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HomeMy WebLinkAbout06-006 Svirsko, Jr.OPINION OF THE COMMISSION Alex L. Svirsko, Jr., Esquire 1021 Church Avenue Johnstown, PA 15901 Before: Louis W. Fryman, Chair John J. Bolger, Vice Chair Donald M. McCurdy Paul M. Henry Raquel K. Bergen Nicholas A. Colafella Reverend Scott Pilarz DATE DECIDED: 5/31/06 DATE MAILED: 6/12/06 06 -006 Dear Mr. Svirsko: This Opinion is issued in response to your advisory request dated March 8, 2006. I. ISSUE: Whether, pursuant to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., Borough Council Members serving a Borough with a population of less than 3,000 would have conflicts of interest under the Ethics Act with regard to: (1) simultaneously serving as compensated as needed" or part -time Borough employees; and (2) participating in approving payments by the Borough for their own compensation as Borough employees, either as Borough bills or as part of payroll, and whether the analysis of the latter question would be impacted if these Council Members would be needed to constitute a quorum at regular monthly Council meeting(s) when payments for their hours worked for the Borough would be reviewed /approved. II. FACTUAL BASIS FOR DETERMINATION: As Solicitor for Lorain Borough (Borough), you request an advisory opinion on behalf of Borough Council Members John Custer (Custer), Terry L. Kauffman (T. L. Kauffman) and Terry P. Kauffman (T.P. Kauffman). You have submitted facts that may be fairly summarized as follows. Borough Council is comprised of seven Members, all of whom serve without compensation. Custer, T. L. Kauffman and T. P. Kauffman were elected to Borough Council in the 2005 municipal election. Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 2 In addition to serving on Council, Custer, T. L. Kauffman and T. P. Kauffman are employed by the Borough on an as needed" or part -time basis. As Borough employees, these Council Members receive an hourly rate of compensation established by Council. The current hourly rate is $6.65 per hour, which rate was established by Council on December 14, 2005. You state that Custer, T. L. Kauffman and T. P. Kauffman keep track of the hours that they work for the Borough and submit that information to the Borough Secretary. Noting that as of July 2004, the Borough had an estimated population of 712, you ask whether Custer, T. L. Kauffman and T. P. Kauffman would have conflicts of interest under the Ethics Act with regard to: (1) simultaneously serving as compensated as needed" or part -time Borough employees; and (2) participating in approving payments by the Borough for their own compensation as Borough employees, either as Borough bills or as part of payroll, and whether the analysis of the latter question would be impacted if these Council Members would be needed to constitute a quorum at regular monthly Council meeting(s) when payments for their hours worked for the Borough would be reviewed /approved. On May 25, 2006, you faxed to this Commission a Memorandum referencing 53 P.S. § 46104 and raising legal arguments. With regard to the exclusions to the statutory definition of "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, you state that it cannot be determined whether the action of voting as to the compensation of the Borough Council Members /employees would have an insignificant economic effect on the Borough or any other person. However, you contend that the "class /subclass" exclusion would apply in this matter. Further, you contend that Section 1103(j) of the Ethics Act would permit the Council Members /employees to vote to approve their own compensation as bills /payroll. By letter dated April 28, 2006, you were notified of the date, time and location of the public meeting at which your request would be considered. It is noted that at or about the commencement of this Commission's public meeting on May 31, 2006, you telephoned the Commission office and stated that you were en route to the meeting but that you would be arriving late. This matter was moved to the end of the public meeting agenda. When all other matters on the public meeting agenda had been completed, and immediately prior to our review and deliberation of this matter, it was determined that you still had not arrived at the meeting. In the absence of any request for a continuance, this Commission considered and decided this matter. Following the public meeting, while this Commission was meeting in executive session, you appeared at the Commission office accompanied by an unidentified individual. As a courtesy, we took a brief recess from the executive session, during which time you proffered commentary and we apprised you of the disposition that had already been made in this matter. III. 