New York State
Ethics Commission


Advisory Opinion No. 97-14: Whether the Watershed Protection and Partnership Council is a "state agency" within the meaning of Public Officers Law §§73, 73-a and 74.

INTRODUCTION

The following advisory opinion is issued in response to a request submitted by Richard M. Weinberg, General Counsel for the New York City Council, who asks whether the Watershed Protection and Partnership Council ("WPPC") is a "state agency" within the meaning of Public Officers Law §§73, 73-a and 74; and if it is, whether an individual appointed by the Speaker of the Council to serve on the WPPC would be a "state officer or employee" as defined by Public Officers Law §§73 and 73-a and an "officer or employee" of a state agency for purposes of Public Officers Law §74.

Pursuant to its authority under Executive Law §94(15), the New York State Ethics Commission ("Commission") hereby renders its opinion that the WPPC is a "state agency" for purposes of Public Officers Law §§73, 73-a and 74. Consequently, WPPC members, including the appointee of the Speaker of the City Council, will have to file financial disclosure statements pursuant to §73-a if the WPPC is designated as a policymaking council and will be subject to the provisions of §74, the code of ethics. They will not be subject to §73, as they are uncompensated. Employees of the WPPC will be subject to §§73, 73-a and 74.

BACKGROUND

The primary sources of water for the New York City water supply originate in portions of the Catskill Mountain Region and the Hudson River Valley. The area, commonly known as the Watershed of the New York City water supply and its sources, spans over 1,900 square miles and portions of eight counties, sixty towns and twelve villages. Protecting the City's Watershed has historically been a matter of great concern to both the City and the State. More than nine million residents of the City and surrounding areas depend upon the City's drinking water supply system.

On January 21, 1997, the New York City Watershed Memorandum of Agreement ("the Watershed MOA") was executed by the State, the City, the United States Environmental Protection Agency, the Coalition of Watershed Towns, the Catskill Watershed Corporation ("CW Corporation"), a newly created not-for-profit corporation, Putnam, Westchester and other counties, numerous towns and villages in the watershed and various not-for-profit environmental organizations concerned with protecting the City's drinking water supply.

The purpose of the Watershed MOA is to create a partnership between the parties that will enhance the development and implementation of a Watershed protection program to maintain and improve both the quality of the City's drinking water supply and the economic vitality and social character of the Watershed communities.

Watershed Protection and Partnership Council.

The parties to the Watershed MOA agreed to create the WPPC to aid in implementing the program [MOA, Article IV, §97]. It will be comprised of 27 members, of whom 16 will constitute the Executive Committee [MOA, Article IV, §98].

The 16 members who will serve as members of the Executive Committee are as follows:

  1. Two appointed by the Governor. One will be an employee of the Governor's office and the other will represent the business community interests of the West of Hudson Watershed and the East of Hudson Watershed;

  2. Two appointed by the Mayor. One will be a City employee to represent the Mayor's Office and the other will represent the rate paying consumers of the City's drinking water supply;

  3. Three chosen by the West of Hudson members appointed to the CW Corporation to represent the West Of Hudson Watershed communities, with no more than one from any county;

  4. One appointed by the Westchester County Executive to represent the East of Hudson Watershed Communities located in Westchester County;

  5. One appointed by the Putnam County Executive, subject to confirmation by the Putnam County Legislature, to represent the East Of Hudson Watershed Communities located in Putnam County;

  6. One appointed by the environmental parties to represent the environmental community;

  7. The Commissioners of the State Departments of Environmental Conservation and Health and the City Departments of Environmental Protection and Health, each serving ex officio; and

  8. The USEPA Region II Administrator and the the chairperson of the Watershed Agricultural Council, both of whom will be non-voting, ex officio members [MOA §104].

