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HomeMy WebLinkAbout90-002 MihalikDear Mr. Mihalik; 1990. I. Issue: >-rr _LrJr � STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Helena G. Hughes, Chair Robert W. Brown, Vice Chair W. Thomas Andrews G. Sieber Pancoast Dennis C. Harrington James M. Howley DATE DECIDED: February 23, 1990 DATE MAILED: March 6, 1990 Mr. John A. Mihalik, Esquire 90 - 002 Hummel, James & Mihalik 29 East Main Street Bloomsburg, PA 17815 -1898 Re: Public Official, Township Supervisor, Voting, Comprehensive Sewage Plan, Real Estate Interest of Supervisor, Developers, Option to Sell Real Estate. This Opinion is issued in response to your request of January 17, What restrictions does the Public Official and Employee Ethics Law impose upon a second class township supervisor as to voting on a comprehensive sewage plan when the supervisor and his brother have sold an option to a partnership to purchase property they jointly own within the township. II. Factual Basis for Determination: As the solicitor for Hemlock Township and on behalf of Supervisor Donald Dieffenbacher, you request an advisory opinion regarding the propriety of voting by Mr. Dieffenbacher on a comprehensive sewage plan. Supervisor Dieffenbacher and his brother Harold jointly own certain land and Harold owns other land individually totaling 180 acres, 60 acres of which is subject to an option to purchase by a partnership. You have submitted two maps: the first map represents Mr. John A. Mihalik Page 2 portions of several townships with the blocked portion reflecting the boundaries of Hemlock Township; the second map illustrates an enlarged portion of Hemlock Township. On the second map there are shaded areas to indicate tracts of land that are jointly owned by Supervisor Dieffenbacher and his brother Harold as well as other shaded areas which represent tracts of land that are owned individually by Harold Dieffenbacher. In addition the map reflects the location of a proposed sewage plant which would be built and operated by consortium, Hemlock Municipal Corporation which is a non profit organization formed by ten commercial developers in the area. Finally there are a series of sewer line layouts on the second map which indicate those areas of the township that could tie into lines to the proposed plant. Hemlock Township is traversed by interstate I -80 which has an interchange near the village of Buckhorn. The township is subject to extensive development on both quadrangles which are north of I -80 consisting of a large mall, several restaurants and a motel that occupies the northeast quadrangle as well as a motel, gas station and truck stop which are located within the northwest quadrangle. There is a proposal for a Walmart store in the southeast quadrangle and plans have been submitted to the township planning commission. A major residential development is proposed for an area near Route 42 which is located between the interchange and the southern boundary of the township. The land of the Dieffenbachers is subject to an option to purchase pursuant to an agreement of January 18, 1988 between the Dieffenbacher's and P & Z Partners, a general partnership, of James A. Zurick and Eugene Picarella, Jr. Under the agreement the general partnership for $5,000 received a six month period in which they would have the option to purchase the property. There are three additional six month options, each for a consideration of $5,000. There is a final six month option granted for the sum of $10,000 which would run from January of 1990 through July of 1990. The agreement provides that if the option is exercised, it must be accompanied by a payment of $25,000. In the event that the option is exercised, the agreed upon consideration for the sale is $1.3 million. If the option is exercised and there is default on the part of the purchasers, there is a provision for liquidated damages in the amount of $110,000. Section 7 of the agreement provides for the purchase of additional acreage in the event that the partnership would elect and determine to construct its own sewage treatment or disposal system. If the partnership elects to purchase the additional property, the agreed upon consideration is $10,000 per acre. For many years there have been sewage problems in the village of Buckhorn and in Hemlock Township. The Department of Environmental Resources (DER) has ordered the township to develop a plan for a Mr. John A. Mihalik Page 3 public sewage system. Since there is no public sewage available for the village of Buckhorn, development in the northwest quadrangle is served by an interim private sewage plant owned by Roadway, Inc. The development in the northeast quadrangle is served by a private sewage plant owned by the developer. The township considers both plants as interim in nature which would have to be closed when public sewage is available. Although Hemlock Township submitted a proposed revision to its sewage facilities plan to DER which called for sewering development north of I -80 with the plant to be located either north or south of the interstate, it was anticipated that future development south of the interstate would be pumped north of the interstate and the plan was submitted without any specific proposal for development south of the interstate at the interchange. DER rejected the plan and directed the township to consider providing sewage for development south of the interstate whereupon the township engineer Sweetland Engineering of State College began preparing a plan. A comprehensive sewage plan will increase the value of the land in the township that would be serviced by the sewage system. During that time, the consortium proposed to build and operate the plant referenced above which is located in the northern part of Montour Township. Tentative negotiations indicate that the township may become the owner of the sewage system after the bond issue is paid. The township would also have the right to purchase the plant by paying off the indebtedness. The Zurick and Picarella partnership entered into another partnership with Joe Yodock to form Buckhorn Associates. That partnership in turn entered into a third partnership with Joe Derrer to form Lanecor which is the developer. Lanecor along with the Columbia Mali and others formed the consortium that plans to build and operate the sewage plant in the township. Since the supervisors of Hemlock Township must vote as to whether they should revise their comprehensive sewage plan, Supervisor Dieffenbacher requests an opinion as to whether he would be precluded from voting on such plan. You express your view that no conflict would exist as to voting because of the exclusion within the definition of conflict regarding actions which affect to the same degree a class consisting of general public or subclass consisting of an industry, occupation or other group. III Discussion: As a supervisor for Hemlock Township, Donald Dieffenbacher is a public official as that term is defined under the Public Official and Employee Ethics Law. Accordingly, he is subject to the provisions of the Ethics Law and the restrictions therein are applicable to him. Mr. John A. Mihalik Page 4 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 the Ethics Law: 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, occupation