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HomeMy WebLinkAbout16-536 McCabe ADVICE OF COUNSEL June 7, 2016 William J. McCabe, Esquire DeBernardo Antoniono McCabe & Davis, P.C. 11 North Main Street Greensburg, PA 15601 16-536 Dear Mr. McCabe: This responds to your letters dated April 8, 2016, and April 18, 2016, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”). Issue: Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would impose prohibitions or restrictions upon an individual serving as a member of a municipal authority board with regard to participating in deliberations or votes of the municipal authority board pertaining to changing an existing policy requiring the installation of grease interceptors for restaurant or food preparation facilities located on properties served by the municipal authority sewer system, where: (1) a member of the individual’s immediate family purchased—through a corporate entity—a Subway sandwich shop franchise to be operated in a building owned by the individual and his wife; (2) the building is located on property served by the municipal authority sewer system; and (3) the existing policy would require that a grease interceptor be installed for the Subway sandwich shop. Facts: You have been authorized by Dale Hines (“Mr. Hines”) to request an advisory from the Commission on his behalf. You have submitted facts, the material portion of which may be fairly summarized as follows. Mr. Hines is a Member of the Board of the Derry Township Municipal Authority (“Authority”), located in Westmoreland County, Pennsylvania. The Authority sewer system provides sewage collection and treatment services for Derry Township (“Township”) and some surrounding communities. The Authority sewer system serves buildings and other structures that have restaurant and food preparation facilities which generate cooking grease as a byproduct of regular business operations. Since approximately April 2003, the Authority Board has adopted various resolutions or regulations requiring the installation of grease traps or interceptors to prevent cooking grease from entering the Authority sewer system. On March 27, 2013, the Board adopted Section 5.06 of the Rules and Regulations of the Derry Township Municipal Authority (“Section 5.06”), regarding the installation and maintenance of grease interceptors. As adopted on March 27, 2013, McCabe, 16-536 June 7, 2016 Page 2 Section 5.06 required, in pertinent part, that a grease interceptor of a minimum 1000 gallon capacity be installed in restaurant or food preparation facilities by March 27, 2018, or when certain conditions would occur. In 2015, Mr. Hines was appointed to fill a vacancy on the Authority Board. During 2015, and after Mr. Hines’ appointment to the Authority Board, a member of Mr. Hines’ immediate family purchased—through a corporate entity (the “Corporation”)—a Subway sandwich shop franchise (the “Subway Franchise”) to be operated in a building (the “Building”) owned by Mr. Hines and his wife. The Building is located in the Township and is served by the Authority sewer system. During the renovation of the Building to accommodate the Subway sandwich shop, Mr. Hines did not install a 1000 gallon grease interceptor as required by Section 5.06. In December 2015, the Authority Board revised Section 5.06 to provide, in pertinent part, that any property served by the Authority which is used as a restaurant or food preparation facility on more than 25 days per calendar year shall install on or before March 27, 2018, a grease interceptor with a minimum 1000 gallon capacity. In January 2016, the Authority Board was reconstituted with the addition of a new Member. You state that it is possible that a majority of the newly-reconstituted Authority Board could vote to not enforce the existing policy requiring the installation of a 1000 gallon grease interceptor for all properties housing a restaurant or food preparation facility, to change the policy to permit the installation of a smaller, less expensive grease interceptor for some such properties, or to eliminate the policy altogether. You have submitted a list of restaurant or food preparation facilities located on properties served by the Authority sewer system, which document is incorporated herein by reference. Based upon the above submitted facts, you ask whether Mr. Hines would have a conflict of interest with regard to participating in deliberations or votes of the Authority Board pertaining to changing the grease interceptor policy of the Authority under circumstances where such a change in policy would result in a financial benefit to him or a member of his immediate family, or whether the “class/subclass” exclusion set forth within the Ethics Act’s definition of “conflict” or “conflict of interest” would be applicable as to such deliberations or votes. 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion/advice may be given only as to prospective (future) conduct. To the extent that your inquiry relates to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent your inquiry relates to future conduct, your inquiry may and shall be addressed. As a Member of the Authority Board, Mr. Hines 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 McCabe, 16-536 June 7, 2016 Page 3 (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 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 related to Section 1103(a) 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. McCabe, 16-536 June 7, 2016 Page 4 "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 65 Pa.C.S. § 1102. Subject to the statutory exclusions to the Ethics Act’s definition of the term “conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office/employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. 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 conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. A conflict of interest would not exist to the extent the “de minimis exclusion” and/or the “class/subclass exclusion” set forth within the Ethics Act’s definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, would be applicable. 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; Schweinsburg, Order 900. 