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HomeMy WebLinkAbout07-566 ShantzGregory A. Shantz, Esquire Garner & Bauer 2050 East High Street Pottstown, PA 19464 Dear Mr. Shantz: ADVICE OF COUNSEL August 8, 2007 07 -566 This responds to your letter of July 2, 2007, and your faxed transmission received July 10, 2007, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., would present any prohibitions or restrictions upon the president of a borough council, whose spouse is the borough tax collector, with regard to participating in /voting on subdivision and land development plans in the borough where such new development would increase the borough tax base /assessed values in the borough and thereby correspondingly increase the amount of compensation received by the borough tax collector. Facts: As Solicitor for the Borough of Pennsburg ( "Borough ") in Montgomery ounty, you have been authorized by Eric Lajeunesse ( "Mr. Lajeunesse"), who is a Member and President of Borough Council, to request an advisory from the State Ethics Commission on his behalf as to the following. Mr. Lajeunesse's spouse, Jennifer Lajeunesse ( "Mrs. Lajeunesse "), is the elected Borough Tax Collector. Mrs. Lajeunesse is compensated for collecting borough, school district, and county taxes at rates set by the respective taxing authorities. The county pays Mrs. Lajeunesse a monthly stipend that is dependent upon the number of bills that are issued each year, and the school district pays Mrs. Lajeunesse a fee that is based upon the number of bills that are returned with proper payment. You state that the Lajeunesses do not have any impact on the compensation rates set by the county or the school district. Mrs. Lajeunesse's compensation for collecting Borough taxes is set by Borough Council. Borough Council has set Mrs. Lajeunesse's compensation for collecting Borough taxes at 3.5% of all Borough taxes collected during discount and face or net Shantz, 07 -566 August 8, 2007 Page 2 periods, and at 5% of all taxes collected in the penalty period. You state that Mr. Lajeunesse abstains from participating or voting as to the setting of Mrs. Lajeunesse's compensation for collecting Borough taxes. The Borough is a small community of approximately 3,000 residents. You state that the Borough is largely "built- out," and that any development within the Borough is typically small and includes in -fill development. The Borough has a Planning Committee, which is comprised of Borough Council Members. Mr. Lajeunesse is Chairman of the Planning Committee. You state that the Planning Committee is only an advisory body, and that all decisions with respect to land development plan approvals are made by Borough Council. You state that new development within the Borough would likely increase the existing tax base /assessed values in the Borough and thereby correspondingly increase the amount of compensation Mrs. Lajeunesse would receive as the Borough Tax Collector. You describe the resulting increase to Mrs. Lajeunesse's compensation as being to a minor degree." Based upon the above submitted facts, you ask whether Mr. Lajeunesse would have a conflict of interest in participating in or voting on subdivision and land development plans in the Borough where such new development would increase the amount of compensation that Mrs. Lajeunesse would receive as the Borough Tax Collector. You express your view that such action by Mr. Lajeunesse would not violate the Ethics Act, the Borough Code, or the Local Tax Collection Law. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords a defense to the extent the requester has truthfully disclosed all of the material facts. In his capacity as a Member and President of Borough Council, Mr. Lajeunesse is a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. (j) Voting conflict. - -Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a Shantz, 07 -566 August 8, 2007 Page 3 matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. 65 Pa.C.S. §§ 1103(a), (j). The following terms are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public 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. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. "Immediate family." A parent, spouse, child, brother or sister. 65 Pa.C.S. § 1102. Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /public employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting, but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a voting conflict, Section 1103(j) of the Ethics Act requires the public official /public employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. In the event that the required abstention results in the Shantz, 07 -566 August 8, 2007 Page 4 inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Act, then voting is permissible provided the disclosure requirements noted above are followed. See, Pavlovic, Opinion 02 -005. In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. Mr. Lajeunesse's spouse is clearly a member of his "immediate family" as that term is defined by the Ethics Act. Pursuant to Section 1103(a) of the Ethics Act, Mr. Lajeunesse would generally have a conflict of interest in matters before Borough Council that would financially impact himself or his spouse. Under the submitted facts that new development in the Borough: (1) would increase the tax base /assessed values in the Borough; and (2) would thereby correspondingly increase