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HomeMy WebLinkAbout98-515 HesslerSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 TELEPHONE (717) 783 -1610 ADVICE OF COUNSEL February 19, 1998 Kirk J. Hessler 170 Sugar Maple Circle Washington, PA 15301 98 -515 Re: Conflict; Public Official /Employee; School Director; Township Planning Commission Member; Township Police Lieutenant; College Instructor; LERTA ZONE; Revenue Allocation Program; Revitalization; Mall Expansion. Dear Mr. Hessler: This responds to your letter of January 22, 1998 by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employe Ethics Law presents any prohibition or restrictions upon a school director with regard to participating and voting on accepting a proposed revenue allocation program related to the expansion and revitalization of a mall, where the school director also serves as a planning commission member and police lieutenant in the affected township. Facts: As a School Director for the Trinity School District, you request an advisory from the State Ethics Commission. You initially note that you serve in multiple capacities. In addition to being a School Director, you serve as a member of the North Franklin Township Planning Commission, which is an unpaid position on a body which is purely advisory. You also serve as lieutenant on the North Franklin Township Police Department, in which capacity you are a full -time, tenured Township employee covered under a collective bargaining agreement for wages and benefits under Act 1 1 1. Additionally, you are employed part-time by both Penn State University and by Penn Commercial College in instructor positions. Both North Franklin Township and Trinity School District are located in Washington County. North Franklin Township is a second class township. North Franklin Township has enacted a LERTA Zone pursuant to the Local Economic Tax Assistance Act, 72 P.S. §§4722-4727. You state that in this LERTA Zone, they wish to enact a Revenue Allocation Program (RAP). To put the RAP in place, the Township needs the approval of the other two taxing bodies which are the County and Trinity School District. You note that the matter previously came before the School Board on two occasions. On one occasion, the Board voted on whether to consider the matter. You state that you abstained from that vote. At the next meeting, the issue came up again. Hessler, 98 -515 February 19, 1998 Page 2 You state that the School Board Solicitor advised you that he had considered the matter, and that he did not feel that it was a conflict of interest for you to vote on the issue. Accordingly, you voted to have the Board hold a public hearing on the matter. On or about February 19, 1998 the School Board will vote on whether to accept the RAP proposal. You state that as a member of the community and the Township Planning Commission, you know just how important this action is to revitalize the community and the area. As a School Board member, you intend to vote on this matter unless this Advice concludes that you should abstain. You have submitted copies of the following documents which are incorporated herein by reference: (1) An organizational chart reflecting the chain of command of the North Franklin Township Police Department where you serve as Lieutenant and report to the Board of Supervisors; (2) A six -page memorandum from Gary L: Sweat, Esq. (the attorney for the Township's Planning Commission) dated November 25, 1997 on the issue of the Crown American- Franklin Mall expansion and the related LERTA Zone and Special Real Estate Tax Treatment; (3) The "Basic Conditions Report" dated November 25, 1997, which was prepared for the Township Planning Commission in this matter. According to the memorandum of Gary L. Sweat, Esq., the owners of Crown American have requested tax relief from North Franklin Township in order to finance their expansion of the Franklin Mall. Specifically, they have asked the Township to create a LERTA Zone in and around the Franklin Mall area that would be utilized to collect the tax revenues from the Franklin Mall to pay for certain municipal /road improvements. Crown American has presented to the North Franklin Township Planning Commission drawings for the expansion of the Franklin Mall. In addition to substantially renovating and expanding the mall, Crown American would be creating a new mall entrance and two ring roads /beltways around the exterior portion of the property to provide access to certain other properties. This particular portion of the work to be done is the result of a settlement of a lawsuit involving North Franklin Township, Crown American, and one of the neighboring property owners. The settlement required Crown American to construct these roads according to Township and State specifications and provide access over these roads to the neighboring property. The settlement further required that the Township accept the dedication of these roads as Township roads once constructed. Attorney Sweat's memorandum further reflects that in order for the LERTA Zone and special tax district to be created /effectuated, the following would have to occur: (1) The Township Supervisors would have to pass an inducement resolution for tax - exempt financing (which action the memorandum indicates has already occurred) (2) The North Franklin Township Planning Commission would have to designate the LERTA area pursuant to Section 1702 of the Urban Redevelopment Law. (3) The North Franklin Township Board of Supervisors would have to approve the LERTA area designation and business improvement district. Hessler, 98 -515 February 19, 1998 Page 3 (4) Crown American and North Franklin Township would have to enter into a cooperation agreement. (5) A LERTA ordinance would have to be approved and passed by the Township. (i.e., by the Township in which you are employed as a Police Lieutenant). (6) A LERTA ordinance would have to be approved and passed by the Trinity Area School District (i.e., by the Board on which you serve as a School Director). (7) A LERTA resolution would have to be approved by the Washington County Board of Commissioners. According to Attorney Sweat's memorandum, the proposed improvements would increase the value of the mall property from $15.5 million to approximately $28 million. The taxing bodies - county, township, and school - would continue to receive their tax revenues based upon the present assessed value for the buildings and the increased value as to the land. The taxes resulting from the increase in value would go into a specially- created trust fund. Meanwhile, the building permit fees for the construction would equal approximately $70,000 (or $.48 per square foot). The Township would receive various financial benefits from the proposal such as monies for future development projects. Finally, it is noted that the submitted Basic Conditions Report reflects that several of the statutory criteria which would allow certification of this area for redevelopment have been met. The enumerated conditions of blight specifically referenced in the report include the economic conditions of the proposed area and economically undesirable land use on the water company property. 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 a School Director for Trinity School District, you are a public official as that term is defined in the Public Official and Employe Ethics Law ( "Ethics Law "), and hence you are subject to the provisions of that law. 