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HomeMy WebLinkAbout91-517 SwickMr. Charles J. Swick Shafer, Swick, Bailey, Irwin & Stack 360 Chestnut Street P.O. Box 594 Meadville, PA 16335 STATE ETHICS COMMISSION 308 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 22, 1991 91 -517 Re: Simultaneous Service, Municipal Authority Member and Municipal Authority Employee Dear Mr. Swick: This responds to your letter of January 16, 1991, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law imposes any prohibition or restrictions upon a member of the board of a municipal authority with regard to allowable expenses and compensation as a board member, or with regard to also serving or being employed as an employee of the Authority compensated by salary and /or reimbursement of expenses. Facts: As the solicitor for the Conneaut Lake Joint Municipal Authority, and with the authorization of the members of the board of the Authority, you seek advice from the Commission with regard to allowable expenses and compensation of the members of the board of the Authority and with regard to whether a board member can be an employee of the Authority and be compensated by salary and /or reimbursement of expenses. Without comment, you have submitted a copy of a cover letter from the solicitor for P.M.A.A. to the Executive Director of the State Ethics Commission enclosing two memoranda authored by the solicitor for P.M.A.A. which appear to set forth the P.M.A.A. solicitor's interpretations of recent State Ethics Commission rulings. Discussion: Initially, it is noted that this advisory is prospective in nature and does not address the propriety of any past conduct or actions. Secondly, this advisory is issued based upon an interpretation of Act 9 of 1989 and likewise would not have application to any matters as to which Act 170 of 1978 would control. Thirdly, since your request for advice was general in Page 2 nature, so too is the response set forth in this advice general in nature. As members of the board for a municipal authority, the members of the board of the Conneaut Lake Joint Municipal Authority are "public officials" as that term is defined in the Ethics Law and hence they are subject to the provisions of the Ethics Law. 65 P.S. §402; 51 Pa. Code §1.1. Section 3(a) of the Ethics Act provides: Section 3. Restricted Activities. (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. The following terms are defined under the Ethics Law: 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 immediate 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 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. In addition, Sections 3(b) and 3(c) of the Ethics Law provide in part that no person shall offer to a public Page 3 official /employee anything of monetary value and no public official /employee shall solicit or accept any thing of monetary value based upon the understanding that official /employee would be influenced thereby. Under Section 3(a) of the Ethics Law quoted above, the Commission has determined that if a particular statutory enactment prohibits an official's receipt of a particular benefit, then that official's receipt of such a prohibited benefit, in and through the authority of office, would also be in contravention of the Ethics Law. Hoak /McCutcheon v. State Ethics Commission, 77 Pa. Commw. Ct. 529, 466 A.2d 283 (1983). The Commission has been called upon, on various occasions, to determine whether a private pecuniary benefit is prohibited by law. Fletcher, Opinion 89 -018. In order to determine whether a particular private pecuniary benefit is strictly prohibited by law, the provisions of the enabling legislation of the governmental body in question must be reviewed. In the instant situation, the Municipality Authorities Act provides as follows: Every Authority is hereby granted, and shall have and may exercise all powers necessary or convenient for the carrying out of the aforesaid purposes, including but without limiting the generality of the foregoing, the following rights and powers: * * * (f) To make by -laws for the management and regulation of its affairs. (g) To appoint officers, agents, employes and servants, to prescribe their duties and to fix their compensation. 53 P.S. 5306B. The Municipality Authorities Act further provides: B. Members shall hold office until their successors have been appointed, and may succeed themselves, and, except members of the boards of Authorities organized or created by a school district or school districts, shall receive such salaries as may be determined by the governing body or bodies of the municipality or municipalities, but none of such salaries shall be increased or diminished by such governing body or bodies during the term for which the member Page 4 receiving the same shall have been appointed.... C. A majority of the members shall constitute a quorum of the board for the purpose of organizing the Authority and conducting the business thereof and for all other purposes, and all action may be taken by vote of a majority of the members present, unless in any case the by -laws shall require a larger number. The board shall have full authority to manage the properties and business of the Authority and to prescribe, amend and repeal by -laws, rules and regulations governing the manner in which the business of the Authority may be conducted, and the powers granted to it may be exercised and embodied. The board shall fix and determine the number of officers, agents and employees of the Authority and their respective powers, duties and compensation and may appoint to such office or offices any member of the board with such powers, duties and compensation as the board may deem proper.... 