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Home My WebLink About26-513 Kutz PHONE: 717-783-1610 STATE ETHICS COMMISSION FACSIMILE: 717-787-0806 TOLL FREE: 1-800-932-0936 FINANCE BUILDING WEBSITE: www.ethics.pa.gov 613 NORTH STREET, ROOM 304 HARRISBURG, PA 17120-0400 ADVICE OF COUNSEL February 26, 2026 To the Requester: Lorenda Kutz Mayor, Borough of Ashland 26-513 Dear Mayor Kutz: This responds to your letter dated February 12,2026, by which you requested an advisory from the Pennsylvania State Ethics Commission (“Commission”), seeking guidance as to the issue presented below: Issue: Whether the Public Official and Employee Ethics Act (“Ethics Act”), 65 Pa.C.S. § 1101 et seq., would prohibit or restrict an individual serving as a borough mayor, who in her private capacity owns a historic building located within the borough, from seeking historic preservation grant funding to stabilize and restore the building, where the borough would not provide any funds for restoration of the building but instead would serve solely as a fiscal agent/pass-through entity for the grant funds for accounting and compliance purposes. Brief Answer:NO. Section 1103(a) of the Ethics Act, pertaining to conflict of interest, imposes restrictions upon the individual in her capacity as the borough mayor rather than upon her in her private capacity. Therefore, Section 1103(a) of the Ethics Act would not prohibit or restrict the individual, in her private capacity as the owner of the building, from seeking historic preservation grant funding for the building under an arrangement where the borough would serve as a fiscal agent/pass-through entity for the grant funds for accounting and compliance purposes. However, in her public capacity as the borough mayor, the individual would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in any matters pertaining to the borough’s oversight of the use of the grant funds. Kutz, 26-513 February 26, 2026 Page 2 Facts: You request an advisory from the Commission based upon the following submitted facts. You are Mayor of the Borough of Ashland (“Borough”), located in Schuylkill County, Pennsylvania. In your private capacity you are the owner of a historic building (“the Building”) that is located in the Borough’s historic corridor. You are seeking historic preservation grant funding for the Building to stabilize and restore itin order to reduce blight, preserve historic character, and support tourism and economic revitalization. No Borough funds are being requested for restoration of the Building. It has been suggested that the Borough could serve solely as a fiscal agent/pass-through entity for the grant funds for accounting and compliance purposes if such an arrangement would be legally and ethically permissible. You state that you have fully disclosed your ownership of the Building to Borough Council and that you intend to recuse yourself from any discussion, deliberation, vote, or other official action related to this matter. Based upon the above submitted facts, you pose the following questions: (1) Whether the Ethics Act would permit you to pursue historic preservation grant funding for the Building in your private capacity as the owner of the Building; (2) Whether it would be ethically permissible for the Borough to serve solely as a fiscal agent/pass-through entity for your historic preservation grant funds for accounting and compliance purposes; and (3) What disclosures, recusals, or additional safeguards would be required to remain in compliance with the Ethics Act. Discussion: 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 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 material facts. Sections 1103(a)and 1103(j) of the Ethics Act provide: § 1103. Restricted activities Kutz, 26-513 February 26, 2026 Page 3 (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 membersof 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), 1103(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 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. Kutz, 26-513 February 26, 2026 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. 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 employee himself, 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. 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 the Borough Mayor, you are a public official subject to the provisions of the Ethics Act. Pursuant to Section 1103(a) of the Ethics Act, you generally would have a conflict of interest in Kutz,26-513 February 26, 2026 Page 5 matters before Borough Council that would financially impact you, a member of your immediate family, or a business with which you or a member of your immediate family is associated. Section 1103(a) of the Ethics Act imposes restrictions upon you in your capacity as the Borough Mayor rather than upon you in your private capacity. Therefore, Section 1103(a) of the Ethics Act would not prohibit you from pursuing historic preservation grant funding for the Buildingin your private capacity as the owner of the Building. Because the Ethics Act does not impose restrictions upon political subdivisions such as the Borough, the Ethics Act would not prohibit the Borough from serving solely as afiscal agent/pass-through entity for your historic preservation grant funds for accounting and compliance purposes. However, in your capacity as the Borough Mayor, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act with regard to participating in any matters pertaining to the Borough’s oversight of the use of your historic preservation grant funds. As noted above, in each instance of a conflict of interest, you 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. 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 receivedat 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. Respectfully, Bridget K. Guilfoyle Chief Counsel