HomeMy WebLinkAbout93-519 MorabitoJohn P. Morabito, Chairman
Beaver Falls Municipal Authority
1425 Eighth Avenue
P.O. Box 400
Beaver Falls, PA 15010
Dear Mr. Morabito:
STATE ETHICS COMMISSION
309 FINANCE BUILDING
P.O. BOX 11470
HARRISBURG, PA 17108 -1470
TELEPHONE (717) 783 -1610
ADVICE OF COUNSEL
February 24, 1993
93 -519
Re: Conflict, Public Official /Employee, Municipal Authority
Member, Authority Officer.
This responds to your letter of January 12, 1993, in which you
requested advice from the State Ethics Commission.
Issue: Whether the Public Official and Employee Ethics Law
presents any prohibition or restrictions upon a municipal authority
member with regard to serving as an officer of the authority.
Facts: Having served as Chairman of the Beaver Falls Municipal
Authority ( "Authority ") since on or about January, 1991, you
request an advisory on behalf of the Members of the Authority as to
their receiving compensation as officers of the Authority.
You state that the instant request for an advisory is
presented after the Authority Members and Solicitor have reviewed
and attempted to interpret Confidential Advice 90 -527 and Opinion
91 -006. The Authority is also aware of the pronouncements that
only legitimate offices of a municipal authority may be
compensated, and that the compensation so provided must not
represent an attempt to evade the Municipality Authorities Act
provision which requires that compensation for authority members be
fixed by the governing body that created the authority. You state
that you are also mindful of the criteria enunciated in
Confidential Advice 90 -527 regarding the "legitimacy" of an
officer's compensation.
You have presented the following factual scenario.
The Authority provides water service to approximately 15,000
customers in north, central Beaver County, including the City of
John P. Morabito
February 24, 1993
Page 2
Beaver Falls, the incorporating municipality of the Authority. The
Authority, however, does provide water service to over twenty
additional municipalities besides the City of Beaver Falls, the
creating municipality. For many years, probably in excess of
fifteen or twenty, the creating . municipality, the City of Beaver
Falls, through its City Council, has legislated and approved
pursuant to the Municipality Authorities Act, that the compensation
for Board Members, per se, be $50.00 per month.
The Authority Board consists of five Members. Because of the
considerable duties performed by the Board Members, as officers,
and after review of the Opinions and Advices of Counsel referenced
above with the Authority Solicitor, in March of 1992 the Board
passed a Resolution giving a $50.00 per month compensation to each
of the five officers of the Authority. The offices were offices
which had been created for many, many years, to wit, Chairman, Vice
Chairman, Secretary, Treasurer and Assistant Secretary- Treasurer.
The $50.00 per month was passed as a Resolution for the officers'
duties. The offices had been created for many years but because of
the increasing duties, the need for recognition of their duties and
compensation of such was awarded at that time. The Resolution was
duly recorded and noted in the minutes of the meeting. You have
submitted a portion of said minutes, which you state to be the
pertinent part, and which is incorporated herein by reference. The
compensation authorized to each of the officers of the Authority
was pursuant to unanimous vote including each of the five Authority
Members.
In mid - December of
generally City Council
claimed in pertinent
authorizing the $50.00
law and /or in violation
Ethics Law.
1992, an anonymous letter which condemned
and the Beaver Falls Municipal Authority,
part that the March 1992 Resolution
officers' pay noted above was contrary to
of the conflict of interest section of the
You state that the Authority passed the aforesaid Resolution
based upon its Solicitor's advice in the belief that the
Municipality Authorities Act in §306(B) authorizes every Authority
to appoint officers and affix their compensation. Because of the
recent pronouncements of this Commission and its counsel, and
because of the nonspecificity on the record in the Board's 1992
minutes of the specific duties of the officers for these offices,
which you characterize as legitimate, the Board has suspended any
such compensation to any of the officers until further advice from
this Commission is received. Heretofore, during the twelve months
of 1992, the Board Members serving in the respective offices noted
above were paid $50.00 per month for twelve months or a total of
$600.00 per officer.
