Loading...
HomeMy WebLinkAbout00-603 BeenerADVICE OF COUNSEL James F. Beener, Esquire Barbara, Clapper, Beener, Rullo & Melvin 146 West Main Street Post Office Box 775 Somerset, PA 15501 -0775 August 22, 2000 00 -603 Re: Conflict; Public Official /Employee; Chairman; Municipal Authority; Board; Operations Manager; Compensation. Dear Mr. Beener: This responds to your letter of July 27, 2000, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. §1101 et seq, presents any prohibition or restrictions upon a chairman of a municipal authority as to receiving compensation as an authority employee. Facts: As Solicitor for the Cambria Somerset Authority ( "Authority "), you seek an advisory on behalf of the Authority Board and the Chairman of the Authority as to whether the Chairman may receive compensation as an Authority employee. The Authority was formed and organized in June 1999 by Somerset and Cambria Counties under the Municipalities Authority Act of 1945, as amended, for the purpose of acquiring stock of an existing water company that owns five water impoundments or reservoirs in the two county area. The Authority Board is composed of eight appointed individuals including the Chairman, Vice- Chairman, Secretary, Assistant Secretary, Treasurer, and Assistant Treasurer. None of the officers is paid. You have submitted a copy of the By -laws of Cambria Somerset Authority, which is incorporated herein by reference. The existing water company employs three caretakers who reside at the dams and work at the three actively operated water impoundments. The caretakers are specifically responsible for a variety of operational and safety matters for the reservoirs at which they are located. Except for the three caretakers whom the Authority hopes to retain, there presently are no other employees. However, the Authority is contemplating hiring a part - time secretary and a system manager or other person to handle day -to -day operations immediately after the acquisition and until such time that the Authority is able to analyze the system and determine its needs. Beener, 00 -603 August 22, 2000 Page 2 The Board has discussed a proposal whereby, after the acquisition and until the Authority has had the opportunity to determine the direction of the new Authority and its specific staffing needs, the Chairman of the Authority would serve as the operations manager. The Chairman is willing to continue to serve as Chairman of the Authority for a limited period of time while he is serving in an active daily management capacity. Pursuant to the proposal, the Chairman would work approximately thirty hours per week on a part -time basis for a period not to exceed three years. The general types of duties that the Chairman would assume would include the following: 1. Providing executive supervision over existing reservoir caretakers and the office secretary; 2. Representing the Authority before customers and the public, related municipal bodies, regional economic development groups, various regulatory agencies including, but not limited to, the Pennsylvania Department of Environmental Protection and the Pennsylvania Public Utilities Commission, and governmental agencies with which the Authority has working relationships including, but not limited to, the Pennsylvania Fish Commission, Forestry Bureau and others; 3. Overseeing the preparation of grant applications; 4. Overseeing the preparation and submittal of required environmental permits; 5. Directing and working with Authority professionals such as accountants, engineers and the Solicitor; 6. Representing and working with watershed groups with which the Authority is involved; 7. Filing the required report with regulatory agencies having oversight of Authority activities; 8. Developing and managing the annual operating and construction budget; 9. Preparing and developing a five -year plan for the Authority; 10. Working with existing and future customers concerning development of water conservation strategies; 11. Analyzing water quality data from all existing water reservoirs; 12. Analyzing reservoir drawdown curves concerning water supply from the system; and 13. Generally overseeing all independent contractors that the Authority may retain in the future. The conditions under which the Chairman would serve are as follows: 1. The Chairman would be paid $2,500 per month, however, he would receive no compensation for work performed prior to July 1, 2000; 2. The Chairman would work part -time with no benefits; 3. The Chairman would serve for a maximum of three years; Beener, 00 -603 August 22, 2000 Page 3 4. The Chairman would have appropriate liability insurance; 5. Either the Authority or the Chairman could terminate compensation at any time; 6. If the Chairman would terminate his services, he would agree to continue until a replacement would be hired and trained; and 7. The Chairman would receive mileage for travel outside of the immediate area or for travel to the five water impoundments. If the Chairman would remain a member of the Authority within the three year time period, but would not serve as Chairman, he would continue the duties enumerated above with the specific approval of the Authority Board. Before the Authority and the Chairman enter into any agreement, you wish to confirm that the actions contemplated above conform to the Ethics Act. Discussion: It is initially noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. § §1107(10), (11), advisories are issued to the requestor based upon the facts which the requestor has submitted. In issuing the advisory based upon the facts which the requestor has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts which have not been submitted. It is the burden of the requestor to truthfully disclose all of the material facts relevant to the inquiry. 