Lansford-Coaldale Joint Water Authority's five officers are taking home salary and benefit packages that far exceed what borough code calls for, Lansford Borough Councilman Tommy Vadyak insists.
But while one state agency said, depending on the circumstances, there may be a violation of ethics laws, others, including the Carbon County District Attorney's Office, say it is not illegal.
The officers are appointed by the borough councils, two from Coaldale and three from Lansford. Vadyak said boroughs set compensation at $25 a month or $300 a year.
According to water authority records, the board chairman earns $15,000 a year; the vice chairman/superintendent $47,000; the treasurer $8,000; the secretary $8,000 and the assistant secretary/treasurer $6,800.
In addition, the chairman receives a $2,250 annual stipend; the vice chairman, treasurer, secretary and assistant secretary-treasurer each receive an annual $2,150 stipend.
Hourly employee wages range from $13.50 to $16.21 an hour. All employees, including the officers, are eligible for medical benefits.
Water authority board chairman Toby Krajcirik has said the officers' salaries were increased in 2006 after they began assuming more responsibilities in the wake of the arrest of a longtime employee who admitted embezzling about $80,000 over five years. The employee's $38,000 a year job was eliminated and the wages used to offset some of the officers' pay increases.
Vadyak who has said that under municipal code, the officials are entitled to $500 a year in base salary and must provide proof of any extra work done and are not entitled to benefits – is frustrated by what he believes is a deliberate effort to cover-up wrongdoing. Recently elected as a write-in to a two-year term on council, Vadyak says he wants a seat on the water authority, and that he would do the job for free.
"In three years these five people received between $300,000 and $400,000 in compensation," Vadyak wrote in an e-mailed message. "The Local Government Commission is quite clear receiving full-time benefits and not working full-time is criminal. The county (district attorney) will not investigate it because of the solicitor of the water authority is a close friend and his (assistant district attorney) is solicitor for Coaldale, part of the water system. He should have removed his department. The borough solicitor in a letter in '07 to council said about jail time and the Lansford Police Chief stated it's criminal. I want the money back for excessive salaries, health care, pension and workers' compensation insurance. Four of the board members should also be removed. The superintendent's hours I can't prove, so he is entitled to health care and pension. SOMEBODY IS BLOCKING THIS INVESTIGATION."
The March 7, 2007 letter Vadyak referred to, from Lansford Borough Council solicitor Robert T. Yurchak to council, cites borough code, the Municipal Authorities Act and the Public Official and Employees Ethics Act.
In the letter, Yurchak writes that "Given the amount of the compensation being paid, for instance the chairman receives $15,000 plus the additional $2,250 'officers' fee', it is my opinion that the compensation being paid by water authority members to themselves constitutes a conflict of interest, is not in nature and is in violation of the State Ethics Act. This would therefore subject the members receiving these monies to penalties under the Ethics Act and could include fines and/or jail time. In order to commence the process for the State Ethics Commission to investigate the matter, a complaint will have to (be) signed and filed with their office."
Vadyak asked District Attorney Gary Dobias to investigate the authority for "violating the Municipal Authority Act."
On June 6, 2008, county detective John J. Mauro sent Vadyak a letter saying he had "initiated and completed an investigation into your allegation of illegal activity" by the officers and that "No criminal misconduct was found in regards to the provision of compensation and benefits provided to the board members."
Vadyak said that when Mauro investigated the matter, he did not have all of the information Vadyak had gathered.
Mauro advised Vadyak to again take his concerns to the State Ethics Commission.
"I have learned that several complaints had been made to the commission regarding your allegation," Mauro wrote. "The commission responded to each of these complaints. If you are not satisfied with the finds of the Ethics Commission, I would suggest that you contact them and ascertain if an appeal could be brought before the commission."
The State Ethics Commission did, indeed, weigh in on Vadyak's complaints.
On March 14, 2008, Executive Director John J. Contino wrote Vadyak, saying "Your complaint fails to provide sufficient specific information to allow a determination as to whether these matters should be further processed. As such, no investigation will be commenced."
Vadyak also took his complaints to House Speaker Keith McCall, who forwarded them to the state Local Government Commission. The commission responded on Nov. 12, 2008, saying that it could offer only "background information on some avenues of recourse" that Vadyak could take, and offered a "brief legal discussion of legal issues that may arise in the context of Mr. Vadyak's allegations."
