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HomeMy WebLinkAbout98-003 HofrichterOPINION OF THE COMMISSION John T. Hofrichter, Esquire William A. Mitchell & Associates 70 E. Wheeling St. Washington, PA 15301 STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 Before: Daneen E. Reese, Chair Austin M. Lee, Vice Chair Allan M. Kluger Boyd E. Wolff Julius Uehlein Louis W. Fryman DATE DECIDED: 5/1/98 DATE MAILED: 5/11/98 98 -003 Re: Conflict; Public Official /Employee; School District; Director; Township; Employer; Planning Commission; Member; Police Department; Lieutenant; Employee; College Instructor; LERTA ZONE; Revenue Allocation Program; Revitalization; Mali Expansion; Vote; Appeal of Advice; Intervention; Past Action. Dear Mr. Hofrichter: This Opinion is issued pursuant to the appeal of Advice of Counsel, No. 98 -515 issued on February 19, 1998. I. ISSUE: Whether the Public Official and Employee Ethics Law presents any prohibitions or restrictions upon a school director with regard to a "revenue allocation program" for the proposed revitalization and expansion of a mall where the school director is an employee of the township in which the mall is located; the township would financially benefit from the project; and the township has already taken at least some of the required action for the LERTA zone and special tax district to be effectuated. 1I. FACTUAL BASIS FOR DETERMINATION: By letter dated March 13, 1998, Kirk J. Hessler (Hessler) appealed Advice of Counsel No. 98 -515, issued on February 19, 1998. In Hessler's initial advisory request letter dated January 22, 1998, he submitted the following facts. Hessler serves as a School Director for the Trinity School District; as an unpaid member of the North Franklin Township Planning Commission, which is purely an Hessler, 98 -003 May 11, 1998 Page 2 advisory body; and as a lieutenant in the North Franklin Township Police Department in a full -time, tenured Township employee position covered under a collective bargaining agreement for wages and benefits under Act 111. Hessler is also 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 which has enacted a LERTA Zone pursuant to the Local Economic Tax Assistance Act, 72 P.S. § §4722 -4727. In this LERTA Zone, the Township seeks to enact a Revenue Allocation Program (RAP) which requires the approval of the two other governmental taxing bodies, Washington County and the Trinity School District. The RAP issue previously came before the School Board on two occasions. On the first occasion, Hessler abstained from the vote on whether the Board should consider the matter. When the issue came up again, the School Board Solicitor advised that he did not believe that it was a conflict of interest for Hessler to vote on the issue. Hessler voted to have the Board hold a public hearing on the matter. The School Board was scheduled to vote on whether to accept the RAP proposal on February 19, 1998. As a member of the community and the Township Planning Commission, Hessler realizes the importance of revitalizing the community and surrounding* area. Hessler indicated that he would vote on the matter unless the Advice concluded that he had a conflict. As part of the advice request, Hessler submitted copies of the following documents: (1) An organizational chart for the North Franklin Township Police Department where Hessler serves as Lieutenant and reports to the Board of Supervisors; (2) A memorandum of the Gary L. Sweat, Esquire 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, prepared for the Township Planning Commission. The Sweat memorandum recites the following, in part. The owners of Crown American have requested tax relief from North Franklin Township to finance their expansion of the Franklin Mall by creating a LERTA Zone in and around the Franklin Mali area that would be utilized to collect the tax revenues from the Franklin Mali to pay for certain municipal /road improvements. Crown American has presented drawings for a substantial renovation and expansion of the Franklin Mall to the North Franklin Township Planning Commission. A new mall entrance would be constructed as well as two ring roads /beltways around the exterior portion of the property to provide access to certain other properties. The roads would be constructed as the result of a settlement of a lawsuit involving North Franklin Township, Crown American, and one of the neighboring property owners. The settlement requires Crown American to construct the roads according to Township and State specifications and to provide access over these roads to the neighboring property with the Township accepting the dedication of those roads as Township roads once construction is completed. The Township would receive various financial benefits from this proposal such as monies for future development projects. Hessler, 98 -003 May 11, 1998 Page 3 Hessler was issued an Advice of Counsel on February 19, 1998 finding that he has a conflict under Section 3(a) of the Ethics Law as to the LERTA Zone /RAP vis -a -vis the proposed Franklin Mall expansion by Crown American for the reason that he as a School Director could vote to approve the project for Franklin Township, which is his employer. Following receipt of a timely appeal of that Advice, Hessler