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HomeMy WebLinkAbout94-006 BankensteinBruce C. Bankenstein, Esquire Manifold & Bankenstein 42 North Duke Street York, PA 17401 -1299 Dear Mr. Bankenstein: I. ISSUE: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG,.PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: James M. Howley, Chair Daneen E. Reese, Vice Chair Dennis C. Harrington Roy W. Wilt Austin M. Lee Allan M. Kluger Joseph W. Marshall, III DATE DECIDED: 09/13/94 DATE MAILED: 09/21/94 94 -006 Re: Conflict, Public Official /Public Employee, Township Supervisor, Use of Authority of Office, Business with which Associated, Sewage Facilities Plan, Sewage Treatment Plant, Vote, Appeal of Supplemental Advice. This Opinion is issued pursuant to the appeal of Supplemental Advice of Counsel, No. 94 -540 -S issued on July 21, 1994. Whether the Public Official and Employee Ethics Law would impose restrictions /prohibitions upon a township supervisor with regard to a revised sewage facilities plan for the - township - and /or related collection facilities for a neighboring borough, where the supervisor's employer: would be interested, if invited, in presenting proposals to the township for one or more phases of the project; would be interested, if invited, in presenting a proposal to the neighboring borough for collection facilities to tie into the township's system; and previously prepared the municipal sewage facilities plan for the said neighboring borough. Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 2 II. FACTUAL BASIS FOR DETERMINATION: By letter dated March 7, 1994, you initially sought advice from the State Ethics Commission on behalf of an unidentified Township Supervisor ("the Supervisor ") for North Codorus Township. Advice of Counsel No. 94 -540 was issued to you on April 6, 1994. By letter dated June 20, 1994, you submitted a request for supplemental advice. In your request for supplemental advice you inquired about prohibitions or restrictions of the Ethics Law which would apply to the Township Supervisor who is employed by a local engineering firm, with regard to the Township's sewage facilities plan. On July 21, 1994, Supplemental Advice 94 -540 -S was issued to you. On August 4, 1994, this Commission received your FAX transmission whereby you appealed the above supplemental advice. The appeal of the supplemental advice did not delineate the nature of your objection to the supplemental advice of counsel other than to indicate the exercise of the right to appeal, specifically from the finding of the supplemental advice that a conflict of interest exists for the Supervisor involved regarding the sewage facilities plan and the determination that that supervisor may not take part in deliberations or actions upon the appropriation or adoption of a revised sewage facilities plan for the Township. By letters dated August 4, 1994 and August 9, 1994, you were notified of the date, time and location of the public meeting at which this matter was scheduled for the Commission's consideration, as well as the procedures for submitting any briefs, memoranda, or other written material. Our review of this matter is de novo. By letter, you have submitted the following facts. The Supervisor has had an opportunity to review the draft of the sewage facilities plan for the Township. If approved, that plan would recommend a sewage treatment plant to serve the developed and developing areas of the Township, including areas of the Township around the Borough of New Salem. The plan would propose service to New Salem Borough which would be contingent upon independent action by that Borough. If adopted and implemented, the Township would design and construct its own sewage treatment facility. However, any collection facilities for New Salem Borough would be its own responsibility. New Salem Borough would contract with North Codorus Township for sewage treatment capacity and would provide its own collection facilities for that purpose, while the Township would be looking to the sewer payments from New Salem Borough as part of its gross revenues for operating its own system. Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 3 The engineering firm which employs the Supervisor previously prepared the sewage facilities plan for New Salem Borough. That project has been concluded. The Supervisor believes that the plan recommends on -lot management until a sewer system with capacity to serve the Borough is eventually built by North Codorus Township or some other township. The firm is not the engineer for the Borough or for the Township, nor is it working on the sewage facilities plan for North Codorus Township. However, should North Codorus Township adopt a sewage facilities plan recommending a central sewage treatment facility, this firm would be interested in presenting a proposal to the Township, if invited, on the design phase or subsequent phases of the project where engineering services would be involved. The firm would also be interested in presenting a proposal, if invited, for the design phase of the New Salem Borough collection facilities to tie into the North Codorus Township system. This particular firm would be only one of a number of firms that would hope to submit proposals on these two potential projects. The Supervisor is not a registered professional engineer but he does hold a Pennsylvania Sewage Treatment Plant Operator Certification, and he is the Assistant Director of his firm's Chemistry and Earth Sciences Division. Among his employment duties are preparing proposals and developing new business, but he does not perform these duties with respect to government agencies. The Supervisor is not involved with the department of his firm which would submit proposals or which would provide the services for any phase of any proposed sewage treatment facilities project by North Codorus Township or of any sewage collection facilities project by New Salem Borough. The Township and the Borough have no agreement with regard to sewage facilities, and each is an independent municipal governing body. During the preparation and adoption of the Township's sewage facilities plan, there is and will be no relationship with any firm other than the Township's own independent engineering firm that is preparing the plan. No agreement exists with any firm for the design, construction or other phase of such a proposed project. You state that no such contract or arrangement can exist until the plan has been fully approved locally and by the state and until formal action is subsequently taken to implement any sewage treatment facilities project. You sought supplemental advice on the following three specific issues: 1. Whether the Supervisor would be permitted to take part in all deliberations and actions upon the preparation and adoption of a revised sewage facilities plan for the Township? Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 4 2. Whether the Ethics Law would impose any restrictions/ prohibitions if the Supervisor's employer would submit a proposal to or be hired by New Salem Borough with regard to the design phase or any other phase of that Borough's own sewage collection facilities? 3. Whether the Supervisor could participate in his official capacity as to phases of the Township project for which his employer submitted proposals but was not awarded the contract(s) if the Supervisor did not take part in any formal action, discussion, deliberation or vote prior to the contract(s) being awarded? In addition to the above facts which you submitted, prior to the public meeting on September 13, 1994, you submitted a brief. You attached a copy of Section 5 of the Sewage Facilities Act, 35 P.S. §750.5, which sets forth the required contents of a sewage facilities plan and any revised sewage facilities plan. It is noted that these requirements include taking into account other community sewage systems and considering the needs of the whole area. You also elaborated upon the nature of a sewage facilities plan. During the preparation and adoption of the plan, there would be no contract with any engineer nor any request for bids or proposals from any engineer or engineering firm. The plan would not provide for any bids from engineers or for any contracts with engineers. Furthermore, a plan is not "self- enforcing" or "self - implementing." After a plan would be adopted, further official action would be required to authorize and make appropriations for a community sewage treatment plant. At that time, engineering firms would submit bids to provide services for designing the sewage treatment plant and sewer system. After the design would be completed and approved, official action would be required to authorize and make appropriations for construction, at which time engineering firms would submit bids to provide engineering services for the construction project. The Supervisor's firm would certainly be interested in submitting bids for the design project or the construction project. In your Brief, you raised various arguments which will be discussed below. You also appeared at the public meeting accompanied by the Township Supervisor. You brought the Township's proposed plan to the meeting for perusal but did not formally move it to be part of the record. You also provided additional information for our consideration. You identified the Township Supervisor as "Mr. Boyer," who Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 5 works for the engineering firm of "Buchart- Horn." You emphasized that the nature of the plan is a general, future projection setting forth the future, long -range planning of the Township which may or may not ever be implemented. You also represented and assured this Commission that you know of no conflict, and that you have tried but have been unable to think of any way by which the action of the Supervisors in working on the plan and voting on the plan itself would give any advantage to Mr. Boyer's employer over any other company. You feel that this is the heart of this matter. Your concern is the disadvantage to the Township should it lose the input of someone with Mr. Boyer's experience in this matter. You also acknowledged that as to the propriety of official action after the plan has been adopted, such as the implementation of the plan, the facts at that time will control. III. DISCUSSION: In considering your appeal we shall first review the pertinent provisions of the Ethics Law, Act 9 of 1989. These sections of the Ethics Law provide as follows: 65 P.S. §403(a). Section 3. Restricted Activities (a) No public official or public employee shall engage in conduct that constitutes a conflict of interest. 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 of his immediate family or Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 6 65 P.S. §402. a business with which he or a member of his immediate family is associated. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 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. 65 P.S. §403 (j) . In applying the above provisions of the Ethics Law to the question of whether a conflict of interest would exist for the Supervisor as to the deliberations and actions upon the preparation Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 7 and adoption of a revised sewage facilities plan for North Codorus Township, we reverse the Supplemental Advice of Counsel. A conflict of interest exists where the use of authority of public office /employment or confidential information received by holding such a public position would result in a private pecuniary benefit for the public official /public employee, a member of his immediate family, or a business with which he or a member of his immediate family is associated. By definition, the engineering firm of Buchart -Horn, as Mr. Boyer's employer, is a business with which he is associated. Prior decisions of this Commission under Act 170 of 1978 and Act 9 of 1989 have held that a conflict exists as to matters where there is a "reasonable and legitimate anticipation" that a contractual relationship will be developed after the official action, resulting in a prohibited "financial gain" or "private pecuniary benefit." See Amato, Opinion 89 -002; Sowers, Opinion 80- 050; Garner, Opinion 93 -004; Katz, Order 885. An absolute certainty of financial gain is not required. However, a public official is not precluded from voting in a matter where such an interest would be considered remote. Amato, Opinion 89 -002 (citing Markham, Opinion 85 -013). You have acknowledged that if North Codorus Township would adopt a sewage facilities plan which recommends a central sewage treatment facility, Buchart -Horn would "be interested," if given the opportunity, in submitting proposals for the Township's project as well as for any collection facilities by which New Salem Borough would seek to tie into the Township's system. The Supplemental Advice of Counsel concluded that in this case, there would be a reasonable expectation that the plan would result in a contractual relationship whereby Mr. Boyer's firm would receive a private pecuniary benefit -- from the Township and /or from the Borough for which the firm had previously prepared a sewage facilities plan. The Supplemental Advice of Counsel concluded that Mr. Boyer would have a conflict of interest as to matters before the Township involving the sewage facilities plan and /or a revised sewage facilities plan. (Supplemental Advice of Counsel No. 94 -540 -S at 4 -5). Your brief