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HomeMy WebLinkAbout95-001-R McCabeDear Mr. McCabe: I. ISSUE: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 OPINION OF THE COMMISSION Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Roy W. Wilt Allan M. Kluger Boyd E. Wolff DATE DECIDED: 05/05/95 DATE MAILED: 05/16/95 William J. McCabe, Esquire DeBernardo, Antoniono, McCabe & Davis, P.C. 11 North Main Street Greensburg, PA 15601 Re: Conflict, Public Official, Municipal Authority, Member, Compensation, Private Pecuniary Benefit, Use of Authority of Office, Prospective, Term, Governing Body, Salary, Increase, Reconsideration. This opinion is issued in response to the timely request for reconsideration of McCabe, Opinion 95 -001. Whether this Commission should grant reconsideration of McCabe, Opinion 95 -001. II. FACTUAL BASIS FOR DETERMINATION: 95 -001 -R As solicitor for the North Huntingdon Township Municipal Authority ( NHTMA), you requested an advisory as to the propriety of NHTMA members receiving a salary of $100.00 per month as voted by the governing body, the North Huntingdon Township Commissioners (NHTC). After noting that the salaries which the NHTMA board members voted to pay themselves were abolished, you asked whether the board members could vote to initiate the payment of salaries to themselves and vote to accept such salaries during their terms of McCabe, William J., Esquire, 95 -001 -R Page 2 office. In McCabe, Opinion 95 -001, we determined that Section 3(a) of the Ethics Law prohibited the NHTMA 'board members from voting to receive a salary set by the governing body which would be applicable only to subsequently appointed board members. In a timely reconsideration request, you argue that we incorrectly and unreasonably interpreted Section 309(b) of the Municipality Authorities Act (MAA). In particular, you assert that our decision was based primarily on the theory that the creation of a salary by the governing body constituted an "increase" whereas the NHTMA board believes that the initial creation of a salary does not. You further argue that a salary increase only occurs when the governing body has previously authorized a salary and subsequently takes action to increase an existing salary during the term of office of the board members which did not occur in this case. When the NHTC board voted to create a salary for the sitting NHTMA board members, no salary had ever been established for the NHTMA board members. You conclude that the resolution of the NHTC constituted a decision to create a salary for the first time for the NHTMA board salaries rather than a decision to increase already existing salaries. You believe that the NHTMA board members would be permitted to receive the salary during their terms of office under Section 309(b) of the MAA on the theory that the receipt of a newly created salary for the current NHTMA board members is authorized under that Section. You state that the question of whether each sitting NHTMA board member could affirmatively vote to initiate the payment of the salary to themselves as NHTMA board members has not been answered by this Commission. You urge the grant of reconsideration and the issuance of an opinion consistent with your request for reconsideration. In a Brief which was received on April 21, 1995, you argue that the NHTC at no previous time authorized or established a salary for the NHTMA board members pursuant to Section 309(b) of the MAA. After stating that the MAA does not limit when salaries shall first be determined, you conclude that the prohibition as to increases applies to salaries that already have been established. You reference the phraseology "such salaries" and "receiving the same" as referring to existing salaries and not something established for the first time. By arguing that the creation of a salary does not constitute an increase, you conclude that such salaries are authorized and hence are not a private pecuniary benefit. At the Public Meeting on May 5, 1995 you appeared and proffered the following. Although a raise from no salary to a salary might seem to be a technical increase, there was no prior McCabe, William J., Esquire, 95- 001 -R Page 3 affirmative vote as to the non - salary. If there were a prior vote to set a zero salary, any subsequent increase would be prohibited by the MAA. However, in this case, since there was never any prior action, the MAA permits the NHTC during the operation of the NHTMA to vote for the first time to create a salary which was done at a public meeting. It is argued that such cannot be an increase because no salary was ever previously designated. The MAA, which is silent as to when a salary may be created, gives to the NHTMA the legal authority to create a salary for the first time so as to be authorized in law. Since the NHTMA did not vote in the past, there was no salary so that the creation of a salary for the first time was not an increase under the MAA. Finally, prohibitions as to salary increases by public officials during their terms are distinguishable in that those salaries are already in place. You conclude by stating that the unique situation of the NHTMA compels a result that the initial setting of salary is in accord with the Ethics Law. III. DISCUSSION: We have been asked to reconsider Opinion 95 -001. This Commission may exercise broad discretion in determining whether to grant or deny reconsideration as long as such discretion is exercised in a sound manner. Krane, Opinion 84- 001 -R; PSATS v. State Ethics Commission, 92 Pa. Commw. Ct. 544, 499 A.2d 735 (1985) . The Regulations of this Commission provide: §13.3. Opinions. (d) Reconsideration may be granted in the discretion of the Commission under 521.29(e). §21.29. Finality; reconsideration. (b) Any party may ask the Commission to reconsider an order or opinion within 15 days of service of the order or opinion. The requestor shall present a detailed explanation setting forth the reason why the order or opinion should be reconsidered. (e) Reconsideration may be granted at the discretion of the Commission if: (1) A material error of