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HomeMy WebLinkAbout203 McCoyMr. Lewis J. McCoy Spotts, Stevens & McCoy, Inc. c/o Joseph Lewis, Esq. 607 Washington Street Reading, PA- 19603 Re: 81 -04 -C STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 ORDER OF THE COMMISSION June 17, 1983 Order No. 203 Dear Mr. McCoy: The State Ethics Commission has received 'a complaint regarding you and a possible violation of Act 170 of 1978. The Commission has now completed its investigation. The individual allegations, conclusions, and findings on which those conclusions are based are as follows: I. Allegation: Your engineering firm performs major subdivision activities in the municipalities that you represent. A. Findings: 1. Spotts, Stevens & McCoy, Inc., hereinafter SS &M, is a Consulting Engineering firm. 2. SS &M is or was appointed as Engineer for various municipalities in Pennsylvania and especially in Berks County including but not necessarily limited to, at various times, the following municipalities: Bally Caernarvon Bechtelsville Cumru Bernville Longswamp Birdsboro Lower Alsace Kenhorst Marion Kutztown North Heidelberg Leesport Oley Lyons Ontelaunee Mohnton Penn Robesonia Pike St. Lawrence Upper Bern Shillington Washington Sinking Spring - Wyomissing Hills Topton Bethel Lewis J. McCoy June 17, 1983 Page 2 3. SS &M served or serve as Zoning Officer in various municipalities including, but not necessarily limited to, at various times, the following: Robesonia; Sinking Spring; Lower Alsace and Penn. 4. SS &M served or serve as sewage enforcement officers in various municipalities including, but not necessary limited to, at various time, the following municipalities: Balley Mohnton Birdsboro Robesonia Bernville Wyomissing Kutztown Reading 5. At various times, SS &M provided engineering work /services to private clients within the municipalities listed in Nos. 2 -4 above where said work product would be subject to review /approval 6y said municipalities. 6. a. When serving as appointed Engineer as set forth in No. 2 above, SS &M generally submits a Proposal, which defines the scope of work to be performed and the compensation rate to be paid. b. Such Proposal and Agreement resulting therefrom, if the client selects SS &M as general Municipal Engineer, provides for "General Services" to be rendered to the municipal- client for a flat retainer fee and the additional services shall be paid for at a payroll -fee, plus out -of- pocket expenses according to a schedule of charges for different classes of employees on a per hour basis. c. Consulting services relating to sewage and water systems of a municipal- client would be or are undertaken on a retainer basis for general services and an additional services format similar to that detailed in (b) immediately above. B. Discussion: This Commission has previously ruled that Engineers serving a municipality by virtue of appointment under a municipal code are "public employees" subject to the Ethics Act. Bryan, 80 -014 and Camp, 81 -006. Thus, your activities during such tenure or period of appointment must conform to the requirements of the Ethics Act. The most pertinent provisions of the Ethics Act relating to this particular allegation are as follows: Lewis J. McCoy June 17, 1983 Page 3 Section 1. Purpose. The Legislature hereby declares that public office is a public trust and that any effort to realize personal financial gain through public office other than compensation provided by law is a violation of that trust. In order to strengthen the faith and confidence of the people of the State in their government, the Legislature further declares that the people have a right to be assured that the financial interests of holders of or candidates for public office present neither a conflict nor the appearance of a conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this act shall be liberally construed to promote complete disclosure. 65 P.S. 401. Section 3. Restricted Activities ' (a) No public official or public employee 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). Under these provisions you must not use your position as appointed Municipal Engineer to benefit your own interests or engage in conduct which presents a conflict or an appearance of a conflict with the public trust. The State Ethics Commission has previously held that a conflict exsists when an individual represents two or more persons whose interests are adverse to each other. Alfano, 80 -007. In the present case, it is clear you serve two clients - -the municipality and the private party /developer. This circumstance gives rise to special concerns which will be addressed more fully below. It is sufficient here, however, to also note that this Commission is not inclined to preclude a party serving as a public employee /official from generally engaging in a business or professional endeavor. See Lench, 79 -047 and Sowers, 80 -050. Thus, the mere fact that you offer your services to public and private clients is not per se precluded under the Ethics Act. C. Conclusion: It is not, per se, a violation of the Ethics Act to serve as Engineer or offer such services to clients within the municipalities you serve as Engineer. Lewis J. McCoy June 17, 1983 Page 4 II. Allegation: Your firm performs private work for people who are required to secure various permits from the township(s) that you represent. A. Findings: 7. The findings No. 1 -6 are incorporated herein by reference. 8. Some of the private clients you serve must secure permits from the municipalities where SS &M is appointed as Engineer. 