in support of your appeal from the Supplemental Advice of Counsel raises the following arguments. First, you argue that there is no conflict of interest because the sewage facilities plan does not result in a contractual relationship with anyone, but provides information required by law to establish a policy for adequate sewage treatment in the future. You note that future official action would be required for building Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 8 and financing a sewage treatment plant. (Brief of Appellant, at 3- 5). You further cite Dodaro v. State Ethics Commission, 527 Pa. 539, 594 A.2d 652 (1991), as supporting your view. Second, you state that a private pecuniary benefit would be "far too remote" in this case and that the conflict must be "immediate." (Brief of Appellant, at 8 -9). Third, you assert that if the Supervisor or his employer can contract with the Township pursuant to Section 3(f), then the expectation that such a contract may result does not constitute a conflict of interest under Section 3(a). Fourth, you seek to invoke the class /subclass exception to the definition of conflict of interest, claiming that the Supervisor's firm will benefit from the plan no more than the other engineering firms, and that the Supervisor will benefit no more than any other member of the public (Brief for Appellant, at 10 -11). Finally, you argue that a finding of a conflict of interest in this case would be "an absurd and unreasonable result." In support of your claim you restate some of your prior arguments, cite Dodaro, and object that Township residents would be deprived of full representation with regard to the plan. Based upon our disposition of this case below, we need not address your arguments. However, so that our decision in this case will not be misunderstood, we parenthetically note the following. As to your first argument, there is no per se exception to the Ethics Law's definition of "conflict of interest" for multi -stage processes. As to your second argument, there is no requirement that a private pecuniary benefit be immediate. Kannebecker, Opinion 92- 010. As to your third argument, we do not agree with your theory. Section 3(a) is completely independent of Section 3(f) and restricts the conduct of the public official /public employee in his official capacity. Section 3(f) does not operate to give "permission" for contracting. Rather, if contracting is not otherwise prohibited -- for example, by the Second Class Township Code -- Section 3(f) imposes additional restrictions upon the contracting /subcontracting process. Thus, a public official's employer may contract with the governmental body despite the fact that the public official has a conflict requiring him to abstain and make disclosures in his official capacity. The fact that a contract may be permissible does not mean that there is no conflict of interest for the public official. Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 9 Finally, we note that the Dodaro case is completely inapplicable to this case. Having parenthetically noted the above, based upon the precedent of this Commission, the facts which you have submitted, and the representations and assurances which you made to this Commission at the public meeting on September 13, 1994, we respond to your questions as follows: 1. A conflict of interest would not exist for Mr. Boyer as to this initial stage of deliberations or actions upon preparation or adoption of a revised sewage facilities plan for North Codorus Township where the said plan does not result in any advantage to Mr. Boyer's employer over other firms, subject to the condition that Mr. Boyer's actions conform to the Ethics Law. We do not address the propriety of any action by Mr. Boyer at any future stages of the process, because such would depend upon the facts and circumstances at that time. Mr. Boyer is advised to seek the further advice of this Commission as to any related official action following the initial stage of adoption of the said plan. In any instance of a conflict of interest, a public official is required to abstain from any participation of any nature whatsoever and to disclose the nature of his conflict both orally at the public meeting and in a written memorandum to be filed with the minutes. 2. The Ethics Law would not impose restrictions or prohibitions if Mr. Boyer's employer would submit a proposal to or be hired by New Salem Borough with regard to the design phase or any other phase of that Borough's own sewage collection facilities subject to the condition of conformance to the Ethics Law. 3. Your third specific inquiry regarding prospective action as to phases of the Township project for which Mr. Boyer's firm submits proposals but is not awarded the contract may not be addressed due to its prematurity. Supplemental Advice of Counsel No. 94 -540 -S is reversed and the appeal is granted. 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 Second Class Township Code. Bankenstein, Bruce C., Esquire, 94 -006 September 21, 1994 Page 10 IV. CONCLUSION: A township supervisor is a public official subject to the Ethics Law. An engineering firm which employs a township supervisor is a business with which he is associated. Subject to the condition that the supervisor's actions conform to the Ethics Law, the supervisor would not have a conflict of interest as to a revised sewage facilities plan for the township where: his employer is interested, at a later stage and if invited, in submitting proposals to the township and a neighboring borough for related work and has previously prepared the borough's own sewage facilities plan; and the township's said plan does not result in any advantage to the said employer over any other firm. The supervisor is advised to seek the further advice of this Commission as to any related official action beyond the initial stage of adoption of the said plan. The Ethics Law would not impose restrictions /prohibitions if the supervisor's employer submits a proposal to or is hired by the borough with regard to its collection facilities, subject to the condition of conformance to the Ethics Law. Pursuant to Section 7(10) on this opinion issued to him civil penalties for so acting stated in the request. such. , the person who acts in good faith shall not be subject to criminal or provided the material facts are as 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, James M. Howley Chair Commissioner Joseph W. Marshall, III dissents as to the majority's opinion that the Ethics Law would not impose restrictions/ prohibitions if the supervisor's employer submits a proposal to or is hired by the borough with regard to its collection facilities subject to the condition of conformance with the Ethics Law.