was requested to supply information about any action he may have taken on the subject matter of the Advice. By letter dated April 7, 1998, Hessler provided the requested information and submitted the following additional documents: certain school board minutes, some of which have not been approved; North Franklin Township LERTA District Revenue Allocation Program; letter of Kenneth L. Baker, Esquire dated January 21, 1998; School District Agenda for January 29, 1998; memo of Patrick J. Clair, Esquire dated January 30, 1998; letter of Douglas A. Masciola, Ed.D. dated February 18, 1998 with attachment; Settlement Agreement dated March 19, 199g; letter of Gary L. Sweat, Esquire dated February 20, 1998 with attachment; Hessler's letter dated March 3, 1998; newspaper articles; letter of State Representative Leo J. Trich, Jr. with attachment; letter of Frank G. Adams, Esquire dated March 19, 1998 with attachment; letter of Kenneth L. Baker, Esquire dated March 20, 1998; Franklin Mall LERTA /Bid Proposal; drafts of the Municipal Cooperation Agreement; two letters of Kenneth L. Baker, Esquire dated March 31, 1998; Franklin Mall LERTA /Bid Proposal; Analysis of Municipal Cooperation Agreement; Cooperation Agreement; letter of Kenneth L. Baker, Esquire dated April 3, 1998; and other miscellaneous documents some of which are duplicates of documents in the existing file. At the February 19, 1998 Board meeting, Hessler voted in favor of Motion #31 to adopt the LERTA Resolution. Hessler states that he was advised at 2:00 p.m. by Gary Sweat, the North Franklin Township Solicitor, that Sweat spoke with a staff member at the Commission who told him that there was no conflict under the Ethics Law but the Second Class Township and Public School Codes should be reviewed. Hessler acknowledges that the information was not binding and is without any legal effect on his voting. Hessler references a written legal analysis by Pat Clair, the School Board's Special Counsel, about any conflict on his part. That legal analysis will be made public when the School Board minutes are adopted. Hessler states that if the Advice had been issued a few hours earlier, circumstances would be easier. Hessler asserts that because the Advice was received late, he is viewed in a bad light and there is controversy within the School Board. Hessler states that he has done everything he could to find out if he should vote. As to the School Board Solicitor, Hessler notes that the Solicitor first told him to- abstain. The Solicitor reconsidered and told Hessler that he could vote and then advised Hessler to obtain a ruling from this Commission. In Hessler's advisory request to this Commission, he referenced the date on which the vote was to be taken, Hessler states that after he received an informal verbal approval from the Commission via the Township Solicitor, he voted and then received the Advice of Counsel the next morning which concluded that he should not vote. Hessler requested the School Board to change his vote to an abstention. The School Board Solicitor advised the Board not to change Hessler's vote, which resulted in personal attacks and controversy. Hessler notes that he will incur legal fees in appealing the Advice which relates to his conduct in an unpaid position on the School Board. Since Hessler has questioned the timeliness with which the Advice of Counsel was issued, a review of the chronology of the events is warranted. Hessler, 98 -003 May 11, 1998 Page 4 Hessler's letter of request dated January 22, 1998 was received on January 23, 1998. The Ethics Law provides for 2 working days to issue an Advice which may be extended for good cause. See, Section 7(11) of the Ethics Law, 65 P.S. 407(11). The 21 working day deadline in this case for issuing the Advice was February 23, 1998. However, due to several requests to expedite the ruling, the Advice was issued early on February 19, 1998 via U.S. mail as well as via FAX transmission to State Representative Leo J. Trich, Jr. who made several telephone calls to staff advising: this matter was a concern to him because it involved an economic development issue in his legislative district; an expedited ruling before the scheduled February 19, 7998 vote by the school board would be helpful; and if the ruling were sent by FAX to his office, he would arrange for Hessler to receive the ruling. Representative Trich confirmed by telephone on February 19, 1998 that he received the Advice by FAX transmission. Nevertheless, Commission staff attempted to reach Hessler at his office, at his home and via his pager on the afternoon of February 19, 1998. Specifically on Hessler's home phone, a detailed message was left informing him that the Advice had been issued and that the Advice was sent to Representative Trich's office. As part of that message, staff offered to send the Advice by FAX transmission to any other number, if Hessler so desired. As to Hessler's pager, staff made two calls: the first call left the Commission's toll -free 800 number and the second call left a verbal message. On April 15, 1998 North Franklin Township filed a Petition to Intervene in Hessler's Appeal of Advice. The proffered basis for intervention is an issue of public importance to the Township. It is asserted that the Advice