HomeMy WebLinkAbout19-539 NixonPHONE: 717-783-1610
TOLL FREE: 1-800-932-0936
STATE ETHICS COMMISSION
FINANCE BUILDING
613 NORTH STREET, ROOM 309
HARRISBURG, PA 17120-0400
FAM
'A , D-1 1, 114 D1-
September 12, 2019
To the Requester:
Mr. Henry Hay Nixon
FI I �-, 1�, I � 1�41
FACSIMILE: 717-787-0806
WEBSITE: Www.e1hIc9.j2a.goy
19-539
This responds to your letter dated August 8, 20191 by which you requested an
advisory from the Pennsylvania State Ethics Commission ('Commission").
Issue: Whether the Public Official and Employee Ethics Act ("Ethics Act"), 65
P—a--C-.S. § 1101 et seg., would impose prohibitions or restrictions upon an individual
serving as a member and president of city council with �egard to voting on an
agreement between the city and a water company under which the water company
would handle all sewer and refuse billing for the city, where: (1) the individual owns
10,000 shares of stock in the water company; and (2) there are approximately 13 million
outstanding shares of stock in the water company.
Facts: As a Member and President of the City Council of the City of York ("City"),
you request an advisory from the Commission based upon the following submitted facts.
The City has approximately 14,000 sewer customers. The City is considering
into an entering ' t agreement with the York Water Company ("Walter Com any") under
I
which the Water Company would handle all sewer and refuse billing for the City, The
Water Company would receive a flat rate payment of approximately from the City
for each customer that the Water Company would bill for the City. he Water Company
would also receive fees that the Water Company would bill directly to customers under
certain circumstances. You state that the Water Company does not anticipate that its
earnings would increase if it would enter into the agreement to perform sewer and
refuse billing for the City.
You own 10,000 shares of stock in the Water Company. There are
approximately 13 million outstanding shares of stock in the Water Company.
Based upon the above submitted facts, you ask whether the Ethics Act would
impose prohibitions or restrictions upon you with regard to voting on an agreement with
the Water Company for the performance of sewer and refuse billing for the City.
Nixon, 19-539
��rnber 12, 2019
Page 2
Discussion, It is initially noted that pursuant to Sections 1107(10) and 1107(11)
ot the Ethics Act, 65 Pa.C.S. §§ 1107(10), (11), advisories are issued to the requester
based upon the facts that the requester has submitted. In issuing the advisory based
upon the facts that the requester has submitted, the Commission does not engage in an
independent investigation of the facts, nor does it speculate as to facts that have not
been submitted. It is the burden of the requester to truthfully disclose all of the material
facts relevant to the inquiry. 65 Pa.C.S. §§ 11070 O�, (11). An advisory only affords a
defense to the extent the requester has truthfully disc used all of the material facts.
As a Member and President of City Council, you are a public official subject to
the provisions of the Ethics Act.
Sections 1103(a) and 11036) of the Ethics Act provide:
§ 1103. Restricted activities
(a) Conflict of interest. --No public official or public
employee shall engage in conduct that constitutes a conflict
of interest.
0) Voting conflict. --Where voting conflicts are not
otherwise addressed by the Constitution of Pennsylvania or
by any law, rule, regulation, order or ordinancethe following
procedure shall be employed. Any public official or public
employee who in the discharge of his official duties would be
required to vote on a matter that would result in a conflict of
interest shall abstain from voting and prior to the vote being
taken, publicly announce and disclose the nature of his
interest as a public record in a written memorandum filed
with the person responsible for recording the minutes of the
meeting at which the vote is taken, provided that whenever a
governing body would be unable to take any action on a
matter before it because the number of members of the body
required to abstain from voting under the provisions of this
section makes the majority or other legally required vote of
approval unattainable, then such members shall be
permitted to vote if disclosures are made as otherwise
provided herein. In the case of a three -member governing
od of a political subdivision, where one member has
abstained from voting as a result of a conflict of interest and
the remaining two members of the governing body have cast
opposing voles, the member who has abstained shall be
permitted to vote to break the tie vote if disclosure is made
as otherwise provided herein.
65 Pa.C.S, §§ 1103(a), 0).
The following terms related to Section 1103(a) are defined in the Ethics Act as
follows.
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public emplo ee of the authority of his office or
employment or any confidential
dential information received through
his holding
ding public office or employment for the private
pecuniary benefit of himself, a member of his immediate
Nixon, 19-539
��ep ember 12, 2019
Page 3
family or a business with which he or a member of his
immediate family is associated. The term 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 of his immediate family or a business
with which he or a member of his immediate family is
associated.
"Authority of office or employment." The actual
power provided by law, the exercise of which is necessary to
the performance of duties and responsibilities unique to a
particular public office or position of public employment.
"Business." Any corporation, partnership, sole
proprietorship, firm, enterprise, franchise association,
organization, self-employed individual, holding company,
joint stock company, receivership, trust or any legal,
y
organized for profit.
"Business with which he is associated." Any
business in which the person or a member of the erson's
immediate family is a director, officer, owner, employee or
has a financial interest.
