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HomeMy WebLinkAbout96-507 MyersSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 5, 1996 G. William Myers, P.E., J.D. Sr. Vice President and General Counsel L. Robert Kimball & Associates 615 West Highland Avenue PO Box 1000 Ebensburg, PA 15931 96 -507 Re: State Consultant; Township Engineer; Engineering firm; Public Employee; FIS. Dear Mr. Myers: This responds to your letter dated December 28, 1995 in which you request advice from the State Ethics Commission. Issue: You ask whether your engineering firm which contractually provides engineering services to Cambria Township would be considered a "public employee" required to file Statements of Financial Interests pursuant to the Public Official and Employee Ethics Law. Facts: You question whether the activities and functions of your firm fall within the purview of the definition of "public employee" as that phrase is defined in the Ethics Law and the regulations of this Commission. You have submitted a copy of your firm's 1994 contract with Cambria Township, entitled "Articles of Agreement for Provision of Annual Professional Services," which is incorporated herein by reference. You state that the contracts for the other years are substantially the same. The services which Kimball provides are as follows: Myers, 96 -507 February 5, 1996 Page 2 Article 1: Retainer Services of the ENGINEER 1.1 The OWNER agrees to employ the ENGINEER on a retainer basis, and the ENGINEER agrees to perform and furnish the following professional consulting services and other related engineering services for the fees paid on a retainer basis. 1.1.1 Attendance by the Engineer at 12 meetings of the OWNER per year, once per month. 1.1.2 Unlimited telephone consultation with the engineer on routine OWNER matters. 1.1.3 Upon request, inspection of the OWNER's facilities on an annual basis, and submitting a summary report on the facility's condition with any recommended improvements. 1.1.4 Upon request, provide advice and recommendations as to the maintenance, repair and operation of the townships roads, parks, buildings and other facilities and property. 1.1.5 Upon request, assist with the townships budget each fiscal year which shall reflect the recommendations made in said report pursuant to paragraph (1.1.4) above. 1.1.6 Upon request, advise and recommend as to any capital improvements that . should be made during the next fiscal year, and estimate the amounts of money necessary for such purposes. 1.1.7 Provide technical assistance to the township in support of funding applications. Article 2: Additional Services of the ENGINEER 2.1 The OWNER may request and the ENGINEER shall provide Additional Services which may be required from time to time in implementation of projects which require a scope of work or type of service beyond that expressed in Article 1 above. 2.2 The OWNER shall authorize ENGINEER to provide Additional Services in writing which should include a precise scope of work, schedule of deliverables, OWNER and ENGINEER responsibilities, timetable and basis of compensation. Typical non - routine projects would include but not be limited to: engineering design projects; Myers, 96 -507 February 5, 1996 Page 3 system rehabilitation projects; construction monitoring projects; feasibility studies; permit applications; preparation and witness in legal matters; surveys; mapping; architectural designs; extensive field studies; environmental assessments and studies; preparation and attendance for special meetings and public hearings. Articles of Agreement for Provisions of Annual Professional Services, Articles 1 and 2, page 2. It is your view that your firm, L. Robert Kimball & Associates ( "Kimball ") and /or its employees are not "public officials" or "public employees" as defined in the Ethics Law. You have raised numerous arguments advocating your view. Your first argument is that you believe Kimball is a "state consultant" as defined by the Ethics Law: Section 2. Definitions "State consultant." A person who, as an independent contractor, performs professional, scientific, technical or advisory service for a State agency, and who receives a fee, honorarium or similar compensation for such services. A "State consultant" is not an executive -level employee. 65 P.S. §402. You state that your firm provides professional, scientific, technical and advisory services (engineering and related services) to Cambria County, PennDOT, and many other governmental bodies. It is your assertion that there is no requirement under the Ethics Law for a "state consultant" to file an FIS. Your second argument is that your firm's services may be terminated at will. Article 7 of the contract provides that your firm may be terminated upon 30 days written notice. Your third argument is that your firm is only responsible to Cambria Township, may act only pursuant to its authorization, and owes no independent duty to the public. You state that your firm exercises none of the powers of sovereignty. Your fourth argument is that your firm is entirely subordinate to Cambria Township. Cambria Township may follow or disregard your firm's advice. The firm cannot control the actions of Cambria Township. Your fifth argument is that the exclusion of "state consultants" from the disclosure provisions of the Ethics Law is Myers, 96 -507 February 5, 1996 Page 4 compatible with the law's purpose. You state that the purpose is to assure