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HomeMy WebLinkAbout97-618 WrightThomas F. Wright Administrator Local Cooperative Sanitation Council 550 Washington Road Washington, PA 15301 STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 TELEPHONE (717) 783 -1 610 ADV CE OF COUNSEL October 21, 1997 97 -618 Re: Public Official /Public Employee; FIS; Local Cooperative Sanitation Council; Independent Contractor; Sewage Enforcement Officer. Dear Mr. Wright: This responds to your letters dated August 22, 1997 and August 28, 1997, and to Norman T. George's letter dated September 10, 1997, pursuant to which you requested advice from the State Ethics Commission. Issue: Whether a Sewage Enforcement Officer (SEO) is considered a "public official /public employee" subject to the Public Official and Employee Ethics Law and the Regulations of the State Ethics Commission, and particularly, the requirements for filing Statements of Financial Interests, where he: (1) is an appointed SEO for individual townships, but is paid on the individual application basis on a self - employed status; or (2) contracts to perform SEO services for a Local Cooperative Sanitation Council formed by member municipalities. Facts: You have been authorized by Norman T. George (George) to request an advisory from the State Ethics Commission on his behalf. George is a Sewage Enforcement Officer (SEO) with the Local Cooperative Sanitation Council (LCSC). The LCSC is a local agency for 31 municipalities in Washington County. The LCSC performs on -lot testing and permitting for each of the member municipalities. The LCSC contracts with four SEO's under what you characterize to be an "independent contract." You state that the SEO's are voted upon to become "independent contractors" by the membership after an interview and recommendation from the Administrator (you). You have submitted copies of the following documents which are incorporated herein by reference: minutes of the last regular meeting of the LCSC; the LCSC's By- laws; the LCSC "Local Government Cooperative Agreement "; and the agreement by Wright /George, 97 -618 October 21, 1997 Page 2 which the LCSC contracts with its Sewage Enforcement Officers. It is noted that per the documents which you have submitted, the LCSC is a non - profit organization that was created by various municipalities (boroughs and townships) to perform statutory responsibilities of the member municipalities under the Sewage Facilities Act (Act 537 of 1966) and amendments thereto, and specifically to carry out and implement the regulations of said Act with regard to sewage disposal in said municipalities. It is further noted that the agreement between the LCSC and its SEO's provides for the retention of the SEO for an indefinite period of time, and includes the following provisions: 2. IT IS UNDERSTOOD and agreed that for all purposes the SEO shall be considered an independent contractor and not for any purpose the agent, employee, or servant of the LCSC. The SEO shall be responsible for paying all of his or her state, federal and local tax, and the LCSC shall not be responsible for withholding tax of any type. Furthermore, the LCSC shall not be responsible for providing workers' compensation or for making contributions to the unemployment compensation fund. 3. THE AGREEMENT can be terminated at any time, upon sixty (60) days written notice, without cause, by either party. You ask whether George, as an SEO who has contracted with the LCSC to perform SEO services, is required to file Statements of Financial Interests, and if so, whether he must file with every member municipality or only with the LCSC office. George additionally asks whether he must also file a Statement of Financial Interests with various other individual townships which he serves as an appointed SEO, given that he is paid by these townships on the "individual application basis" on a self - employed status. Discussion: It is initially noted that pursuant to Sections 7(10) and 7(1 1) 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. In determining whether Norman T. George (George), as a Sewage Enforcement Officer (SEO) with individual townships and the LCSC, must file Statements of Financial Interests pursuant to the Ethics Law, the threshold issue is whether in those capacities, George is a "public official" or "public employee" subject to the Ethics Law. The Ethics Law defines the terms "public employee" and "public official" as follows: Wright /George, 97 -618 October 21, 1997 Page 3 65 P.S. §402. 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 individuals who are employed by the State or any political subdivision thereof in teaching as distinguished from administrative duties. "Public Official." Any person elected by the public or elected or appointed by a governmental body, or an appointed official in the Executive, Legislative or Judicial Branch of the State or any political subdivision thereof, provided that it shall not include members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense, or to otherwise exercise the power of the State or any political subdivision thereof. Typically, Sewage Enforcement Officers (SEO's) are appointed and /or employed, and they are considered to be public officials /public employees subject to the Ethics Law. See, Bartos, Order No. 995; 51 Pa.Code § 1 1.1 ( "public employee "). There is no question that as to the Townships for which George serves as an appointed SEO, George is to be considered a public official /public employee subject to the Ethics Law. George is required to file a Statement of Financial Interests with each such Township, each year that he holds the position and the year after termination of service in the position. The particular compensation arrangement struck between the Township and George as the SEO does not alter this conclusion. Wright /George, 97 -618 October 21, 1997 Page 4 As for George's status with the LCSC, the analysis must necessarily begin with a determination of the nature of the LCSC itself, in light of the statutory definitions set forth in the Ethics Law as well as Commission precedent. Under the facts which have been submitted, it is clear that the LCSC is a "political subdivision" as defined in the Ethics Law: Section 2. Definitions "Political subdivision." Any county, city, borough, incorporated town, township, school district, vocational school, county institution district, and any authority, entity or body organized by the afore - mentioned. 