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HomeMy WebLinkAbout86-590 AllenRichard A. Allen Tax Collector Borough of West Mifflin P.O. Box 32 4733 Greensprings Avenue West Mifflin, PA 15122 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 July 30, 1986 ADVICE OF COUNSEL 86 -590 Re: Borough Tax Collector; Participation, Group Hospitalization Program Dear Mr. Allen: This responds to your letter of June 30, 1986, wherein you requested the advice of the State Ethics Commission. Issue: Whether, within the purview of the State Ethics Act, a borough tax collector may participate in a group hospitalization program. Facts: You advise that you currently serve as the tax collector for West Mifflin Borough. You further indicate that the former tax collector was enrolled in the Borough's Blue Cross /Blue Shield Group Health Insurance Program during his term of office. The monthly premiums regarding this particular individual were paid for by the individual rather than by the Borough. You are interested in enrolling in this plan and paying your own monthly premiums. You have, therefore, requested the advice of the State Ethics Commission in relation to whether such activity is permissible. Discussion: Initially, it must be noted that as an elected public official of the borough, a borough tax collector is a public official as that term is defined in the State Ethics Act. See Domalakes, 85 -010. Accordingly, the conduct of such official must conform to the requirements of the State Ethics Act. 65 P.S. §401 et. seq. This Commission, on a number of occasions, has addressed the issue of various municipal officers receiving or participating in insurance benefits provided for by the municipality. Specifically, the Ethics Commission has previously addressed the issue in relation to townships of the second class, Krane, 84 -001, borough councilmemhers and mayors, Davis, 84 -012. In addition thereto, the Commission has also considered the issue specifically in relation to whether a borough tax collector may receive such benefits. Domalakes, 85 -010. Generally, the Ethics Act provides as follows: Richard A. Allen July 30, 1986 Page 2 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). Within this provision of law, the Commission has specifically addressed the question which you have asked. As such, we believe it will be particularly instructive to set forth the analysis of the Commission in Domalakes, 85 -010. The Commission in Domalakes, specifically referred to another opinion in relation to boroughs, Davis, 84 -012 and the analysis of the Commission in these particular opinions follows: In. Davis, the Commission concluded that borough councilmembers and the mayor could not utilize their official positions to secure for themselves insurance coverage in that their compensation was statutorily fixed and, therefore, such coverage would constitute prohibited financial gain pursuant to the aforecited section of the Ethics Act as it would be in excess of that provided for by law. This result was occasioned by two specific factors. First, the council and the mayor would be acting in their official positions to obtain the insurance coverage. Secondly,,the compensation of councilmembers and the mayor is specifically fixed by the Borough Code. In contrast to this situation is the matter at hand. The tax collector has no authority to fix compensation for himself or otherwise expend funds or contract on behalf of the borough. The duties of the tax collector are specifically set forth in the Borough Code. Generally these duties include the collection of all state, county, borough, school institution district, and other taxes levied within the borough. 53 P.S. §46086 Additionally, the compensation of one who serves as a borough tax collector is to be fixed in accordance with the Local Tax Collection Law which provides that: The tax collector in boroughs and townships of the second class shall receive, as compensation for the collection of county, institution district, borough and township taxes to be fixed by the respective taxing authorities levying such taxes, not exceeding five percent of the amount collected. 72 P.S. §5511.35. See also; In re Ordinance No. 218 of the Borough of Westmont 37 Mun L.R. 298, (Cambria 1946). Richard A. Allen July 30, 1986 Page 3 This compensation is to be fixed by the borough council. 57 P.S. §4606(6). It is clear that the borough tax collector cannot fix the compensation that he is to receive. As previously noted, in Davis the Commission ruled that this element was in part the reason §403(a) of the Ethics Act was operational. An additional question that is raised in relation to that section is whether the acceptance of financial gain, other than compensation provided by law, is a use of a public office in violation of the State Ethics Act. While this issue is one of interest, we need not decide that question in the context of this matter as we believe that there is another section of the Ethics Act which is controlling. The Ethics Commission may address areas of possible conflict on the part of public officials and public employees. 