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HomeMy WebLinkAbout02-565 ShimmelCarl P. Beard, Esquire Andrews, Wagner & Beard 3366 Lynnwood Drive P.O. Box 1311 Altoona, PA 16603 -1311 Dear Mr. Beard: ADVICE OF COUNSEL June 4, 2002 02 -565 Re: Conflict; Public Official /Employee; School Director; School District; Elementary School; Construction /Renovation Project; Accepting Employment With a Vendor Currently Under Contract With the School District; Business With Which Associated. This responds to your letter of May 1, 2002, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 1a. =S. § 1101 et seq., presents any prohibition or restrictions upon a school director as to accepting a position of employment with a construction company that is currently under contract with the school district to provide professional services for the construction /renovation of one of the school district's elementary schools. Facts: As Solicitor for the Clearfield Area School District ( "School District "), you swan advisory on behalf of David M. Shimmel ( "Shimmel "). You have submitted facts, which may be fairly summarized as follows. Shimmel has served as a member of the Clearfield Area School District Board of Directors since December 1995. Shimmel is currently serving his second four -year term, which commenced in December 1999. Shimmel's second term in office will end in December 2003. Prior to Shimmel's election, he was employed as an engineer with Gasbarre Products, Inc. In November 2001, Shimmel was laid off from his engineering position as a result of downsizing. During Shimmel's first term in office, the School Board decided to construct a new elementary school. The School Board also considered making renovations to the existing elementary school, the Goshen School. Beard /Shimmel 02 -565 June 4, 2002 Page 2 For the construction project, the School Board secured the services of Victor R. Graves, a professional architect and also considered securing the services of a professional construction management firm. In 1995, the School District entered into professional agreements with V. R. Graves Architects ( "Graves ") to provide architectural services and O'Brien Krietzberg, n /k/a URS /O'Brien Kreitzberg ( "Krietzberg ") to provide professional construction management services. The new Clearview Elementary School was completed in 1998. Towards the end of the construction project, the School Board decided to proceed with the renovation of the Goshen School. Once again, the services of Graves and Kreitzberg were retained. You state, however, that "the financial impact of the John Gardner Black and the Devon debacle caused the Clearfield Elementary School, like many other schools, to lose several million dollars as a result of its investments," necessitating the School Board to shelve the project until most of the lost Devon monies could be recouped. In July 2001, the School Board authorized the continuation of the Goshen School renovation project, and in April 2002, the Board approved the notice of intent to award bids. During the construction process, the School Board approved various "PlanCon" documents for submission to the Pennsylvania Department of Education, Bureau of Facilities Management, including PlanCon E, which was approved and incorporated into the official Board Minutes on January 28, 2002, and PlanCon F, which was revised, approved and incorporated into the official Board Minutes on February 25, 2002. A draft PlanCon G form was presented by Graves and Kreitzberg at a School Board work session on February 25, 2002. On March 11, 2002, Graves and Kreitzberg's Project Manager presented information at a work session regarding the Goshen School renovation project. On or about March 18, 2002, Shimmel noticed an advertisement in the local newspaper, The Progress. The advertisement stated that Kreitzberg was seeking a site manager for a school project in Clearfield, Pennsylvania. Shimmel contacted you to inquire whether it would be illegal for him to submit a letter of interest relative to an employment opportunity with Kreitzberg and whether he should resign as School Director if Kreitzberg would offer him the position. You advised Shimmel that it would not be illegal to apply for the job, but that he should contact the State Ethics Commission for further guidance should the job prospect become promising. You further advised Shimmel that pursuant to Section 1103(g) of the Ethics Act, he would be precluded from "coming back and working in a capacity" before the School District and therefore, should remain on the School Board, but abstain from voting on any matters directly related to Kreitzberg, including the approval of any of Kreitzberg's invoices and the approval of any recommended change orders from the Kreitzberg's Project Manager, even though the change orders would be approved by the architect rather than the Construction Manager. You state that Shimmel is aware that if any dispute should arise between the School District and its Construction Manager, he would be precluded from participating in and /or being privy to any type of discussions that would involve Kreitzberg. On March 21, 2002, Shimmel applied for the site manager position. Following a job interview with Kreitzberg, Shimmel sought legal advice from you. You advised Shimmel that he should abstain from any votes on the PlanCon process relating to presentations by Kreitzberg. You state that Shimmel has abstained from approving PlanCon G and tentative contract awards to various primary contractors on the project. In April 2002, Kreitzberg extended a formal offer of employment to Shimmel. You state that pursuant to the terms of employment with Kreitzberg, Shimmel would serve as Site Manager of the Clearfield Area School District, Goshen Elementary School construction project, and report to Kreitzberg's Project Manager. Shimmel would be responsible for monitoring the day -to -day operations of the Goshen Beard /Shimmel 02 -565 June 4, 2002 Page 3 Elementary School construction project, attending job conferences with prime contractors, and serving as a conduit of information to and from the architect and the Project Manager. The Project Manager would be responsible for making reports and recommendations to the School Board regarding the Goshen Elementary School construction project. You note that the School Board is not contemplating any further construction projects in the near future that would require the services of Kreitzberg beyond the Goshen Elementary School construction project. Therefore, the Site Manager position sought by Shimmel would be completed on or about May 30, 2003, at least seven to eight months prior to the end of his current term in office. You ask whether Shimmel would be precluded from accepting a position of employment with Kreitzberg given the above facts. 