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HomeMy WebLinkAbout81-508 MuehlMs. Judith M. Muehl Borough of Fairview Fairview, PA 16415 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 February 4, 1981 ADVICE OF COUNSEL RE: Borough Council, Equipment Rental Dear Ms. Muehl: 81 - 508 This responds to your letter of October 23, 1980, in which you, as Secretary for the Borough of Fairview, requested an opinion from the Ethics Commission. Issue: You requested advice as to whether Fairview Borough could continue to rent equipment from a family -held corporation when a member of the family is also a member of Borough Council. Facts: You informed us that the Borough of Fairview has rented a tractor for removing snow from borough sidewalks. This tractor was rented on a cost basis from a family -held corpora- tion. A member of this family is now a Borough Councilman. You do not indicate the total amount of rental paid by the Borough for this tractor. Discussion: An elected Borough Councilman is a public official within the meaning of the Ethics Act. 65 P.S. §402. The Ethics Act has several provisions governing the conduct of public officials. The Borough Councilman shall not use his public office or confidential information received through his holding public office to obtain financial gain for himself, his immediate family or a business with which he is associated. 65 P.S. §403(a). Thus, the Borough Councilman may not use his office or confidential information obtained as councilman to obtain rental business. See Sowers, 80 -050. The statute also requires that public officials avoid the appearance of a conflict of interest 65 P.S. §401. Therefore, the Borough Councilman should abstain from voting on the rental question and /or contract with his family -held corporation and place the reason for his abstention on the public record. Kilmer, 79 -037. The Councilman should reveal his interest to the public and report any income over $500 received from the family corporation on the Financial Interest Statement as required by the Ethics Act, 65 P.S. §405(b)(2), (5), (8) and (9). Ms. Judith M. Muehl February 4, 1981 Page 2 The Act does not, however, prohibit the Borough from contracting with the family -held corporation as long as the procedure specified in the Act, if applicable, is followed. In pertinent part, the Ethics Act provides that: No public official or public employee or a member of his immediate family or any business in which the person or member of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into any contract valued at $500 or more with a governmental body unless the contract has been awarded through an open and public process, including prior public disclosure of all proposals considered and contracts awarded. 65 P.S. §403(c).. Previous decisions of the Ethics Commission have defined an open and public process. There must be: (1) Prior public notice that the contract will be considered; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. Howard, 79 -044. A reasonableness test is used to determine if each of the foregoing criteria are satisfied. It is essential that a reasonable and prudent competitor of the pubic official be able to prepare and submit a proposal. Howard, 79 -044. Thus, if the annual rental paid was $500 or more, these tests and require- ments must be met as well. Conclusion: A Borough Councilman is a public official whose conduct is governed by the Ethics Act. Accordingly, the Borough Councilman may not: (1) use his public office or confidential information received through his holding public office to obtain financial gain for himself, his immediate family or a business with which he is associated. (2) vote on a contract with a business with which he is associated. The Councilman should: Ms. Judith M. Muehl February 4, 1981 Page 3 SW /rdp (1) disclose his interest in the business (2) place the reason for his abstention from voting on the equipment rental contract on the public record. (3) report any income from the family -held corporation on a Financial Interest Statement. The Borough may continue to contract with the family -held corporation for snow removal services if it complies with the requirements of 65 P.S. §403(c). The contract, if for $500 or more, must be awarded in an open and public process which includes: (1) prior public notice that the contract will be consi- dered (2) public dislcosure of all proposals considered. (3) public disclosure of the award of the contract. Pursuant to Section 7(9)(ii), this Advice is a complete defense in any enforcement proceeding initiated by the Commis- sion, 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 may be scheduled and a formal Opinion from the Commission will be issued. You should make such a request or indicate your disapproval of this Advice within the next 30 days. Sincerely, 44andra S. ristianson General Counsel