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, this 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. It is further initially noted that, pursuant to the same aforesaid Sections of the Ethics Act, an opinion /advice may be given only as to prospective (future) conduct. If the activity in question has already occurred, this Commission may not issue an opinion /advice but any person may then submit a signed and sworn complaint, which will be investigated by Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 3 this Commission if there are allegations of Ethics Act violations by a person who is subject to the Ethics Act. To the extent you have inquired as to conduct that has already occurred, such past conduct may not be addressed in the context of an advisory opinion. However, to the extent you have inquired as to future conduct, your inquiry may and shall be addressed. As Borough Council Members, Custer, T. L. Kauffman and T. P. Kauffman are public officials subject to the provisions of the Ethics Act. 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 pertaining to conflicts of interest under the Ethics Act are defined 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 Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 4 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. "Immediate family." A parent, spouse, child, brother or sister. 65 Pa.C.S. § 1102. 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. The above statutory definition of "conflict" or "conflict of interest" contains two exclusions, referred to herein as the "de minimis" exclusion and the "class /subclass exclusion." 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, a conflict would not exist and Section 1103(a) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsburq, Order 900. 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" (in no way differently) than the other members of the class /subclass. 65 Pa.C.S. § 1102; see, Kablack, Opinion 02 -003; 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, supra. Subject to certain voting conflict exceptions, Section 1103(j) of the Ethics Act requires a public official /public employee with a conflict of interest 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. Sections 1103(b) and 1103(c) of the Ethics Act, pertaining to improper influence, provide as follows: § 1103. Restricted activities (b) Seeking improper influence. —No person shall offer or give to a public official, public employee or nominee or Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 5 candidate for public office or a member of his immediate family or a business with which he is associated, anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment based on the offeror's or donor's understanding that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. (c) Accepting improper influence. —No public official, public employee or nominee or candidate for public office shall solicit or accept anything of monetary value, including a gift, loan, political contribution, reward or promise of future employment, based on any understanding of that public official, public employee or nominee that the vote, official action or judgment of the public official or public employee or nominee or candidate for public office would be influenced thereby. 65 Pa.C.S. §§ 1103(b), (c). The term "person" is defined in the Ethics Act as follows: § 1102. Definitions "Person." A business, governmental body, individual, corporation, union, association, firm, partnership, committee, club or other organization or group of persons. 65 Pa.C.S. § 1102. Reference is made to Sections 1103(b) and 1103(c) of the Ethics Act not to imply that there has been or will be any transgression thereof but merely to provide a complete response to the question presented. In applying the above provisions of the Ethics Act to your inquiry, your first question is whether Council Members Custer, T. L. Kauffman and T. P. Kauffman would have conflicts of interest under the Ethics Act with regard to simultaneously serving as compensated as needed" or part -time Borough employees. In considering the question of simultaneous service, we must first determine whether the positions in question have been statutorily declared incompatible. It is noted that the General Assembly has the constitutional power to declare by law which offices are incompatible. Pa. Const. Art. 6, § 2. In this case, the applicable statute to be reviewed is the Borough Code, which provides, in pertinent part, as follows: § 46104. Appointments; incompatible offices Unless there is incompatibility in fact, any elective or appointive officer of the borough shall be eligible to serve on any board, commission, bureau or other agency created by or for the borough, or any borough office created or authorized by statute and may accept appointments thereunder, but no mayor or member of council shall receive compensation therefor. No elected borough official of a borough with a population of 3,000 or more may serve as an employe of that borough... . Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 6 53 P.S. § 46104 (Emphasis added). Although this Commission does not have statutory authority to interpret the Borough Code, it would seem that on its face, the above provision would permit simultaneous service in the positions of Borough Council Member and compensated as needed" or part - time Borough employee as long as the population of the Borough would remain under 3,000. Having concluded that the positions in question have not been declared incompatible by the General Assembly, the next step in our analysis is to determine whether simultaneous service in these positions would result in an inherent conflict under Section 1103(a) of the Ethics Act. An inherent conflict is a continual state of conflict under the Ethics Act, such as, for example, where in one position the public official /public employee is accountable to himself in another position on a continual basis. See, McCain, Opinion 02 -009. We have determined that when an inherent conflict would exist, it would be impossible, as a practical matter, for the public official /public employee to function in the conflicting positions without running afoul of Section 1103(a) of the Ethics Act. Id. In this case, based upon the facts that have been submitted, there does not appear to be an inherent conflict that would preclude simultaneous service as a Borough Council Member and as an as needed" or part -time Borough employee. Absent a statutorily - declared incompatibility or an inherent conflict, Section 1103(a) of the Ethics Act would not preclude an individual from simultaneously serving in more than one position, but in each instance of a conflict of interest, the individual would be required to abstain and to satisfy the disclosure requirements of Section 1103(j) as set forth above. Therefore, you are advised that the Ethics Act would not prohibit Custer, T. L. Kauffman and T. P. Kauffman from simultaneously serving as Borough Council Members and compensated as needed" or part -time Borough employees conditioned upon the assumption that the population of the Borough would remain under 3,000. However, such dual roles would be likely to result in conflicts of interest for Custer, T. L. Kauffman and T. P. Kauffman, and these Council Members would be required to observe the restrictions and requirements of Sections 1103(a) and 1103(j) of the Ethics Act. You have specifically asked whether Custer, T. L. Kauffman and T. P. Kauffman would have conflicts of interest with regard to participating in approving payments by the Borough for their own compensation as Borough employees, either as Borough bills or as part of payroll, and whether the analysis of this question would be impacted if these Council Members would be needed to constitute a quorum at Council meeting(s) when payments for their hours worked for the Borough would be reviewed /approved. You have indicated that it cannot be determined whether the "de minimis" exclusion would apply in the instant matter. We agree. Given the limited submitted facts, which provide the hourly rate of compensation for Council Members /employees but no information whatsoever as to the number of hours they might be expected to work, it is impossible to determine whether the "de minimis" exclusion would apply in the instant matter. In the absence of sufficient facts, we shall not speculate as to the applicability or inapplicability of the de minimis exclusion, but rather, shall reach our holding based upon the restrictions of the Ethics Act that are generally applicable. As for the class /subclass exclusion, we reject your contention that such exclusion would apply in the instant matter. For the class /subclass exclusion to apply, the Borough Council Members /employees would have to be affected by their actions to approve Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 7 employee compensation to the same degree as all other members of a true class /subclass. However, regardless of whether the class /subclass would be delineated to include all Borough employees or only the Borough Council Members /employees, the class /subclass exclusion would not apply because the amounts of compensation claimed by the Council Members /employees would vary depending upon the number of hours worked. Therefore, we hold that generally, pursuant to Section 1103(a) of the Ethics Act, Custer, T. L. Kauffman and T. P. Kauffman would each have a conflict of interest as to participating in reviewing /approving payments by the Borough for his own compensation as an "as- needed" or "part- time" Borough employee, regardless of whether the review /approval of such compensation would occur in the context of general Borough bills or as part of payroll. See, Small, Order 1391; Schweinsberq, Order 940. Subject to certain voting conflict exceptions, in each instance of a conflict, Section 1103(j) of the Ethics Act requires the public official /public employee to abstain completely 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 instant matter, the potential problem of having an insufficient number of non - conflicted Council Members present at a given meeting to review /approve employee compensation for Custer, T. L. Kauffman and T. P. Kauffman might be avoided by having the compensation for each employee /Council Member considered by Council as a separate item. Under such a scenario, as long as there would be no improper influence /understandings in violation of Section 1103(b) or Section 1103(c) of the Ethics Act, each Council Member could participate in the review /approval of the employee compensation for the