The 11 additional members are as follows:

  1. One appointed by the Mayor to represent the business community of the City;

  2. The Commissioners of the State Departments of Agriculture and Markets and Economic Development, the Secretary of State, and the President of the New York City Economic Development Corporation, each serving ex officio;

  3. One appointed by the Temporary President of the New York State Senate;

  4. One appointed by the Speaker of the New York State Assembly;

  5. One appointed by the Speaker of the New York City Council;

  6. One appointed by the Westchester County Executive to represent the residents of Westchester County that are consumers of the New York City water supply;

  7. One appointed by the Dutchess County Executive; and

  8. One appointed by the environmental parties to represent the environmental community. [MOA §100(a)].

The members of the WPPC, or their representatives, other than the ex officio members and those members who are employees of the State, City or federal government, are entitled to receive reimbursement for any "actual and necessary expenses incurred in the performance of their duties" [MOA §§100(c), 104(c)].

Each member of the Council will serve for a term of office and until his or her successor is appointed [MOA §102(i)]. Provision is made for the filling of vacancies [MOA §120(j)].

The Council will have committees and subcommittees which must meet at least annually [MOA §103(a)]. The full Council will have only limited powers, which include its serving as a forum for the exchange of ideas, reviewing and assessing the efforts taken to implement the agreement and obtaining input from various sources [MOA §101]. However, the Executive Committee is given much more extensive powers. It is intended to serve as a forum where disputes can be referred and resolved [MOA §105(a)].

While its powers to make final decisions are very limited -- it has the power to provide binding arbitration in matters on referral from Westchester or Putnam Counties and the City -- the Executive Committee is given the ability to play an important role in driving policy decisions. For example, it can recommend a Croton Plan, and it can consider certain objections to various projects, with a requirement that a project to which an objection has been filed must be held while the Committee considers the matter for the purpose of making a recommendation [MOA §§105, 107].

In §98 of the MOA, the parties agree that:

[Although] not public bodies as defined by section 102 of the Open Meetings Law, the Council, the Executive Committee, the East of Hudson Advisory Committee, the Technical Advisory Committee and the East of Hudson Sporting Advisory Committee shall conduct meetings consistent with sections 103, 104, 105 and 106 of the New York State Open Meetings Law. The Parties further agree that section 87 of the New York State Freedom of Information Law (entitled "access to agency records") is applicable to records kept by the Council, the Executive Committee, the East of Hudson Advisory Committee, the Technical Advisory Committee and the East of Hudson Sporting Advisory Committee.

Funding the WPPC - Agreement Between the City and State.

Contemporaneously with the execution of the Watershed MOA, an agreement was executed between the City Department of Environmental Protection and the Department of State ("DOS") for the funding of the WPPC. Article 1 of that agreement requires DOS to "establish and maintain" the WPPC. Under Article 2, DOS is mandated "to serve as program manager" and to administer and disburse the WPPC's operating funds. The agreement has been approved by the State Comptroller pursuant to §112 of the State Finance Law.

The City has agreed to pay $1,075,000 in WPPC Operating Funds to DOS over three years,(1) while the State has agreed to pay not less than $425,000. In the event appropriation authority is not available to enable the DOS to disburse operating funds, DOS is required to enter into an agreement with the Environmental Facilities Corporation to receive payment. All receipts, management and disbursement of funds are subject to audit by the State Comptroller, as provided by State law, and by the City Comptroller, pursuant to the New York City Charter and Administrative Code.

The Watershed MOA also contemplates funding for DOS to support the work of the WPPC. For fiscal year 1996-97, the Legislature has approved the Governor's request to sub-allocate up to $150,000 to DOS to establish a Master Plan and Zoning Incentive Award Account [§152(b) MOA]. An additional $350,000 for DOS is required to be included in subsequent Executive budgets to enable DOS to allocate Incentive Funds to certain parties that develop and implement community development tools and necessary local laws [MOA §152(c) MOA]. Further, DOS is mandated to establish and maintain a "one stop shopping" permit program to assist the regulated community in identifying the necessary governmental permits required to implement a regulated activity in the Watershed [MOA§152 (f)].

Under the terms of Article 6 of the funding agreement, headed "Personnel and Indemnification," the parties agree that members of the WPPC, except as they may hold other government positions, are not employees of the City or State.(2) The Article then goes on to discuss indemnification.

