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HomeMy WebLinkAbout95-555 CeraulDavid J. Ceraul, Esquire 22 Market Street P.O. Box 19 Bangor, PA 18013 Dear Mr. Ceraul: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 25, 1995 95 -555 Re: Simultaneous Service, Municipal Authority Member, Borough Council Member, Governing Body, Authority Employee, Compensation. This responds to your letters of March 8, and March 24, 1995, in which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Law imposes any prohibition or restriction upon authority board members, who are also borough councilmembers from serving or receiving compensation as authority board members or officers, or authority agents or employees. Facts: The Borough Council of Wind Gap is the governing body over the Wind Gap Municipal Authority, a duly appointed authority of the Commonwealth. The authority operates the borough's municipal sewer system. Mr. Jeffrey Yob, a councilmember since 1994, is a duly appointed authority board member. Mr. Yob receives a stipend as borough councilmember and compensation as an authority board member. You are the solicitor to the council of the Borough of Wind Gap. On behalf of the borough council, as appointing authority, you seek advice from the Commission under the Ethics Law concerning the following questions: (1) whether compensation for authority members is established by the governing body under 53 P.S. §309(S); (2) whether Mr. Yob is permitted to receive compensation as an authority board member while also serving as a councilmember; and (3) whether the authority can establish compensation for authority members who perform services for the authority and whether such activity is controlled by Rebottini v. State Ethics Commission, 634 A.2d 743 (Pa. Commw. 1993). You included in your letters to the Commission copies of the memorandum and summary that you wrote for the Wind Gap Borough Council concerning the above questions. In particular, with respect to the second question, you advised the borough council that Ceraul, David J., Esquire, 95 -555 April 25, 1995 Page 2 councilmembers who also serve as permitted to receive compensation the Ethics Law and Borough Code. you cited 53 P.S. § §46001 and support, you cited 53 P.S. §46404 authority board members are not as authority board members under As support to this conclusion, 65 P.S. §403 and, as possible Discussion: Authority board members are "public officials" as that term is defined in the Ethics Law and hence are subject to the provisions of the Ethics Law. 65 P.S. 402. It must first be noted that the State Ethics Commission may only address questions regarding the duties and responsibilities of public officials within the purview of the Public Official and Employees Ethics Act. The Commission does not specifically have the statutory jurisdiction to interpret the.provisions of Borough Code or the Municipality Authorities Act. If, however, another provision of law somehow impacts on the provisions of the Ethics Law or the Ethics Law accords jurisdiction in relation to other provisions of law, then this Commission may be required to interpret such provisions of law. See Bigler, Opinion 85 -020. 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 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 Ceraul, David J., Esquire, 95 -555 April 25, 1995 Page 3 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 (c) of the Ethics Law provide in part that no person shall offer to a public official /employee anything of monetary value or no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, orr 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 or will be any transgression thereof but merely to provide a complete response to the question presented. The Commission has determined if a particular statutory enactment prohibits an official from receiving a particular benefit, then that official's receipt of such a prohibited benefit, through the authority of public office, would also be a use of the authority of office contrary to Section 3(a) of the Ethics Law. In this respect, this Commission has been called upon, on various occasions, to determine whether a specific pecuniary benefit or financial gain is prohibited by law. In order to determine whether compensation for authority members would constitute a prohibited "private pecuniary benefit" under the Ethics Law, the provisions of the Municipality Authorities Act (MAA) must be reviewed: Members shall hold office until their successors have been appointed, and may succeed themselves, and . . . shall receive such salaries as may be determined by the governing body or bodies of the municipality or municipalities. 