effectively decreases the Township's legislative representation on the school board by prohibiting Hessler, a Township police officer, from voting in any matter which financially impacts upon the Township. In support of its request for intervention, the Township proffers the following series of arguments: the Advice overlooked important facts and established a new and dangerous precedent by finding that the To.wnship is a business rather than a public entity; the Advice incorrectly found that Hessler has a conflict of interest when his status clearly falls both in a de minimis and subclass exception as set forth in the definition of conflict in the Ethics Law; Hessler's receipt of some financial gain from the school district's approval of a RAP or LERTA district is far - reaching in that any benefit to Hessler would be de minimis at most; the Township's receipt of financial benefits and opportunities is not certain to individual employees who would be in a de minimis category; any financial benefit to Hessler would necessarily affect not only him individually, but all employees of the Township to the same degree which must necessarily be considered as a class or subclass; based upon some analogy to Amato, Opinion No. 89 -002, Hessler is but one of eighteen Township employees. and ten officers in the police department, all of whom are members of a bargaining unit and are paid under the terms of a collective bargaining agreement; the Preamble of the Ethics Law recognizes that a public employee may maintain contacts in his community through his occupation and profession; and Hessler ability to maintain such contacts and to represent his community as a resident of North Franklin Township have been stripped away. The Petition seeks to distinguish the Woodrinq and Bassi Opinions, 90 -001 and 86 -007 respectively, which are cited in the Advice, as involving private pecuniary business interests as compared to Hessler who has no private pecuniary interest but only employment in the Township. It is argued that there is no evidence that the creation of a LERTA district or RAP program will result in any economic benefit to Hessler, and that such economic impact would be de minimis and affect a class of Township employees to the same degree. Hessler, 98 -003 May 11, 1998 Page 5 The Township submits the following additional arguments: the Advice assumes that Hessler has a business interest which raises an issue of whether a municipality is now considered a business under the Ethics Law; although Ncvak, Opinion No. OCS he'd mat Penn State University was a business under the Ethics Law, the Township officials are public officials and the Township cannot be considered a business so as to give rise to conflicts; the consequences of the holding that Hessler as a Township employee has a conflict when he votes as school director on items involving the Township; the Advice wrongfully implies that the two positions Hessler holds are incompatible and not permissible; neither the Public School Court nor the Second Class Township Code prohibit a township employee from holding office as a school director; Swick, Opinion No. 91 -006 permits board members of a municipal authority to simultaneously serve in the compensated position with the authority and receive a salary so that the Commission cannot now suggest that a township employee while serving as school director is not permitted to vote on matters affecting the Township; Hessler did not vote to give himself a raise, but merely sought to vote on a matter of concern to the Township where he lives; any remote possibility of a financial gain to Hessler as an employee of the Township is uncertain and comparable to other Township residents who sit on boards and might receive a financial gain through lower taxes; involvement by residents of municipalities in the school district by sitting proportionately on the school board will allow municipalities and the residents' interests to be considered in school board actions; the Advice thwarts the statutory interest by finding Hessler to be in conflict simply because he is salaried as a Township employee voting on Township issues. The Township summarizes its public importance claim based upon the following arguments: it Fs an unwise precedent for the Commission to conclude that mere employment by municipality creates a conflict whenever the employee also serves on a related school board which is required by law to have residents involved; the Advice of Counsel taken to the extreme would mean that all school board members would have a conflict on any matter involving their individual districts; and such an extreme position has not been contemplated by the General Assembly. By letter dated April 14, 1998, you were notified of the date, time and location of the public meeting at which the appeal was to be considered. . You submitted a brief, in which you presented the following arguments in support of your appeal: Crown American, which does not employ Hessler, would receive the private pecuniary benefit; the Township would benefit as to infrastructure improvements; economic development could continue; the Township might create public recreation facilities; but neither the Township Supervisors nor employees would ' obtain a private pecuniary