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HomeMy WebLinkAbout484 BentleyMr. Uavi d Bentley 1311 tan Avenue Beaver Falls, PA IbUIU Re: 254 -175 -C Uear Mr. Bentley: STATE ETHICS COMMISSION 308 FINANCE BUILDING HARRISBURG, PENNSYLVANIA 17120 UKUE11 OF frit COMMISSION May 2, 1986 Order No. 4R4 The State Ethics Commission has received a complaint reyardiny you and a possible violation of Act 17U of 1918. The Commission has now completed its investigation. the individual alleyations, conclusions, and tindinys on which those conclusions dr' based are as follows: 1. Allegation: That you, a Councilmernber for the City of Beaver Falls, violated Section 3(a) of the Ethics Act, bb N.S. 4U3(a), by having the City pay tur a hospitalization /medical plan and a Iife insurance policy in which you participate. A. Findings: 1. Yuu have served as a city c:ouncilmember in Beaver Falls from April, 19d through Uecember, 1983 and, as such, are subject to the Lthics Act (Act 1 /U- 19 /8). Z. You believe your participation in this proyram is authorized by a city ordinance and the Third Class City Code. J. According to the city clerk, officials are automatically added to the nospi:al1zation and Iife insurance plans when they assume ottice. 4. the c,cy auditor acknowled that he was aware the city paid fur city ofticials participation in life and hospitalization plans but never questioned it. b. City council touk the followin actions relating to insurance; Mr. David Bentley Page 2 may 2, 19R6 a. Ordinance #975 passed by council April 13, 1951 and signed by Mayor Edward C. Corcoran, authorized contracts with insurance companies insuring the employees of the City of Beaver Falls under policies for group insurance covering life, health and accident insurance and agreed that the city could pay part of the premimums. This ordinance was based on Section 2403 of the Third Class City Law as amended May 22, 1933, which authorized council to contract with insurance companies insuring its employees under group insurance policies for life, health, or accident insurance. b. This ordinance' authorized the city to contract for group life insurance for its employees with Sun l i f e Assurance Company of Canada and Zurich General Accident and Liability Insurance Company, LTD, insuring its employees under a group, health and accident policy. c. The city was authorized to pay approximately 2/3 of the premiums or charges for such contracts but this payment was not to exceed $7 per month for each employee. d. The city clerk and mayor who were in office in 1951 and who were involved in the passage of Ordinance #975 have affirmed that it was the intent of the city council , at that time, to include city officials and officers within the provisions of the ordinance. 6. The council also approved an ordinance in 1976. This ordinance involved changes in compensation, expenses, bonds and organization of the police department but did not affect Ordinance #975. The 1976 ordinance did not deal with life insurance or hospitalization benefits. 7. The city has paid premiums for your life insurance as follows: a. From April, 1982 through December, 1983 $168.00 8. The total cost to the city for your life insurance from April, 1982 through December, 1983 was $168.00. 9. The city has paid the following premiums for your participation in the hospitalization program: a. From June, 1982 through December, 1982 $1,082.34 b. From January, 1984 through December, 1985 $2,107.56 10. The total premiums paid by the city for your hospitalization program. from February, 1984 through September, 1985 was $3,189.90. 11. The total premiums paid for your hospitalization and life insurance premiums paid for by the city was $3,357.90 (hospitalization - $3,189.90, life insurance - $168.00). . Mr. David Bentley Page 3 12. Other city officials have received similar hospitalization and life insurance benefits at city expense. 13. You served the city of Beaver Falls as a councilperson and are not employed by the city in any other capacity. 14. The Beaver Falls city council routinely has passed ordinances adopting city budgets. These budgets included payments for hospitalization and life i nsurance. B. Discussion: As an elected member of city council, you area public official as that term is defined in the State Ethics Act. 65 P.S. §401 et. seq. As such, your conduct must conform to the requirements thereof. Boyle, 80 -020. The Ethics Act provides, in part, that: 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). The Code provides that: §36016. Salaries May 2, 19R6 Within this provision of law, this Commission has determined that a public official may not use his office to approve, obtain, accept or otherwise receive financial gain other than his compensation provided by law. This Commission has also held, on a number of occasions, that insurance coverage of the type herein involved is, in fact, financial gain. See Krane, 84 -001; Cowie, 84 -010; Domalakes, 85 -010. See also Conrad v. Township of Exeter et. al., 76 Berks 7, 27 D &C 3d 253, (1983). The question to be resolved, therefore, is whether this insurance coverage is compensation provided by law. For this answer, we must look to the Third Class City Code. Councilmen shall receive for their services during their term of service annual salaries, to be fixed by ordinance, payable in monthly or semimonthly instalments (sic). Councils may, by the ordinance fixing said salaries, provide for the assessment and retention therefrom of reasonable fines for absence from regular or special Mr. David Bentley Page 4 meetings of council or councilmanic committees. The salary paid to any councilman shall not be less than two hundred and fifty dollars per year. The compensation to be received by councilmen shall not be increased or diminished after their election; but succeeding councils may change all compensation, said change to take effect as to councilmen taking office at least six months after the passage of the ordinance providing for such change. 