LGC said municipal authorities may award their members compensation as officers, according to the Pennsylvania Municipal Authorities Act (PMAA). They may also vote for their own appointment to an officer position and also vote to set their own salaries as an officer. However, if they created the office in order to receive compensation, it could be a violation of the state Ethics Act.
LGC also noted that authority board members may not receive health insurance, although their employees may.
Krajcirik in a recent interview described authority officers as "salaried employees."
LGC went on to say that "if the board authorized health insurance for themselves as employees, they could argue that this is permitted by the PMAA. However, (a previous case argument and ruling) appears to contain logic that would permit the (State Ethics Commission) and a court to examine the creation of positions primarily to give benefits or compensation to board members."
LGC also said that if authority officers authorized the compensation for hours they didn't actually work, that also could be a violation of the Ethics Act "as well as a possible crime."
Vadyak contends that at least three of the five officers hold down full-time jobs elsewhere and one works two jobs, so they could not possibly work 40 hours a week for the water authority.
"I don't think that we're doing anything wrong," said authority secretary Bob Demyanovich. "We are definitely working for what we are receiving. I don't have a guilty conscience about anything that I get from the authority. I basically see the employees every day, or talk to them."
Krajcirik said the officers are "on call 24/7. They are called out weekends, evenings for water leaks and other problems," he said. "You can just about guarantee that every officer is in this office every day."
LGC concluded in its report that "Among the list of allegations Mr. Vadyak has assembled, some may be authorized by law depending on the circumstances. With regard to some other allegations, Mr. Vadyak may wish to explore whether a state regulatory body, primarily the SEC, would review them to determine if further investigation is warranted. A few allegations appear to demonstrate violations of the PMAA that may have resulted in a loss to the authority. It is possible that any illegalities committed by the board may warrant an action for removal or another private action seeking redress from the court. Mr. Vadyak may wish to explore his options with private legal counsel."
Krajcirik said water authority officers increased their salaries and gave themselves benefits after an employee, Anna Mae Surotchak, in 2005 admitted siphoning about $80,000 in authority funds from 2000 through 2005.
"On the recommendation of Kirk Summa, our auditors, we took a more hands-on approach," he said. "Since then, every board member has become bonded that was an issue we had, that nobody was bonded here."
The auditors "recommended the board exercise more oversight and become more involved in the day-to-day operations of the water authority," Krajcirik wrote in a letter to council on Jan. 31, 2007.
"In January of 2006, the board of directors of the Lansford-Coaldale Joint Water Authority took the corrective action, which they deemed necessary, to prevent any further criminal activity such as Anna Mae Surotchak had perpetrated on the authority," Krajcirik wrote. "The board increased the involvement of each position of chairman, vice chairman, treasurer, secretary and assistant secretary-treasurer. To compensate the officers for the increased time, the salaries to these positions was increased. At the same time, the position of office administrator was never filled. The savings have offset the increases in salaries."
On Aug. 5, Vadyak filed a Freedom of Information Act request with the state Municipal Retirement Board for information on money water authority officers were having set aside in a pension fund.
On Oct. 28, water authority solicitor James R. Nanovic sent a letter to the Pennsylvania Municipal Retirement System. In the letter, Nanovic wrote that he is investigating possible "inappropriate " contributions made to the authority's pension fund several years ago.
"In October of 2005 the authority's office supervisor, Anna Mae (Vadyak) Surotchak pled guilty in federal court to embezzling approximately $80,000.00 from the authority. That amount has been repaid by Anna Mae (Vadyak) Surotchak. However, Mrs. Surotchak was in charge of the fund contributions during the course of her tenure with the authority. She was employed by the authority from 1976 through 2005," he wrote.
"We are asking you to research the contribution amounts for each employee from year to year since the inception of the fund for the Lansford-Coaldale Joint Water Authority," he wrote.
Lansford Borough council President Bob Gaughan said it's time to let go.
"Investigations by all involved have not come up with anything to prosecute or bring charges about. We have had legal opinions from and by both sides with the net effect of even," he said. "With all of the ongoing challenges that we face in local government it is long past time to move on and focus on the current and pressing problems of the day."