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 in the Ethics Law as follows: Section 2. Definitions. Hessler, 98 -515 February 19, 1998 Page 4 "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 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. 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 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. In each instance of a conflict, 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 abstention results in the inability of the governmental body to take action because a majority is unattainable due to the Hessler, 98 -515 February 19, 1998 Page 5 abstention(s) from conflict under the Ethics Law, then voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. In applying the above provisions of the Ethics Law to the circumstances which you have submitted, pursuant to Section 3(a) of the Ethics Law, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. Pursuant to Section 3(a) of the Ethics Law, you would have a conflict of interest as to the aforesaid proposed Revenue Allocation Program involving Crown American's Franklin Mall expansion and revitalization. This conclusion is based upon the State Ethics Commission's rulings in Bassi, Opinion No. 86- 007 -R, and Woodrina, Opinion No. 90 -001. In Bassi, Opinion No. 86- 007 -R, the State Ethics Commission held, inter all, that a County Commissioner (Edward Paluso) could not enter into a lease with a municipal authority, where one of the members of the authority (Norman Carson) was a county employee directly responsible to the commissioners of the county, unless the execution of the lease was accomplished after an open and public process, with the authority member abstaining from participating in the review and award of said lease, and the county commissioner abstaining from participating in any matter relating to the authority member in his position as a county employee. The Commission stated, inter alia: ... we cannot ignore the fact that Mr. Carson is an authority member and has influence and control over authority decisions. In this respect, Mr. Carson, by voting on the final adoption of a lease, would be voting on a matter directly related to his employer. Even though that employer is another governmental body, we have held, in the past, that a public official may not vote or participate in a matter if it somehow relates to a financial interest which he may have. See, Welz, 86 -001. In the instant situation, Mr. Carson would be called upon to determine the advisability of renting property for the authority. The property which they are seeking to rent is owned by the individual or one of the individuals who currently supervises him and controls his public employment with the county. As a result of this, Mr. Carson, as an authority member, should abstain from participating in any matter relating to this particular lease. See, Bassi, 86 -007 at 3. The Commission further stated: Mr. Paluso as a county commissioner, is, in part, responsible for the general supervision of Mr. Carson. Mr. Carson, on the other hand, is an authority member in a position to grant Mr. Paluso a lease which results in Mr. Paluso receiving a financial gain. It may be difficult for the public to perceive how Mr. Paluso's actions as a county official, would not somehow be influenced by this potential leasing arrangement. It may be argued that Mr. Paluso, in dealing with Mr. Carson, to date, has done so in order to effect the favorable outcome of this lease. Additionally, it could be argued that Mr. Carson voted in favor of the lease in order to advance his position as a full -time county employee. The above factual scenarios, while hypothetical in nature, nonetheless create the types of conflicts of interest that are to be addressed by this Commission. Hessler, 98 -515 February 19, 1998 Page 6 at 4. In Woodrinq, Opinion No. 90 -001, the State Ethics Commission reviewed a similar situation. Jesse Woodring, Chairman of the Sunbury Redevelopment Authority, had applied to the City for a rehabilitation grant through the Federal. Rental Rehabilitation Program (hereinafter, the "Program "). Kenneth Pick, who was employed as the Executive Director of the Redevelopment Authority (chaired by Woodring) also served as the Community Development Coordinator for Sunbury. In the latter capacity, Pick was administrator in charge of the Program for the City. Pick's functions included administering the Program, reviewing all applications, and determining eligibility. The Commission stated: we are concerned that Mr. Pick, who is an employee of the Redevelopment Authority of which you are Chairman, has the duty of reviewing all applications and determining eligibility in his capacity as Community Development Coordinator for the city. In particular, the potential exists, given the employer - employee relationship between the Redevelopment Authority and Mr. Pick, that your application might be reviewed in a more favorable light than other applications. To forestall such a situation, you must not participate or take any action as to Mr. Pick if your application is approved and you receive benefits. Bassi, Opinion 86 -007. In addition, Section 3(j) of the Ethics Law would require you to publicly note that you would have a conflict as to any matter involving Mr. Pick. In addition, you must file a written memorandum to that effect with the person responsible for recording the minutes. Woodrinq, Opinion No. 90 -001 at 6. As was the case in the Bassi and Woodrinq rulings discussed above, the facts which you have submitted reflect that in your public position as a School Director for the Trinity School District, you would take official action that would be legally required in order for the proposed Revenue Allocation Program to occur. Meanwhile, North Franklin Township, your employer, has already taken at least some action in order to approve this project. Additionally, it would appear that if the project /Revenue Allocation Program is approved, the Township may receive various financial benefits and opportunities for further development. Therefore, for the reasons enunciated in Bassi and Woodrinq, supra, you would have a conflict of interest pursuant to Section 3(a) of the Ethics Law in matters pertaining to the Revenue Allocation Program related to the proposed Crown American - Franklin Mall revitalization and expansion, based upon your ability to approve the project in your official capacity as a School Director for the Township which is your employer. In each instance of a conflict of interest, you would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. 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 herein is the applicability of the Public School Code. Hessler, 98 -515 February 19, 1998 Page 7 Conclusion: As a School Director for Trinity School District, you are a public official subject to the provisions of the Ethics Law. Based upon the submitted facts that in addition to serving as a School Director, you are also a full -time employee of North Franklin Township, you would have a conflict of interest pursuant to Section 3(a) of the Ethics Law in matters pertaining to the Revenue Allocation Program related to the proposed Crown American - Franklin Mall revitalization and expansion based upon your ability to approve the project in your official capacity as a School Director for the Township, which is your employer. In each instance of a conflict of interest, you would be required to abstain from participation and to fully satisfy the disclosure requirements of Section 3(j) as set forth above. 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 1. 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. erely, Vincent . Dopko Chief Counsel