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HomeMy WebLinkAbout99-553C BogarNiles S. Benn, Esquire Benn and Robinson PO Box 5185 135 N. George St., Suite 303 York, PA 17405 -5185 Dear Mr. Benn: STATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 17108 -1470 (717) 783 -1610 1- 800 - 932 -0936 ADVICE OF COUNSEL July 19, 1999 99 -553C Re: Conflict; Public Official /Employee; Supervisor; Second Class Township; Sewer; Extension; Farm; Class; Subclass; To the Same Degree; Use of Authority of Office; Private Pecuniary Benefit; Appraisal; Clarification. This responds to your letter of June 18, 1999 by which you requested advice clarification from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. §1101 gt seq., presents any prohibition or restrictions upon a township supervisor from participating on the matter of the extension of public sewers when the supervisor owns real estate, a portion of which could be developed due to the public sewer. Facts: Solicitor James D. Bogar (Solicitor) submitted a request by letter dated April 23, 1999, to the State Ethics Commission seeking an advisory on behalf of Lorin L. Stough (Stough), a Supervisor in Franklin Township, York County. Bogar, Advice 99 -553 was issued on May 25, 1999, and is incorporated by reference as if fully set forth herein. Bogar Advice suorg, concluded that Stough would have a conflict in participating as to the matter of the extension of sewers in an area where he owns a farm that would be positively impacted in value if sewers were approved. The Advice further concluded that with a conflict, the subclass exclusion might apply but real estate appraisals would be necessary. A timely request for Clarification of Advice was received June 21, 1999. Following a procedural history as to the Advice and your interpretation of its holding, you provide the following additional information. FAX: (717) 787 -0806 • Web Site: www,ethics.state.pa.us • e -mail: ethics @state.pa.us Bogar 99 -553 July 19, 1999 Page 2 The referenced farm is approximately 14.28 acres and is owned by Stough and his spouse. The farm fronts Capitol Hill Road on one side. Portions of Franklin Township already have public sewers. The proposed sewer line extension would run through a substantial portion of Capitol Hill Road, providing public sewers to a number of properties located there. Those properties are not owned by the Stough family. There are more than fifty (50) separate parcels along a portion of Capitol Hill Road that would be benefited. The cut -off point for the proposed sewer line extension ends at a point on Capitol Hill Road in front of Stough's farm land and hence does not travel the entire length of Stough's property. You submit, as Exhibit "A ", a map of a portion of Capitol Hill Road and properties along that Road. You state Exhibit "A" only illustrates a small section of Capitol Hill Road to be improved. The proposed sewer line extension will yield 300 additional "EDUs ", the units that provide sewer service. Some of the fifty(50) plus parcels to be benefited along Capitol Hill Road contain multiple apartment dwelling units, such as the Clear Spring Apartments. As set forth in a Final Plan of Subdivision prepared by Rodney Lee Decker & Associates dated May 29, 1984 and recorded on June 21, 1984 at Plan Book EE, page 479 in the York County Recorder of Deeds Office, Stough's farm land is located in a flood hazard area. You submit, as Exhibit "B ", a Final Plan of Subdivision. Stough's mother -in -law, Christine D. Yohe, owns a small .46 acre tract fronting Capitol Hill Road. Stough's mother -in -law owns two tracts along the proposed sewer route extension with another tract owned by Stough's mother - in -law and spouse. You opine that the definition of "immediate family" contained in Section 1102 of the Ethics Act does not include in -laws and would thus exclude Stough's mother -in -law. You state that there is developable land affected by the proposed sewer line extension not owned by Stough or any member of his immediate family, as that term is defined by the Ethics Act. You assert that in relation to other property owners affected by the proposed sewer line extension, Stough's benefit from the said extension, if any, would be less than many property owners. You conclude that Stough's benefit, if any, will be no greater than any other affected property owners and he and his spouse have no greater potential gain or benefit from the proposed sewer line extension than any other affected owners. After interpreting Section 1103(a) of the Ethics Act and the one exclusion which relates to an action that affects to the same degree a class or subclass consisting of an industry, occupation, or group which includes the public official /employee, you state that the Commission concluded that the people who would be subject to the sewer installation in this case would be a subclass and that real estate appraisals would be necessary to determine whether Stough would be affected to the same degree as all other individuals in terms of real estate valuation. You then interpret Section 1103(j) of the Ethics Act as requiring a public official who has a conflict of interest to abstain and to publicly disclose the abstention and the reasons for same, both orally and by filing a written memorandum to that effect with the person responsible for recording the minutes of the meeting at which the vote is taken, but if the required abstention results in the inability of the governmental body to take action Bogor 99 -553 July 19, 1999 Page 3 because a majority is unattainable due to the abstention(s) from conflict, voting by the public official with a conflict is permissible provided the disclosure requirements of the Act have been followed. On behalf of Stough you request clarification of the following issues: 1) The Solicitor's statement of facts did not contain financial data, appraisals or any other factual information relative to the impact of the extension of public sewers as to Stough's property or the proper of other citizens affected by the proposed sewer extension. In that the Commission does not speculate as to facts which have not been submitted, you seek clarification as to how the Commission was able to conclude that public sewers would have a positive financial impact upon Stough's farm without any financial date, appraisals or any other factual information indicating such a positive financial impact and given that a very significant portion of the farm is within a declared Federal Flood Hazard Area. You assert that because there are no appraisals, the Commission cannot assume that public sewers would have a positive financial impact upon any tracts owned by Stough or his spouse. 