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HomeMy WebLinkAbout25-544 BolockPHONE: 717-783-1610 TOLL FREE: 1-800-932-0936 STATE ETHICS COMMISSION FINANCE BUILDING 613 NORTH STREET, ROOM 309 HARRISBURG, PA 17120-0400 FACSIMILE: 717-787-0806 WEBSITE: www.ethics.pa.gov ADVICE OF COUNSEL October 20, 2025 To the Requester: Frank J. Bolock, Jr., Esquire Dear Mr. Bolock: 25-544 This responds to your letter dated September 22, 2025, by which you requested an advisory from the Pennsylvania State Ethics Commission ("Commission"), seeking guidance as to the issue presented below: Issue: Whether, pursuant to Section 1103(a) of the Public Official and Employee Ethics Act ("Ethics Act"), 65 Pa.C.S. § 1103(a), a member of the board of directors of a sewer authority would have a conflict of interest with regard to participating in discussions, deliberations, or votes of the sewer authority board pertaining to the potential dedication to the sewer authority of a residential subdivision's private sanitary sewer system, where: (1) the sanitary sewer system is owned by the developer of the residential subdivision; (2) the member owns and resides at a property located in the residential subdivision and is a member of the residential subdivision's homeowners association; and (3) if the sanitary sewer system would not be dedicated to the sewer authority by the developer it might ultimately be dedicated to the homeowners association, which would then be responsible for the payment of expenses associated with maintaining the sanitary sewer system. Brief Answer: NO. The mere possibility that the sewer authority board member, in his private capacity as a member of the homeowners association, might at some point in time have some responsibility for the payment of expenses associated with maintaining the sanitary sewer system if it would ultimately be dedicated to the homeowners association instead of to the sewer authority is too remote and speculative to establish a conflict of interest under the Ethics Act. Therefore, under the submitted facts, the member of the sewer authority board would not have a conflict of interest with regard to participating in Bolock, 25-544 October 20, 2025 Page 2 discussions, deliberations, or votes of the sewer authority board pertaining to the potential dedication of the sanitary sewer system to the sewer authority. Facts: As the Solicitor for the Dalton Sewer Authority (“Sewer Authority”), you have been authorized by Nikola Lalovic (“Mr. Lalovic”), who is a Member of the Sewer Authority Board of Directors (“Sewer AuthorityBoard”), to request an advisory from the Commission on his behalf. You have submitted facts that may be fairly summarized as follows. In early 2000 Joseph and Carol Chermak (“the Chermaks”), who owned approximately 26.5 acres of land located in Dalton Borough (“the Borough”), sought and eventually received preliminary subdivision approval from the Borough to develop this land into the Woodland Hills Subdivision (“the Residential Subdivision”), consisting of single-family residential lots. The Borough subsequently approved the plan for the Residential Subdivision with the understanding that the sanitary sewer system of the Residential Subdivision would be privately owned. The provisions of a Declaration of Protective Covenants and Restrictions for Woodwind Hills Subdivision that was filed with the Lackawanna County Recorder of Deeds in August 2003 reflect the intention that the Chermaks would eventually convey the Residential Subdivision’s sanitary sewer system and the accompanying maintenance responsibilities to the Woodwind Hills Homeowners Association (“the Homeowners Association”). The Chermaks have not yet conveyed the Residential Subdivision’s sanitary sewer system to the Homeowners Association. Joseph Chermak has informally approached the Sewer Authority with regard to the potential dedication of the Residential Subdivision’s sanitary sewer system to the Sewer Authority. If the Sewer Authority would accept the dedication, the Chermaks and potentially the Homeowners Association would be relieved of the responsibility of maintaining the sanitary sewer system in perpetuity. Mr. Lalovic owns and resides at a property located in the Residential Subdivision. By virtue of Mr. Lalovic’s home ownership, he is a member of the Homeowners Association. The question that is presented by your advisory request is whether Mr. Lalovic would have a conflict of interest with regard to participating in discussions, deliberations, or votes of the Sewer Authority Board pertaining to the potential dedication of the Residential Subdivision’s sanitary sewer system to the Sewer Authority. 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 requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage in an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester 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 requester has truthfully disclosed all of the material facts. Bolock, 25-544 October 20, 2025 Page 3 Sections 1103(a) and 1103(j) of the Ethics Act provide: § 1103. Restricted activities (a) Conflict of interest.--No public official or public employee shall engage in conduct that constitutes a conflict of interest. (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(a), (j). The following terms related to Section 1103(a) 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 Bolock, 25-544 October 20, 2025 Page 4 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. “Business.” Any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint 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. Subject to the statutory exclusions to the Ethics Act’s definition of the term “conflict” or “conflict of interest” (i.e., the “de minimis exclusion” and the “class/subclass exclusion”), 65 Pa.C.S. § 1102, a public official/public employee is prohibited from using the authority of public office or confidential information received by holding such a public position for the private pecuniary (financial) benefit of the public official/public employeehimself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. The use of authority of office is not limited merely to voting but extends to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. In each instance of a conflict of interest, a public official/public employee would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 1103(j) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 1103(j) of the Ethics Act would have to be satisfied in the event of a voting conflict. Per the Pennsylvania Supreme Court’s decision in Kistler v. State Ethics Commission, 610 Pa. 516, 22 A.3d 223 (2011), in order to violate Section 1103(a) of the Ethics Act, a public official/public employee: … must act in such a way as to put his \[office/public position\] to the purpose of obtaining for himself a private pecuniary benefit. Such directed action implies awareness on the part of the \[public official/public employee\] of the potential pecuniary benefit as well as the motivation to obtain that benefit for himself. Bolock, 25-544 October 20, 2025 Page 5 Kistler, supra, 610 Pa. at 523, 22 A.3d at 227. To violate Section 1103(a) of the Ethics Act, a public official/public employee “must be consciously aware of a private pecuniary benefit for himself, his family, or his business, and then must take action in the form of one or more specific steps to attain that benefit.” Id., 610 Pa. at 528, 22 A.3d at 231. Conclusion: In applying the above provisions of the Ethics Act to the instant matter, you are advised as follows. As a Member of the Sewer Authority Board, Mr. Lalovic is a public official subject to the provisions of the Ethics Act. Pursuant to Section 1103(a) of the Ethics Act, Mr. Lalovic generally would have a conflict of interest in matters before the Sewer Authority Board that would financially impact him, a member of his immediate family, or a business with which he or a member of his immediate family is associated. Under the submitted facts, although the Homeowners Association is a “business” as the Ethics Act defines that term, the Homeowners Association would not be considered a business with which Mr. Lalovic is associated. (It is noted that membership in the Homeowners Association alone is not sufficient to make it a business with which Mr. Lalovic is associated.) Although the avoidance of expenses may constitute a private pecuniary benefit, the mere possibility that Mr. Lalovic, as a member of the Homeowners Association, might at some point in time have some responsibility for the payment of expenses associated with maintaining the Residential Subdivision’s sanitary sewer system if it would ultimately be dedicated to the Homeowners Association instead of to the Sewer Authority is too remote and speculative to establish a conflict of interest under the Ethics Act. Therefore, under the submitted facts, you are advised that Mr. Lalovic would not have a conflict of interest with regard to participating in discussions, deliberations, or votes of the Sewer Authority Board pertaining to the potential dedication of the Residential Subdivision’s sanitary sewer system to the Sewer Authority. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1107(11) of the Ethics Act, 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 requester 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 Bolock, 25-544 October 20, 2025 Page 6 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. Respectfully, Bridget K. Guilfoyle Chief Counsel