53 P.S. §36016 The Code also provides: May 2, 1986 §37403. Specific powers In addition to other powers granted by this act, the council of each city shall have power, by ordi nance: To make contracts of insurance with any insurance company, or nonprofit hospitalization corporation, or nonprofit medical service corporation, authorized to transact insurance business within the Commonwealth, insuring its elected or appointed officers, officials and employes, or any class or classes thereof, or their dependents, under a policy or policies of group insurance covering life, health, hospitalization, medical service, or accident insurance. 53 P.S. §37403 The Code clearly provides a mechanism for the purchase of insurance of the type here in question for elected or appointed officials of cities of the third class. The Code also sets forth a method by which the salary of councilmembers is to he fixed. Our reading of the law, however, also clearly indicates that when a public official has the power to fix compensation for himself, the mechanism provided for such power must be complied with strictly. While it cannot be questioned that the General Assembly has the inherent power to declare the public policy of the Commonwealth and may confer upon members of council of municipalities power to appoint themselves to membership upon boards of authorities and to fix their own salaries as it has been done here, such grant of power must be strictly construed and strictly applied. Commonwealth ex. rel. McCreary v. Major, 343 Pa. 355, (1941); See also Warminister Township appeal, 56 D &C 2d 99, (1971); Genkinger v. New Castle, 368 Pa. 547, (1951); McCutcheon v. State Ethics Commission, 77 Commw. 529, (1981). Both the salary of councilmen as well as the purchase of insurance benefits for officials must be authorized by a duly enacted city ordinance. There is no other mechanism through which these benefits may be obtained by Mr. David Bentley Page 5 May 2, 1986 such officials. In the instant situation, an ordinance was in fact passed in 1951 which authorized the city to contract for the purchase of various insurance benefits for employees of the city. While the ordinance did not reference to such coverage for officials or officers of the city, we have received the sworn statements of several individuals who were in office at the time of the passage of the ordinance. These individuals, in substance, have indicated that it was the intent of that ordinance to extend the insurance coverage to members of council and other city officials. The council believed that the ordinance, in fact, had accomplished this goal. In several matters we have, in the past, accepted the statements of intent of authorized officials as sufficient evidence of appropriate approval. Kiniry, 84 -008; Saunders, 85- 006 -R. Based upon our prior decisions, we believe that the intent of Ordinance #975 was to extend the insurance coverage to the city officials. We must here note that the argument has been advanced; that the offici als and officers of the ci ty are, i n fact, empl oyees within the meani ng of that term. Our decision herein is not based upon that analysis and we believe that the officers and officials are not employees of the city. See, e.g., Conrad v. Exeter Township, 76 Berks L.J. No. 2p. 7, (1983); In Re: Appeal of Auditors Report of Muncy Creek Township, 16 Lycomi ng Rep. 159, (1985). Our decision is based solely upon our finding that the Third Class City Code al lows for the purchase of such insurance benefits for city officials by ordinance and our finding that the ordi nance enacted was intended to implement this provision of the code. As such, we do not believe that you violated the State Ethics Act in the instant situation. We must note, that the problems encountered in this matter were occasioned by the faulty language of the in question ordinance. In this respect, we strongly suggest that said ordinance be amended sc a to include the proper language to clearly extend the benefits to officials and officers of the city. C. Conclusion: Based upon the foregoing, we do not believe that you violated the State Ethics Act when you received certain insurance benefits. The Third Class City Code allows for the purchase of such benefits for officials of a city when a duly enacted ordinance is promulgated. Here, while the ordinance only references to such benefits for employees, we believe that it was also the intent of the council to provide said benefits to officials and offic€ts as well. We do suggest that an appropriate ordinance be enacted so as to avoid future problems of this type. Mr. David Bentley Page 6 May 2, 1986 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 (defined as mailing) 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 $1,000 or imprisoned for not more than one year or both, see 65 P.S. 409(e). By the Commission, G. Sieber Pancoast Chai rman