prohibit the Commission from initiating appropriate enforcement actions in the event of Respondent's failure to comply with this agreement or the Commission's order or cooperating with any other authority who may so choose to review this matter further. Consent Agreement, at 2-3. In consideringthe Consent Agreement, we accept the recommendation of the parties for a findingat a violation o? Section 1103(a) of the Ethics Act occurred when Pickett, as the Real Estate Manager for the City, assessed and set the sale price of real property owned/held by the City, at a time when he possessed a reasonable interest in purchasing the property for himself; and when, as the Real Estate Manager for the City, he executed a Proposal to Purchase agreement between the City and himself concerning the sale of real property. After Pickett assumed the responsibility of pricing City -Held Properties in his capacity as the Real Estate Manager for the City, he initiated the process to purchase 1103 Tropical, which was available for private purchase as a City -Held Property. Pickett used the authority of his public employment as the Real Estate Manager for the City: (1) when, on or about August 9 2016 he performed a physical inspection/assessment of 1103 Tropical and completed a �roperty Value Worksheet that assigned a sale price of , * 2 6, he executed �a Proposal $2,500.00 to 1103 opical; and 2 he n 0 n Octo'er " 0 1 to Purchase in relation to 1103 Tropical, ' which he also executed in his capacity as the parties have s ipu lated that b pe sona setting Pickett purchaser of 1103 Tropical. The a the price p s the Rea I Estate M na er or the it I for 1103 Tropical in his capacity a sa C acquired $9, 9 0 1 ss t p rice the property for a price that was approximately 555555555 2 , 4 less than he price originally established for the property at a Treasurer's Sale. Pickett, 18-041 P—age---30 Based upon the Stippulated Findings and the Consent A reement, we hold that Pickett violated Section 11 "3(a) of the Ethics Act, 65 Pa.C.S. § 1 lRa), when, as the Real Estate Manager for the City, he assessed and set the sale price of real property owned/held by the City,atatime when he possessed a reasonable interest in purchasing the property for himself, and when, as the Ieal Estate Manager for the City, he executed a Proposal to Purchase agreement between the City and himself concerning the sale of real property. We accept the parties' recommendation and we hold, that a technical violation of Section 11 04(a) of the Ethics Act, 65Pa.C.S.§1104(a}, occurred when Pickett failed to file i an SFI for the 2014 calendar year n association with his public position as a Finance Administrator 1, and when, as the Real Estate Manager, he ailed to file SFIs for calendar years 2015, 2016, and 2017. We agree with the parties that no violation of Section 1104 of the Ethics Act occurred in relation to Pickett's alleged N Qed failure to file an SH for the 13 calendar year. Given that Pickett did not initiate his employment as a Finance Administrator I in the Collections and Compliance Division of the Finance Department until July 14,2014, he was not required to file an SH for the 2013 calendar year. Accordingly, we hold that no violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S.§1104(a occurred in relation to Pickett's alleged failure to file an SH for the 2013 calendar year, in �hat he did not initiate his employmentas a Finance Administrator I in the Collections and Compliance Division of the Finance Department until July 14, 2014. As part of the Consent Agreement, Pickett has agreed to make payment in the amount of $5,000.00 payable to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30) days of the issuance of the finaladjudication in this matter. Pickett has agreed to not accept any reimbursement, compensation or other paymentfrom the City representing a full or partial reimbursement of the amount paid in settlement of this matter. Pickett has further a reed that any profit (defined as the greater of either the sale price or fair market value/appraised value at the time of sale minus the $5,000.00 settlement amount reflected herein and cost for any documented improvements resulting from the sale of 1103 Tropical Avenue, Ward: 19 Block & Lot: 16-K-154, Attsburgh, Pennsylvania, occurring within the time period of the date of execution of the Consent Agreement and five (5) years henceforhh, shall be forfeited to the Commonwealth of Pennsylvania. Pickett has additionally agreed to file complete and accurate SFIs with the City, through this Commission for calendar years 2014, 2015, 2016, and 2017 within thirty (3 days of the issuance of t6 final adjudication in this matter. We determine that the Consent Agreement submitted bthe parties sets forth a proper disposition for this case, based upon our review as reflec led in the above analysis and the totality of the facts and circumstances. Accordingly, per the Consent Agreement of the parties, Pickett is directed to make payment in the amount of $5,000.00 payable to the Commonwealth of Pennsylvania and forwarded to this Commission by no later than the thirtieth (30th) day after the mailing date of this adjudication and Order. Pickett is directed to not accept any reimbursement, compensation or other payment from the City representing a full or partial reimbursement of the amount paid in settlement of this matter. Pickett is ordered to fulfill his agreement that any profit (defined as the greater of either the sale price or fair market value/appraised value at the time of sale minus the $5,000.00 settlement amount reflected herein and cost for any documented improvements) Pickett 18-041 org-11 resulting from the sale of 1103 Tropical Avenue, Ward: 19 Block & Lot: 16-K-154, Pittsburgh, Pennsylvania, occurrin 01 9within the time period