public confidence in government by preventing either actual or apparent realization of personal financial gain through public office. You contend that "state consultants" are situated similarly to "members of advisory boards" who are excluded from the reach of the disclosure provisions of the Ethics Law when the advisory board has "no authority to expend public funds other than reimbursement for personal expense, or to otherwise exercise the power of the State or political subdivision thereof." In your sixth argument, you disagree with any assertion that because no other firm or individual is designated the Township Engineer, your firm has to be it. You state that pursuant to the First and Second Class Township Codes, a township "may" but is not required to have a township engineer, as to which you cite 53 P.S. §56301 (first class township) and 53 P.S. §65585 (second class township). In your seventh argument, you further disagree with any assumption that the label "township engineer" makes one a "public official" or "public employee." You cite Cerino v. Palmer, 401 A.2d 770, 265 Pa.Super. 1 (1979) for the propositions that a township engineer does not perform any policymaking function and has no governmental discretion but simply administers mandatory duties at the operational level because a township engineer may only perform supervisory tasks as directed by the township supervisors. In your eighth argument, you disagree that Commission regulations which include township engineers as examples in the definition of "public employee" would be applicable. 51 Pa.Code §11.1. In your ninth argument, you further state that since your firm is a corporation and not an individual, the firm would not be considered a "public employee" under the Ethics Law. You contend that only individuals can be public employees under the Ethics Law and Commission Regulations. You state that the ordinary meaning of an individual, as well as the statutory definition of a "person," distinguish between individuals and corporations. As for the question of who specifically would have to file FIS's, you indicate that the Cambria Township Fee Schedule does not list individual names but lists 13 categories of employees. Your firm employs over 500 individuals, the majority of which would fall within those 13 categories. You question whether those hundreds of individuals would be required to file FIS's. In support of various of the above arguments, you cite Rogers v. SEC, 80 Pa.Commw. 43, 470 A.2d 1120 (1984); Ballou v. SEC, 496 Pa. 127, 436 A.2d 186 (1981); and Cerino v. Palmer, 265 Pa.Super. 1, 401 A.2d 770 (1979). Myers, 96 -507 February 5, 1996 Page 5 DiSCUSSioU: The question to be answered is whether certain individuals employed by the engineering firm of L. Robert Kimball & Associates ( "Kimball ") are, as a result of contractually providing the engineering services described above to Cambria Township, within the Ethics Law's definition of "public employee" and are therefore required to file Statements of Financial Interests. The Ethics Law defines the term "public employee" as follows: 65 P.S. 5402 Section 2. Definitions "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible for taking or recommending official action of a nonministerial nature with regard to: (1) contracting or procurement; (2) administering or monitoring grants or subsidies; (3) planning or zoning; (4) inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person. "Public employee" shall not include individ- uals who are employed by the State or any political subdivision thereof in teaching as distinguished from administrative duties. The regulations of the State Ethics Commission similarly define the term "public employee" as above with the following additional criteria: (ii) That the following criteria will be used, in part, to determine whether an individual is within the definition of "public employee ": (A) That the individual normally performs his responsibility in the field without onsite supervision. (B) That the individual is the immediate supervisor of a person who normally performs his Myers, 96 -507 February 5, 1996 Page 6 responsibility in the field without onsite supervision. (C) That the individual is the supervisor of a highest level field office. (D) That the individual has the authority to make final decisions. (E) That the individual has the authority to forward or stop recommendations from being sent to the person or body with the authority to make final decisions. (F) That the individual prepares or supervises the preparation of final recommenda- tions. (G) That the individual makes final technical recommendations. (H) That actions are an position. (I) That actions affect organization. the individual's recommendations or inherent and recurring part of his the individual's recommendations or organizations other than his own (iii) That the term does not include individuals who are employed by the Commonwealth or a political subdivision of the Commonwealth in teaching as distinguished from administrative duties. (iv) Persons in the following positions are generally considered public employes: (A) Executive and special directors or assistants reporting directly to the agency head or governing body. (B) Commonwealth bureau directors, division chiefs or heads of equivalent organization elements and other governmental body department heads. (C) Staff attorneys engaged in representing the department, agency or other governmental