You state that the Municipal Authority Members are also
John P. Morabito
February 24, 1993
Page 3
mindful, through the Solicitor, of Opinion 91 -006 wherein some
analogous issues were reviewed. Of particular interest and concern
to your request for advice is page 8 of the Opinion wherein you
state that the Commission noted that in approving the compensation
and employment paid to that board member, among the qualifications
to the opinion was that the board member could not use the
authority of office by participation in or voting in favor of his
own appointment or in other matters concerning his employment such
as salary, raises, etc. The Board requests an advisory as to
whether Board action in the future which would not include
participation in, or voting in favor of the appointment of a
respective Member as an officer, would be in violation of the
Ethics Law provided that appropriate legitimate criteria be shown
as to the duties for said office and it not being the purpose to
evade the prohibition against awarding compensation to Board
Members where only the creating municipal body has such power
according to the Municipality Authorities Act.
You state that you are further aware and acknowledge that your
request is being made public to the municipal creating body, the
City of Beaver Falis City Council and to other interested parties
and citizens in the hope that this matter can be expeditiously
resolved. The Board deems this matter to be of an incidental
nature relative to the rather significant and pressing duties which
its Board Members have pursued for many months in improving the
quality of water distributed in its service area.
Based upon all of the above, you request an advisory from the
State Ethics Commission.
Discussion: Before addressing the issue which you have raised,
three points must initially be noted.
First, as to your statement that you are aware that your
request is being made public to the municipal creating body, the
City of Beaver Falis City Council, and other interested parties and
citizens, it is not clear what your comment is intended to convey.
From this Commission's perspective, it is true that this Advice is
public. However, pursuant to the standard operating procedures of
this Commission, the Advice is being mailed to you because you are
the requestor.
Second, it is noted that advisories are issued only as to
prospective conduct. A reading of Sections 7(10) and (11) of the
Ethics Act makes it clear that an opinion /advice may be given only
as to prospective (future) conduct. If the activity in question
has already occurred, the Commission may not issue an opinion/
advice but any person may then submit a signed and sworn complaint
which will be investigated by the Commission if there are
allegations of Ethics Law-violations by a person who is subject to
John P. Morabito
February 24, 1993
Page 4
the Ethics Law. The bulk of your inquiry is a recitation of past
conduct which may not be addressed in an advisory.
Third, to the extent you may be seeking some blanket approval
of the particular Authority offices involved, be advised that in
the advisory process, the Commission does not conduct an
independent investigation of the facts as is done in the complaint
process. Rather, the advisory process provides the inquirer with
advice as to proposed future conduct based upon the facts which
have been submitted. The Advice which is issued is only as good as
the facts submitted, and only affords protection to the extent that
all material facts have been truthfully disclosed by the inquirer
who then acts in accordance with and in reliance upon the Advice.
Having set forth the above three initial points, the pertinent
provisions of the Ethics Law will now be addressed.
As a Member of the Beaver Falls Municipal Authority
( "Authority "), each Authority Member is a public official as that
term is defined under the Ethics Law, and hence each is 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.
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 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
John P. Morabito
February 24, 1993
Page 5
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 official /employee
anything of monetary value and no public official /employee shall
solicit or accept anything of monetary value based upon the
understanding that the vote, official action, or judgement of the
public official /employee would be influenced thereby. Reference is
made to these provisions of the law not to imply that there has
been or will be any transgression thereof but merely to provide a
complete response to the question presented.
Section 3(j) of the Ethics Law provides as follows:
Section 3. Restricted activities.
(j) Where voting conflicts are not
otherwise addressed by the Constitution of
Pennsylvania or by any law, rule, regulation,
order or ordinance, the 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 body of a political
subdivision, where one member has abstained
from voting as a result of a conflict of
John P. Morabito
February 24, 1993
Page 6
interest, and the remaining two members of the
governing body have cast opposing votes, the
member who has abstained shall be permitted to
vote to break the tie vote if disclosure is
made as otherwise provided herein.
If a conflict exists, Section 3(j) requires the public
official /employee to abstain and to publicly disclose the
abstention and reasons for same, both orally and by filing a
written memorandum to that effect with the person recording the
minutes or supervisor.
Having set forth the above pertinent provisions of the Ethics
Law, the issue which you have raised shall be addressed. However,
it is necessary to identify the precise issue which you have
raised. Disregarding any concerns as to past conduct, which as
noted above may not be addressed in the context of an advisory, the
only issue which appears to have been raised is in the following
sentence of your three -page letter of January 12, 1993:
The board requests for counsel advice as to
whether board action in the future which did
not include participation in, or voting in,
favor of the appointment of a respective
member as an officer, would be in violation of
the Act provided, of course, that appropriate
legitimate criteria be shown as to the duties
for the said office and it not being the
purpose to evade the prohibition against
awarding compensation to board members where
only the creating municipal body has such
power according to Municipal Authorities,Act.