of the date of execution of the Consen?Agreement (May 21, 2 and five (5) years henceforth, shall be forfeited to the Commonwealth of Pennsylvania. To the extent he has not already done so, Pickett is ordered to file complete and accurate SFls for calendar ears 2014, 2015, 2016, and 2017 with the City, through this Commission, by no later years the thirtieth (30th) day after the mailing date of this adjudication and (Order. Compliance with the forming will result in the closing of this case with no further action by this Commission. oncompliance will result in the institution of an order enforcement action. IV. CONCLUSIONS OF LAW: In his capacities as, (1) a Finance Administrator I for the Collections and Compliance Division of the Department of Finance of the City of Pittsburgh City"), Pennsylvania, from July 14, 2014, through January 24, 2016; and �Co "City"), Manager/Manager of the Real Estate Division of the Department of Finance of the (hereinafter, "the Real Estate Mana er for the City") from January 25, 2016, to City present, s i t� �pondent Aaron Picket Pickett") has been a public employee the e en Re y p ct to t subject e provisions of the Public Zial and Employee Ethics Act ('Ethics Act"), 65 Pa.C.S. § 1101 et §eg. 2. Pickett violated Section 11 03(a) of the Ethics Act, 65 Pa.C.S. § 11 03(a), when, as the Real Estate Manager for the City, he assessed and set the sale price of real property owned/held by the City, at a T16e when he possessed a reasonable interest in purchasing the pro ertfor himself; and when, as the Real Estate Manager for the City, he executeTa Proposal to Purchase agreement between the ?1y and himself the sale of real property. 3. A technical violation of Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), occurred when Pickett failed to file a Statement of Financial Interests for the 2014 calendar year in association with his public position as a Finance Administrator 1, and when, as the Real Estate Manager, he failed to file Statements of Financial Interests for calendar years 2015, 2016, and 2017. 4. No violation of Section 11 ONa) of the Ethics Act, 65 Pa.C.S. § 1104(a), occurred in relation to Pickett's alleged ailure to file a Statement of Financial Interests for the 2013 calendar year, in that he did not initiate his employment as a Finance Administrator I in the Collections and Compliance Division of the Department of Finance until July 14, 2014. In Re: Aaron Pickett, File Docket: 18-041 Respondent Date Decided: 6/28/19 Date Mailed, 7/3/19 Aaron Pickett ("Pickett"'), a public employee in his capacities as: (1) a Finance Administrator I for the Collections and Compliance Division of the Department of Finance of the CiW of Pittsburgh ("City"), Pennsylvania, from July 14, 2014, through January 24, 2016; and (2) the Collection Manager/Manager of the Real Estate Division of the Department of Finance of the City hereinafter, "the Real Estate Manager for the Tity") from January 25, 2016, present, violated Section 1103 (a) of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S, § 11 03(a), when, as the Real Estate Manager for the City, he assessed and set the sale price of real property owned/held by the City, at a time when he possessed a reasonable interest in purchasing the property for himself; and when, as the Real Estate Manager for the City, he executed a Proposal to Purchase agreement between the City and himself concerning the sale of real property. 2. A technical violation of Section 11 01a) of the Ethics Act, 65 Pa.C.S. § 11 04(a), occurred when Pickett failed to file a tatement of Financial Interests for the 2014 calendar year in association with his public position as a Finance Administrator 1, and when, as the Real Estate Maria er, he failed to file Statements of Financial Interests for calendar years 2015, 209 6, and 2017. 3. No violation of Section 11 04(a) of the Ethics Act, 65 Pa.C.S. § 11 04(a), occurred in relation to Pickett's alleged failure to file a Statement of Financial Interests for the 2013 calendar year, in that he did not initiate his employment as a Finance Administrator I in the Collections and Compliance Division of the Department of Finance until July 14, 2014. 4. Per the Consent Agreement of the parties, Pickett is directed to make payment in the amount of $5,000-00 payable to the Commonwealth of Pennsylvania and forwarded to the Pennsylvania State Ethics Commission by no later than the thirtieth (301h) day after the mailing date of this Order. 5. Pickett is directed to not accept any reimbursement, compensation or other payment from the City representing a full or partial reimbursement of the amount paid in settlement of this matter. 6. Pickett is ordered to fulfill his agreement that any profit (defined as the greater of either the sale price or fair market value/appraised value at the time of sale minus the $5,000.00 settlement amount reflected herein and cost for any documented improvements) resulting from the sale of 1103 Tropical Avenue, Ward: 19 Block & Lot: 16-K-154, Pittsburgh, Pennsylvania, occurring within the time period of the date of execution of the parties' Consent Agreement ( May 21, 2019) and five (5) years henceforth, shall be forfeited to the Commonwealth of Pennsylvania. To the extent he has not already done so, Pickett is ordered to file complete and X accurate Statements of Financial Interests for calendarears 2014, 2015, 2016, and 2017 with the City through the Pennsylvania State Ethics Commission, by no oth) , later than the thirtieth �3 ay after the mailing date of this Order. Pickett, 18�-041 7@—ge--33 8. Compliance with paragraphs 4, 5, 6, and 7 of this Order will result in the closing of this case with no further action by this Commission. a. Non-compliance will result in the institution of an order enforcement action. BY THE COMMISSION,