benefit. You argue that there is no conflict as that term is defined under the Ethics Law: the benefit is to the general public; the Police Department is not a business; no business that could receive a benefit is owned by Hessler; and Woodring and Bassi, supra, are distinguishable as involving direct pecuniary benefits. You then argue that the exceptions to the definition of conflict have application: no direct economic or pecuniary benefit would flow to Hessler; any benefit to the Police Department would apply to that class to the same degree; and an extension of the advice would mean that an employed supervisor could not vote on any matter that would benefit the Township. Lastly, you assert that Hessler as a Township police officer is covered by the Police Tenure Act and by a binding arbitration contract and his wages and benefits are set by contract so that Hessler cannot receive additional benefits `or a raise as a reward for favorable consideration on his part. Hessler, 98 -003 May 11, 1998 Page 6 By letter dated April 27, 1998, you state that you are aware that this issue may have become moot as a result of Hessler's vote but request an opinion since similar issues involving Hessler may arise in the near future. Hessler appeared at the public meeting on May 1, 1998. Although Hessler chose not to offer any presentation, he did offer some limited commentary about the differing advice offered by the various solicitors /attorneys and the time at which he learned about the conclusion set forth in the Advice of Counsel. III. DISCUSSION: As a School Director for Trinity School District, Hessler is a public official as that term is defined in the Public Official and Employe Ethics Law ( "Ethics Law "), and hence he is subject to the provisions of that law. We must determine whether Hessler's request, which is in the form of an appeal of an advice of counsel, qualifies for review on our part. It is fundamental under the Ethics Law that in order for an advisory request to be reviewed, two conditions must be satisfied. First, we may only consider a request by a public official /employee who seeks an advisory concerning his or her own conduct. Thus, requests as to other public official's /employee's conduct are treated as third party requests which cannot be considered. Second, an advisory request, by definition, must be as to future prospective conduct. Both of the above requirements are implicit within the Ethics Law. See, Sections 7(10) and ( of the Ethics Law, 65 P.S. 407(10) and (11); 51 Pa. Code §13.1. In this case, the Advice of Counsel was issued on February 19, 1998 which was well before the 21 working days provided in Section 7(11) of the Ethics Law. Assuming that the material facts were truthfully disclosed, a limited defense would have been accorded to Hessler under the Ethics Law if he acted in reliance. However, Hessler participated and voted, contrary to the ruling in the Advice which was issued on the day of — but prior to — the meeting of the School Board. Not only was the Advice sent via FAX transmission to State Representative Trich, it was also sent by first -class mail. Further, staff made numerous attempts as detailed above to personally contact Hessler. Since Hessler has already taken action, this case is now in a procedural posture where we are asked to decide, in essence, whether Hessler violated the Ethics Law as to his past conduct. Thus, we would have to make a determination as to whether a violation occurred based upon submitted facts rather than through the statutorily - prescribed process of an investigation. For obvious reasons, we cannot and will not take such a course of action. We note that extensive documentation has been supplied with Hessler's letter of April 7, 1998. Unfortunately, the documents for the most part consist of letters written after the fact, drafts, and documents concerning the mall expansion in general. We do not find such documents relevant to the conflict issue before us. In any event, such a submission would not equate to what would be produced if an investigation were undertaken in this or any other case. This Commission takes its responsibilities and duties under the Ethics Law very seriously. Our inability to substantively review this case is through no fault of this Commission or staff. Hessler could have possibly submitted his request at an earlier date or sought to postpone consideration of the matter by the School Board pending review. Hessler certainly could have followed the Advice and abstained. However, as noted, Hessler chose to participate and vote. We accordingly must dismiss the appeal as involving past conduct. Hessler, 98 -003 May 11, 1998 Page 7 As to the Petition to Intervene filed by North Franklin Township, it is denied since at this point there is no case in which to intervene. IV. CONCLUSION: The appeal of Advice of Counsel 98 -515 is dismissed on the basis that the case involves past conduct. The Petition to Intervene is denied since the case, in which intervention is sought, has been dismissed. 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. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code §21.29(b). By the Commission, eitd, Daneen E. Reese Chair Commissioner Allan M. Kluger did not participate in this matter.