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HomeMy WebLinkAbout03-519 ConfidentialADVICE OF COUNSEL March 4, 2003 03 -519 Re: Conflict; Public Official /Employee; A; Participating in Discussions Pertaining to Allocation of State funds Between Uniform and Non - Uniform Pension Plans; Service on Management Committee That Negotiates Collective Bargaining Agreement With Police Benevolent Association; Salary; Benefits. This responds to your letter of January 27, 2003, by which you requested a confidential advice from the State Ethics Commission. Issue: Whether under the Public Official and Employee Ethics Act ( "Ethics Act "), 65 F'a.C.S. § 1101 et seq., an A who is appointed by the township board of supervisors and is under an employment agreement with the township would be considered a public official or a public employee, and if so, whether the A would have a conflict of interest as to: (1) participating in discussions of the board of supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund when he participates in the non - uniform pension plan; and (2) serving on the management committee which negotiates the collective bargaining agreement with the township's police benevolent association when his salary as A is set by Council, and by ordinance, his healthcare coverage, vacation, sick days, personal days, and other leaves, are and shall remain identical to those benefits enjoyed by the uniformed township employees. Facts: As Solicitor to the Board of Supervisors of Township B in County C, en�nsylvania, you have been authorized by D, the appointed A, to seek a confidential advisory on his behalf. You have submitted facts, which may be fairly summarized as follows. Township B, a township of the second class, is governed by the Second Class Township Code. Township B has adopted an ordinance establishing the position of A. Township B has also entered into an employment agreement with D as A. You have submitted copies of the ordinance and employment agreement, which documents are incorporated herein by reference. D's salary as A is set by the Board of Supervisors. By ordinance, D's healthcare coverage, vacation, sick days, personal days, and other leaves are identical to those benefits enjoyed by the uniformed Township employees. D is covered by the non- uniform pension plan established by the Township, a defined benefit plan. You have Confidential Advice 03 -519 March 4, 2003 Page 2 submitted a copy of the Non - Uniformed Employees Pension Plan, which is incorporated herein by reference. You note that in addition to A, D is an attorney in good standing with the Pennsylvania Bar Association. You pose the following specific inquiries: 1. Whether D as A would be considered a "public official" as that term is defined under the Ethics Act given that he is both appointed by the Board of Supervisors and employed by the Township, and is authorized to expend public funds and to exercise power on behalf of the Township; 2. Whether D as A may participate in discussions of the Board of Supervisors regarding the allocation of State funds that the Township receives for the benefit of both the non - uniform and uniform pension plans when he participates in the non - uniform pension plan, which provides that no participant shall be required to make any contribution to the plan; and 3. Whether D as A may serve on the management committee which negotiates the Collective Bargaining Agreement with the Township's Police Benevolent Association: (1) when he participates in the non- uniform pension plan; (2) where he would assist in the negotiations, but would have no authority to vote on the execution of the Collective Bargaining Agreement, and; (3) where his role beyond negotiations would be limited to an advisory capacity. 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. Substantively, the first matter to be addressed is D's status as a "public official" or "public employee" subject to the Ethics Act. Such status is important because the conflict of interest provisions of the Ethics Act about which you have inquired only apply to restrict the conduct of public officials and public employees. 65 Pa.C.S. §§ 1103(a), The Ethics Act defines the term "public official" as follows: § 1102. Definitions "Public official." Any person elected by the public or elected or appointed by a governmental body or an appointed official in the executive, legislative or judicial branch of this Commonwealth or any political subdivision thereof, provided that it shall not include members of advisory boards that have no authority to expend public funds other than reimbursement for personal expense or to otherwise exercise the power of the State or any political subdivision thereof. 65 Pa.C.S. § 1102. Confidential Advice 03 -519 March 4, 2003 Page 3 The Regulations of the State Ethics Commission similarly define the term "public official" and set forth the following additional criteria that are used to determine whether the advisory board exception italicized above applies: (i) The following criteria will be used to determine if the exception in this paragraph is applicable: (A) The body will be deemed to have the power to expend public funds if the body may commit funds or may otherwise make payment of monies, enter into contracts, invest funds held in reserves, make loans or grants, borrow money, issue bonds, employ staff, purchase, lease, acquire or sell real or personal property without the consent or approval of the governing body and the effect of the power to expend public funds has a greater than de minimis economic impact on the interest of a person. (B) The body will be deemed to have the authority to otherwise exercise the power of the Commonwealth or a political subdivision if one of the following exists: (I) The body makes binding decisions or orders adjudicating substantive issues which are appealable to a body or person other than the governing authority. (11) The body exercises a basic power of government and performs essential governmental functions. (III) The governing authority is bound by statute or ordinance to accept and enforce the rulings of the body. (IV) The body may compel the governing authority to act in accordance with the body's decisions or restrain the governing authority from acting contrary to the body's decisions. (V) The body makes independent decisions which are effective without approval of the governing authority. (VI) The body may adopt, amend and repeal resolutions, rules, regulations or ordinances. (VII) The body has the power of eminent domain or condemnation. (VIII)The enabling legislation of the body indicates that the body is established for exercising public powers of the Commonwealth or a political subdivision. (ii) The term does not include judges and inspectors of elections, notary publics and political party officers. (iii) The term generally includes persons in the following offices: (A) Incumbents of offices filled by nomination of the Governor and confirmation of the Senate. Confidential Advice 03 -519 March 4, 2003 Page 4 (B) Heads of executive, legislative and independent agencies, boards and commissions. (C) Members of agencies, boards and commissions appointed by the General Assembly or its officers. (D) Persons appointed to positions designated as officers by the Commonwealth or its political subdivisions. (E) Members of municipal, industrial development, housing, parking and similar authorities. (F) Members of zoning hearing boards and similar quasi-judicial bodies. (G) Members of the public bodies meeting the criteria in paragraph (i)(A). 