bodies. Myers, 96 -507 February 5, 1996 Page 7 (D) Engineers, managers and secretary - treasurers acting as managers, police chiefs, chief clerks, chief purchasing agents, grant and contract managers, administrative officers, housing and building inspectors, investigators, auditors, sewer enforcement officers and zoning officers in all governmental bodies. (E) Court administrators, assistants for fiscal affairs and deputies for the minor judiciary. (F) School superintendents, assistant superintendents, school business managers and principals. (G) Persons who report directly to heads of executive, legislative and independent agencies, boards and commissions except clerical personnel. (v) Persons in the following positions are generally not considered public employes: (A) City clerks, other clerical staff, road masters, secretaries, police officers, maintenance workers, construction workers, equipment operators and recreation directors. (B) Law clerks, court criers, court reporters, probation officers, security guards and writ servers. (C) School teachers and clerks of the schools. 51 Pa. Code §11.1. (Emphasis added). The question you present must be reviewed under these provisions of the statute and the regulations of the Commission in light of Kimball's duties and obligations as set forth in the contract with Cambria Township. The Commonwealth Court in its ruling in Phillips v. State Ethics Commission, 79 Pa. Commw. 491, 470 A.2d 659 (1984), directs that coverage of the Ethics Act be construed broadly, rather than narrowly, and conversely, directs that exclusions from the Ethics Law should be narrowly construed. Based upon this directive and reviewing the definition of "public employee" in the statute and the regulations and opinions of this Commission, in light of your duties and the information submitted, the necessary conclusion is that certain individuals employed by Kimball are "public employees" such that those persons in the firm who are primarily responsible for providing the services to Cambria Myers, 96 -507 February 5, 1996 Page 8 Township are responsible for filing Statements of Financial Interests pursuant to the Ethics Law. 51 Pa.Code §15.2(h). The duties which are performed for Cambria Township are the duties of a Second Class Township Engineer. See, 53 P.S. 5655(a)(6). Furthermore, these duties clearly fall within the definition of "public employee" as contained in the Ethics Law and the Regulations of the Commission set forth above. For example, there is no doubt that the authority -- and in fact the duty -- exists to make recommendations to the Board of Supervisors, which is the body with the authority to make final decisions. These recommendations are an inherent and recurring part of the work for Cambria Township, and the recommendations have a greater than de minimis economic impact upon other persons /organizations. The above is just one example of how the duties under the contract with Cambria Township fall squarely within the statutory and regulatory criteria for determining status as a "public employee." Your arguments to the contrary shall be considered seriatim. As for your argument that you believe Kimball is a "state consultant," the argument fails for several reasons. First, the term "state consultant" applies to a consultant for a state agency. You may, in fact, be a state consultant as to other bodies, but not with regard to Cambria Township. Furthermore, your assumption that a state consultant would necessarily not be a public employee is erroneous. The definition of state consultant excludes status as an "executive - level" employee, (see, definition of "executive - level" state employee at 65 P.S. §402), but does not preclude a finding that such a consultant is a "public employee." As for the fact that your services are contractually provided, the definition of "public employee" does not preclude such a payment arrangement. Many public employees are paid and perform their duties pursuant to a contract with a governmental body. The Ethics Law does not dictate how payment arrangements are to be made between a township and its engineer. By the same token, the Ethics Law does not hinge status as a "public employee" based upon how payment arrangements are made. Nor does the Ethics Law hinge upon semantics. However, to the extent you may be troubled by the use of the word "employee" in the term "public employee," please refer to Kimball's contract at Article 1, Section 1.1, wherein it is stated, "the OWNER agrees to employ the ENGINEER on a retainer basis . . . " (Emphasis added). As for the fact that your firm's services may be terminated at will, a review of the Second Class Township Code does not seem to Myer., 96 -507 February 5, 1996 Page 9 indicate any greater security for any other Second Class Township engineer. As for your third argument, that your firm is only responsible to Cambria Township, such does not differ in any pertinent way from any other Second Class Township engineer. As for your fourth argument, that your firm is entirely subordinate to Cambria Township and that Cambria Township may follow or disregard your firm's advice, such that the firm does not control the actions of Cambria Township, again, this argument fails to distinguish your situation from the situation of other Second Class Township engineers. As for your fifth argument, that the exclusion of "state consultants" from the disclosure provisions of the Ethics Law is compatible