Loading...
HomeMy WebLinkAbout82-534 CashmanMr. David R. Cashman, Esquire Cauley, Birsic, and Conflenti 1212 Manor Building 564 Forbes Avenue Pittsburgh, PA 15219 Mailing Address: STATE ETHICS COMMISSION P.O. BOX 1 179 HARRISBURG, PA 17108 TELEPHONE: (717) 783 -1610 April 21, 1982 ADVICE OF COUNSEL 82 -534 RE: Financial Interest Statement - Consulting Engineer to Municipal Authority Dear Mr. Cashman: This responds to your letter of March 11, 1982 in which you, as Solicitor for the Allegheny County Sanitary Authority, requested an opinion from the State Ethics Commission. Issue: Is a consulting engineering firm, hired on an annual basis by a County Sanitary Authority, subject to the provisions of the Ethics Act requiring the annual filing of a Financial Interest Statement? Facts: You write the Commission in your capacity as solicitor for the Allegheny County Sanitary Authority. The Authority, created in 1949, provides sanitary sewage disposal to approximately 77 communities within Allegheny County. In the process of providing the service, the Authority has found it necessary to borrow funds and to secure the borrowing of the funds by issuing debentures. To issue debentures, the Authority executed a trust agreement. The trustee, Mellon Bank, required that a consulting engineer be hired on an annual basis. One of the engineer's functions, as required by the Bank, would be to prepare the Authority's budget for each operating year. The Authority has retained a consulting engineer. In addition to preparing the budget, the engineer helps prepare and review specifications for contract bids. The consulting engineer also he 1p sevaluate problems within the plant and makes certain recommendations concerning the methods in which problems, both internal and external, to the operation of the Authority are to be handled. State Ethics Commission • 308 Finance Building • Harrisburg, Pennsylvania Mr. David R. Cashman, Esquire April 21, 1.982 Page 2 The company employed as the consulting engineer is a division of a corporation, which corporation is not engaged primarily in the engineering business. The consulting engineer has assigned as the project engineer one engineer to oversee all the work to be done for and on behalf of the Authority. The project engineer attends the Board meetings and is the individual to whom all initial inquiries are made. This does not mean, however, that there are not other engineers who provide service to the Authority and make recommendations to it. You believe that the consulting engineer employs other engineers who also make recommendations to the Authority. You question, specifically, the Financial Interest Statement filing requirements, if any, of the consulting engineer and of individuals employed by the consulting engineer. Discussion: The Ethics Act, 65 P.S. §401 et seq. requires that public employees and officials shall file Statements of Financial Interests with the governing authority of the political subdivision by which he is employed no later than May 1 of each year that he holds such a position and of the year after he leaves such a position. 65 P.S. §404(a). Whether a consulting engineer, employed by a political subdivision - such as a County sanitary authority - is a public employee for purposes of the Ethics Act depends on the nature of the engineer's employment. When an engineer is brought in for a particular job because of its unique expertise in a particular area, e.g. hydrology, and is not the regular consulting engineer employed by the political subdivision, the engineer or engineering firm is not considered a public employee. No member of the firm or person hired by that firm would be required by the State Ethics Act to file a Statement of Financial Interests. On the other hand, a consulting engineering firm employed by a political subdivision as needed is subject to the Ethics Act as a public employee. The Act applies whether the firm performs on a retainer or on a "per job" basis. The "public employee" classification applies, notwithstanding an arguable independent contractor status under common law, because of the definition of public employee in the Ethics Act: a person responsible for taking or recommending official action of a nonministerial natue with regard to .. contracting or procurement... or any other activity where the official action has an economic impact of greater than a de mimimus nature of any person." 65 P.S. 402. The engineer or firm, whose duties you have described, appears representative of a "public employee" as defined in the preceding paragraph. The engineer or firm is retained on an annual basis, pursuant to a separate trust agreement, and performs a variety of important duties. The engineer or firm takes official action with respect to the preparation and review of contract bids. They recommend official action with respect to plant operation and evaluate internal and external authority problems. Thus, the consulting engineer or firm in this case, is subject to the provisions of the Ethics Act as a public employee. The consulting engineering firm, therefore, must comply with the Act's Financial Interest Statement filing requirements. See Bryan, 80 -014; Hemsley, 80 -034. Mr. David R. Cashman, Esquire April 21, 1982 Page 3 Because the consulting engineering company i:y a public employee, as set forth above, the Authority's governing body must, in accordance with 51 Pa. Code 4.7 of the Commission's regulations, designate the individual(s) within the firm responsible for filing the Financial Interest Statement. Typically, this designee is someone within the firm of a position of management. The data to be provided relates to the designee. The description of the project engineer which you supplied, if he is management level, suggests that he would be the logical individual designated to file. Other employees of the engineer or individuals employed by the engineer to do authority work are not to be considered "public employees" because of this work assignment alone. As noted, the Authority should designate the filer, and other employees of the engineer need not be considered "public employees" for filing purposes. Conclusion: As discussed above, in this case, the consulting engineering firm to the Allegheny County Sanitary Authority is a public emloyee subject to the Ethics Act and required by the Act to file a Statement of Financial Interests pursuant to Section 4(a). Persons associated with the consulting engineer, in particular the project engineer, do not become public employees as defined by the Act simply because they work for the consulting engineer. The governing body of the Authority must designate the "filer" within the consulting engineering company. 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 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. BF /rdp Sincerely, Jkdia Sandra S. Christianson General Counsel