Letter of January 12, 1993, at 3.
Your inquiry appears to be tailored to eliminate (by
assumption) prior concerns which this Commission has noted.- -
specifically by assuming an office is legitimate and does not have
as its purpose evading the prohibition against Board Members
awarding themselves compensation where only the creating municipal
body may do so, and assuming that the individual being appointed to
such an office did not participate as to his own appointment -- and
then to ask whether concerns under the Ethics Law would have been
alleviated.
Furthermore, you have not posed a specific factual scenario to
be addressed. In that you have posed a general inquiry, the
response to your inquiry must also be general.
The Municipality Authorities Act provides as follows:
John P. Morabito
February 24, 1993
Page 7
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:
* * *
(g) To appoint officers, agents, employees
and servants, to prescribe their duties and to
fix their compensation. 53 P.S. S306B.
. . . 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. §309C.
Thus, on its face, there is statutory authority within the
Municipality Authorities Act for authority board members to serve
as compensated officers. However, as you have noted, various
decisions of this Commission have raised concerns as to the
legitimacy of the offices; the "creation" of positions to evade the
requirement that the compensation of authority members be fixed by
the governing body which created the authority; and the
participation of an authority member in his own appointment and /or
the setting of his compensation as an officer, either directly or
through "understandings" where board members reciprocate in
appointing each other and /or setting each other's compensation.
See, Confidential Advice 90 -527, affirmed Confidential Opinion 90-
012; see also, Swick /Aman, Opinion 91 -006.
Furthermore, in Painter, Order No. 861, Mance, Order No. 862,
Rhodes, Order No. 863, and Rebottini, Order No. 864, members of
municipal authorities were found to have violated Section 3(a) of
Act 170 of 1978, when each of these individuals voted to appoint
himself to authority officer positions and voted to set the salary
for those positions. It is additionally noted that these decisions
encompassed the requirement that an authority officer only be
compensated for the actual performance of duties within the scope
of the duties for that office. The authority office may not be
used as a vehicle for obtaining compensation for duties unrelated
to the office, which would be yet another evasion of the
requirement that an authority member's compensation be set by the
governing body that created the authority.
To answer your inquiry, assuming: that the offices in
John P. Morabito
February 24, 1993
Page 8
question would be legitimate; that they would not be "created"
positions in order to evade the requirement that the compensation
of Authority Members be fixed by the governing body that created
the Authority; that no Board Member would be participating as to
his own appointment or the setting of his own compensation for such
an office; that no Board Member would be a party to an
"understanding" with other Board Member(s) whereby they would
appoint each other or set each other's compensation for the various
offices; and that each officer would only be compensated for the
actual performance of duties within the scope of duties for that
office, the concerns which have been previously 'raised by the
Commission would appear to be satisfied. Conditioned upon the
assumption that those concerns would be satisfied, the Ethics Law
would not preclude the service of an Authority Member as an officer
of the Authority under the general facts which have been submitted.
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 Law has not been considered in that they do not involve an
interpretation of the Ethics Law.
Conclusion: As a Member of the Beaver Falls Municipal Authority
( "Authority "), each Authority Member is a public official subject
to the provisions of the Ethics Law. Conditioned upon the
assumptions: that the offices created by the Authority would be
legitimate; that they would not be "created" positions in order to
evade the requirement that the compensation of Authority Members be
fixed by the governing body that created the Authority; that no
Board Member would be participating as to his own appointment or
the setting of his own compensation for such an office; that no
Board Member would be a party to an "understanding" with other
Board Member(s) whereby they would appoint each other or set each
other's compensation for the various offices; and that each officer
would only be compensated for the actual performance of duties
within the scope of duties for that office, the Ethics Law would
not preclude the service of an Authority Member as an officer of
the Authority under the general facts which have been submitted.
Lastly, the propriety of the proposed conduct has only been
addressed under the Ethics Law.
Pursuant to Section 7(11), 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.
John P. Morabito
February 24, 1993
Page 9
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 and must be received at
the Commission within 15 days of the date of this Advice pursuant
to 51 Pa. Code §2.12.
Sincerely,
1 4 7 /;
Vincent. J. Dopko
Chief Counsel