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; 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 reasonably affected to the same degree by the proposed action. Kablack, supra. In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. McCabe, 16-536 June 7, 2016 Page 5 The Corporation/Subway Franchise is a business with which Mr. Hines’ immediate family member is associated as an owner. Mr. Hines would have a conflict of interest under Section 1103(a) of the Ethics Act as to deliberation(s) or vote(s) of the Authority Board pertaining to change(s) in the grease interceptor policy of the Authority that would result in a financial benefit to him, member(s) of his immediate family, or the Corporation/Subway Franchise unless the class/subclass exclusion set forth within the Ethics Act’s definition of the term “conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, would be applicable. The submitted facts are insufficient to enable a conclusive determination as to whether the class/subclass exclusion would be applicable as to any potential financial impact upon Mr. Hines, affected member(s) of his immediate family, or the Corporation/Subway Franchise. Specifically, the submitted facts do not indicate whether it would be Mr. Hines, his aforesaid immediate family member, or the Corporation/Subway Franchise that would be responsible to pay for any grease interceptor(s) installed in the Building. The submitted facts also do not indicate whether the party responsible to pay for any grease interceptor(s) installed in the Building would qualify as a member of a true subclass of similarly situated person(s) who would be responsible for installing grease interceptor(s) in restaurant or food preparation facilities, or whether the member(s) of such a proposed subclass would be affected to the same degree by any proposed change(s) in the grease interceptor policy (for example, if different capacities would be allowed for different facilities or if related expenses would vary for different facilities). In each instance of a conflict of interest, Mr. Hines would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. 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 Municipality Authorities Act. Conclusion: Based upon the submitted facts that: (1) Dale Hines (“Mr. Hines”) is a Member of the Board of the Derry Township Municipal Authority (“Authority”), located in Westmoreland County, Pennsylvania; (2) the Authority sewer system provides sewage collection and treatment services for Derry Township (“Township”) and some surrounding communities; (3) the Authority sewer system serves buildings and other structures that have restaurant and food preparation facilities which generate cooking grease as a byproduct of regular business operations; (4) since approximately April 2003, the Authority Board has adopted various resolutions or regulations requiring the installation of grease traps or interceptors to prevent cooking grease from entering the Authority sewer system; (5) on March 27, 2013, the Board adopted Section 5.06 of the Rules and Regulations of the Derry Township Municipal Authority (“Section 5.06”), regarding the installation and maintenance of grease interceptors; (6) as adopted on March 27, 2013, Section 5.06 required, in pertinent part, that a grease interceptor of a minimum 1000 gallon capacity be installed in restaurant or food preparation facilities by March 27, 2018, or when certain conditions would occur; (7) in 2015, Mr. Hines was appointed to fill a vacancy on the Authority Board; (8) during 2015, and after Mr. Hines’ appointment to the Authority Board, a member of Mr. Hines’ immediate family purchased—through a corporate entity (the “Corporation”)—a Subway sandwich shop franchise (the “Subway Franchise”) to be operated in a building (the “Building”) owned by Mr. Hines and his wife; (9) the Building is located in the Township and is served by the Authority sewer system; (10) during the renovation of the Building to accommodate the Subway sandwich shop, Mr. Hines did not install a 1000 gallon grease interceptor as required by Section 5.06; (11) in December 2015, the Authority Board revised Section 5.06 to provide, in pertinent part, that any property served by the Authority McCabe, 16-536 June 7, 2016 Page 6 which is used as a restaurant or food preparation facility on more than 25 days per calendar year shall install on or before March 27, 2018, a grease interceptor with a minimum 1000 gallon capacity; (12) in January 2016, the Authority Board was reconstituted with the addition of a new Member; and (13) it is possible that a majority of the newly-reconstituted Authority Board could vote to not enforce the existing policy requiring the installation of a 1000 gallon grease interceptor for all properties housing a restaurant or food preparation facility, to change the policy to permit the installation of a smaller, less expensive grease interceptor for some such properties, or to eliminate the policy altogether, you are advised as follows. As a Member of the Authority Board, Mr. Hines 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. The Corporation/Subway Franchise is a business with which Mr. Hines’ immediate family member is associated as an owner. Mr. Hines would have a conflict of interest under Section 1103(a) of the Ethics Act as to deliberation(s) or vote(s) of the Authority Board pertaining to change(s) in the grease interceptor policy of the Authority that would result in a financial benefit to him, member(s) of his immediate family, or the Corporation/Subway Franchise unless the class/subclass exclusion set forth within the Ethics Act’s definition of the term “conflict” or “conflict of interest,” 65 Pa.C.S. § 1102, would be applicable. The submitted facts are insufficient to enable a conclusive determination as to whether the class/subclass exclusion would be applicable as to any potential financial impact upon Mr. Hines, affected member(s) of his immediate family, or the Corporation/Subway Franchise. In each instance of a conflict of interest, Mr. Hines would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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 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