Article 8 of the Agreement is entitled Conflicts of Interest, and section 8.01A provides that:

Officers and employees of [DOS] are subject to the State's Code of Ethics set forth at §74 of the Public Officer's [sic] Law, the provisions of which shall apply to any decisions made by State officers and employees relating to this Agreement.

Weinberg's position.

Weinberg argues in his letter requesting the opinion that the WPPC should not be deemed a "state agency" since it performs local functions in assisting in the preservation of the City's drinking water supply and in helping to preserve the economic vitality of the Watershed region. He distinguishes these from State functions. In support of this position, he notes that the Governor appoints only two of the WPPC's 27 members. He further notes that the WPPC is not subject to the requirements imposed on State agencies with respect to hiring employees, as the Executive Committee may hire an Executive Director and other officers and employees, and fix their qualifications and compensation, without limitation. Finally, Weinberg notes that the members of the WPPC serve without compensation and only receive reimbursement for actual and necessary expenses incurred in the performance of their WPPC duties.

APPLICABLE STATUTES

Public Officers Law §73(1)(g) and §73-a(1)(b) define the term "state agency" as follows:

The term "state agency" shall mean any state department, or division, board, commission, or bureau of any state department, any public benefit corporation, public authority or commission at least one of whose members is appointed by the governor, or the state university of New York or the city university of New York, including all their constituent units except community colleges of the state university of New York and the independent institutions operating statutory or contract colleges on behalf of the state.

Public Officers Law §73(1)(i) defines "state officer or employee" as follows:

(i) heads of state departments and their deputies and assistants other than members of the board of regents of the university of the state of New York who receive no compensation or are compensated on a per diem basis;

. . .

(iii) officers and employees of state departments, boards, bureaus, divisions, commissions, councils or other state agencies other than officers of such boards, commissions or councils who receive no compensation or are compensated on a per diem basis . . . .

Public Officers Law §73-a, which imposes the financial disclosure filing requirement, defines the term "state officer or employee" as follows:

(i) heads of state departments and their deputies and assistants;

(ii) officers and employees of statewide elected officials, officers and employees of state departments, boards, bureaus, divisions, commissions, councils or other state agencies, who receive annual compensation in excess of the filing rate established by paragraph (l) of this subdivision or who hold policy-making positions, as annually determined by the appointing authority and set forth in a written instrument which shall be filed with the state ethics commission established by section ninety-four of the executive law during the month of February, provided, however, that the appointing authority shall amend such written instrument after such date within thirty days after the undertaking of policy-making responsibilities by a new employee or any other employee whose name did not appear on the most recent written instrument . . . .

Public Officers Law §74, the code of ethics, contains the following definition in subdivision one:

As used in this section: the term "state agency" shall mean any state department, or division, board, commission or bureau of any state department or any public benefit corporation or public authority at least one of whose members is appointed by the governor.

DISCUSSION

The Commission has not previously considered whether an entity created by agreement can be a State agency for purposes of the Public Officers Law. While the vast majority of State agencies are created by the Legislature, and by a statute specifically designating them as such, this is not the exclusive method of establishing an agency. There are those that have been created by Executive Order of the Governor, including some with members who file annual statements of financial disclosure.(3) Still others have been created in a less formal manner, such as by having been announced in a press release.(4)

Critically, the definitions of "state agency" found in Public Officers Law §73 and 73-a, quoted above, do not indicate the method by which a State agency is to be created. In fact, the definitions to do not even refer to the method by which an entity is created.

Here, the WPPC has been created by an agreement between numerous governmental entities and a few private sector organizations.(5) While the Commission has not previously considered whether such an entity can be a State agency, it sees no reason to preclude the possibility, as there is nothing in the definition to require such preclusion. It, therefore, turns to the characteristics of the WPPC.