65 Pa.C.S. §1107(10), (11). An advisory only affords a defense to the extent the requestor has truthfully disclosed all of the material facts. As Chairman of the Board of the Cambria Somerset Authority ( "Authority "), the Chairman is a "public official" as that term is defined in the Ethics Act, and hence the Chairman is subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: Section 1103. Restricted activities. (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 65 Pa.C.S. §1103(a). The following terms are defined in the Ethics Act as follows: Section 1102. Definitions. "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business with which he or a member of his immediate family is associated. Beener, 00 -603 August 22, 2000 Page 4 "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular public office or position of public employment. 65 Pa.C.S. §1102. In addition, Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /employee anything of monetary value and no public official /employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /employee would be influenced thereby. Reference is made to these provisions of the law not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. Section 1103(j) of the Ethics Act provides as follows: Section 1103. Restricted activities. (j) Voting conflict. - -Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest, and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. 65 Pa.C.S. §1103(j). In each instance of a conflict, Section 1103(j) requires the public official /employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes or supervisor. In the event that the required abstention results in the inability of the governmental body to take action because a majority is unattainable due to the abstention(s) from conflict under the Ethics Act, then voting is permissible provided the disclosure requirements noted above are followed. See, Mlakar, Advice 91- 523 -S. Beener, 00 -603 August 22, 2000 Page 5 In applying the above provisions of the Ethics Act to the instant matter, pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such public position for the private pecuniary benefit of the public official /public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. If a matter would come before the Authority that would result in a financial gain to the Chairman, he would have a conflict and would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act. Turning to the question of whether the Chairman would have a conflict if he would receive compensation as an Authority employee, the Commission has held that if a particular statutory enactment prohibits an official from receiving a financial benefit, then that official's receipt of such a prohibited benefit through the authority of public office would be contrary to Section 1103(a) of the Ethics Act. In Swick/Aman, Opinion 91 -006, the Commission reviewed the Municipality Authorities Act, 53 P.S. §301 et seq., and noted that, pursuant to Sections 306B(g) and 309C of that Act, authority board members may fix the number of authority employees and their respective powers, duties and compensation. The Commission stated, however, that authority board members may not be compensated as authority employees for duties that they would properly perform as board members. Based upon Swick/Aman, supra, the Chairman may receive compensation as the operations manager for the Authority, provided that such employment position is legitimate, rather than a mere machination to enable him as an Authority board member to set his own compensation for duties performed as a board member, rather than a bona fide employee. Id. Having established that the Ethics Act would not preclude the Chairman from receiving compensation as an Authority employee subject to the qualifications outlined above, it is further noted that he may not use the authority of office by participating in matters pertaining to his employment such as salary raises, job performance, etc. Id., Koslow, Order 458 -R, affirmed Koslow v. State Ethics Commission, 540 A.2d 1374 (Pa. Commw. Ct. 1988). In each instance of a conflict, the Chairman would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act. The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the respective municipal code. Conclusion: As Chairman of the Board for the Cambria Somerset Authority, the Chairman is a public official subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 et seq. Section 1103(a) of the Ethics Act would not prohibit the Chairman from receiving compensation as the operations manager for the Authority subject to the qualifications noted above. If a matter would come before the Authority that would result in a financial gain to the Chairman, he would have a conflict and would be required to abstain and observe the disclosure requirements of Section 1103(j) of the Ethics Act. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11), an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requestor has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Beener, 00 -603 August 22, 2000 Page 6 Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writing and must be actually received at the Commission within thirty (30) days of the date of this Advice pursuant to 51 Pa. Code 13.2(h). The appeal may be received at the Commission by hand delivery, United States mail, delivery service, or by FAX transmission (717 - 787 - 0806). Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sincerely, Vincent J. Dopko Chief Counsel