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HomeMy WebLinkAbout91-009 NovakSTATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, }PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Robert W. Brown, Chair Dennis C. Harrington, Vice James M. Howley Daneen E. Reese Roy W. Wilt Austin M. Lee James P. Gallagher DATE DECIDED: DATE MAILED: Ben Novak, Esq. Novak, Stover & McCarty 122 East High Street P.O. Box 209 Bellefonte, PA 16823 -0209 August 23, 1991 September 3, 1991 Chair 91 -009 RE: Conflict, Public Official /Employee, .Township Supervisor, Township Solicitor, Pennsylvania State University, Business With Which Associated, Water Authority Application For Conditional Use, Appeal of Advice Dear Mr. Novak: This Opinion is issued pursuant to your appeal of the Advice of Counsel, No. 91 -558, issued on July 11, 1991. I. Issue: Whether the Public Official and Employee Ethics Law imposes any prohibitions or restrictions upon either a Township Supervisor who is an employee of the Pennsylvania State University, or upon a Township Solicitor who is a member of the Board of Trustees of Pennsylvania State 'Uni.versity, regarding the State College Borough Water, Authority's Application before the Township as to a conditional use to operate one or more water wells in order to increase the capacity of the Authority's water supply when the Pennsylvania State University is a customer of the Authority's water supply system. II. Factual Basis for Determination: The issue which you presented was originally processed as a request for an advice of counsel and as a result on July 11, 1991, Advice of Counsel, No. 91-- 558, was issued. That Advice was issued solely with regard to prospective conduct, but it recited a lengthy factual history including substantial past action, which you had submitted. The' factual recitation of Advice 91 -558 is incorporated herein by reference and will not be repeated at length. It will suffice to briefly summarize those facts herein. There is an Application for Conditional Use pending before the Benner Township Board of Supervisors. The Application was filed by the State College Borough Water Authority (SCBWA), which seeks to operate one or more wells on several lots that the SCBWA proposes to purchase from a private individual in the Airport Commercial Zoning District in Benner Township. The wells would provide an increased water supply for the entire SCBWA water system of which the Pennsylvania State University (Penn State) is a customer. Although most of the Penn State campus is supplied from the University's own wellfields, some activities of Penn State are served from SCBWA's water system. SCBWA has testified that it does not presently supply any water service to residents or businesses of Benner Township,. but that it would provide such service to any potential customer who would request such service and was willing to meet the rules and regulations of SCBWA. If the wellfield is permitted, a water line can physically be laid from the proposed wellfield to serve nearby entities which could include Penn State. The Airport Area Improvement Association, of which Penn State is a member, has expressed a strong interest in obtaining water that would be made available by the system, although none of the Association's members -have as of yet filed any requests or applications with SCBWA. Advice 91 -558 concluded that Ben Novak, as Solicitor for the Benner Township Board of Supervisors, and Michael Kelleher, as a Township Supervisor, each had a conflict under Section 3(a) of the Ethics Law and were required to abstain from participating on matters concerning the SCBWA's said Conditional Use Application in -light of the fact that such would be a private pecuniary benefit to the Pennsylvania State University, a business with which Novak and Kelleher are associated in their respective positions as a member of.the Board of Trustees and as an employee of Penn State. On July 22, 1991, the Commission timely received your .letter appealing the above Advice. By letter dated July 26, 1991, you were notified that your appeal would go before the full Commission and that you would be notified of the date, time and location of that meeting by separate letter. You were then notified by letter _of August 5, 1991 of- the date, time and location of the public meeting of August 23, 1991.. In your appeal of Advice 91 -558, you disagree with the Advice's conclusion which you state was based upon a misunderstanding of the pertinent facts. You opine that the major premise of. the Advice was that a grant of a conditional use to SCBWA to allow it to develop one or more wellfields which would add to the capacity of the entire water system would result in an increase of real estate values in the region and in particular to the market value of Penn State's landholdings. You argue that there is nothing of record nor any factual basis to conclude that adding another wellfield to the SCBWA system would result in a rise of property values, either generally or to Penn State lands. Were there some facts showing a shortage of water