In previous opinions where the Commission has been asked to consider whether an entity is a State agency under the Public Officers Law, it has examined the nature of the entity. In Advisory Opinion No. 90-2, it had to determine whether the members of the Board of Trustees of the Interest On Lawyer Account ("IOLA") and its employees were subject to the provisions of §§73 and 73-a. The function of the IOLA board -- to dispense interest earned in the IOLA account to appropriate legal service organizations in the State -- was found to be a public function. The Commission went on to say:

Since the Fund performs a public purpose, is appointed by public officials, has State employees on staff, is covered by the indemnification provisions of the Public Officers Law and has its funds in the custody of the State Comptroller, one could conclude that IOLA is a State agency.(6)

In Advisory Opinion No. 93-1, the Commission held that members of the county alcoholic beverage control boards ("ABC boards") were not subject to Public Officers Law §§73, 73-a and 74. There, in contrast to members of the IOLA board, the members of the ABC boards are not covered by the defense and indemnification provisions of Public Officers Law §17 and the boards are not considered to be "state agencies" for purposes of the State Administrative Procedure Act. Furthermore, board members are not subject to time and attendance rules as are State employees. The Commission also noted that there are no gubernatorial appointees on the county Boards. In reaching its conclusion, the Commission cited an opinion of the Attorney General, 1953 Opinions of the Attorney General 111, which stated:

The fact that such local boards have jurisdiction only within their respective counties and only within the City of New York in the case of the New York City Board, that members are required to be residents of the county (or City of New York) for which they are appointed, and that they are appointed on a local basis, is certainly inconsistent with the theory that members of such boards are State officers or employees.

Turning to the WPPC, the Commission notes several factors that support a finding that it is a State agency. First, unlike the ABC boards, there are gubernatorial appointees as members of both the WPPC and its Executive Committee. Furthermore, it has two State Commissioners who serve as ex officio members of the Executive Committee--the Commissioners of the Departments of Environmental Conservation and Health. Two additional State Commissioners -- the Commissioners of the Departments of Agriculture & Markets and Economic Development -- serve as members of the WPPC, as does the Secretary of State. From its membership alone, it is fair to conclude that the WPPC performs a State function, fulfilling a mission in the State's interests.

One of the more interesting aspects of the WPPC is that, while it was created by agreement, its funding arrangement requires the DOS "to establish and maintain" the entity. It is also funded through the DOS, which receives funds from both the City and State for its operations. In this respect, it has the appearance of a council within DOS, making it part of that Department. Although it is denominated as a Council, it has many attributes of a board or commission of a State department, which would bring it squarely within the definition of a State agency. In fact, in Advisory Opinion No. 90-2, the Commission, relying on the definition of "state officer or employee" in §73(1)(i)(iii), which includes officers and employees of councils within a State agency, found that a council within an agency comes within those bodies that are deemed State agencies. Given these attributes, the Commission holds that the WPPC is a State agency.

The Commission also notes that the WPPC will exercise powers that are governmental in nature. For example, proposed projects are subject to delay if an objection is filed to allow the WPPC time to review the objection and decide on a recommendation. The power to delay a project pending a decision is the type of power usually exercised by government. The WPPC can also provide for binding arbitration to resolve disputes between the City and the Counties of Westchester and Putnam.

With regard to its structure, WPPC members are appointed to terms, with provisions for their holding over until their successors are chosen, and provision is made for the filling of vacancies. It is also specifically made subject to the Freedom of Information Law and the Open Meetings Law. In all of these respects, the WPPC appears to be governmental in nature and similar to most State agencies.

The Commission, in reaching its determination that the WPPC is a State agency, is aware that it does not have all of the attributes of many other agencies. For example, it is not subject to government strictures regarding the hiring of employees, and its members and employees are not indemnified under §17 of the Public Officers Law. In fact, Section 6.01B says that members of the WPPC are not State or City employees, but this provision appears to be related to indemnification. The Commission has previously found an individual to be a State officer or employee for purposes of §§73, 73-a and 74 even though the Attorney General had found him not to be a State employee for purposes of §17 (See Advisory Opinion No. 93-7).

While the WPPC may not be a State agency for all purposes because of its unusual characteristics, the Commission finds that, on balance, it should fairly be considered a State agency for purposes of §§73, 73-a and 74.

