HomeMy WebLinkAbout84-010 CowieDonald W. Cowie, Vice - Chairman
Board of Supervisors
Upper Yoder Township
c/o 565 Melander Street
Johnstown, PA 15905
II. Factual Basis for Determination:
STATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
OPINION OF THE COMMISSION
RE: Insurance Coverage, Second Class Township
Dear Mr. Cowie:
I. Issue:
The date on this Opinion was inadvertently
omitted. It was served on May 24, 1984.
84 -010
You ask whether, as a supervisor within a township of the second class,
you are entitled to participate in certain insurance programs paid for by the
township.
You indicate that you have served as a duly elected supervisor in Upper
Yoder Township, hereinafter, the Township, since January 1, 1982. The
Township is a Second Class Township in Cambria County and because of this
classification is governed by and subject to the provisions of the Second
Class Township Code, Act of May 1, 1933, P.L. 101 as amended, 53 P.S.
65101- 67605.
You indicated in your original letter to us that since November 1, 1983,
you have been covered by the Township's group hospitalization plan and for
purposes of this Opinion, we will assume that the Township has paid the
premiums associated with your participation in this hospitalization program.
However, in your letter of March 29, 1984, you state that you have removed
yourself from this policy /program as of April 1, 1984. You indicate that the
program of insurance within the Township requires a thirty -day waiting period
before coverage is effective.
You state that you have never served in the position or been appointed to
the post of roadmaster, superintendent, laborer, treasurer, or secretary for
the Township as is permitted under the provisions of the Second Class Township
Code, 53 P.S. 65514 and 65515. It should be noted that if you were selected
or appointed to serve in one of these posts, your compensation for such
service would be set by the auditors of the Township pursuant to the
provisions of the Second Class Township Code, 53 P.S. 65531 and 65540. Your
Donald W. Cowie, Vice - Chairman
Page 2
letter of March 29, 1984 provided letters of auditors of the Township
indicating - that supervisors appointed as roadwookers were to be "paid at the
same rate per hour as other employees doing similar work" and the January 10,
1984 letter of the auditors further states that the roadmaste, "will be -
entitled to benefits accorded all other Township employees."
Although not appointed as roadmaster or worker, you devote between 20 and
60 hours a month to your duties as a Township Supervisor and you "stand ready"
to undertake the duties of any of the posts of roadmaster, superintendent,
laborer, secretaoy, or treasurer for the Township should an emergency or other
situation indicate a need for you to perform such duties. However, if and
when the need for you to assume the responsibilities of these posts arises,
you indicate that you would only perform such duties if you were covered by
the Township group hospitalization policy.
As was noted above, the Township's hospitalization policy has a
thirty -day waiting period. Thus, because you would only perform duties of the
roadmaster, superintendent, laborer, treasurer, or secretary of the Township
if you were covered by the Township insurance policy, you would not be
immediately able or willing to undertake any of these duties. For this
reason, you indicate that you have "allowed" yourself to be covered by the
Township's group hospitalization policy and to have the Township pay the
premiums associated with your inclusion from November 1, 1983 . to April 1,
1984. However, in your letter of March 29, 1984, you state that should this
Commission opine that the Township should not pay for such coverage, you will
"reimburse the Township for the premium cost associated with (your) inclusion
.... from November 1, 1983 to March 31, 1984."
III. Applicable Law:
The law to be applied to this question is as follows:
Section 3. Restricted Activities.
(a) No public official or public employe` shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself, a
member of his immediate family, or a business with which
he is associated. 65 P.S. 403(a).
Second Class Township Code.
Section 515.
Supervisors may receive from the general township fund, as
compensation, twenty -five dollars for each meeting which
they attend. The compensation of supervisors, when acting
as superintendents, roadmasters or laborers, shall be
fixed by the township auditors either per hour, per day,
Donald W. Cowie, Vice- Chairman
Page 3
similar services... but no supervisor shall receive
- compensation as a superintendent or roadmaster for any day
he receives compensation for attending a meeting of
supervisors, unless such meeting is held after regular
working hours. 53 P.S. 65515.
Section 702. Insurance.