9. a. More than 21 interviews were conducted in this case including interviews with: one,former Township Supervisor; three currently serving Township Supervisors; one Township Secretary; one Township Manager; four Borough Secretaries; three Borough Mayors; and three members of Water Authorities. b. In some instances, where SS &M must seek and secure permits for private clients from the municipalities served by SS &M as Engineer, an Engineer /firm other than SS &M is engaged to review and recommend approval /disapproval of the permit application(s) presented on behalf of private clients - applicants by SS &M. c. In some instances with or without the approval of the municipal - client, SS &M submits permit applications for private clients to the municipality SS &M serves as Engineer and SS &M both reviews /recommends same for approval /disapproval. In such instances, two different employees of SS &M are typically involved in preparing and submitting the application and in reviewing same for approval. B. Discussion: As outlined in Part I, above, the actions of SS &M must not conflict or appear to conflict with the public trust. SS &M may not use its public employment, contracts or position to secure benefits for itself. It is a benefit to SS &M to be able to present and approve permit applications for private clients in municipalities where SS &M is appointed and serves as Engineer. While it is not a per se violation of the Ethics Act to offer one's services to private clients while serving as a public employee /official it is a per se conflict to, while so serving, review and approve one's own work. See Sowers, 80 -050 and Simmons, 79 -056. This principle is one of long and good standing. There is no doubt that a public employee /official may not review and recommend approval of his /her own work consistent with the Ethics Act. C. Conclusion: While SS &M may undertake work, including preparation of permit applications, on behalf of private clients, where same are submitted to the municipality SSW serves as Engineer, SS &M may not play any role in reviewing or recommending approval /disapproval of same: .In some instances SS &M did engage in this practice, and the State Ethics Commission considers this to constitute the appearance of a conflict of interest with the public trust. This conduct must be discontinued and should not recur. Lewis J. McCoy June 17, 1983 Page 5 III. Allegation: Your firm represents developers at zoning hearings in the township(s) where you are the engineers; the zoning board relies on the advice of the planning commissions and the planning commissions then rely on the engineeer's advice who represents the individual seeking the zoning change. A. Findings: 10. The findings 1 -9 are incorporated herein by reference. 11. Typically when a party seeks a zoning change, in accordance with statute and ordinance a recommendation is received from the municipality's planning commission which is provided after a review and recommendation by the Planning Commission's Engineer is undertaken and completed. 12. SS &M served or serves as Engineer to the planning commissions in various municipalities, at various times, where SS &M submitted plans, zoning requests, etc. for private developers. 13. SS &M on occasion with or without the consent of the municipality has provided the review /recommendation referred to in No. 11 above to the planning commission on projects or requests where SS &M has served the private client - requestor as engineer. 14. Typically, approval of any zoning change or request requires review and approval by the political subdivision, the planning and zoning boards of a municipality, and the County Planning Commission and the recommendation or technical review of same by the Engineer for the Planning Commission, such as SS &M, does not represent a final approval of same. B. Discussion: As stated in Part II herein, SS &M should play no role on both sides of a question relating to zoning changes. Where SS &M has prepared and presents zoning requests or changes on behalf of a private client, SS &M, even through an engineer distinct from the individual who prepared same, should withdraw from participating in reviewing and recommending approval /disapproval of same to the planning /zoning board which SS &M serves as engineer. Again, the point should be obvious -- no one can effectively and ethically serve two masters. C. Conclusion: While SS &M may undertake work, including zoning applications /requests on behalf of private clients, where these are submitted to the municipality where SS &M serves as engineer for the zoning /planning agency of the municipality, or for the municipality itself SS &M may not play any role in reviewing or recommending approval /disapproval of same to the zoning /planning agency or the municipality itself if called upon to undertake such a task. In some instances, SS &M did engage in this practice and the State Ethics Commission considers this to constitute the appearance of a conflict of interest with the public trust. This conduct be discontinued and must not recur. Lewis J. McCoy June 17, 1983 Page 6 IV. Allegation: When you services are not used, difficulties are encountered. A. Findings: 15. The Findings No. 1 -14 are incorporated herein by reference. 16. There is insufficient evidence to indicate that there is a significantly higher probability that a developer /applicant will be subjected to any more scrutiny or encounter significantly more difficulties in securing approval of plans, applications and zoning changes, etc. where the services of SS &M are not used than where the developer, applicant, etc. utilizes SS &M as engineer. B. Discussion: It was not verified that SS &M used its post as Engineer for any municipal entity to stymie or place roadblocks in the path of a developer, applicant, etc. who chose to engage an engineer other than SS &M. Of course, where the practice had been for SS &M to act as engineer for both a developer, applicant and to conduct the official review of this developer's proposal for the municipality, it is logical that SS &M submitted plans would inevitably meet with their own approval. This could result as much from the fact that as municipal Engineer, SS &M is intimately familiar with the municipality's zoning and planning codes and their requirements as from any inherent bias or favoritism shown by SS &M for the plans it