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HomeMy WebLinkAbout06-575 ConnerNancy Conner, Council Secretary Borough of Tullytown 500 Main Street Tullytown, PA 19007 Dear Ms. Conner: ADVICE OF COUNSEL August 4, 2006 06 -575 This responds to your letter of July 5, 2006, by which you requested advice from the State Ethics Commission. Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa. .S. § 1101 et seq., presents any prohibition or restrictions upon two borough council members from voting upon a proposed non - uniformed borough employees pension plan in which one council member's daughter and one council member's sister, as non - uniformed borough employees, would be eligible to participate. Facts: As Council Secretary of Tullytown Borough ( "Borough "), you have been authorized to seek an advisory from the State Ethics Commission on behalf of Council Members Rick Adams ( "Adams ") and Matt Pirolli ( "Pirolli "). You have submitted the following facts. In the near future, Borough Council will vote on a proposed defined benefit pension plan for non - uniformed Borough employees. Adams daughter, Sandi Adams, and Pirolli's sister, Beth Pirolli, are non - uniformed employees of the Borough and would be eligible to participate in the pension plan. Adams' daughter and Pirolli's sister are paid an hourly rate of $18.58. Five other non - uniformed Borough employees would also be eligible to participate in the pension plan. Two of these five employees are paid an hourly rate of $18.58, and the other three are paid an hourly rate between $19.09 and $21.08. All eligible employees would be equally entitled to the defined benefit of the pension plan. You ask whether Adams and Pirolli may vote on the proposed pension plan for non - uniformed Borough employees. 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 Conner /Adams /Pirolli, 06 -575 August 4, 2006 Page 2 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. As Council Members for the Borough, Adams and Pirolli are public officials as that term is defined in the Ethics Act, and hence they are subject to the provisions of that Act. 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. "Immediate family." A parent, spouse, child, brother or sister. 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 Conner /Adams /Pirolli, 06 -575 August 4, 2006 Page 3 (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(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, Pavlovic, Opinion 02 -005. 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 inquiry shall now be addressed. Based upon the submitted facts, you are advised that participation by Adams and Pirolli in voting on the proposed pension plan for non - uniformed Borough employees would be a conflict for both Council Members. Adams' daughter is a member of Adams' "immediate family" and Pirolli's sister is a member of Pirolli's "immediate family" as that term is defined in the Ethics Act. Under Section 1103(a) of the Ethics Act, Adams and Pirolli would use the authority of office by participating in voting on the proposed pension plan. Further, such action would result in private pecuniary benefits to Adams' daughter and Pirolli's sister, consisting of eligibility to receive benefits under the pension plan as non - uniformed Borough employees. Hence, all elements of a conflict would exist. Conner /Adams /Pirolli, 06 -575 August 4, 2006 Page 4 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." The de minimis exclusion precludes a finding of a 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 a public official, 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 participation in such matter. See, Schweinsburq, Order 900. In that the inquiry involves the Council Members' participation in voting on a proposed pension plan that would cover seven non - uniformed Borough employees, including Adams' daughter and PiroIli's sister, such 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 Adams' daughter and PiroIli's sister belong is the subclass consisting of those non - uniformed Borough employees who are paid an hourly rate of $18.58 and would be eligible to participate in the proposed pension plan. Regarding the second criterion, concerning being affected to the same degree as the other members of the class /subclass, although the submitted facts state the pay rate for the members of the subclass, the submitted facts do not disclose the amount of pension benefits that each member of the subclass would be eligible to receive under the pension plan or disclose any variables, such as years of credited service, earnings history, or ages of the employees, that may impact upon the calculation of said benefits. Therefore, a determination cannot be made as to whether Adams' daughter and PiroIli's sister would be reasonably affected to the same degree as the other members of the subclass. When a factual insufficiency exists as to the impact of proposed action on members of the subclass, the advisory must necessarily be limited to providing general guidance. If, as a result of the proposed action, Adam's daughter and PiroIli's sister would be affected to the same degree (i.e., eligible to receive the approximate same amount of pension benefits) as the other members of the subclass of non - uniformed Borough employees who are paid an hourly rate of $18.58 and would be eligible to participate in the roposed pension plan, the class /subclass exclusion would apply and Adams and Pirolp would not have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in voting on the proposed pension plan. If, as a result of the proposed action, Adams' daughter and PiroIli's sister would not be affected to the same degree as the other members of the subclass, the class /subclass exclusion would not apply and Adams and PiroIli would have a conflict of Conner /Adams /Pirolli, 06 -575 August 4, 2006 Page 5 interest under Section 1103(a) of the Ethics Act as to participating in voting on the proposed pension plan. In any instance of a conflict, Adams and Pirolli would be required to abstain from participating and observe the disclosure requirements of Section 1103(j) of the Ethics Act. 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 Borough Code. Conclusion: As Council Members for Tullytown Borough ( "Borough "), Adams and Pirolli are public officials subject to the provisions of the Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq. Adams' daughter is a member of Adams' "immediate family" and Pirolli's sister is a member of Pirolli's "immediate family" as that term is defined in the Ethics Act. Adams' and Pirolli's participation in voting on the proposed pension plan for non - uniformed Borough employees would be a conflict for both Council Members as such action would result in private pecuniary benefits to Adams' daughter and Pirolli's sister consisting of eligibility to receive pension benefits under the plan. 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." The de minimis 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. In considering the first criterion, it would appear that the correct identification of the class /subclass to which Adams' daughter and Pirolli's sister belong is the subclass of those non - uniformed Borough employees who are paid an hourly rate of $18.58 and would be eligible to participate in the proposed pension plan. Regarding the second criterion, concerning being affected to the same degree as the other members of the class /subclass, although the submitted facts state the pay rate for the members of the subclass, the submitted facts do not disclose the amount of pension benefits that each member of the subclass would be eligible to receive or disclose any variables that may impact on the calculation of said benefits. Therefore, a determination cannot be made as to whether other members of the subclass would be affected to the same degree. Due to a factual insufficiency, it has not been established that the class /subclass exclusion would apply. If, as a result of the proposed action, Adams' daughter and Pirolli's sister would be affected to the same degree (i.e., eligible to receive the approximate same amount of pension benefits) as the other members of the subclass, the class /subclass exclusion would apply and Adams and Pirolli would not have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in voting on the proposed pension plan. If, as a result of the proposed action, Adams' daughter and Pirolli's sister would not be affected to the same degree as the other members of the class /subclass, the class /subclass exclusion would not apply and Adams and Pirolli would have a conflict of interest under Section 1103(a) of the Ethics Act as to participating in voting on the proposed pension plan. In any instance of a conflict, Adams and Pirolli would be required to abstain from participating and observe the disclosure requirements of Section 1103(j) of the Ethics Act. Conner /Adams /Pirolli, 06 -575 August 4, 2006 Page 6 Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. 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 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 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