HomeMy WebLinkAbout99-553C StoughNiles 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