51 Pa. Code § 11.1. 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 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 additional criteria used to determine whether an individual is within the definition. In applying the above to the instant matter, it is clear that D is both a public official and a public employee under the Ethics Act. In his capacity as an A, D is a public official in that he was appointed by the Township Board of Supervisors. Further, given that D's duties as A include, but are not limited to, E, he is responsible for taking or recommending official action of a nonministerial nature with regard to any other activity where the official action has an economic impact of greater Confidential Advice 03 -519 March 4, 2003 Page 5 than a de minimis nature on the interests of any person. Therefore, in his capacity as A, D is also a public employee as that term is defined under the Ethics Act. Sections 1103(a) and 1103(j) of the Ethics Act pertaining to conflicts of interest specifically apply to public officials and public employees: 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. "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: § 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 Confidential Advice 03 -519 March 4, 2003 Page 6 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. 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 a 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. Having established the above general principles, your specific inquiries shall now be addressed. Your first question pertaining to D's status as a public official /public employee has been fully addressed above. In response to your second question as to whether D may participate in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund when he participates in the non - uniform pension plan, which provides that no participant shall be required to make any contribution to the plan, you are advised as follows. Pursuant to Section 1103(a) of the Ethics Act, D would generally have a conflict of interest in matters that would financially impact himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated. However, the statutory definition of "conflict" or "conflict of interest' includes two exclusions, hereinafter referred to as the "de minimis" exclusion and the "class /subclass exclusion." Confidential Advice 03 -519 March 4, 2003 Page 7 The de minimis exclusion precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact upon D, a member of his immediate family, or a business with which he or a member of his immediate family is associated, a conflict would not exist and Sections 1103(a) and 1103(j) of the Ethics Act would not restrict D's participation in such matter. See, Schweinsburq, Order 900. In that your inquiry involves D's participation in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund, his action would not have a de minimis economic impact, and therefore, this exclusion would not apply. In order for the class /subclass exclusion to apply, two criteria must be met: (1) the affected public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be a member of a class consisting of the general public or a true subclass consisting of more than one member; and (2) the public official /public employee, immediate family member, or business with which the public official /public employee or immediate family member is associated must be affected "to the same degree" as the other members of the class /subclass. 65 Pa.C.S. § 1102; see, Graham, Opinion 95 -002 (citing Van Rensler, Opinion 90 -017); Rubenstein, Opinion 01 -007. The first criterion of the exclusion is satisfied where the members of the proposed subclass are similarly situated as the result of relevant shared characteristics. The second criterion of the exclusion is satisfied where the individual /business in question and the other members of the class /subclass are reasonably affected to the same degree by the proposed action. Kablack, Opinion 02 -003. In considering the first criterion, it would appear that the correct identification of the subclass to which D belongs is the subclass consisting of all non - uniform Township employees. An "employee" is defined in the Non - Uniformed Employees Pension Plan as 'any employee who is employed by the employer, on a regular full -time, permanent basis other than a police officer, for this purpose, a full -time employee shall mean an employee who is employed by the employer more than five (5) months per each calendar year and employed more than twenty (20) hours per week." Non - Uniformed Employees Pension Plan, §[Number]. It should be noted that such a subclass exists solely for the purposes of the Non - Uniformed Employees Pension Plan, which establishes non - uniformed employees as those individuals who are covered by said Plan. In other scenarios, D would not belong to a true subclass consisting of more than one member in that he is the only A in Township B. In considering the second criterion, the Non - Uniformed Employees Pension Plan provides in part that upon retirement, a participant shall be entitled to a monthly retirement benefit equal to a percentage of his base average monthly compensation multiplied by his years of service, plus a percentage of his excess average monthly compensation multiplied by his years of credited service. See, Non - Uniformed Employees Pension Plan, §[Number]. The submitted facts, however, do not disclose any of the above variables - base average monthly compensation, years of service, excess average monthly compensation, and years of credited service - as they pertain to D or to any other non - uniformed Township employee; therefore, a determination cannot be made as to whether D would be reasonably affected to the same degree as all the other non - uniform Township employees who make up the subclass. When a factual insufficiency exists as to the impact of D's proposed action upon the monthly retirement benefits of the members of the subclass consisting of all non - uniformed Township employees, an advisory must necessarily be limited to providing general guidance. If, as a result of D's proposed action, he would be affected to the same degree as the other members of the subclass of