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HomeMy WebLinkAbout95-505 SvirskoDear Mr. Svirsko: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL January 26, 1995 Alex L. Svirsko, Jr., Esquire Gvozdich, Buchan & Svirsko Attorneys at Law 107 East Lloyd Street, P.O. Box 330 Ebensburg, PA 15931 95 -505 Re: Conflict of Interest, Public Official /Employee, Contracting with Governmental Body, Municipal Authority, Engineer, Rental and Storage Agreement, Sewer Jet Truck. This responds to your letter of December 22, 1994, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law presents any prohibition upon a municipal authority engineer from contracting with the authority for the rental, storage, and use of a sewer jet truck owned by the engineer. Facts: As Solicitor for the Nanty Glo Sanitary Sewer Authority ( "Authority "), you request an advisory from the State Ethics Commission on behalf of the Authority's appointed Engineer, Stiffler, McGraw and Associates, Inc. ( "Engineer "). The Authority owns and operates various property related to sewage treatment. An integral part of the building that houses the sewage treatment plant is a heated garage which is neither occupied nor presently used by the Authority. The Engineer is the owner of a sewer jet truck ( "truck ") which it recently obtained. The truck's manufacturer recommends that the truck be garaged in a heated facility when not in use. The Engineer does not have a heated facility in which to store the truck. The Engineer has made a proposal to the Authority to use its facilities to store the truck. You have submitted a copy of the proposal which is designated a "Sewer Jet Truck Rental & Storage Agreement" between the Authority and the Engineer, which two page document is incorporated herein by reference. The Authority does not own a sewer jet truck. The Authority's current practice when it is in dire need of a sewer jet truck is to Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 2 contact entities that own such a truck and rent it for an hourly rate which varies from $40.00 to $80.00 per hour, depending upon the purpose and number of operators provided by the owning entity. The owning entity sends the sewer jet truck and an operator to the place where the Authority needs the sewer jet truck. To date, the Authority has never rented the truck from the Engineer. The Engineer is proposing that the Authority pay the Engineer $300.00 to store the truck at the Authority's garage. In turn, the truck will be available for the Authority to use free of charge. For every day that the truck is not available to the Authority because the Engineer is using or renting it, the monthly rental would be reduced $10.00. For example if the Engineer would need the truck to rent to ABC Company on February 1, 1995 and would return it to the Authority garage February 5, 1995, the Authority would not pay the Engineer $300.00 for the month of February but instead would pay the Engineer $300.00 less $50.00. You state that the $300.00 fee is negotiable. The plant operator for the Authority believes that the truck would enhance the service that the Authority provides to its customers because the truck can be used for more than its original purpose and a sewer jet truck and operator would not have to be provided by the owning entity or Engineer, thus saving the Authority the cost of renting a sewer jet truck from another entity. You state that the only drawback is that it cannot be determined how often the Authority would need the truck because it only rents one when it is in dire need of one. The following points are noted as to the Sewer Jet Truck Rental & Storage Agreement which you have submitted. First, the monthly rental of $300.00 has been stricken and replaced with a handwritten notation of $250.00 as the monthly rental to be paid by the Authority to the Engineer, subject to a $10.00 per day reduction for each day the sewer jet truck is not stored and available for use at the Nanty Glo Sewage Treatment plant site. The Authority is responsible for keeping the sewer jet truck in a heated environment above 40 degrees Fahrenheit to prevent freezing of piping, pump, tank, and the like. Only certain specified, authorized individuals would be allowed to operate the truck. The Engineer is to provide automotive insurance for the truck but the Authority is responsible for any damages caused by the sewer jet truck during the sewer cleaning operation by Authority personnel. The Authority is to be responsible for normal operation and maintenance of the sewer jet truck during its use of that truck. The Authority is to be responsible for the purchase of gasoline used during its operation of the truck. The Authority is to provide the Engineer access to the sewer jet truck at the Nanty Glo Sewage treatment facility as required by the Engineer. The contract is for a one year period and is automatically renewable, Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 3 but may be cancelled by either party immediately upon written notification to the other party. Based upon all of the above, you request an advisory from the State Ethics Commission regarding the Engineer's proposal. Discussion: Three points must initially be noted. First, pursuant to Sections 7(10) and 7(11) of the Ethics Law, 65 P.S. § §407(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 P.S. § §407(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. Additionally, it is initially noted that Sections 7(10) and (11) of the Ethics Act make 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 the Ethics Law. Finally, it is noted that advisories do not proffer an opinion as to the wisdom of a governmental body's decision such as whether the instant proposal may be accepted where the authority only rents a sewer jet truck when it is in "dire need" of one. Your inquiry will now be addressed. The appointed Engineer for the Nanty Glo Sanitary Sewer Authority ( "Authority ") is a "public official /employee" as defined in the Ethics Law. 65 P.S. §402; 51 Pa. Code §11.1. As such, the Authority Engineer is subject to the provisions of the Ethics Law and the restrictions therein are applicable to the Engineer. Section 3(a) of the Ethics Law provides: Restricted Activities No public official or public employee shall engage in conduct that constitutes a conflict of interest. Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 4 The following terms are defined under the Ethics Law: "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 or 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 with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. Under Section 3(a) of the Ethics Law quoted above, a public official /employee may not use the authority of office or confidential information to obtain a private pecuniary benefit for himself, a member of his immediate family or a business with which he is or a member of his immediate family is associated. Generally, the Ethics Law places no per se prohibition upon a public official /employee or business with which he is associated from contracting with his governmental body. Pancoe, Opinion 89- 011. Pursuant to Section 3(a), a public official /employee could not participate or vote on matters involving the contract between the governmental body and the public official /employee or the "business with which he is associated." In addition, the requirements of Section 3(j) of the Ethics Law must be followed whereby the reasons for the abstention must be publicly noted, and a written memorandum to the same effect must be filed with the Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 5 secretary recording the minutes. Therefore, under Section 3(a), the public official /employee or the "business with which he is associated" is not precluded from contracting with the governmental body but the public official /employee could not participate or vote as to the matter of the contract and must comply with the disclosure requirements of Section 3(j) of the Ethics Law. Having set forth the above general principles, it is clear that Stiffler, McGraw and Associates, Inc., as the Nanty Glo Sanitary Sewer Authority's Engineer, could not participate in an official capacity with regard to the Sewer Jet Truck Rental & Storage Agreement proposal or related matters, such as, for example, specific instances for using the truck or for providing for its maintenance. In each instance that a conflict of interest would arise for the Engineer, it would be required to abstain from any participation and to publicly disclose the abstention and the reasons for same, both orally at the public meeting and in the written memorandum to be filed with the secretary recording the minutes. Section 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 any thing of monetary value based upon the understanding that the vote, official action, or judgement of the public official /employee would be influenced thereby. Section 3. Restricted activities. (f) No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 6 the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. In relation to the above provision of law, the State Ethics Commission has generally determined that this provision is a procedure to be used when a public official or employee contracts with his own governmental body in an amount of $500 or more. The process must be open and public with prior public notice and subsequent public disclosure. In addition, the public official/ employee may not have any supervisory or overall responsibility for the implementation or administration of the contract. Thus, situations contracting more. This the open and public process must be used in all where a public official is otherwise appropriately with his own governmental body in an amount of $500 or open and public process would require: (1) prior public notice of the employment or contracting possibility; (2) sufficient time for a reasonable and prudent competitor /applicant to be able to prepare and present an application or proposal; (3) public disclosure of all applications or proposals considered and; (4) public disclosure of the contract awarded and offered and accepted. Further, Section 3(f) requires that the public official could not have supervisory or overall responsibility as to the implementation or administration of the contract. Thus, assuming the proposed contract would otherwise be permissible, in order for the proposed contract between the Authority and its Engineer to meet the requirements of Section 3 (f) of the Ethics Law, the aforesaid requirements would have to be satisfied. The facts which you have submitted do not expressly indicate whether such an open and public process has occurred, but a concern on this issue is noted since the phraseology of your letter indicates that it is the Engineer who has submitted the proposal rather than the Authority which has solicited proposals publicly. Nevertheless, as noted above, an advisory does not address past conduct. Parenthetically, although the contracting in question would Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 7 not be prohibited under the Ethics Law provided the restrictions of Sections 3(a), (b) , (c) , (f) and (j) are satisfied, a problem may exist as to such contracting under the Municipality Authorities Act of 1945, 53 P.S. §301 et sea. In the instant situation, the Municipality Authorities Act provides as follows: D. No member of the Authority or officer or employee thereof shall either directly or indirectly be a party to or be in any manner interested in any contract or agreement with the Authority for any matter, cause or thing whatsoever by reason whereof any liability or indebtedness shall in any way be created against such Authority. If any contract or agreement shall be made in violation of the provisions of this section the same shall be null and void and no action shall be maintained thereon against such Authority. 53 P.S. §312(D). It is suggested that to the extent the Authority is concerned as to the validity of this contract, it consult with its Solicitor, and to the extent the Engineer has concerns as to the legality of its proposal, it seek the advice of private legal counsel. 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 Law has not been considered in that they do not involve an interpretation of the Ethics Law. Specifically not addressed in this advice is the applicability of the Municipality Authorities Act of 1945, although a concern has been noted as to its applicability and recommendations have been made as to the Authority and the Engineer obtaining legal advice in that regard. Conclusion: As the appointed Engineer for the Nanty Glo Sanitary Sewer Authority ( "Authority "), Stiffler, McGraw and Associates, Inc. ( "Engineer ") is a public official /employee subject to the provisions of the Ethics Law. Under Section 3(a) of the Ethics Law, a public official /employee or a "business with which - -- associated" may contract with the governmental body but could not vote or participate in the matter of the contract. In this case, the Authority's Engineer may not participate in an official capacity as to the sewer jet truck rental and storage agreement and /or related matters. The disclosure requirements of Section 3(j) outlined above must be observed. Finally, given that the contract is $500 or more, the open and public process as outlined Svirsko, Jr., Alex L., Esquire, 95 -505 January 26, 1995 Page 8 above must be accomplished. The Engineer could not have any supervisory or overall responsibilities as to the contract. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. Due to the possible application of the Municipality Authorities Act of 1945, it is suggested that the Authority consult its Solicitor and that the Engineer obtain legal Advice from private counsel in that regard. 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. such. This letter is a public record and will be made available as 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 writing and must be actually received at the Commission within fifteen (15) days of the date of this Advice pursuant to 51 Pa. Code §13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717- 787 - 0806). Failure to file such an appeal at the Commission within fifteen (15) days may result in the dismissal of the appeal. cerely, Vincent . Dopko Chief Counsel