drew for a private developer. Nevertheless, the perception of almost automatic and easily approved plans where SS &M is Engineer for a private developer - applicant is inevitable under these circumstances. However, as outlined in Part II and III above, the practice of SS &M reviewing plans it prepares should be halted by this Order. Accordingly, the perception of "difficulties" invariably being resolved where SS &M is involved as private and public engineer will be obviated in a large part. Also we believe that SS &M must observe the standards we established in Sowers, 80 -050 that require a public official or employee to abstain from taking or recommending official action on a particular developer - applicant's plans or submissions where the public official /employee: (1) has worked on these plans or applications; (2) knows he will be asked to perform work for the developer - applicant with respect to the particular plans or application to be reviewed; or (3) can reasonably expect to obtain, seek, bid upon or otherwise secure work with respect to the plans or applications to be reviewed. C. Conclusion: There is no factual basis to support this allegation. SS &M must conform its conduct to this Order with respect to future review of plans, etc. set forth in Part II and III above and by so doing should remove any perception that persons hiring engineers other than SS &M will meet with "difficulties." Lewis J. McCoy June 17, 1983 Page 7 V. Allegation: You advertise through pamphlets which township officials distribute to individuals who are seeking a surveyor or engineer. A. Findings: 17. The Findings 1 -16 are incorporated herein by reference. 18. SS &M does advertise its services by way of pamphlets and advertisements in other media. 19. There,is no evidence to support the allegation that such advertisements were placed in or made available at municipal offices where SS &M is appointed as Engineer. 20. There is no evidence to support the allegation that officials or employees of the municipalities SS &M serves as Engineer distribute(d) such advertisements or pamphlets to persons considering or in need of the services of an engineer or surveyor. B. Discussion: Absent evidence of any efforts by SS &M to use its public - municipal clients to enhance or develop its private clientele, no violation of the Ethics Act is apparent. C. Conclusion: There is no violation of the Ethics Act apparent under the facts as found above. VI. Allegation: You distribute briefcases, pens, paperweights to all municipal officials in the municipalities you represent. A. Findings: 21. The findings 1 -20 are incorporated herein by reference. 22. SS &M did on several instances distribute inexpensive ballpoint pens, pencils and plastic -type paper folios to administrators, employees or officials associated with municipalities where SS &M serves as Engineer. 23. There is no evidence that these items were given in an effort to or with the understanding that the official conduct of the municipal employees', administrators' or officials' conduct would be influenced thereby. Lewis J. McCoy June 17, 1983 Page 8 B. Discussion: Section 3(b) of the Ethics Act states that: No person shall offer or give to a public official or public employee or candidate for public office or a member of his immediate family or a business which which he is associated, and no public official or public employee or candidate for public office shall solicit or accept, anything of value, including a gift, loan, political contribution, reward, or promise of future employment based on any understanding that the vote, offficial action, or judgment of the public official or public employee or candidate for public office would be influenced thereby. 65 P.S. 403(b). It is clear that even the smallest thing of value may not be provided to an official or employee on the understanding that official conduct will be influenced thereby. In this case, however, nowhere has it been alleged or established that these items were transferred to accomplish such an end. Thus, we find no fault with the transfers in these circumstances. However, any such gift - giving can be perceived as potentially raising concerns as to the impartiality of the officials and employers involved. In this realm, SS &M would be wise to review its policy and practice and take whatever steps are necessary to eliminate any appearance of a conflict with the public trust in this area. C. Conclusion: There is no violation of Section 3(b) in these circumstances and upon the facts as found above. VII. Allegation: You charge outrageous review fees, whenever possible, to competitors' clients. A. Findings: 21. The Findings No. 1 - 20 are incorporated herein by reference, 22. There is no evidence to support the allegation that the fees which are associated with the review process SS &M undertakes as a municipality's Engineer are designed to impose excessive or exorbtitant costs upon persons who obtain services from engineers other than SS &M. 23. In some instances, in accordance with the proposal and contract with a municipal client, SS &M bills the client for services performed which are not covered by the annual retainer fee. See Finding No. 6 above. Lewis J. McCoy June 17, 1983 Page 9 24. In some instances, as municipal engineer, SS &M advises and recommends certain work, improvements, etc. and are paid as set forth above for said services, but on other occasions SS &M also obtained from and performed work for a municipal client which SS &M served, as Engineer which was not included in the proposal /contract referenced above. 