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Home My WebLink About01-553 GoldbergBarbara R. Goldberg Corporate Counsel American Water Services, Inc. 10000 Sagemore Drive, Suite 10101 Marlton, New Jersey 08053 ADVICE OF COUNSEL May 16, 2001 01 -553 Re: Public Employee; FIS; Employees; American Water Services, Inc.; Contract; Services. Dear Ms. Goldberg: This responds to your letter dated April 16, 2001, by which you requested Financial Interest disclosure advice from the State Ethics Commission. Issue: Whether employees of a private corporation that performs various levels management and operational services under contract to municipalities are to be considered "public employees" subject to the Public Official and Employee Ethics Act (the "Ethics Act "), 65 Pa.C.S. §1101 et seq., and the Regulations of the State Ethics Commission, and particularly, the requirements for filing Statements of Financial Interests. Facts: As corporate counsel to American Water Services, Inc. CAWS "), you seek as drtrmination as to whether employees of AWS are "public employees" subject to the Ethics Act and the Regulations of the State Ethics Commission. See, 65 Pa.C.S. §1102; 51 Pa. Code §11.1. You specifically question whether AWSmployees are required to file Statements of Financial Interests. AWS performs various levels of management and operation of water treatment plants, wastewater treatment plants, water delivery systems and sewage collection systems for cities, towns and authorities in Pennsylvania. AWS' duties range from operation and maintenance of plants to, in the case of the Scranton Sewer Authority, billing and collection of sewer charges and maintenance of the Sewer Authority's books. AWS is compensated with an annual fee for its management services. Discussion: The Ethics Act defines the term "public employee" as follows: $1102. Definitions. "Public employee." Any individual employed by the Commonwealth or a political subdivision who is responsible Goldberg, 01 -553 May 16, 2001 Page 2 for taking or recommending official action of a nonministerial nature with regard to: 1 contracting or procurement; 2 administering or monitoring grants or subsidies; 3 planning or zoning; 4 inspecting, licensing, regulating or auditing any person; or (5) any other activity where the official action has an economic impact of greater than a de minimis nature on the interests of any person. The term shall not include individuals who are employed by this Commonwealth or any political subdivision thereof in teaching as distinguished from administrative duties. 65 Pa.C.S. §1102. The regulations of the State Ethics Commission similarly define the term "public employee" and set forth the following additional criteria: (ii) The following criteria will be used, in part, to determine whether an individual is within the definition of "public employe ": (A) The individual normally performs his responsibility in the field without onsite supervision. (B) The individual is the immediate supervisor of a person who normally performs his responsibility in the field without onsite supervision. (C) The individual is the supervisor of a highest level field office. (D) The individual has the authority to make final decisions. (E) The individual has the authority to forward or stop recommendations from being sent to the person or body with the authority to make final decisions. (F) The individual prepares or supervises the preparation of final recommendations. (G) The individual makes final technical recommen- dations. (H) The individual's recommendations or actions are an inherent and recurring part of his position. (1) The individual's recommendations or actions affect organizations other than his own organization. (iii) The term does not include individuals who are employed by the Commonwealth or a political subdivision of the Commonwealth in teaching as distinguished from administrative duties. Goldberg, 01 -553 May 16, 2001 Page 3 (iv) Persons in the following positions are generally considered public employes: (A) Executive and special directors or assistants reporting directly to the agency head or governing body. (B) Commonwealth bureau directors, division chiefs or heads of equivalent organization elements and other governmental body department heads. (C) Staff attorneys engaged in representing the department, agency or other governmental bodies. (D) Engineers, managers and secretary - treasurers acting as managers, police chiefs, chief clerks, chief purchasing agents, grant and contract managers, administrative officers, housing and building inspectors, investigators, auditors, sewer enforcement officers and zoning officers in all governmental bodies. (E) Court administrators, assistants for fiscal affairs and deputies for the minor judiciary. (F) School superintendents, assistant superintendents, school business managers and principals. (G) Persons who report directly to heads of executive, legislative and independent agencies, boards and commissions except clerical personnel. (v) Persons in the following positions are generally not considered public employes: (A) City clerks, other clerical staff, road masters, secretaries, police officers, maintenance workers, construction workers, equipment operators and recreation directors. (B) Law clerks, court criers, court reporters, probation officers, security guards and writ servers. (C) School teachers and clerks of the schools. 51 Pa. Code §11.1. In applying the definition of "public employee" and the related regulatory criteria to the functions of your position, the necessary conclusion is that AWS employees are not to be considered "public employees" as that term is defined in the Ethics Act. Based upon an objective review, AWS employees are not responsible for taking or recommending official action of a non - ministerial nature with regard to any of the five categories set forth in the Ethics Act's definition of the term "public employee." "Nonministerial action" is defined in the Ethics Act as an action in which the person exercises his own judgment as to the desirability of the action taken." 65 Pa.C.S. § 1102. AWS employees do not exercise their own judgment and have no discretionary authority whatsoever. In that AWS employees perform purely "ministerial action" — that is, action performed in a prescribed manner in obedience to the mandate of legal authority,' they are not to be considered public employees. See, Goldberg, 01 -553 May 16, 2001 Page 4 Fraas, Opinion 80 -016; 65 Pa.C.S. § 1102. Thus, AWS employees are not subject to the disclosure requirements of the Ethics Act, and they are not required to file Statements of Financial Interests. The only provisions of the Ethics Act that apply to AWS employees are Sections 1103(b) and 1103(c), which apply to everyone. For your information, Sections 1103(b) and 1103(c) of the Ethics Act provide in part that no person shall offer to a public official /public employee anything of monetary value and no public official /public employee shall solicit or accept anything of monetary value based upon the understanding that the vote, official action, or judgment of the public official /public 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. Lastly, 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. Conclusion: Employees of American Water Services, Inc., a private corporation that performs various levels of management and operational services under contract to municipalities, are not to be considered "public employees" as that term is defined by the Public Official and Employee Ethics Act ( "Ethics Act "). Accordingly, in that capacity, AWS employees are not subject to the disclosure requirements of the Ethics Act and are not required to file Statements of Financial Interests. Sections 1103(b) and 1103(c) of the Ethics Act apply to everyone. 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. 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