or other group which includes the public official or public employee, a member or his immediate family or a business with which he or a member of his immediate family is associated. Section 2. Definitions. "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(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 any thing 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 or will be any transgression thereof but merely to provide a complete response to the question presented. Mr. John A. Mihalik Page 5 Finally, Section 3(j) of the Ethics Law provides: 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 determining whether Supervisor Dieffenbacher would have a conflict regarding voting on the comprehensive sewage plan under these facts and circumstance, we note that the agreement to sell the option to purchase to the general partnership is pending. There can be no question that the matter of sewage facilities would be a prime consideration to the general partnership that has the option to purchase. Such concern is evidenced by the fact that the agreement has a provision concerning sewage whereby the partnership may purchase additional acreage if they install a sewage system. Further, the value of the tract which is subject to the option would be affected in value by the sewage facilities in the township because sewage is a consideration in plans for development, that is, it is a matter that the general partnership would consider in deciding whether to exercise the option to purchase the property for the $1.3 million consideration. Mr. John A. Mihalik Page 6 We must therefore conclude that if Supervisor Dieffenbacher were to vote on the comprehensive sewage plan, such action would not only affect the value of property in general and in particular the land on which he and his brother have sold an option to purchase but in addition the comprehensive sewage plan could be a decisive factor for the general partnership regarding making a decision as to whether they should exercise the option to purchase the land. We also take note of the fact that although the original agreement was entered into on January 18, 1988, the general partnership has continued to renew the options but has not exercised the option to this date. Although we are not suggesting that the proposed sewage system is the sole factor on the part of the general partnership as to whether they would exercise the option to purchase, we believe that it is certainly part of their deliberations. Under these circumstances we are of the opinion that Supervisor Dieffenbacher would have a conflict on voting on the comprehensive sewage plan for the township. The voting by Mr. Dieffenbacher is a use of authority of office. In addition, such action would result in a private pecuniary benefit to Mr. Dieffenbacher because the matter of sewage will impact upon the decision of the developers to purchase the land from the Dieffenbachers for $1.3 million. The sewage plan will also raise the value of land in the township that would be serviced by the. system. It is suggested however that Supervisor Dieffenbacher would not have a conflict based upon the exclusionary language within the conflict definition regarding actions which affect to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which would include the public official or a member of his immediate family. Harold Dieffenbacher, as the brother of Supervisor Dieffenbacher, is a member of his immediate family as that term is defined under the Ethics Law. We do not believe that the exclusion is applicable in this case. The situation before us does not involve a supervisor voting upon a comprehensive sewage plan that would affect him to the same extent as all other land owners that would be subject to the plan. Supervisor Dieffenbacher and his brother have entered into the agreement to sell the option to purchase to a general partnership. As we noted above, the comprehensive sewage plan will undoubtedly affect the value of the property for its development potential as well as influence to some extent the decision of the general partnership as to whether they will exercise the option to purchase the land. Further, the extensive land holdings of Supervisor Dieffenbacher and his brother do not place them in the class of the typical residential lot owner within the township. It is clear that the action of Supervisor Dieffenbacher, if he were to vote on the comprehensive sewage plan, would be an action which would not affect him to the same degree as the class or subclass. Mr. John A. Mihalik Page 7 Our decision in this case is in accord to Dettra, Opinion 89 -021, wherein we determined that a township supervisor who entered into an option agreement to sell certain acreage within the township was precluded from voting upon the enactment of the zoning ordinance because his participation or vote could result in a private pecuniary benefit to himself. Although in the cited opinion the zoning could affect the housing density which derivatively affected the ultimate purchase price which was dependent upon the number of units the purchaser could build on the property, such element does not distinguish Dettra. The underlying concern in both instances relates to the private pecuniary benefit which would inure as a result of participation or voting. Because Supervisor Dieffenbacher has a conflict, he may not vote pursuant to Section 3(a) of the Ethics Law. If the situation were to arise that the three member board of Hemlock Township would become deadlocked on the matter of the comprehensive sewage plan when Supervisor Dieffenbacher abstains, then Section 3(j) of the Ethics Law would allow him to vote provided he publicly disclosed his conflict and filed a written memorandum to that effect with the person recording the minutes. Lastly, 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 Act has not been considered in that they do not involve an interpretation of the Ethics Law. IV. Conclusion: A second class township supervisor is a public official subject to the provisions of the Ethics Law. Section 3(a) of the Ethics Law would prohibit a second class township supervisor from voting on a comprehensive sewage plan when the supervisor and a member of his immediate family have sold an option to a partnership to purchase various parcels of property they jointly and individually own within the township. In the event that a deadlock would occur due to the abstention of the supervisor, Section 3(j) of the Ethics Law would then allow the township supervisor to vote provided he publicly disclosed his interest as well as filed a written memorandum to that effect with the secretary recording the minutes. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Law. 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 on the advice given. Mr. John A. Mihalik Page 8 such. This letter is a public record and will be made available as Finally, any person may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within fifteen days of the mailing date of this Opinion. The person requesting reconsideration should present a detailed explanation setting forth the reasons why the Opinion requires reconsideration. By the Commission, ena G. Hughes hair Commissioner W. Thomas Andrews did not participate. Commissioner James M. Howley dissents. 1 v