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HomeMy WebLinkAbout85-611 LeporeAlphonse P. Lepore, Jr., Esquire 70 North Mt. Vernon Avenue Uniontown, Pennsylvania 15401 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 December 19, 1985 ADVICE OF COUNSEL 85 -611 Re: Pension Program, Township Supervisor, Part -Time Roadmaster Dear Mr. Lepore: This responds to your letter of November 20, 1985, wherein you requested the advice of the State Ethics Commission. Issue: Whether the supervisors of a township of the second class may initiate a township funded pension program for a township supervisor who serves as a township roadmaster on a part -time basis. Facts: You have requested the advice of the State Ethics Commission on behalf of the hoard of township supervisors of Georges Township. You indicate that one township supervisor has heen serving the township as a roadmaster on a part -time basis and now desires the township to fund a pension program for him. Township supervisors requested that you ohtain the advice of the State Ethics Commission in regard this situation. You have not indicated in your letter of request the nature of this supervisors part -time service and the number of hours for which he is serving the township. Discussion: At the outset, it should he noted that the supervisors of a township of the second class are puhlic officials as that term is defined in the State Ehtics Act. 65 P.S. b As such, the supervisor must conform his conduct to the requirements of tNP Act. See Sowers, 80 -050. Generally, the Ethics Act provides: Section 3. Restricted activities. (a) No puhlic official or puhlic employee shall use his puhlic office or any confidential information received through his holding puhlic 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). Alphonse P. Lepore, Jr., Esquire December 19, 1485 Page 2 The compensation to be paid to a township supervisor is established by the Second Class Township Code. Specifically, supervisors serving only in that capacity (i.e. as a supervisor) may receive a statutory fee and no other compensation. 53 P.S. 565515. Supervisors who are appointed and actually serve as roadmaster, road superintendent, secretary /treasurer, or 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 a township's supervisors which would he applicable to and benefit the township supervisors themselves is not in accordance with the State Ethics Act. Basically, the compensation for a supervisor acting as a roadworker or roadmaster, including compensation in the form of a pension or annuity program must be fixed or otherwise approved by the auditors of the township. The township supervisors may not, even for a working roadmaster, establish and fund such program on their own. This concept was affirmed by the Commonwealth Court of Pennsylvania in Hoak /McCutcheon v. State Ethics Commission, 77 Pa. Commw. 529, 466 A.2d 283, (1983). See also Hendricks v. East Rockhill Township, 1 D. & C. 3d 763, (1977). In relation to the specific question that you have presented, the State Ethics Commission has recently addressed the question of whether a township supervisor, who is employed on a part -time basis by a township may, within the purview of the State Ethics Act, receive at township expense, life, health, and hospitalization insurance coverage. Nanovic, 85 -005. The Commission stated in that opinion that: The Commission, of course, w i l l 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 Alphonse P. Lepore, Jr., Esquire December 19, 1985 Page 3 and extent of coverage accorded to others under similar circumstances 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 Pianovi c , the case involved here concerns pension/retirement coverage. GeneraTTy, 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, participation may be possible. In a similar situation, the Commission has issued a previous advice of counsel indicating that a township supervisor employed for fourty hours per year, could not participate in a pension type program funded by the township. See Flower, 85 -528. This was especially true in the situation where the pension program would be one that consisted of the out right purchase of an insurance /annuity policy funded by the township with no other limitations. The foregoing rationale was most recently employed when the General Assembly of Pennsylvania enacted, Act 82 of 1985, November 29, 1985. That provision of law was an amendment to the First Class Township Code and permits the township funded purchase of pension or insurance benefits for first class township commissioners. That Act, however, provides such commissioners are eligible for inclusion in the plan only if they meet the same requirements, including hours of employment, as other full -time employees of the township. Thus, the General Assembly of Pennsylvania has indicated that in order for a township commissioner in a first class township to receive pension benefits, they must be employed on a full -time basis by the township. This concept appears to be in accord with the previous Ethics Commission ruling. In order to be complete, it should also he noted that the current time a bill similar to Act 82 is currently pending before the General Assembly of Pennsylvania regarding townships of the second class. See House Bill No. 1295. While this bill has not currently been enacted, it patterns the rationale set forth above. Conclusion: Based upon the foregoing provisions of law, and prior opinions of the State Ethics Commission, township supervisors, in townships of the second class may not enact for themselves a township funded pension program. The township board of auditor's is the only authority that may fix the compensation for township supervisors who are employed as roadmaster, etc. Additionally, even if said township supervisors are so employed, their compensation, in the form of pension and annuity benefits, must be reasonably related to the amount of work that is performed and in light of the treatment of similarly situated employees. In light of the currently pending Alphonse P. Lepore, Jr., Esquire December 19, 1985 Page 4 legislation, and that which has already been enacted for townships of the first class, requiring that pension benefits only be accorded to full -time employed commissioners, it may be advisable to forego any pension benefits for a part -time employed supervisor at this time. You may, if necessary, seek the further advice of this Commission in relation to this situation. 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 the 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 be 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 /sfb Si ncerely, n J. Conti no General.�Counsel