With the Commission's determination that the WPPC is a council within a State agency, certain consequences follow. First, its members, who receive no compensation, are not, by virtue of their membership, State officers subject to Public Officers Law §73. Section 73(1)(i)(iii) excludes from the definition those who receive no compensation.(7) Whether they are State officers for purposes of §73-a will depend upon whether the WPPC is named as a policymaking council. If it is, the members will be policymakers, thereby bringing them within the definition of State officer in §73-a(1)(c)(ii) and requiring them to file annual statements of financial disclosure. For purposes of §74, the members would be considered State officers, and they would be subject to that section's provisions.

Weinberg asked specifically whether the appointee of the Speaker of the City Council would be subject to §§73, 73-a and 74. The analysis set forth in the above paragraphs would apply to all members of the WPPC, including the Speaker's appointee.(8)

The Commission's determination that the WPPC is a State agency also means that its employees will be subject to the provisions of §§73, 73-a and 74. Therefore, those employees who are designated as policymakers or who earn in excess of the job rate for SG-24, which is currently $58,198, will be required to file annual statements of financial disclosure.

CONCLUSION

The Commission concludes that, as a council within a State department, WPPC is a "state agency" within the meaning of Public Officers Law §§73, 73-a and 74. Its members, including the appointee of the Speaker of the City Council, will have to file financial disclosure statements pursuant to §73-a if the WPPC is designated as a policymaking council and will be subject to the provisions of §74. However, they will not be subject to §73, as they are uncompensated. Employees of the WPPC will be subject to §§ 73, 73-a and 74.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.

All concur:

Evans V. Brewster,
Angelo A. Costanza,
Donald A. Odell, Members

Dated: June 9, 1997


Endnotes

1. §137 (b) of the MOA provides that the Operating Funds shall be applied solely to pay for the operational costs and expenses of the Council, the Executive Committee or the other committees and subcommittees established pursuant to Article IV as determined by the Executive Committee, including salaries of employees, office equipment, office expenses, space rent, telephone and postage, consulting and professional fees and similar costs and expenses. Paragraph (c) authorizes the Executive committee to actively solicit federal land State grant funds, private contributions and other sources of financing to supplement the Operating Funds being provided. Additionally, the WPPC may apply to the CW Corporation, from time to time, for grants to assist with the payment of operating expenses of the Council.

2. §6.01 states: The Parties agree that, except for members that are appointed by the City or are members by virtue of their status as a City employee or official, members of the Council are not employees of the City. The Parties further agree that, except for members that are appointed by the State or are members by virtue of their status as a State employee or official, members of the Council are not employees of the State.

3. The following agencies created by Executive Order have members who file financial disclosure statements: The Advisory Committee for Black Affairs (No. 66); the Job Training Partnership Council (No. 10); the NY School and Business Alliance Task Force (No. 85).

4. For example, the following entities were created by the following press releases: 1/6/89, the Commission on the Future of the Adirondacks; 10/90, the Task Force on the Catskills; 1/06/88, the Governor's Task Force on Coastal Resources; 7/90, the Finger Lakes Flood Control Advisory Council; 1/3/90, the Blue Ribbon Committee on the Consolidation of Local Governments; 5/27/88, the Westside Waterfront Panel.

5. The signatories of the original MOA include the Governor, the Mayor of New York City, four State agencies, one City agency, the USEPA, seven counties, 72 Towns and Villages and the Coalition of Watershed Towns. The six non-governmental signatories include: the Catskill Watershed Corporation; Catskill Center for Conservation and Development; Hudson Riverkeeper Fund, NYPIRG, Open Space Institute, Inc., and Trust for Public Land.

6. State Finance Law §97-v(3)(d) defines IOLA members as employees of the State for purposes of the defense and indemnification provisions of Public Officers Law §17, and the IOLA Board has the power to issue rules and regulations and act in accordance with the State Administrative Procedure Act.

7. They may, however, be subject to §73(3), limiting their ability to appear in the Court of Claims (See §73[3][b]).

8. Although these statutes are applicable to all members, the Commission would not attempt to exert jurisdiction over members representing the federal government in recognition of federal sovereignty.



URL: http://www.nysl.nysed.gov/edocs/ethics/97-14.htm