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HomeMy WebLinkAbout97-552 SchimizziSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL April 9, 1997 Richard W. Schimizzi, Esquire R35 West Pittsburgh Street Greensburg, PA 15601 97 -552 Re: Conflict, Public Official /Employee, Township Sewage Authority, Vote, Increase in Compensation. Dear Mr. Schimizzi: This responds to your letters of February 21 ,1997 and March 10, 1997 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 Members of a Township Sewage Authority as to a vote to increase their compensation where the Township Commissioners have adopted an Ordinance authorizing that increase in compensation. Facts: As Solicitor for the Penn Township Sewage Authority ( "Authority "), you have been authorized by the Authority Board Members to request an advisory on their behalf. The Authority was formed under the Municipality Authorities Act of 1945 with the original Articles of Incorporation being filed on May 7, 1956. Since its formation, the Authority has been a "non- operating" or "leaseback" Authority. The Authority acted to acquire financing to complete various sewer construction projects. Upon completion of each project, the Authority would lease the sewer system to Penn Township. Thereafter, the actual operation of the sewer system was the responsibility of the Township Commissioners. During the years in which the sewer system was operated by the Township Commissioners, the Authority conducted regular quarterly meetings. Because the Authority was not operating the sewer system, there was no need to meet more frequently. In 1995, the Township Commissioners decided to transfer the duties associated with the operation of the sewer system to the Authority. This in effect transformed the Authority from a non - operating authority into an operating authority. As a result, the amount of work and time required by Authority Members has substantially increased. You state as an example that in 1995 the Authority held bi- monthly meetings and in addition, Members have been involved in reviewing employment Schimizzi /Penn Township Sewage Authority, 97 -552 April 9, 1997 Page 2 applications and hiring Authority employees, obtaining and evaluating quotes for insurance, conducting an inventory of tools and equipment used in the operation of the sewer system, and numerous other tasks needed to transform the Authority into an operating authority. Pursuant to the Municipality Authorities Act, the Members of the Authority Board were initially appointed by the Township Commissioners. However, re- appointments did not generally occur upon conclusion of the initial term of each Member of the Authority. Consequently, on July 22, 1996, the Township Commissioners adopted Resolution No. 10, a copy of which you submitted and which is incorporated herein by reference. That Resolution appointed the current Members to the Board in the correct order of each Member's term. Four of the Members appointed pursuant to that Resolution were existing Members of the Board. The fifth Member appointed was new to the Board. The four existing Members were unaware that the Resolution was being adopted by the Township. Furthermore, none of the Members of the Board being appointed pursuant to that Resolution were made aware of the salary restrictions set forth in 53 P.S. §309B. Consequently, no request for an increase in salary was made to the Township Commissioners in connection with the appointment of Members to the Board. Had the existing Members of the Board been advised of the salary restriction, a request for an increase in compensation would have been made in connection with each Member's appointment. On December 30, 1996, the Township Commissioners adopted Ordinance #678, a copy of which you have submitted and which is incorporated herein by reference. That Ordinance approves an increase in compensation to all Members of the Authority Board who are "legally able to accept such compensation." Based on the foregoing, you request an advisory as to whether an affirmative vote by any Member of the Authority Board to begin immediately accepting the increases in compensation approved by the Township Commissioners pursuant to Ordinance #678 would transgress the Ethics Law. The increase in salary authorized pursuant to that Ordinance is commensurate with the extensive duties being undertaken by the current Board Members. You state that it would be difficult to find members of the community willing to devote the substantial time and effort needed to fulfill the duties of a Member of this Authority without providing this amount of reasonable compensation. Discussion: It is initially noted that 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. As Members of the Penn Township Sewage Authority (Authority), such Members are public officials as that term is defined under the Ethics Law, and hence they are subject to the provisions of that law. Section 3(a) of the Ethics Law provides: Schimizzi /Penn Township Sewage Authority, 97 -552 April 9, 1997 Page 3 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, occupatiotr 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 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 Schimizzi /Penn Township Sewage Authority, 97 -552.. April 9, 1997 Page 4 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 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. In the event that the required abstentmn results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Law, then in that event voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. In applying Section 3(a) of Act 9 of 1989 to the instant matter, the question turns upon whether there would be a use of the authority of office by Board Members to obtain a private pecuniary benefit for themselves. As the Commission noted in Confidential Opinion No. 90 -012, 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). This Commission has been called upon, on various occasions, to determine whether a financial gain or private pecuniary benefit is strictly prohibited by law and to that end, the provisions of the enabling legislation of the governmental body in question have been reviewed. Imo,. at 5. The Municipality Authorities Act of 1945, P.L. 382, as amended, Section 309B, 53 P.S. 309B provides: Members shall hold office until their appointed, and may succeed themselves, and, boards of Authorities organized or created by a districts, shall receive such salaries as may governing body or bodies of the municipality or of such salaries shall be increased or diminished successors have been except members of the school district or school be determined by the municipalities, but none by such governing body Schimizzi /Penn Township Sewage Authority, 97 -552 April 9, 1997 Page 5 or bodies during the term for which the member receiving the same shall have been appointed. In this case the five appointments to the Authority Board occurred in July, 1996 and the compensation was increased in December, 1996. Since the compensation was increased during their terms, that increase by law is not effective for current Authority Board Members. Thus, the increase in compensation enacted by the governing body will be effective for subsequent but not current Board Members. Since the receipt of such an increase in compensation is not authorized in law, the receipt of such compensation by the Board Members would be contrary to Section 3(a) of the Ethics Law. Accordingly, the Authority Board Members may not receive the increase in compensation under Section 3(a) of the Ethics Law. 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: The Members of the Penn Township Sewage Authority (Authority) are public officials subject to the provisions of thd`Ethics Law. Under Section 3(a) of Act 9 of 1989, the current Authority Board Members cannot accept an increase in compensation set by the governing body during their term with the Authority. 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. 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 ). 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 tlf appeal. rely Vincent J. opko Chief Counsel