To expend out of the general township fund such amount as
may be necessary to secure workmen's compensation
insurance for its employees, including volunteer firemen
of companies duly recognized by the township by motion or
resolution, killed or injured while going to, returning
from, or attending fires in said township or territory
adjacent thereto, or while performing any other duties
authorized by the township; to make contracts of insurance
with any fire insurance company, duly - authorized by law to
transact business in the Commonwealth of Pennsylvania, on
any building or property owned by such township, to make
contracts with any insurance company, so authorized,
insuring any public liability of the township including
insurance on every township officer, official and employe
for liability arising from errors and omissions in the
affiliated corporations, the individual proprietors,
partners and employes of individuals and firms, if the
business of the employer and such individual or firm is
under common control through stock ownership, contract or
otherwise. The term "employes ", as used herein, may
include retired employes. A policy issued to insure
employes of a public body may provide that the term
"employes" shall include elected or appointed officials.
40 P.S. 75612.
Group life Insurance.
532.2. Policies issued to employers or trustees of
employer funds.
A policy issued to an employer, or to the trustees of a
fund established by an employer, to insure employes of the
employer for the benefit of persons other than the
employer shall be subject to the following requirements.
Donald W. Cowie, Vice - Chairman
Page 4
IV. Discussion:
(1) The employes eligible for insurance under the policy
shall be all of the employes of the employer, or all of
any class or classes thereof determined by conditions
pertaining to their employment. The policy may provide
that the term "employes" shall include the employes of one
or more subsidiary corporations, and the employes,
individual proprietors, and partners of one or more
affiliated corporations, proprietors or partnerships if
the business of the employer and of such affiliated
corporations, proprietors or partnerships is under common
control through stock ownership or contract. The policy
may provide that the term "employes" shall include the
individual proprietor or partners if the employer is an
individual proprietor or a partnership. The policy may
provide that the term "employes' shall include retired
employes. A policy issued to insure employes of a public
body may provide that the term "employes" shall include
elected or appointed officials. 40 P.S. 532.2.
As an elected Supervisor within the Township, you are a "public official"
as defined in the Ethics Act and as such, your conduct must conform to the
requirements of the Ethics Act. As we have stated in prior Opinions,
particularly in the Krane, 84 -001 Opinion, our response can only address and
answer your questions under the provisions of the Ethics Act.
Under the Ethics Act, you cannot use your public office or confidential
information obtained through your office to secure for yourself "financial
gain other than the compensation provided by law." See Section 3(a) of the
Ethics Act cited above. It is clear that in allowing yourself to be covered
by the Township -paid group hospitalization coverage from November 1, 1983 to
April 1, 1984, you secured a "financial gain" as that term or concept is
generally understood. Thus, the questions remaining are, as they were in
Krane, as follows:
1. whether your participation is allowed by law;
2. whether you may accept, vote, or otherwise participate in securing
or benefitting from these coverages at the Township expense by the
use of your position as a Supervisor; and,
3. whether the facts that you have presented regarding the thirty - day
waiting period, your restriction on your "readiness ", i.e., you will
perform work only if covered by insurance, and your desire to be
immediately available to perform duties in an emergency as a
roadmaster, superintendent, laborer, treasurer, or secretary of the
Township affect our thinking or conclusions.
Donald W. Cowie, Vice - Chairman
Page 5
The answers to the questions you raise involve a review and analysis of
the Second Class Township Code to determine the " compensation which is
allowed "by law." We undertook such a review in the context of our ruling in
Krane. In that ruling we concluded that, after analyzing the Second Class
Township Code, the case law surrounding that Code, certain provisions of the
Insurance Code cited above in Part II, and recently reported cases that a
supervisor such as yourself, who is not employed in any other capacity by the
Township, could not, consistent with Section 3(a) of the Ethics Act, use his
public office to obtain and have the Township pay the premiums for
hospitalization insurance under circumstances substantially similar to those
which you present. Basically, we are not convinced that these laws allow
Supervisors who are not serving the Township in any capacity other than a
Supervisor, to benefit from Township -paid insurance coverages which were
available to "employees" of the Township. See Krane, supra and the cases
cited therein which are incorporated herein by reference.
Thus, consistent with Krane, we must conclude that it is a violation of
the Ethics Act for you to use your public office or to "allow" yourself to be
placed on such policies, to obtain or to have the Township pay for the
premiums associated with this insurance coverage because these payments are
not clearly authorized by law.
However, you ask us to consider whether the desire you have to "stand
ready" to perform duties as a roadmaster, superintendent, laborer, treasurer,
or secretary for the Township and your refusal to perform such duties unless
you are covered by the Township -paid group hospitalization coverage affect our
conclusion. Basically, you set inclusion within the group hospitalization
program as a prerequisite for your assumption of the duties you might be
called upon to perform should you he appointed as a roadmaster,
superintendent, laborer, treasurer, or secretary of the Township. The Second
Class Township Code authorizes you to be appointed to any of these positions.
