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