53 P.S. §309(B). As you have stated, the "governing body . . . of the municipality" is the Wind Gap Borough Council. If the Wind Gap Municipal Authority Board set the salaries of authority board members, it would provide those people a pecuniary benefit not authorized in the MAA. Such pecuniary benefit would constitute a private pecuniary benefit, and because the authority board members used the authority of their office to get such benefit, the action would be contrary to Section 3(a) of the Ethics Law. If, on the other hand, the borough council set the salaries of the authority board members as provided in the MAA, such pecuniary benefit would not be "private" because it is authorized in law. Hence, such benefit would not be prohibited by the Ethics Law. The above analysis does not consider the issue of a councilmember, who is also an authority member, receiving a salary as an authority member while sitting as a councilmember which issue is addressed below. Ceraul, David J., Esquire, 95 -555'' April 25, 1995 Page 4 The next question is whether Mr. Yob is permitted to receive compensation as an authority board member while also serving as a councilmember. In order to determine whether such pecuniary benefit is strictly prohibited by law and, therefore, a private pecuniary benefit, the provisions of the Borough Code must be reviewed. Although the Borough Code sections cited in the supplementary material you included with your letters, that is, Section 46001 dealing with compensation of borough councilmembers and Section 46404 dealing with penalty for personal interest in contracts or purchases, may have some bearing, it appears that Section 46104 deals more directly with the question at hand. This section provides: Unless there is incompatibility in fact, any elective or appointive officer of the borough shall be eligible to serve, on any board, commission, bureau or other agency created by or for the borough, or any borough office created or authorized by statute and may accept appointments thereunder, but no mayor or councilman shall receive compensation therefor. 53 P.S. §46104. Upon researching previous advices issued by the Commission, three advices were located that touch upon the compensation question. In 1990, the Commission issued an advice that included in the recited facts an inquiry as to whether a recently elected councilmember could continue to receive compensation from the water authority as a member of its board. Schlegel, Advice 90 -535. The advice concluded that "there does not appear to be any real possibility of a private pecuniary benefit if a councilmember also served as an authority member." The advice did not quote Borough Code Section 46104 above nor did it distinguish a councilmember's eligibility to serve as an authority board member from his eligibility to receive compensation for such service. Early in 1992, the Commission issued an advice that quoted Borough Code Section 46104 and made a distinction between a councilmember's eligibility to serve and his eligibility to receive compensation as an authority member. The advice concluded that although the Borough Code "would appear to permit you to hold both positions simultaneously, . . . you could not receive compensation for your . . . position as a Borough Authority Member." Yurchak, Advice 92 -506 at 4. In late 1992, the Commission issued an advice that quoted Borough Code Section 46104 and again made a distinction between a councilmembers's eligibility to serve and eligibility to receive compensation as an authority member. Lichty, Advice 92 -635. This advice also concluded that simultaneous service as a councilmember and an authority board member was permitted by the Borough Code. Ceraul, David J., Esquire, 95 -555 April 25, 1995 Page 5 However, with respect to the compensation question, this advice stated: It is not clear whether a position on the Municipal Authority, which has presumably been created under the Municipality Authorities Act, 53 P.S. §301 et seq., and is a separate governmental body from the Borough Council, would be deemed to be a Borough position. Therefore, while it is clear that the Borough Code would not preclude you from holding both positions, a judicial determination would be required as to whether you could be compensated as an Authority member. Lichty, Advice 92 -635 at 6(emphasis in original). Among these three advices, Lichty more closely represents the correct interpretation under the Ethics Law. Therefore, it is clear that councilmembers can also serve as authority board members under the Borough Code without transgressing the Ethics Law. However, determining whether such councilmembers can receive compensation as authority members requires a more in -depth statutory analysis of the Borough Code. The Commission jurisdiction is limited to the Ethics Law and only peripherally involves other laws to determine whether a particular pecuniary benefit is not authorized, or "private." Therefore, until an appropriate judicial forum interprets the relevant portion of the Borough Code, it is not clear whether a councilmember may be compensated as an authority member. Assuming the appropriate forum decides that compensation is not permitted as per the above quoted prohibition in the Borough Code, a