in the SCBWA system and development was being delayed for a lack of water, you theoretically would accept such a proposition. However, you state that there are no facts- of record showing such a water shortage in the SCBWA water system at the present time and that there is no- development being held up due to a lack of water. In this regard, you reference a newspaper article from the Centre Daily Times dated July 19, 1991, as showing that the State College water supply is sufficient given this summer's dry spell. But the article also says that many other Centre County water providers are "feeling the pinch" of the dry weather, at least one being under mandatory water restrictions and. a boil - water advisory. The article indicates that one reason SCBWA is more fortunate is precisely because 'it has a number of different sources including a new wellfield it just brought on line. The article does not mention the condition of Penn State University's own wellfields which you claim serve as its primary source of water. After stating that there is no known increase in property values recorded for the addition of other wellfields in the SCBTIA system, you conclude that the Advice cannot automatically presume such a result of a private pecuniary benefit without sufficient facts. You next assert that the conclusion in, the Advice that the increase in the capacity of the SCBWA system would increase the value of the University's lands by enabling improvements to the University's infrastructure is also incorrect. You disagree with the Advice because you note that the University supplies most of its own water from its own wellfields and that merely some of the activities of Penn State are served by the SCBWA water system. In particular, only four or five buildings of Penn State will 'be involved because these buildings are remote from Penn State's own wellfield and it would be easier to connect piping to the SCBWA water system. Further, the areas that will be serviced will not be added to the system but will merely receive supplementary water service. Since there is no present service where the wellfields are located, the passibility exists that a person located in the area of the wellfields_ could connect. Penn State also owns land in the area of the wellfields but there is no indication that Penn State would connect to the system. You further assert that Penn State University is not in the business of buying lands.for resale or for profit and would not derive any pecuniary benefit from an increase in market value of its lands which it holds for educational purposes. You characterize as a.seccnd misinterpretation of the facts the Advice's "assumption" that the University's substantial landholdings would benefit to a greater degree than other customers from SCBWA's increased capacity. You .respond that the majority of the University's water use is supplied by its own wellfields and.hence will be unaffected by any increase in SCBWA's capacity. . You submit that the position of Penn State as- a customer of SCBWA was misinterpreted. After noting that SCBWA is a public utility under the Pennsylvania Municipality 'Authorities Act, you state that the Authority provides water service to, all of State College Borough (except the Penn State Campus and lands) and most of the townships of College, Patton and Ferguson. The latter municipalities .contain large industries, shopping centers, apartment- complexes and developments as well as commercial uses and homes. After noting that Penn State is just one of many customers for only a small portion of its activities, you assert that any effect occurring as a result of SCBWA's increased capacity would be de minimis and would not affect Penn State in any way differently than any other customer or'the general public. You then argue that the Advice did not Appreciate the remoteness of. the interest of Penn State in the actual case before the Board of Supervisors. In this regard, you note that the Application at issue is a "conditional use" application,.which is a specific type of legal proceeding involving a formal hearing under the Pennsylvania Municipalities Planning Code. In particular, a conditional use application is a zoning procedure similar to a special exception which is a request for approval by the zoning hearing board for a use permitted as of right in a zoning district but which may involve special considerations. At the actual hearings, only two parties entered their appearances: SCBWA and Eric Levin, who is a landowner opposing the grant of the conditional use, with each party being represented by an attorney. You state as significant that neither of the two parties or their counsel objected to any conflict of interest although familiar with, the relationship of you and Mr. Kelleher to Penn State. You also note that Penn State was not a party in the case, nor did it appear as a witness, although a Mr. Finley, who is employed by Penn State, appeared as a representative of the Airport Area Improvement Association which includes Penn State as a member. Because you argue that Penn State's