However, there is nothing in the Second Class Code which indicates that you,
as a Supervisor, can demand insurance coverage, establish such coverage as a
prerequisite for your appointment to such a post or to premise your
performance of the obligations of such posts upon the receipt of certain
benefits. Accordingly, if you as a Supervisor have decided that you, as a
Supervisor, must be included on the Township -paid insurance policies in order
to eliminate this thirty -day waiting period provided in the Township's
policies, you have used your public office to secure for yourself the
inclusion on these policies -- a financial gain -- which is not allowed, much
less required, by law. The motivation for such inclusion -- that is, the
anticipation that you may at some future point be appointed to one of these
posts -- is irrelevant to the fact that you have currently used your public
position to secure for yourself a "financial gain" which we have already
determined is not clearly authorized by law.
Donald W. Cowie, Vice - Chairman
Page 6
Incidentally, were you not both the employer and the potential employee
(roadmaster, superintendent, laborer, etc.) you would not be in a position to
anticipate your hiring by at least thirty -days so as to eliminate the waiting
period established in the Township hospitalization; policy. Any other employee
would be required to undertake his duties and responsibilities, experience
this thirty -day waiting period, and suffer the consequences should he be
injured within the first thirty -day period after he is hired by the Township.
In this respect, despite your expression that you desire to be "ready" to
perform the duties of roadmaster, laborer, etc. you are not ready to do so.
You have placed a pre - condition upon your assumption of such duties -- you
will only perform such duties when you are covered by insurance.
Additionally, you will enjoy the benefits of this Township -paid coverage even
though you may never, in fact, be asked to or assume duties as roadmaster,
laborer, etc. Your ability to place this pre - condition and to your actions in
allowing yourself to be placed upon the Township -paid insurance policies as a
result of your self - imposed pre - condition upon your performance of duties as a
roadmaster, superintendent, etc. amount to a use of your public office to
secure for yourself "financial gain" other than the compensation which is
allowed by law.
We also note that the letters of the Auditors which you have recently
supplied provide support for the conclusion that as a non - working supervisor
you are not entitled to the "benefits" provided to other Township workers.
The Auditors' letter of January 10, 1984 clearly reserves and approves such
benefits for the Township Roadmaster. If and when you were to be appointed as
Roadmaster, you would experience this 30 -day waiting period because this is
the nature and limitation on this "benefit accorded to all other Township
employees." Thus, we are not convinced that the circumstances you present
regarding this waiting period and your desire to "stand ready" to serve the
Township support a conclusion that you would be entitled to have the Township
pay for these insurance coverages. Our conclusion here, as in Krane, must be
that this benefit is not clearly authorized by law and, therefore, should not
be secured by virtue of or use of your office as Township Supervisor.
We do not, in the context of this response to your request, need to
address the problem associated with the fact that you have been included on
this policy since November 1, 1983 through April 1, 1984, because you have
already expressed your intent to reimburse the Township for the premiums paid
of such coverage for that period should we conclude this coverage is improper.
This reimbursement is an appropriate and acceptable method of responding to
our ruling.
Donald W. Cowie, Vice - Chairman
Page 7
V. Conclusion:
As a Township Supervisor who is not currently employed in a capacity by
the Township other than as Supervisor, you may not, consistent with Section
3(a) of the Ethics Act, use your public office to obtain or to have the
Township pay the premiums for your participation in the Township's group
hospitalization program. You have taken the steps necessary to have the
Township discontinue its payments of the premiums associated with your
coverage under this policy. Your voluntary repayment to the Township of
premiums already paid by the Township for your participation in this program
is an appropriate and acceptable remedy.
Pursuant to Section 7(9)(i), this opinion is a complete defense in any
enforcement proceeding initiated by the Commission, and evidence of good faith
conduct in any civil or criminal proceeding, providing the requestor has
disclosed truthfully all the material facts and - committed the acts complained
of in reliance of the advice given.
This letter is a public record and will be made available as such.
Finally, any person may request within 15 days of service of the opinion
that the Commission reconsider its opinion. The person requesting reconside-
ration should present a detailed explanation setting forth the reasons why the
opinion requires reconsideration.
SSC /rdp
cc: Tom Wenger, Esquire
By the •mmission,
CONNER
C