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. Further, since advisories only address future conduct, any past action will not be addressed in this advice. As a School Director for the Clearfield Area School District ( "School District "), David M. Shimmel ( "Shimmel ") is a public official as that term is defined in the Ethics Act, and hence Shimmel is subject to the provisions of that Act. Section 1103(a) of the Ethics Act provides: § 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: § 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. Beard /Shimmel 02 -565 June 4, 2002 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. "Business." Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. 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: §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 Beard /Shimmel 02 -565 June 4, 2002 Page 5 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. In applying the above provisions of the Ethics Act to your inquiry, you are advised that Section 1103(a) of the Ethics Act does not prohibit public officials /public employees from having outside business activities or employment; however, the public official /public employee may not use the authority of his public position - or confidential information obtained by being in that position - for the advancement of his own private pecuniary benefit or that of a business with which he is associated. Pancoe, Opinion 89- 011. Examples of conduct that would be prohibited under Section 1103 a) would include: (1) the pursuit of a private business opportunity in the course of pubic action, Metrick, Order No. 1037; (2) the use of governmental facilities, such as governmental telephones, postage, staff, equipment, research materials, or other property, or the use of governmental personnel, to conduct private business activities, Freind, Order No. 800; Pancoe, supra; and (3) the participation in an official capacity as to matters involving the business with which the public official /public employee is associated in his private capacity, such as the review /selection of its bids or proposals, Gorman, Order No. 1041. If a business with which the public official /public employee is associated or its client(s) would have matter(s) pending before the governmental body, the public official /public employee would have a conflict of interest as to such matter(s). Miller, Opinion No. 89 -024; see also, Kannebecker, Opinion 92 -010. In each instance of a conflict of interest, the p5u ilc official /public employee would be required to abstain from participation and to satisfy the disclosure requirements of Section 1103(j) set forth above. Having established the above general principles, your specific inquiry shall now be addressed. As a general rule, Section 1103(a) of the Ethics Act would not prohibit Shimmel from accepting a position of employment as a Site Manager for Kreitzberg subject to the above restrictions and conditioned upon the assumptions that there would be no improper understandings under Sections 1103(b) and 1103(c), and Shimmel would not be using the authority of his position as a School Director or confidential information to obtain or perform such work. Pursuant to Section 1103(a) of the Ethics Act, Shimmel would have a conflict of interest in his public capacity as a School Director as to matters before the School Board involving Kreitzberg, Kreitzberg's client(s) or any project in which Kreitzberg is involved, such as the Goshen Elementary School construction/ renovation project . See, Miller supra; Kannebecker, supra. The foregoing matters would pose a conflict even before Shimmel would formally accept Kreitzberg's job offer because of his reasonable expectation of developing a financial relationship with Kreitzberg. See, Amato, Opinion 89 -002. As noted above, in each instance of a conflict, Shimmel would be required to abstain from participation and satisfy 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 Public School Code of 1949. Conclusion: As a School Director for the Clearfield Area School District ( "School District "), David M. Shimmel ( "Shimmel ") is a public official subject to the provisions of Beard /Shimmel 02 -565 June 4, 2002 Page 6 the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. As to whether the Ethics Act would prohibit Shimmel from accepting a position of employment as a Site Manager for URS /O'Brien Kreitzberg ( "Kreitzberg ") given Kreitzberg's current contract with the School District for the provision of construction management services in connection with the construction /renovation of the Goshen Elementary School construction project, as a general rule, Section 1103(a) of the Ethics Act would not prohibit Shimmel from such position subject to the above restrictions and conditioned upon the assumptions that there would be no improper understandings under Sections 1103(b) and 1103(c), and Shimmel would not be using the authority of his position as a School Director or confidential information to obtain or perform such work. Pursuant to Section 1103(a) of the Ethics Act, Shimmel would have a conflict of interest in his public capacity as a School Director as to matters before the School Board involving Kreitzberg, Kreitzberg's client(s) or any project in which Kreitzberg is involved, such as the Goshen Elementary School construction /renovation project. The foregoing matters would pose a conflict even before Shimmel would formally accept Kreitzberg's job offer because of his reasonable expectation of developing a financial relationship with Kreitzberg. See, Amato, Opinion 89 -002. As noted above, in each instance of a conflict, ShimmiFwould be required to abstain from participation and satisfy 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. 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