interest is remote, you feel that any effect upon the University is indirect and secondary. You assert that the issue in this case is whether the mere mention by a witness of Penn State's membership in the Airport Area Improvement Association gives rise to a conflict of interest. The Airport Area Improvement Association was formed several years ago and consists of several landowners and businesses located around the' Centre County Airport, which include- the Centre County Airport Authority, Penn State (which has hangars at the Airport), several businesses and a landowner- developer near the Airport. In the Airport commercial district, one of the permitted uses is essential services which is a conditional use but a hearing is still necessary in order to determine whether certain conditions are met or whether any protections are needed. At the hearing, there were discussions as to the availability of water service to hundreds of residents in Continental Courts; 34 homes in Crestview Development; the homes on Route 550 and on Siebert Road, as well as other landowners and residents of the Township. In this regard, Penn State was only one of a large number of customers who might potentially connect to the SCBWA System. You conclude that the facts would show that Penn State has only a remote, secondary, indirect interest ,as to the Conditional Use Application and any effect resulting from the grant or denial of the Conditional Use Application would' be de minimis . and no greater or lesser than upon any other customer of SCBWA. You assert that Penn State is a member of a class consisting of all customers of the water- utility, placing this case within the exclusionary language of the definition of "conflict" or "conflict of interest." You express your view that the Advice implies that any action affecting the University, no matter how .indirect, remote or theoretical., and regardless of how generally it affects others, may give rise to an automatic conflict of interest requiring disqualification of one of the Township Supervisors. You then suggest that the Advice would affect a large part of Township matters, for example, the adoption of a new comprehensive plan and a new zoning ordinance for the entire Township, in that Mr. Kelleher would have to vote on such'a general ordinance which would include the lands of Penn State. You l_ikewisa,,ingi: re as to whether conflicts of interest would- arise -for Mr. Kelleher in regard to the, enactment of other ordinances of general application, such as. subdivision and land development, sewage, air pollution, building codes, and noise ordinances, or in opening a new road which might serve Penn State lands as well as the general public. You assert that since a large number of Penn State employees are residents of Benner Township, such disqualification by reason, of matters affecting Penn State .indirectly or remotely would preclude many residents from serving as Township Supervisors. You assert that 1/3 of Benner Township consists. of lands owned by the State Correctional Institution at Rockview, where many residents are employed. You ask whether these residents would practically be disqualified as municipal officials from acting on ordinances of general application since Rockview is the largest landowner in the Township. Therefore, based upon the above, you have requested that the Commission - review the above -cited Advice of Counsel. III. Discussion: Michael Kelleher as a Supervisor of Benner Township is a "public official," and Ben Novak as Solicitor for the Township is a "public employee," as those terms are defined in the Public Official and _Employee Ethics 'Law. As ,such, Michael. Kelleher and Ben Novak are each. subject to the provisions of that law. Section 3(a) of the Ethics Law provides: Section 3. 'Restricted Activities (a) No public official or public employee shall engage ,in conduct that constitutes a .conflict of interest. In addition the following terms are defined in the Ethics Law as follows: Section 2. 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 immedra�e family or a business with which he or a member of his immediate family is associated. "Conflict" or "conflict of interest" 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 or his immediate family or a business with which he or a member of his immediate family is associated. "Business with which Any business in which the of the person's immediate director, officer, owner, financial interest. he is associated." person or a member family is ,a employee or has a "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. Reviewing the Advice of Counsel, we have three questions before us. First, whether Penn State is a "business" as that term is defined under our Act, and if so, whether Kelleher and Novak are associated with that.business; secondly, whether under the submitted • facts and the additional facts supplied in the appeal of advice, a private pecuniary benefit would exist for Pennsylvania State University based upon SCBWA's Conditional Use Application for wellfields which is pending before the Benner