25. Not all work referred to above as outside the proposal /contract was undertaken by SS &M following an open and public process wherein competitors of SS &M are advised of the availability of such work and are given the opportunity to submit proposals to obtain same. B. Discussion: This allegation characterizing the fees charged by SS &M as "exorbitant" is fundamentally an administrative problem which is best addressed .by the municipal clients and a critical review of the proposals and contracts under which SS &M provides services to those municipal clients. Instances where engineering services are required arise, but where remuneration for same is calculated on an indeterminate and unestimated number of hours (to be multiplied by a per -hour rate) creates the situation in which the total dollar amount to be paid for such services cannot be set for budgeting purposes, with any definiteness, on an annual basis. Widely varied services and, therefore, bills for such services will wreck havoc upon ever - tightening municipal budgets. See Weaver v. Tracy, 436 A. 2d .253, Pa. Cmwlth. (1981) where a solicitor's "salary" based upon a per hour fee without imitation was rejected as illegal under the County Code, 16 P.S. 1605 which specified that county officers' "salaries" must be fixed and certain. However, because municipal clients face such bills, it does not follow necessarily that the Ethics Act has been violated, Of a more serious concern, under this Part, is the prevalent and apparent practice whereby the municipal Engineer, in this case SS &M, secures contracts or work in addition to those services undertaken and provided to the municipality as appointed Engineer. The State Ethics Commission has previously ruled that the Engineer for a municipality may not use its public employment or office or confidential information acquired by virtue of its role as municipal Engineer to "corner the market" on any additional services, work, etc. required by the municipality. For example, SS &M could not, in its capacity as municipal Engineer, propose buildings, improvements, etc., draw plans and specifications for same and then without notice or opportunity to compete being given to other firms, secure the job of completing same where the work to be done is not clearly specified in the original municipal - SS &M agreement(s) as part of the work SS &M is to perform as municipal Engineer. In other words, where SS &M is to perform and be paid for services for work other than that which is generally within the purview of the responsibility of SS &M as the municipal Engineer and specified in the proposal - contract under which SS &M serves as Engineer, if the services will cost $500 or more, the open and public process of Section 3(c) of the Ethics Act must be met. Lewis J. McCoy June 17, 1983 Page 10 Section 3(c) of the Ethics Act specifies that: No public official or public employee or a member of his immediate family or any business in which the person or a member of the person's immediate family is a director, officer, owner or holder of stock exceeding 5% of the equity at fair market value of the business shall enter into any contract valued at $500 or more with a governmental body unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. Any contract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of making of the contract. 65 P.S 403(c). Under this provision, if SS &M contracts for services as discussed above with an entity where they serve as appointed Engineer, the contract(s) in excess of $500 must be awarded only following an open'and public process allowing for: (1) prior public notice; and (2) public disclosure of all proposals considered; and (3) public disclosure of the award of the contract. Howard, 79 -044. C. Conclusion: The State Ethics Commission has no jurisdiction over the amount of fees charged to private clients. While the State Ethics Commission finds no evidence of past use of your public office or the use of confidential information to benefit itself, SS &M may not use confidential information acquired as a result of service as a municipal Engineer or the post so held to benefit SS &M's interests. If SS &M contracts with the municipality served as Engineer for services not within its responsibilitites as appointed Engineer and not detailed in the proposal - contract under which SS &M serves, the contract, if in excess of $500, must be awarded in an open and public process allowing for: (1) prior public notice; and (2) public disclosure of all proposals considered; and (3) Public disclosure of the award of the contract. Lewis J. McCoy June 17, 1983 Page 11 VIII. Allegation: You completely control a municipality, whenever possible; you take over all planning and engineering functions, water authority, sewer authority, etc. It is made difficult or impossible for competitors to obtain the records. A. Findings: 26. The Findings 1 -25 are incorporated herein by reference. 27. There is insufficient evidence to support the allegation that SS &M made it difficult or impossible to obtain records within a municipality SS &M serves as,Engineer. 28. There is no evidence that any difficulty allegedly experienced by SS &M competitors existed or inured to the financial benefit of SS &M. B. Discussion: Of course, SS &M cannot "control" public records and information to the detriment of the public or SS &M competitors. On the facts as we have found, however, such circumstances are not sufficiently apparent to warrant further review of this allegation. C. Conclusion: The Ethics Act has not been violated on the facts as found here. Our files in this case will remain confidential in accordance with Section 8(a) of the Ethics Act, 65 P.S. 408(a). However, this Order is final and will be made available as a public document 15 days after service unless you file documentation with the Commission which justifies reconsideration and /or challenges pertinent factual findings. See 51 Pa. Code 2.38. During this 15 -day period, no one, including the Respondent unless he waives his right to challenge this Order, may violate this confidentiality by releasing, discussing or circulating this Order. Any person who violates the confidentiality of a Commission proceeding is guilty of a misdemeanor and shall be fined not more than $1000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). PJS /jc By the Commission, Paul J. Chairman