65 P.S. §402 (Emphasis added). The LCSC is clearly an entity or body which has been organized by boroughs and townships. Therefore, the LCSC is a "political subdivision." Moreover, the LCSC is a political subdivision which was created specifically for the purpose of performing governmental responsibilities. Those governmental responsibilities are far from "purely advisory." As set forth in the documents which you have submitted, the LCSC actually performs statutory responsibilities of the member municipalities under the Sewage Facilities Act, which responsibilities have been delegated by the municipalities to the LCSC. Consequently, those who serve the LCSC are to be considered "public officials" or "public employees" subject to the Ethics Law to the extent they fit within the definitions of those terms set forth above. The above conclusions follow the Commission's decision in Area Loan Organizations Under Capital Loan Fund Act, Opinions Nos. 95 -006 and 95- 006 -R, involving the Northwest Pennsylvania Regional Planning and Development Commission (Northwest), which had been formed as a non - profit corporation by various political subdivisions and which functioned as an area loan organization under the Capital Loan Fund Act, 73 P.S. §394.1 et seq.. The State Ethics Commission held, inter alia, that Northwest was a "political subdivision" as defined in the Ethics Law. The Commission reasoned that the Regional Planning Commission was a political subdivision as defined in the Ethics Law because it was formed by other political subdivisions. The Commission further held that given Northwest's ability as an area loan organization to disapprove applications for governmental loans, thereby effectively eliminating applicants from that governmental loan program, it could not be viewed as a purely advisory board. Consequently, the Commission held that Northwest's members were "public officials" and that those of its employees who fit within the definition were "public employees," subject to the Ethics Law and specifically the filing requirements for Statements of Financial Interests. See, also, Flower, Opinion No. 80 -033. As for whether George is a "public official" or "public employee" in his capacity with the LCSC, the mere fact that his contract with the LCSC characterizes him to be, for "all purposes," an independent contractor does not govern the determination of George's status under the Ethics Law. Wright /George, 97 -618 October 21, 1997 Page 5 Based upon the facts which you have submitted, the necessary conclusion is that in voting to approve the selection of George as an SEO, the LCSC appointed him to that position to perform a governmental function. Therefore, in his capacity as an SEO for the LCSC, George is a public official /public employee subject to the Ethics Law and he is specifically required to file Statements of Financial Interest. Although a true independent contractor who performs limited services for a particular project for a limited period of time is not to be viewed as a public official /public employee subject to the Ethics Law, Rogers v. SEC, 470 A.2d 1 120 (1984), this arrangement between the LCSC and George as its SEO would not fall within the independent contractor situation under the Rogers consultant exception. The relationship between the LCSC and George as its SEO does not present the typical "independent contractor" situation, where the independent contractor is awarded a contract to perform limited services for a particular project for a limited period of time. To the contrary, the agreement between the SEO's and the LCSC provides for an on- going relationship for an indefinite period of time. Therefore, in his capacity as an SEO for the LCSC, Norman T. George would be considered to be a public official /public employee subject to the Ethics Law and specifically the requirements for filing Statements of Financial Interests. As for the filing location, since the LCSC is the political subdivision which George serves, it is the proper filing location for his Statements of Financial Interests. George need not file a separate Statement of Financial Interests with each of the member municipalities that comprise the LCSC. Since George is required to file separate Statements of Financial Interests at each of the individual townships that he serves as SEO, it may be most convenient for him to complete one form providing full disclosure for all of his various public positions, to file the original form at one of the filing locations, and to provide a photocopy of that same form to each of the other filing locations. Conclusion: In each of his capacities as the appointed Sewage Enforcement Officer for various individual townships, and as a Sewage Enforcement Officer (SEO) for the Local Cooperative Sanitation Council (LCSC), Norman T. George (George) is a public official /public employee subject to the Public Official and Employe Ethics Law ( "Ethics Law ") and the Regulations of the State Ethics Commission. Accordingly, George must file a Statement of Financial Interests in each such capacity each year that he holds such position and the year following his termination of such service. As an SEO for individual townships, George is required to file the Statement of Financial Interests form with each such township. As an SEO for the LCSC, George is required to file the Statement of Financial Interests with the LCSC but he need not file it with each member municipality. If George has not already done so, his Statements of Financial Interests must be filed within 30 days of this Advice. 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. VVright /George, 97 -618 October 21, 1997 Page 6 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 - 0805). 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