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State Watchdog Says Township’s Closed Session on Sewers Failed to ‘Err on Side of Transparency’



In mid-September the Cheltenham Township board of commissioners held what appeared to be a routine executive session to discuss issues around the possible sale or divestiture of the sewer system.  The township is under pressure from the PA DEP to settle on a costly capital improvement plan, subject to DEP approval, to resolve inflow of stormwater and infiltration of groundwater into the collection system and end sanitary system overflows.

The purpose of the meeting was to review the progress of a sewer valuation study contracted for in April.  The study by financial consultant Richard Orloff of Quakertown is to assess the market value of the system, its customer base and the impact of a divestiture on short and long-term sewer rates on rate payers.

Citizens’ Call reported the day after the meeting that board president Harvey Portner indicated progress was being made toward the selling or leasing of the system to an undisclosed entity, perhaps a newly created public sewer authority.

Since then, the director of the state Office of Open Records, Erik Arneson, has reviewed the situation and raised a concern about whether the executive session met the requirements of the PA Sunshine Act, which sets parameters for open meetings of government agencies and municipalities.  The law spells out six categories of exceptions to regular open meetings, in which the public is barred from attendance and participation.

According to Township Solicitor Joe Bagley, the category of exception which applies is number three, which states:

To consider the purchase or lease of real property up to the time an option to purchase or lease the real property is obtained or up to the time an agreement to purchase or lease such property is obtained if the agreement is obtained directly without an option.

Bagley later told Citizens’ Call that what was discussed falls under the exception (above) because a variety of options around divestiture were being discussed and the law does not specify which party – the township or its partner in the transaction – would have to be doing the purchasing or leasing to qualify for the open meeting exception.  That is, it doesn’t say by whom.  “It doesn’t say acquisition by the township, it just says acquisition (“purchase or lease”) of real estate,” he maintained.  The statute is only directed to public “agencies” broadly defined, which includes municipalities.

The solicitor also cited a 2008 unreported panel decision by the PA Commonwealth Court that ruled that the sale of real estate by a school district was covered under the exception with no explanation given.  However, unreported panel decisions are not binding precedents for future court decisions.

Upon reviewing the court decision and being informed of the Cheltenham context, Arneson, whose office acts as the statewide watchdog over transparency issues, said there does not appear to be a “definitive ruling” on the meaning of “purchase” in the statute, although the Lackawanna County court case was the only one his legal staff found to apply.

“Certainly an agency that wanted to err on the side of transparency would not include the sale of real estate in that exception to the Sunshine Act. And there are agencies that have not used it that way.  So I’m not saying that an agency that does use the exception that way is necessarily doing anything wrong,” said Arneson.  “But certainly if an agency wanted to err on the side of transparency, they would interpret it narrowly.” He added that the decision cited by Bagley is not one that would necessarily bind a court hearing a similar case, “but right now this is the highest existing authority dealing with this specific issue that we have been able to identify.”

Reflecting the murkiness of the issue, when Citizens’ Call asked about the process of the Cheltenham school district selling its Administration Building more than a year ago, a high level decision-maker said that board discussion of the sale would not be subject by law to executive session.

A decision on any transaction by the township involving the sewer system is not expected until well into next year.



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  1. Tom McHugh

    Clearly, the exception shown above serves an important purpose when the Township is considering the purchase or lease of real estate, not the sale of our Township property or assets. In any business a buyer does not want to telegraph his intention to buy because it would invite competitive bids. Therefore it is reasonable for the Township management and commissioners to meet behind closed doors until the option for the Township to buy is secured. The exception from the Sunshine Act seems to have no purpose for when the Township is exploring the advantages and disadvantages of selling off an asset.