2) The facts provided by the Solicitor merely indicated that a relatively small portion of Stough's farm could be developed with public sewer as opposed to Stough actually developing or selling his farm, or entering into an agreement of sale as to the farm. Further, a very significant portion of Stough's property is located within a declared Federal Flood Hazard Area. You cite Mihalik Opinion, 90 -002 as a case which involved a pending agreement between a supervisor and his brother and a general partnership with option to purchase land owned by the supervisor and brother wherein a conflict was found relative to a vote on the proposed revision to the comprehensive sewage plan for the township because the sewage plan would impact upon the decision of the partnership to exercise the existing option. You quote from the statement of facts in Mihalik supra, that a "comprehensive sewerage plan will increase the value of the land in the township that would be serviced by the sewage system." You also cite Dettra Opinion, 89 -021 for the proposition that a supervisor had a conflict because of an existing pending option agreement to sell land owned by the supervisor and his brother, with the land being affected by proposed changes to the zoning ordinance. After referencing the definition of "conflict" contained in Section 1 102 of the Ethics Act, the claimed lack of factual evidence before the Commission that Stough intends to sell the farm or develop the farm in the event that public sewers are extended to his farm property, and the location of Stough's property within a Federal Flood Hazard Area, you request clarification as to how the Commission was able to conclude that Stough would have a private pecuniary benefit as to the installation of public sewer. You also inquire as to whether the definition of "conflict" contained in Section 1102 is intended to apply to a situation where the pecuniary benefit allegedly accruing to a public official is purely speculative and may never come to fruition. 3) As to the statement in the Advice that real estate appraisals would be necessary to determine the applicability of the "subclass" exception to the Bogor 99 -553 July 19, 1999 Page 4 conflict rules, you request clarification as to who would be responsible for paying the costs associated with obtaining these appraisals. 4) Regarding the statement in the Advice that real estate appraisals would be necessary to determine whether Stough would be affected to the same degree "as all other individuals in terms of real estate valuation ", you state that this would require obtaining appraisals on all of the properties to be benefited by the EDUs which would consist of approximately 300 separate appraisals, an exceedingly costly requirement. You request clarification as to what appraisals are necessary to determine whether Stough would be affected to the same degree to as all other individuals in terms of real estate valuation. You ask whether the appraisals would be as to all properties to be benefited in Franklin Township or only certain properties and, if so, which ones and the basis for such a determination. You state that such questions are unanswered in the Advice. 5) You reference the Advice as to Stough and possible participation as to the matter of the extension of the sewers in the context of Section 1103(j). You state that Section 1103(j) addresses voting conflicts in terms of abstention from voting. You request clarification that if a conflict exists, could the person having the conflict second a motion to have that matter put forth for discussion before any vote. If a second does not occur, a lack of second will cause the motion to fail and, thereby, force Franklin Township to be in violation of "Act 537" requirements in your view. Clarification is required in that you state the Commonwealth obligates municipalities to conform to "Act 537 ". 6) After referencing the Conclusion of the Advice regarding real estate appraisals, you assert that obtaining appraisals is not necessary to rebut the findings in the Advice. You argue that the alleged conflict has been rebutted by the additional facts, circumstances, data and the Exhibits provided. There are approximately 300 EDUs to be created and approximately fifty (50) parcels along Capitol Hill Road that would be affected by the proposed sewer line extension. You believe that . obtaining appraisals relative to the proposed extension would be exceedingly costly and an unnecessary expenditure of funds. You state that Stough's farm is located in a Federal Flood Hazard Area and the farm would be difficult to develop even with sewers. There are many developable properties not owned by Stough or any member of his family that would be affected by the proposed sewer line extension. You conclude that Stough would accrue no greater benefit than any individual property owner and has no greater potential for gain or benefit from the said proposed sewer extension than that of any other affected property owner. You state that the additional facts or change in circumstances create a basis for reversing the Advice. Discussion: In that Bogar, Advice 99 -553 is incorporated by reference, the quotations and commentary as to the Ethics Act will not be repeated. The questions you pose will be addressed seriatim. As to your first two queries, you attack the Advice for accepting, as fact, that the ability to develop Boaar, 99 -553 July 19, 1999 Page 5 Stough's farm would result in a private pecuniary