65 P.S. 403(d). The Commission has previously ruled that this section would operate to prevent such an official or employee from representing interests that are adverse to the interest represented in an official capacity, see Allen, 79 -024; Fritzinger, 80 -008. Additionally, such a conflict of interest would arise if the public official or employee attempted to serve in incompatible offices or positions. We also believe that Section 403(d) would prevent a public official from accepting in his public position, as part of that position, compensation in excess of that provided for by law. Such a knowing acceptance of compensation to which one is not entitled would present a conflict between the official's or employee's personal interests and that of his public position wherein he is to serve the interest of the public. Strong'support for this concept can be found in Section 1 of the Ethics Act as well as in judicial precedent. See Allegheny County v. Grier, 179 Pa. 639, (1897), Warminister Township Appeal, 56 D & C 2d 99, (1971); 65 P.S. §401. The Ethics Act was promulgated based upon the concept that public office is a public trust and that any effort to realize personal financial gain through such public office, other than compensation provided for by law, is a violation of that trust. 65 P.S. §401. We believe that the Act must be liberally construed, and when a public official accepts compensation in excess of that provided for by law, even if he does not technically award such to himself, the spirit of law and the public trust has been violated. With this general principle in mind, we must now turn to the issue of whether the borough tax collector may receive these insurance benefits at the expense of the borough, that is, whether such is in excess of the compensation provided for by law. The Borough Code, on its face, appears to allow the purchase of insurance only for employees. If this is in fact the status of the law, then any insurance purchased at borough expense for a borough official would be financial gain in excess of that provided for by law. Richard A. Allen July 30, 1986 Page 4 First, the Commission has previously ruled that insurance coverage of the type herein involved would constitute financial gain. Krane, 84 -001; Cowie, 84 -010; Davis, 84 -012. The next question, of course, is whether the gain would be in excess of that provided by law. Generally, the Borough Code provides for the purchase of life, health and accident insurance for borough "employes" but does not include any provision for insurance for borough officials. 53 P.S. §46202(37). It is important to note that the Insurance Code originally provided that a borough could purchase such insurance for its elected and appointed officials. See 40 P.S. §535. The Borough Code, however, when enacted, became the complete and exclusive system for the regulation of boroughs and, as such, the aforecited Insurance Code provision was repealed insofar as it pertains to boroughs. See 53 P.S. §48501. While it has been argued that subsequent amendments to the Insurance Code have "revived" the code's application to municipalities we do not find these aguments pursuasive. (See Krane, 84 -001, for an analysis of our position in relation to this issue). As such, the only question is whether the provision of the Borough Code allows the borough to purchase these benefits for the borough officials. We believe that it does not. The Borough Code provisions regarding insurance specifically reference only to employees, while in other subparts of the same section it specifically mentions officers. 53 P.S. §46202(1). Additionally, in 1975 the Borough Code was amended to provide for the purchase of liability insurance for "officers and employees ", once again creating a distinction between these positions. See Act of 1975 June 26, P.L. No. 15, §1, repealed 53 P.S. (1)(37.1). In light of these facts, we believe that the Borough Code does not provide for the purchase of this insurance for borough officials. The acceptance of such coverage would, therefore, result in the receipt of compensation in excess of that provided for by law. If knowingly accepted, we believed that there is a conflict of interest bewtween the personal and public interests of such an official. Such a conflict is prohibited by Section 403(d) of the Ethics Act. We do not believe that a public official may accept, at the public's expense, compensation to which he knows or has reason to know he is not entitled. With regard to your specific question, the Commission has issued prior advices that indicate that even if the group insurance coverage could not be obtained by a particular official at the expense of the borough, such officials may nevertheless participate in such programs at their own expense. See Musto, 84 -583; Davis, 84 -012. Richard A. Allen July 30, 1986 Page 5 IV. Conclusion: A public official, such as a borough tax collector, may not as a part of his public position, accept financial gain or compensation for such public service to which he is not entitled. The Borough Code only allows the purchase, at borough expense, of medical, health and life insurance for borough employees and not borough officials. We believe that the acceptance of such compensation to which one is not entitled gain obtained would create a conflict between the personal and public interests in violation of §403(d) of the Ethics Act. The borough tax collector may participate, at his own expense, in the borough's group insurance program. 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 wiT1 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. S n J. General .unse