Township Board of Supervisors; and lastly, if such a private pecuniary benefit did exist, whether such would be de minimi.s or would affect to the same degree Penn State University as part of a subclass consisting bf water utility customers in the area. 1J, As to the first issue, we note that in McQuaide, Opinion-80 -043, this Commonwealth held that trustees and employees of the Pennsylvania State University were not public officials /employees subject to coverage under the Ethics Act. Given the cited opinion, and the .extremely broad definition of "business" contained in Act 9 of 1989, we must conclude: 'that Pennsylvania State University is classified as a "bd'Siness" under the statutory definitions contained in the Ethics Law. Therefore, since Novak is a member of the-Board of Trustees and since Kelleher is an employdb of Pennsylvania State University, it follows that'the University is a-business with which Novak and Kelleher are associated as the term "business with which he is associated" is defined under the Ethics Law. Having established the first question in the affirmative, we must now determine.whether the participation by Novak and Kelleher, as to SCBWA's conditional use application for wellfields, would entail a private pecuniary benefit to the business with which-they are associated. Based upon the additional .information and ,clarifications provided in the letter appealing the Advice, we must conclude that the participation on the conditional use application would not result in a private pecuniary benefit to'Pennsylvania State;University. It has been stated that the Pennsylvania State University provides a .} majority of,its water from its own wellfields. The foregoing Conditional. Use Application would do nothing more than give the'University another source of water which is in addition to its own current supply. In­this regard, only four'or'five buildings would be serviced which are remote from Penn State's own wellfields. �V In Mihalik, Opinion 90 --002, we did opine that the Ethics Law prohibited a second class township supervisor from voting on a comprehensive sewage plan when the supervisor and his brother sold to a partnership an option to purchase property that the supervisor and his brother jointly owned within the township. In the cited Opinion, we noted that such action could impact upon the decision of the partnership in deciding'whether to exercise -the option to purchase the land, and we further noted the extensive landholdings of the township supervisor and his brother which distinguished them from the typical residential landowner in the township. Mihalik, however, is distinguishable from the facts of this case in that Penn State University is merely one customer of the water utility which includes a cross section of- businesses, apartments, landowners and individuals that are supplied water by SCBWA. Since the water usage would not be a private pecuniary benefit to Penn State University, we need not address the third question as to whether such would be de minimis or excluded on the alleged basis that Penn State University would be affected to the same degree as part of a subclass. Parenthetically, we note :that we have only addressed the very narrow question posed under the unique facts and circumstances of'thisparti.cular case. In addition, we have only addressed the mattor under the Ethics Law. The Second Class Township Code and the Rules of Professional Conduct have specifically not been addressed herein. The Advice of Counsel, No. 91 -558, is reversed. IV. CONCLUSION: A Township Supervisor and Township Solicitor are a "public official" and "public employee" respectively, and each is subject to the provisions of the Ethics Law. The Public Official and Employee Ethics Law would not prohibit participation by the Township Supervisor and Solicitor regarding a municipal authority's Conditional Use Application for a wellfield which would service, in part, a state university which the solicitor serves as a member of the Board of Trustees and where the Supervisor is employed. The state university would be a business with which the Supervisor and Solicitor.'a.re associated as that term is defined under the Ethics Law, but participation on the Conditional Use Application would not involve a private pecuniary benefit to the state university. Lastly, the propriety of the proposed conduct is only addressed 'Under the Ethics Law. Advice of Counsel, No. 91 -558, is reversed. Pursuant to Section 7(10), the person who acts in good•faith on this Opinion issued to him shall not be subject to criminal-or civil penalties for so acting provided the, material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, any person may requestothe Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within fifteen days of the mailing date of this Op'fnion. The pe�Qaon request�g reconsideration should prese detai Le nt a < Q p� ana on setting forth the reasons why the Opinion, requ .rias reconsideration. By- the':Comrkf-ssioil, 4nn-TVry f 'PC, ngto .v vice,:�a3x Robert Ww: Brown, Chair did ' not•.. pazci.pate ter.