53 P.S. S309 B, C. The Commission may only address questions regarding the duties and responsibilities of public officials within the purview of the Public Official and Employee Ethics Law. If, however, certain provisions of other laws impact upon the Ethics Law or the Ethics Law accords jurisdiction in relation to other provisions of law, then the Commission may be required to review such provisions of law. Confidential Opinion 90 -012, at 5 (citing Bigler, Opinion 85 -020) (reviewing Municipal Authorities Act). Accord; Confidential Opinion 91 -001 at 4 (reviewing Second Class Township Code). Thus, in Confidential Opinion 90 -012, affirming Confidential Advice 90 -527, the Commission reviewed the Municipality Authorities Act regarding simultaneous service of authority board members as officers, although the Ethics Law itself does not per se prohibit such simultaneous service Id. at 5 -6. The Commission determined that Section 309B of the Municipality Authorities Act requires that the compensation for members of the Authority must be set by the governing body. The Commission stated: "This is a clear expression of intent that the Authority Board Members may not set their own compensation." Id. at 6. Page 5 The Commission further reviewed Section 309C of the Municipality Authorities Act and determined that although the act does allow for a majority of the members of the Authority to fix and determine the number of officers and their compensation in those offices, any "creation" of offices for the members of the board so that the board in effect would set compensation for themselves would contravene the Municipality Authorities Act and therefore Section 3(a) of the Ethics Law. Id. The Commission held that the action of "creating" such offices and setting the compensation would be clearly a use of authority of office to obtain a private pecuniary benefit for the members which is not provided and is impliedly prohibited by the Municipality Authorities Act. Id. Confidential Advice 90 -527 stated criteria for considering whether an office is legitimate: The criteria necessary to determine whether the offices are legitimate would be to consider the time at which the "offices" were created, the number of "offices" relative to the number of authority board members, the duties that are performed in these "offices ", the underlying purpose for creating the "offices ", the salaries for these "offices" relative to the compensation set by the governing body and any other considerations which bear upon the legitimacy of such "offices." Id. at 5. In applying the provisions of the Ethics Law and the reasoning of the Commission in Confidential Opinion 90 -012, affirming Confidential Advice 90 -527, to the general questions posed in this case, it is quite clear with respect to your first inquiry that the allowable expenses and compensation of board members of the Conneaut Lake Joint Municipal Authority are limited to such expenses and compensation allowed under the Municipality Authorities Act. As the Commission noted in Confidential Opinion 90 -012, at 6, Section 309B of the Municipality Authorities Act requires that the compensation for members of the Authority must be set by the governing body. Therefore, it is not for the Ethics Law or the Ethics Commission to set such compensation. However, if members of the board of the Authority use the authority of office to obtain a private pecuniary benefit for the members which is not provided and is impliedly prohibited by the Municipality Authorities Act, the receipt of such compensation and /or expenses would be in contravention of the Municipality Authorities Act and would be prohibited by Section 3(a) of the Ethics Law. Page 6 Your second inquiry regards authority board members simultaneously serving as employees, rather than officers. A review of Section 309C of the Municipality Authorities Act does not reveal authorization for board members serving as employees of the Authority. To the extent that the receipt of compensation and /or expenses by a board member of the Authority acting as an employee of the Authority would violate the Municipality Authorities Act, then such would also be prohibited by Section 3(a) of the Ethics Law. The action of setting the compensation and /or creating the employment position would be clearly a use of authority of office to obtain a private pecuniary benefit for the members which is not provided and is impliedly prohibited by the Municipality Authorities Act, and thus the Ethics Law. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law; 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: As members of the board for a municipal authority, the members of the board of the Conneaut Lake Joint Municipal Authority are "public officials" subject to the provisions of the Ethics Law. Under the Municipality Authorities Act, all compensation for members of the Authority must be set by the governing body. The receipt of any such compensation and /or expenses by board members which contravenes the Municipality Authorities Act is also prohibited by Section 3(a) of the Ethics Law. The Municipality Authorities Act does not authorize a board member of an Authority to simultaneously serve as an employee of the Authority and such would therefore be prohibited by Section 3(a) of the Ethics Law. Lastly, the propriety of the proposed course of conduct has only been addressed under the Ethics Act. 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 will be scheduled and a formal Opinion from the Commission will be issued. Any such appeal must be in writing Page 7 and must be received at the Commission within 15 days of the date of this Advice pursuant to 51 Pa. Code §2.12. Sincerely, (,:,,,,N\ D,A, Vincent J. Dopko, Chief Counsel