benefit to him through the increase in the fair market value of the property. While it is true that the burden is upon the requestor to submit all of the material facts as to his inquiry - -a burden which neither you nor the Solicitor has met in your respective inquiries - -and while it is also true that the Commission does not engage in speculation as to facts which have not been submitted by the requestor, it is most certainly true that the Commission may administratively note certain facts. Thus, although neither you nor the Solicitor mentioned the material fact that the Franklin Township Board of Supervisors is a three Member Board, this Advice may (and does) administratively note that fact. Similarly there has been a failure to submit the material fact that the ability to develop his property (regardless of whether Stough would actually choose to develop it) would increase its market value, the initial Advice could properly take notice of that fact, because it would be ludicrous to suggest that the property, part of which is located in a flood plain, would have a greater fair market value as land that could not possibly be developed than it would have as land that could be developed. However, since you specifically make a challenge that there would be increase in value, the Advice accordingly is modified as follows. It cannot be concluded, due to a factual insufficiency, if Stough's farm would increase in value with the sewer extension; consequently, it cannot be determined whether Stough would or would not have a conflict as to the matter of the sewer extension. As to your third inquiry regarding responsibility for paying costs associated with appraisals, since it is the requestor's responsibility to submit the facts in an advisory context, it is clearly not the Commission's responsibility to pay for such appraisals which seems to be the intimation of your inquiry. Your fourth inquiry relates to defining the scope of the class or subclass relative to the exception to conflict involving action of the public official /employee which affect to. the same degree the class of the general public or subclass consisting of the industry, occupation of groups which includes the public official /employee, member of immediate family or business with which associated. The appraisals should be obtained as to the properties which you contend to be in the subclass. While it would appear to make sense to include any properties along the sewage line that you contend to be similarly situated, it is not for the Commission to either define for you or to impose limits upon you as to the boundaries of the subclass which you would propose. You will note the statutory requirement that the action must affect the class or subclass to the same degree. That determination is fact based. As to your fifth inquiry, you have not stated whether the Township Board is composed of three or five members. Since the Board is three members as Boaar 99 -553 July 19, 1999 Page 6 per administrative notice, the issue you raise has been addressed in Garner, Opinion 93 -004: ...you are advised that Section 3(j) of the Ethics Law does allow an individual to second a motion where a second is not forthcoming in situations where the two remaining Supervisors have opposing views or where one of the other two Supervisors is absent. Our ruling is expressly limited in its application to three member boards involving the question presented. at 6. You also claim that in instances of a lack of a second, the Township could be in violation of "Act 537 ". Section 1112 of the Ethics Act provides that if the provisions of the Ethics Act conflict with any other statute, the Ethics Act shall control. 65 Pa.C.S. 1112. For your sixth inquiry, you seek a reversal of the Advice with a finding that no conflict exists. Contrary to your assertion, "the Exhibits" (Stough minor Subdivision Plan and map), "additional facts ", and "data" that you have supplied do not establish as a fact that Stough would not receive a private pecuniary benefit as to the public sewer extension. Your statement that Stough would receive no greater financial benefit then any other affected property owner as to the sewer extension constitutes a conclusion. Likewise, there is not a factual basis to conclude that if a conflict exists, that Stough would be affected "to the same degree ". A conflict depends upon whether there would be a positive financial impact as to Stough's farm from the sewer extension. Whether there would be a positive financial impact depends upon facts necessary to establish the existence or lack of a private pecuniary benefit. Given the insufficiency of facts, a determination cannot be made as to whether Stough would or would not have a conflict as to the sewer extension, that is, a private pecuniary benefit as to his farm relative to the proposed sewer extension. Ld.at6. As the Commission in Laser, Opinion 93 -002 noted: Our result should not be construed to suggest that an incomplete or deficient factual submission will supply a requestor with what he perceives to be a favorable result. All that we have determined is that the facts are insufficient to conclude that a conflict exists. If, in the instant matter, there are facts which though not presented would establish that there would be a private pecuniary benefit, then this Opinion will not accord Laser a defense under Section 7(10) of the Ethics Law. Bogar, 99 -553 July 19, 1999 Page 7 The insufficiency of facts neither establish nor negate a conflict by Stough. The Advice is not reversed but modified as noted above. Conclusion: As a Supervisor in Franklin Township, Lorin L. Stough 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. Under Section 1103(a) of the Ethics Act, there are insufficient facts to determine whether Stough would or would not have a conflict as to the farm he owns relative to the sewer extension which could result in a portion of his property being developed. 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 1. 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. incent ,N. Dop o Chief Counsel