HomeMy WebLinkAbout85-528 FlowerDavid J. Flower, Esquire
Yelovich & Flower
166 East Union Street
Somerset, PA 15501
Dear Mr. Flower:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 1 71 08 -1 470
TELEPHONE (717) 783 -1610
March 22, 1985
RE: Insurance /Pension Coverage; Township Supervisors
85 -528
This responds to your letter of February 12, 1985, wherein you requested
the advice of the State Ethics Commission.
Issue: Whether the supervisors of a township of the second -class may
authorize their participation in an (insurance /annuity) program paid for by
the township.
Facts: You are a solicitor for a township of the second - class. In that
capacity, you have requested the advice of the State Ethics Commission in
reference to the potential participation by township supervisors in an
annuity /insurance program, paid for by the township. On behalf of the
township, you request to know the propriety of such participation.
You have indicated that the township currently provides a retirement type
policy for its employees. There are presently three supervisors in the
township. One supervisor is employed by the township as a
roadmaster /superintendent; one supervisor is employed by the township as a
laborer and works forty (40) hours per year; and the final supervisor serves
only in the capacity as supervisor. The auditors of the township have
approved the purchase of the insurance /annuity for all of the supervisors.
You have requested the advice of the Commission as to the propriety of these
supervisors receiving, at the township's expense, the aforementioned insurance
benefits.
Discussion: At the outset, it should be noted, that the supervisors of a
township of a second -class are public officials as that term is defined in the
State Ethics Act. 65 P.S. §402. As such, these individuals must conform
their conduct to the requirements of the Act. See opinion 80 -050, Sowers.
David J. Flower, Esquire
March 22, 1985
Page 2
Generally the Ethics Act provides that:
Section 3. Restricted activities.
(a) No public official or public employee shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself, a
member of his immediate family, or a business with which
he is associated. 65 P.S. 403(a).
The compensation to be paid to a township supervisor is established by
the Second -Class Township Code. Specifically, supervisors who serve only in
that capacity (i.e., as a supervisor) may receive a statutory fee and no other
compensation. 53 P.S. §65515. The supervisors who, are appointed and
actually serve as roadmaster, road superintendent, and laborer, may receive
additional compensation, but only as fixed by the township board of auditors.
Based upon these provisions of law, the State Ethics Commission has previously
concluded that the purchase of pension /annuity policies on the authorization
of the township supervisors which would be applicable to and benefit the
township supervisors themselves is questionable. Basically, the compensation
for a supervisor acting as a roadworker or roadmaster, including deferred
compensation in the form of a pension or annuity must be fixed or otherwise
approved by the auditors of the township. These concepts were affirmed by the
Commonwealth Court of Pennsylvania in Hoak and McCutcheon v. State Ethics
Commission, 77 Cmwlth. Ct. 529; 466 A.2d 283, (1983).
Turning to the questions presented in your letter requesting advice,
there can be no doubt that in reference to the township supervisor who serves
only in that capacity, this individual may not, as a supervisor, authorize the
purchase for himself, participate or otherwise receive any compensation or
benefit from the program herein question. Such would be financial gain
obtained in violation of the State Ethics Act. See 84 -561, Ferraro; 84 -576,
Butler. The second supervisor mentioned in your letter has been appointed as
the township roadmaster and /or road superintendent. In reveiwing this
situation, we have utilized the Ethics Commission Statement of Policy as set
forth in 51 Pa. Code §7.1. This supervisor, as noted previously, may be
awarded additional compensation in accordance with the provisions of the
Township Code and court pronouncements. Of course, such compensation must be
fixed and affirmatively approved by the township board of auditors. This
approval should also operate prospectively and should be duly recorded in the
minutes of the auditors meetings. The compensation in the form of a
retirement or annuity program should be similiar to that in effect for other
township employees and should not extend any special type of treatment to this
supervisor.
David J. Flower, Esquire
March 22, 1985
Page 3
Finally, we will assume for the purpose of this advice that the
supervisor here in question is employed by the township in the aforementioned
capacity on a full -time basis. If the conditions, as outlined above, are now
existing, then there would be no prohibition under the Ethics Act with this
supervisor's receipt of compensation in the form of a township established
pension or retirement program. See opinion 84 -008, Kiniry.
The final question presented by your request is in reference to the
supervisor who is employed by the township as a worker approximately forty
(40) hours per year. The Commission has recently addressed the question of
whether a township supervisor who is employed on a part -time basis may, within
the purview of the State Ethics Act, receive, at township expense, life and
health insurance coverage. See Opinion 85 -005, Nanovic.
The Commission stated in that opinion that:
The Commission, of course, will not attempt to nor
does it have the authority to usurp the function of the
township auditors. That body must fix the salary of
supervisors employed as laborers, roadmasters, or
superintendents. We believe, however, that the Board of
Township Auditors has no authority to fix compensation
when no work is performed. As such, any approved
compensation must bear a rational and reasonable
relationship to the actual services performed.
We believe that in the instant matter, the supervisor
may, within the purview of the State Ethics Act, receive
insurance coverage to the extent approved by the auditors.
This coverage, however, should bear a reasonable
relationship to the functions performed. Factors to
consider in this respect may include; the extent of the
coverage offered to other employees performing similar
functions; the percentage of time actually worked by said
supervisor in relation to the other employees; the type
and extent of coverage accorded to others under similar
cirmcumstances in the locality; the extent of any co -pay
requirement to be imposed upon the supervisor; and the
limitation of coverage if apportioned in relation to the
percentage of time actually worked.
Unlike Nanovic, the case involved here concerns pension /retirement
coverage. Generally, this type of coverage is usually available to full -time
or salaried employees or otherwise contains various contribution rate, and
vesting provisions. See e.g., Pennsylvania Municipal Retirement Law. 53 P.S.
§881.101 et. seq. If such a system existed that was based upon the previously
mentioned factors and was reasonably related to the work performed,
David J. Flower, Esquire
March 22, 1985
Page 4
participation may be possible. In any event, because of the very limited
nature of this supervisors employment, (40 hours per year, or less than one
hour per week) and because the "program" in question appears to be the type
that is the flat purchase of an insurance policy with no other limitations, we
believe that this supervisor may not purchase at township expense, the
pension /retirement insurance policy herein question without violating the
Ethics Act. Under these circumstances and in light of Nanovic, any
contribution by the township would and must be of a minimal nature.
Conclusion: Township supervisors are public officials within the purview of
the State Ethics Act. As such, they may not use their public position in
order to obtain financial gain other than compensation provided by law. In
light of this and the factors herein present, only the supervisor who is a
full -time township employee may participate in the retirement program in
question.
Pursuant to Section 7(9)(ii), this 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, providing tyre requestor 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 request that the full Commission review this Advice. A
personal appearance before the Commission will he scheduled and a formal
Opinion from the Commission will be issued. Any such appeal must be made, in
writing, to the Commission within 15 days of service of this Advice pursuant
to 51 Pa. Code 2.12.
JJC /rdp
Sincerely,
John J ontino
General Counsel