non - uniformed Township employees with respect to his monthly retirement benefits, the class /subclass exclusion would apply and he Confidential Advice 03 -519 March 4, 2003 Page 8 would not have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund. If, as a result of D's proposed action, he would not be affected to the same degree as the other members of the subclass of non - uniformed Township employees, the class /subclass exclusion would not apply and he would have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund. In each instance of a conflict, D would be required to abstain from participating and observe the disclosure requirements of Section 1103(j) of the Ethics Act. Your third question asks whether D may serve on the management committee which negotiates the Collective Bargaining Agreement with the Township's Police Benevolent Association. Factually, you have not indicated whether the Collective Bargaining Agreement would include benefits or would be limited to salary. You state that D's salary as A is set by Council, and by ordinance, his healthcare coverage, vacation, sick days, personal days, and other leaves, are and shall remain identical to those benefits enjoyed by the uniformed Township employees. Based upon the foregoing, if the Collective Bargaining Agreement would include benefits, D would have a conflict of interest under Section 1103(a) of the Ethics Act as to serving on the management committee because he would be using the authority of his office or confidential information for a private pecuniary benefit to himself. The class /subclass exclusion would not apply in such a case, because D would not belong to the subclass of police officers or a true subclass consisting of more than one member in that he is the only A in Township B. As noted above, D would be required to abstain and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. If the Collective Bargaining Agreement would be limited to the salaries of uniformed employees, D would not have a conflict of interest under Section 1103(a) of the Ethics Act as to serving on the management committee because his use of authority of office would not result in a private pecuniary benefit to himself. 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 Second Class Township Code. Conclusion: As the A for Township B, D is both a public official and a public empubject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. As to whether D may participate in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non- uniform pension fund when he participates in the non - uniform pension plan, pursuant to Section 1103(a) of the Ethics Act, D would generally have a conflict of interest in matters that would financially impact himself, a member of his immediate family, or a business with which he or a member of his immediate family is associated unless the "de minimis" exclusion or the "class /subclass" exclusion to the definition of conflict or conflict of interest would apply. The "de minimis" exclusion would not apply under the submitted facts for the reasons stated above. Confidential Advice 03 -519 March 4, 2003 Page 9 As for the "class /subclass" exclusion, it would appear that D would belong to a subclass consisting of all non - uniform Township employees subject to the qualifications noted above. With respect to whether D and the other members of the subclass would be reasonably affected to the same degree, the submitted facts indicate that a participant in the Non - Uniformed Employees Pension Plan shall be entitled to a monthly retirement benefit equal to a percentage of his base average monthly compensation multiplied by his years of service, plus a percentage of his excess average monthly compensation multiplied by his years of credited service. The submitted facts, however, do not disclose any of the above variables - base average monthly compensation, years of service, excess average monthly compensation, and years of credited service - as they pertain to D or to any other non - uniformed Township employee; therefore, a determination cannot be made as to whether D would be reasonably affected to the same degree as all the other non - uniform Township employees who make up the subclass. In the absence of additional facts, only the following general guidance may be given. If, as a result of D's proposed action, he would be affected to the same degree as the other members of the subclass of non - uniformed Township employees with respect to his monthly retirement benefits, the class /subclass exclusion would apply and he would not have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund. If, as a result of D's proposed action, he would not be affected to the same degree as the other members of the subclass of non - uniformed Township employees, the class /subclass exclusion would not apply and he would have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in discussions of the Board of Supervisors with regard to the allocation of State funds between the uniform pension fund and the non - uniform pension fund. In each instance of a conflict, D would be required to abstain from participating and observe the disclosure requirements of Section 1103(j) of the Ethics Act. As to whether D may serve on the management committee which negotiates the Collective Bargaining Agreement with the Township's Police Benevolent Association, the submitted facts to not indicate whether the Collective Bargaining Agreement would include benefits or would be limited to salary. You state that D's salary as A is set by Council, and by ordinance, his healthcare coverage, vacation, sick days, personal days, and other leaves, are and shall remain identical to those benefits enjoyed by the uniformed Township employees. Based upon the foregoing, if the Collective Bargaining Agreement would include benefits, D would have a conflict of interest under Section 1103(a) of the Ethics Act as to serving on the management committee because he would be using the authority of his office or confidential information for a private pecuniary benefit to himself. The class /subclass exclusion would not apply in such a case, because D would not belong to the subclass of police officers, or a true subclass consisting of more than one member in that he is the only A in Township B. As noted above, D would be required to abstain and to observe the disclosure requirements of Section 1103(j) of the Ethics Act. If the Collective Bargaining Agreement would be limited to the salaries of the uniformed employees, D would not have a conflict of interest under Section 1103(a) of the Ethics Act as to serving on the management committee because his use of authority of office would not result in a private pecuniary benefit to himself. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Confidential Advice 03 -519 March 4, 2003 Page 10 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