councilmember who accepts compensation as an authority member would be receiving a private pecuniary benefit contrary to Section 3(a) of the Ethics Law. Assuming, on the other hand, the appropriate forum decides that such compensation is not prohibited by the above quoted provision of the Borough Code, a councilmember who accepts compensation as an authority member would not be receiving a private pecuniary benefit and would not be contrary to Section 3(a) of the Ethics Law. The next question you raise is whether the authority board can establish compensation for authority members who perform services for the authority. Taken together with the supplementary material you provided, "service" is assumed to mean work of "agents" or "employees" of the authority. Authority members are permitted to simultaneously serve as authority employees. Swick, Opinion 91- 006; 53 P.S. §309(C). As to whether a councilmember may serve as an authority employee when the Borough Code provides that "[n]o elected borough official of a borough with a population of 3,000 or more may serve as an employe of that borough." 53 P.S. §46104. This question is resolved when the authority is a separate, distinct governmental Ceraul, David J., Esquire, 95 -555 April 25, 1995 Page 6 body established under the MAA. Employees of an authority that is a separate and distinct governmental body are not employees of the borough. Bover, Advice 93 -625. Therefore, under Section 3(a) of the Ethics Law, borough councilmembers may serve as authority employees. The derivative question is whether a councilmember may receive compensation as an agent or employee of an authority. The Borough Code states that councilmembers shall not receive compensation for serving "on any board, commission, bureau or other agency created by or for the borough, or any borough office created or authorized by statute." Because such prohibition appears to be limited to officers and appointments, there would be no prohibition of a councilmember receiving compensation as an authority employee or agent. Mutschler, Advice 93 -613. Turning now to authority board officers, Borough Code Section 309(C) authorizes an authority board to "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. §309(c)(emphasis added). The case of Rebottini et al v. SEC, 634 A,2d 743 (1993) establishes that authority board members under certain circumstances may appoint themselves and set their own compensation as board officers without violating the Ethics Law. 634 A.2d at 747. However, conflict between Sections 309(C) and 46104 may arise when asking whether a councilmember, who is an authority board member and officer, may be compensated as an officer of the board. As noted above, determining whether such councilmembers may receive compensation as authority board officers requires a more direct in -depth statutory analysis of the Borough Code. The Commission's jurisdiction is limited to the Ethics Law and only peripherally to other laws that impact the Ethics Law. Therefore, until an appropriate judicial forum interprets the relevant portions of the Borough Code, it is not clear whether a councilmember may be compensated as an authority board officer. Assuming the appropriate forum decides that such compensation is not permitted, a councilmember who accepts compensation as an authority board officer would be receiving a private pecuniary benefit contrary to Section 3(a) of the Ethics Law. Assuming, on the other hand, the appropriate forum decides that such compensation is permitted, a councilmember who accepts compensation as an authority board officer would not be in contravention to Section 3(a) of the Ethics Law. Lastly, it must be noted that the propriety of the proposed course of conduct has only been addressed under the Ethics Law. Conclusion: Members of the Wind Gap Municipal Authority are "public officials" subject to the provisions of the Ethics Law. As Ceraul, David J., Esquire, 95 -555 April 25, 1995 Page 7 public officials, members of the authority who are not councilmembers may accept compensation for serving as authority members if such compensation is set by the Wind Gap Borough Council, the governing body of the municipality, as provided in 53 P.S. §309 (B) . Under Section 3(a) of the Ethics Law, a Wind Gap councilmember who is also an authority board member may or may not be allowed to . accept compensation as a member or officer of the Wind Gap Municipal Authority depending upon the appropriate judicial forum determining whether such compensation is permitted under the Borough Code, 53 P.S. §46104. A councilmember may serve as an authority agent or employee and receive compensation for such work under Section 3(a) of the Ethics Law. Lastly, the propriety of the proposed course of 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. 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 513.2(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. erely, Vincent J. Dopko Chief Counsel