"Financial interest." Any financial interest in a legal
entity engaged in business for profit which comprises more
than 5% of the equity of the business or more than 5% of the
assets of the economic interest in indebtedness.
65 P.C.S. § 1102.
Subject to the statutory exclusions to the Ethics Act's definition of the term
"conflict" or "conflict of interest," 65 Pa.CS. § 1102, a public official/public employee is
prohibited from using the authority of public office/employment or confidential
information received by holding such a public position for the private pecuniary benefit
of the public official/public employee himself, any member of his immediate family, or a
business with which he or a member of his immediate family is associated.
The use of authority of office is not limited merely to voting, but extends to any
use of authority of office including, but not limited to, discussing, conferring with others,
t
and lobbying for a particular result. Juliante, Order 809,
In each instance of a conflict of interest, a public official/public employee would
be required to abstain from participation, which would include voting unless one of the
statutory exceptions of Section 11030) of the Ethics Act would be applicable.
Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have
i
to be satis ied in the event of a voting conflict.
In a% the above provisions of the Ethics Act to the instant matter, you are
.1r,n,, , follows.
advised as o ow .
Given that the 10,000 shares of Water Company stock that you own constitute
only 0,07692% of the 13 million outstanding shares of Water Company stock, there is
no basis under the submitted facts u on which to conclude that you are the holder of a
"financial interest" in the Water on
for purposes of the Ethics Act. Cf.,
Nixon, 19-539
September 12, 2019
Page 4
Confidential Ooinion 92-003.1 Accordingly, based upon the submitted facts, the Water
Company is not a usiness with which you are associated because you are not a
director, officer, owner, employee, or holder of a financial interest in the Water
Company, Therefore, you would not have a conflict of interest as a Member and
President of City Council in matters that would financiall impact the Water Company
7your immediate family, or a
but that would not financially impact you, a member o
business with which you are associated.
You are advised that absent some basis for a conflict of interest such as a private
pecuniary benefit to you, a member of your immediate family, or a business with which
you or a member of your immediate family is associated, you would not have a conflict
of interest under Section 1103(a) of the Ethics Act with regard to voting on an
agreement with the Water Company for the performance of sewer and refuse billing for
the City.
The propriety of the proposed conduct has only been addressed under the Ethics
Act; the applicability of any other statute, code, ordinance, regulation or other code of
conduct other than the Ethics Act has not been considered in that they do not involve an
interpretation of the Ethics Act.
Conclusion: Based upon the submitted facts that: (1) you are a Member and
President the City Council of the City of York ("City");(2) the City has approximately
14,000 sewer customers; g3) the City is considering entering into an agreement with the
York Water Company (" ater Company" under which he Water Company \�OLIld
handle all sewer and refuse billing for the Company"
(4) the Water Company would receive a
flat rate payment of approximately $2.50 from the City for each customer that the Water
Company would bill or the City; (5) the Water Company would also receive fees that
the Water Company would bill directly to customers under certain circumstances; (6)
the Water Company does not anticipate that its earnings would increase if it would enter
into the agreement to perform sewer and refuse billing for the City; (7) you own 10,000
shares o?stock in the Water Company- and (8) there are approximately 13 million
outstanding shares of stock in the Water 6ompany, you are advised as follows.
As a Member and President of City Council, you are a public official subject to
the provisions of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. §
1101 et sgg. Given that the 10,000 shares of Water Company stock that you own
constituteonly0.07692% of the 13 million outstanding shares of Water Company stock,
there is no basis under the submitted facts upon which to conclude that you are the
holder of a "financial interest" in the Water Company for purposes of the Ethics Act.
Accordingly, based upon the submitted facts, the Water Company is not a business with
which you are associated because you are not a director, Nicer, owner, employee, or
holder of a financial interest in the Water Company. Therefore u would not have a
conflict of interest as a Member and President of City Council you
matters that would
financially impact the Water Company but that would not financially impact you, a
member of your immediate family, or a business with which you are associated.
Absent some basis for a conflict of interest such as a private pecuniary benefit to
you, a member of your immediate family, or a business with which you or a member of
your immediate family is associated, you would not have a conflict of interest under
Section 11 Ma) of the Ethics Act with regard to voting on an agreement with the Water
Company for he performance of sewer and refuse billing for the City.
Lastly, the propriety of the proposed conduct has only been addressed under the
Ethics Act.
'Act 9 of 1989 deleted the words "holder of stock" from the Ethics Act's definition of "business with which
he is associated" and replaced them with "has a financial interest."
Nixon, 19-539
'6p mber 12, 2019
Page 5
Pursuant to Section 1107(11) of the Ethics Act, an 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, provided the requester 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 appeal the Advice to the full
Commission. A personal appearance before the Commission will be
scheduled and a formal Opinion will be issued by the Commission.
Any such appeal must be in writi"ngg and must be actuall
received at the Commission within fhi'rty (30j days of the date
Advicepursuant to 51 Pa. Code ,§ f3.2(h). The . appeal may be
received at the Commission by handdelivery, United States mail,
delivery service, or by FAX transmission (717-787 0806). Failure to
file such an appeal at the Commission within thirty (30) days may
result in the dismissal of the appeal.
Sincerely,
Xftl �n M. Hittie
Chief Counsel