other Council Members unless there would be some other basis for a conflict of interest, such as the existence of an immediate family relationship between Council Members. If Borough Council would review /approve the employee compensation for Custer, T. L. Kauffman and T.P. Kauffman together, either as part of the general Borough bills or payroll, then practical difficulties could arise. For example, if there would be only four Council Members present at a regular monthly meeting, and two or all three of the aforesaid employee /Council Members would be among them, there would be an insufficient number of non - conflicted Council Members present at the meeting to take action in such matters. Although Section 1103(j) of the Ethics Act contains two voting conflict exceptions, you are advised that under the submitted facts, neither of the exceptions would apply. The exception for breaking a tie vote despite a conflict is available exclusively to members of three - member governing bodies who first abstain and disclose their conflicts as required by Section 1103(j) of the Ethics Act. See, Pavlovic, Opinion 02 -005. That exception would not apply in the instant matter, because Borough Council is not a three - member board. The other exception is not limited to three - member boards but requires that the following conditions be met: (1) the board must be unable to take any action on the matter before it because the number of members required to abstain from voting under the provisions of the Ethics Act makes the majority or other legally required vote of approval unattainable; and (2) prior to voting, such members with conflicts under the Ethics Act must disclose their conflicts as required by Section 1103(j). Id. Per the submitted facts, only three Council Members would have conflicts as to the compensation of the Council Members /employees. Furthermore, the submitted facts do not indicate any other bases for conflicts of interest on the part of other Council Members as to the Borough bills or payroll. With four non - conflicted Council Members fully capable of reviewing /approving such matters, Council would be able to take action and the legally required vote of approval Svirsko /Custer /Kauffman /Kauffman, 06 -006 June 12, 2006 Page 8 would be attainable, such that the voting conflict exception would not apply. We are aware that in Garner, Opinion 93 -004, this Commission concluded that Section 1103(j) of the Ethics Act would allow a member of a three - member board to second a motion where the two remaining supervisors would have opposing views or where one of the other two supervisors would be absent. This Commission emphasized that its ruling in Garner was expressly limited in its application to three - member boards. In the instant matter, the mere absence of board members from a particular Borough Council meeting would have no legal significance, because Borough Council is a seven - member board. Council could simply defer the matter of reviewing /approving employee /Council Member compensation to another date. 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. IV. CONCLUSION: Borough Council Members are public officials subject to the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. The Ethics Act would not prohibit Borough Council Members from simultaneously serving as compensated as needed" or part -time Borough employees conditioned upon the assumption that the population of the Borough would remain under 3,000. Generally, pursuant to Section 1103(a) of the Ethics Act, a Borough Council Member receiving compensation at an hourly rate as an as needed" or part -time Borough employee would have a conflict of interest with regard to participating in reviewing /approving his or her own employee compensation, regardless of whether such review /approval would occur in the context of general Borough bills or as part of payroll. In each instance of a conflict of interest, a Borough Council Member would be required to abstain fully from participation and to satisfy the disclosure requirements of Section 1103(j) of the Ethics Act. Neither of the voting conflict exceptions of Section 1103(j) would apply to permit Borough Council Members serving on a seven - member board to vote to approve their own employee compensation where only three Council Members would have conflicts of interest under the Ethics Act. Act. The propriety of the proposed conduct has only been addressed under the Ethics Pursuant to Section 1107(10), the person who acts in good faith on this Opinion issued to him shall not be subject to criminal or civil penalties for so acting provided the material facts are as stated in the request. This letter is a public record and will be made available as such. Finally, a party may request the Commission to reconsider its Opinion. The reconsideration request must be received at this Commission within thirty days of the mailing date of this Opinion. The party requesting reconsideration must include a detailed explanation of the reasons as to why reconsideration should be granted in conformity with 51 Pa. Code § 21.29(b). By the Commission, Louis W. Fryman Chair