the amount of compensation received by Mrs. Lajeunesse as the Borough Tax Collector, you are advised that Mr. Lajeunesse would have a conflict of interest in participating in or voting on matters pertaining to or impacting the approval of subdivision and land development plans in the Borough except when one of the exclusions to the statutory definition of "conflict" or "conflict of interest" would be applicable. The statutory definition of "conflict" or "conflict of interest" includes two exclusions, referred to herein as the "de minimis" exclusion and the "class /subclass exclusion." The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburq, Order 900. The Commission has determined the applicability of the de minimis exclusion on a case -by -case basis, considering all relevant circumstances. In the past, the Commission has found amounts ranging from $2 to approximately $500 to be de minimis. See, Bixler v. State Ethics Commission, 847 A.2d 785 (Pa. Cmwlth. 2004). However, you are cautioned that an economic impact may aggregate over time, rather than be limited to a particular increment of time such as a month or year. Confidential Opinion, 05 -001. The submitted facts do not disclose by what amount Mrs. Lajeunesse's compensation as Borough Tax Collector would increase due to new development in the Borough resulting from Borough Council's approval of subdivision and land development plans. Therefore, the submitted facts do not enable a conclusive determination as to whether the de minimis exclusion would apply in the instant matter. In order for the class /subclass exclusion to apply, two criteria must be met: (1) the affected public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be affected "to the same degree" (in no way differently) than the other members of the class /subclass. 65 Pa.C.S. § 1102; see, Kablack, Opinion 02 -003; Graham, Opinion 95 -002 (citing Van Rensler, Opinion 90- 017); Rubenstein, Opinion 01 -007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual /business in question and the other members of the class /subclass are Shantz, 07 -566 August 8, 2007 Page 5 reasonably affected to the same degree by the proposed action. Kablack, supra. Under the submitted facts, as the Borough Tax Collector, Mrs. Lajeunesse would not be part of a class /subclass of similarly situated individuals, but rather would be a uniquely situated individual whose compensation as Borough Tax Collector would be increased by new development arising from Borough Council's approval of subdivision and land development plans. Therefore, the class /subclass exclusion would not apply in the instant matter. When neither the de minimis exclusion nor the class /subclass exclusion would be applicable, Mr. Lajeunesse would have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in or voting on matters pertaining to or impacting the approval of subdivision and land development plans in the Borough. In each instance of a conflict of interest, Mr. Lajeunesse would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Borough Code or the Local Tax Collection Law. Conclusion: As a Member and President of Borough Council for the Borough of Pennsburg ( "Borough "), Eric Lajeunesse ( "Mr. Lajeunesse ") is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Jennifer Lajeunesse ( "Mrs. Lajeunesse "), who is the Borough Tax Collector and Mr. Lajeunesse's spouse, is a member of Mr. Lafeunesse's "immediate family" as that term is defined by the Ethics Act. Pursuant to Section 1103(a) of the Ethics Act, Mr. Lajeunesse would generally have a conflict of interest in matters before Borough Council that would financially impact himself or his spouse. Under the submitted facts that new development in the Borough: (1) would increase the tax base /assessed values in the Borough; and (2) would thereby correspondingly increase the amount of compensation received by Mrs. Lajeunesse as the Borough Tax Collector, you are advised that Mr. Lajeunesse would have a conflict of interest in participating in or voting on matters pertaining to or impacting the approval of subdivision and land development plans in the Borough except when one of the exclusions to the statutory definition of "conflict" or "conflict of interest" would be applicable. The submitted facts do not enable a conclusive determination as to whether the de minimis exclusion would be applicable. The class /subclass exclusion would not apply because Mrs. Lajeunesse as Borough Tax Collector would not be part of a class /subclass of similarly situated individuals, but rather would be a uniquely situated individual whose compensation as Borough Tax Collector would be increased by new development arising from Borough Council's approval of subdivision and land development plans. When neither the de minimis exclusion nor the class /subclass exclusion to the statutory definition of "conflict" or "conflict of interest" would be applicable, Mr. Lajeunesse would have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in or voting on matters pertaining to or impacting the approval of subdivision and land development plans in the Borough. In each instance of a conflict of interest, Mr. Lajeunesse would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed Shantz, 07 -566 August 8, 2007 Page 6 truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 - 787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Robin M. Hittie Chief Counsel