law has been made. (2) A material error of fact has been made. (3) New facts or evidence are provided which would McCabe, William J., Esquire, 95 -001 -R Page 4 We must now address the question as to whether you meet the criteria for this Commission to exercise its discretion to either grant or deny reconsideration. The basis for requesting reconsideration centers upon the argument that since the NHTC for the first time established a salary for the NHTMA board members, said salary did not constitute an increase in existing salary so as to be authorized under Section 309(b) of the MAA. There is an explicit statutory prohibition as to salary increases of current municipal authority board members in the MAA of 1945, as amended, which provides in part: B. Members shall hold office until their successors have been appointed, and may succeed themselves, and, except members of the boards of Authorities organized or created by a school district or school districts, shall receive such salaries as may be determined by the governing body or bodies of the municipality or municipalities, but none of such salaries shall be increased or diminished by such governing body or bodies during the term for which the member receiving the same shall have been appointed... 53 P.S. 309 B lead to reversal or modification of the order or opinion and if these could not be or were not discovered by the exercise of due diligence. It is clear from the MAA of 1945 that salaries for municipal authority members as set by the governing authority "shall [not] be increased or diminished ... during the term for which the member receiving the same shall have been appointed." Id. Despite the above statutory prohibition, it is argued that a salary may be received by the current NHTMA board members on the theory that the initial setting of a salary is not an increase in salary. Although there is no decision under the MAA nor any Pennsylvania case law on this issue, the word "increase" has been interpreted in other jurisdictions. Unfortunately, such decisions are of limited benefit in that they involve interpretations of the word "increase" in the context of a given statute. In King v. Herron, 243 SE 2d 36 (1978), the Georgia Supreme Court determined that the attempt to provide salaries to the Mayor /Councilman who previously received no compensation was not the "fix[ing]" of a salary but an . increase which was disallowed on the basis that the requirements of the Home Rule Act for increasing compensation were not met. In Re Moore, 77 P.2d 676 (1938), the McCabe, William J., Esquire, 95 -001 -R Page 5 Oklahoma Supreme Court construed an increase in a tax assessment to encompass an increase from a zero or no assessment so that a taxpayer had a right of appeal under the tax statute which limited appeals to only increases in assessments. In Kendale v. Stafford, 101 SE 14 (1919), the North Carolina Supreme Court interpreted "fix[ing]" a salary to include either an initial setting or an increase although the court favored the former interpretation in its holding that public officials could not take action to increase their own salaries. Contrariwise, in Union Loan v. Trust Co. v. Southern California Motor Road Co., 51 F 840 (1892), it was held that a prohibition as to an increase in corporate indebtedness without the consent of the persons holding the larger amount in value of the stock did not apply to the first creation of indebtedness because the first issuance of bonds did not constitute an "increase." Although the case law from other jurisdictions is not definitive on the issue before us, our view is that an increase encompasses not only an increase from a lesser to a higher amount but also from no salary to a set amount. The MAA is explicit in prohibiting such salary increases to current members. That law makes no distinction between increase from a prior set salary or a prior non - salary. We as a Commission do not have the power to condone the receipt of a pecuniary benefit under the Ethics Law when such benefit is private as being unauthorized and in fact prohibited by law. Confidential Opinion 93 -005. The proffered difference between not setting an initial salary versus the affirmative act of setting a zero salary is in our view an argument without any meaningful distinction. Based upon the Statutory Construction Act and the clear intendment of the MAA of 1945, we believe that even the initial setting of a salary is an increase since that salary amount has increased from no salary to the set amount. Thus, the initial setting of a salary in this case was an increase. 1 Pa. C.S.A. §1922. As noted in McCabe, Opinion 95 -001, it is clear that municipal authority board members may not accept a salary increase set by the governing body which may be received by only subsequently appointed members. Since such compensation is prohibited in law, the receipt of that salary by current members would be a use of authority of office to obtain a private pecuniary benefit. There would be a use of authority of office by virtue of the members holding that position and derivatively taking the salary as a result of public office. Juliante, Order 809. The pecuniary benefit would be private because it is not authorized in law. Marsh, Opinion 93- 007. McCabe, William J., Esquire, 95 -001 -R Page 6 Since the receipt of a salary by the current NHTMA board members is prohibited under the Ethics Law, it is clear that the members could not cast affirmative votes to initiate the payment of a salary to themselves. Parenthetically, we must note that such individuals are aware of such salary limitations when they accept these positions. In that there has been no material error of fact or law or new evidence, we deny the request for reconsideration. IV. CONCLUSION: The request for reconsideration of McCabe, Opinion 95 -001 is denied. Pursuant to Section 7(10), the person who acts in good faith on this opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. 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, a f)/yz, Aubtin M. Lee Vice Chair Daneen E. Reese, Chair and Commissioner Roy W. Wilt dissent.