with the law's purpose, the argument is not correct but need not be addressed in that, insofar as your status with Cambria Township is concerned, you are not a "state consultant." Nevertheless, insofar as you attempt to liken a state consultant to a member of an advisory board, it is noted for your information that the advisory board exception only applies to members of advisory boards and does not apply in this case. With regard to your sixth argument, although the State Ethics Commission does not have the express statutory jurisdiction to interpret the Second Class Township Code, it would appear that there is no requirement that a Second Class Township retain a township engineer. You are also correct that for purposes of the Ethics Law, one does not become the Township Engineer merely by default. However, there is some significance to the fact that there is no other individual or firm serving as the Township Engineer. Where Cambria Township has no other Township Engineer and does retain and employ Kimball every year, all year long, to perform the duties of a township engineer, the mere fact that you deny having the official label of "Township Engineer" does not preclude the Commission from finding those employees who provide the services to be "public employees" subject to the Ethics Law. Such a holding would exalt form over substance. Such would also encourage firms or individuals to attempt to circumvent the requirements of the Ethics Law through mere contrivances. As for your seventh argument, as noted above, labels are not the controlling factor and so you are correct in your assertion that a mere label does not make one a "public official" or `public employee." Likewise, the lack of such a label does not preclude status as a "public official" or "public employee." However, as noted above, Kimball's duties to Cambria Township fall squarely within the statutory and regulatory criteria for determining status as a "public employee." Flyers, 96 -507 February 5, 1996 Page 10 As for your eighth argument, township engineers are included as examples of those typically within the definition of "public employee." Nevertheless, the specific duties provided by Kimball fall squarely within those criteria for determining status as a "public employee." As for your ninth and final argument, the Commission Regulations specifically provide that where an engineering or law firm acts as a township engineer, those persons who are primarily responsible for providing the services in the firm are responsible for filing the Statements of Financial Interests. 51 Pa.Code §15.2(h). Based upon all of the above, those employees of the firm of L. Robert Kimball & Associates who are primarily responsible for providing the aforesaid services to Cambria Township are "public employees" and are responsible for filing Statements of Financial Interests. The cases which you cite do not require a contrary conclusion. Ballou v. SEC, 496 Pa. 127, 436 A.2d 186 (1981), which many of your arguments track, does not afford a solid basis for your position. First of all, the Supreme Court strictly limited its holding in Ballou to attorneys serving as township solicitors. Id. (Note 3). Second, after Ballou, the Legislature in Act 9 of 1989 acted to specifically include solicitors as among those required to file Statements of Financial Interests, 65 P.S. §402, such that continued reliance on Ballou is questionable at best. Rogers v. SEC, 80 Pa.Commw. 43, 470 A.2d 1120 (1984), was decided in the wake of Ballow and cited it. Furthermore, the decision was heavily based upon the fact that Rogers provided very limited accounting services on a temporary basis for only a few days, without any ongoing relationship with the political subdivision. Factually, you have a completely different situation from that considered in Rogers. Yours is not a situation where the firm is providing a one -shot service for the Township but rather, the firm is performing the duties of a township engineer all year long, year after year. Finally, as for the case of Cerino v. Townshi,p of Palmer, 265 Pa.Super. 1, 401 A.2d 770 (1979), the case simply does not apply here. In Cerino, the Court was considering whether the township engineer qualified for official immunity under the very different standards which apply to such a question. Status as a public employee subject to the Ethics Law is construed liberally under the standards set forth above. Conclusion: The employees of L. Robert Kimball & Associates who are primarily responsible for providing the engineering services Myers, 96 -507 February 5, 1996 Page 11 described above to Cambria Township, where the services are those of a Township Engineer and are provided all year long, year after year, are responsible for filing Statements of Financial Interests. Such persons must file a Statement of Financial Interests for each year in which the position is held and for the year following termination of this service. If the Statements of Financial Interests have not already been filed, they must be filed within 30 days of this Advice. The Statement of Financial Interests form reports information for the prior calendar year. 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 thirty (30) days of the date of this Advice pursuant to 51 Pa. Code §13.2(h). That 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 thirty (30) days may result in the dismissal of the appeal. cerely, Vincent J. Dopko Chief Counsel