Secrecy Surrounds Suterra Land Sale

The City of Bend has entered into a Sale and Purchase Agreement with Suterra for land at Juniper Ridge. According to earlier media reports, this purchase is for eight acres at $7 a square foot, a purchase price of $2,439,360. Juniper Ridge Partners will received a fee of 6% on this transaction initiated by Suterra, about $146,000, for some kind of ill defined services that have no documentation. The cost to the city to prepare the site is estimated to be $3.5 million, which will also serve future tenants of Juniper Ridge when the City/ODOT logjam over traffic on Highway 97 is solved. City Manager Eric King estimates this will happen in the spring of 2009.

Only four of the seven Councilors actually made it to the special Joint Session of the Bend Urban Renewal Agency and the City Council (BURA is the City Council), with Councilor Friedman attending via conference call. Councilors Abernethy and Clinton were not in attendance.

Once again a disheartening level of secrecy surrounded a transaction at Juniper Ridge. The meeting was called to order by Councilor Telfer and immediately recessed into Executive Session "to discuss real estate issues" for almost an hour. Suterra executives and EDCO director Roger Lee left he executive session early, and then the Suterra execs were summoned back into the Executive Session again by Economic Development Director John Russell. When the execs came back out 15 minutes later, they were complaining to each other about being questioned so strongly on the subject of being able to finance their project.

The Purchase and Sale Agreement was not available to the public before, during and after the vote on the agreement, and there was no public hearing held before the vote on the agreement, which passed 5-0 on the condition that Suterra provides adequate proof of financing capability to the City. There were public hearings held on the two topics regarding financing issues, specifically to allow the entire purchase price plus another $200,000 from the General Fund to be transferred to the BURA Juniper Ridge Construction Budget to build out the area. The City will also not pay itself over a million dollars in SDC's related to the Les Schwab purchase until some future date, will maintain it's $6 million line of credit until some future date, and will continue paying the $120,000 per year in interest on the line of credit.

No public comments were made. The meeting was not held at the normal time of Council meetings, but rather at 4 PM on the fourth Wednesday of the month, and virtually no public was in attendance. The three votes and all council discussion took about 20 minutes. Most questioning was by Councilor Telfer regarding taking monies from the General Fund for this project. Telfer was the only Councilor to vote no on any of the three issues. Finance Director Sonia Andrews stated that the City could increase it's line of credit by $200,000, but that it was easier to take it out of the General Fund. None of the other Councilor's seemed to take issue with this, although we all remember several hours of discussion over using $70,000 to fund the transit system.

I was told by City Attorney Pete Schannauer that there was no requirement for a public hearing on this public land sale, and that for unspecified reasons the agreement was not made available to the public prior to the special Joint Session. ORS 221.725 states that "...when a city council considers it necessary or convenient to sell real property or any interest therein, the city council shall publish a notice of the proposed sale in a newspaper of general circulation in the city, and shall hold a public hearing concerning the sale prior to the sale." Pete and Economic Development Assistant Director Jerry Mitchell assured me that I could receive a copy of agreement the next day, today. I will update this post with a link to the agreement if and when I receive it.

Suterra seems to be an excellent tenant for Juniper Ridge. According to Suterra President Steve Hartmeier the average salary is $90,000. Five to ten new jobs will be created per year, in addition to the 50 or so employees that will move from the current Suterra facility in the Columbia/Simpson area, which has almost 200,000 square feet of space empty and available already. Suterra creates pheromone-based insect control products. Suterra claims a high level of safety, although there have been reports of extensive safety issues with aerial applications in California.

This reporter has no issue with the tenant but does take issue with the process. Secrecy and extensive Executive Sessions have no place in the public process, and in fact are tightly regulated to certain issues that the City of Bend has far exceeded. This is an issue that will be further examined in the near future, as I firmly believe that the next City Council needs to become much more open, especially as the Highway 97 issue is cleared up and further lands are sold in Juniper Ridge. Also the continued significant payments to Juniper Ridge Partners for completely undocumented "services" is very troubling.

Bend City Council Executive Sessions--Legal or Not?

This is a question that has been on my and many others minds for a long time: is the broad and secretive way the Bend City Council holds Executive Sessions completely legal under Oregon's Open Meetings Law?

Oregon Revised Statutes Chapter 192 — Records; Public Reports and Meetings contains the relevant law in paragraphs 192.610 to 192.690. The relevant paragraphs state:

192.610 Definitions for ORS 192.610 to 192.690.
As used in ORS 192.610 to 192.690:

(1) “Decision” means any determination, action, vote or final disposition upon a motion, proposal, resolution, order, ordinance or measure on which a vote of a governing body is required, at any meeting at which a quorum is present.

(2) “Executive session” means any meeting or part of a meeting of a governing body which is closed to certain persons for deliberation on certain matters.

(3) “Governing body” means the members of any public body which consists of two or more members, with the authority to make decisions for or recommendations to a public body on policy or administration.

(4) “Public body” means the state, any regional council, county, city or district, or any municipal or public corporation, or any board, department, commission, council, bureau, committee or subcommittee or advisory group or any other agency thereof.

(5) “Meeting” means the convening of a governing body of a public body for which a quorum is required in order to make a decision or to deliberate toward a decision on any matter. “Meeting” does not include any on-site inspection of any project or program. “Meeting” also does not include the attendance of members of a governing body at any national, regional or state association to which the public body or the members belong. [1973 c.172 §2; 1979 c.644 §1]

192.640 Public notice required; special notice for executive sessions, special or emergency meetings.
(1) The governing body of a public body shall provide for and give public notice, reasonably calculated to give actual notice to interested persons including news media which have requested notice, of the time and place for holding regular meetings. The notice shall also include a list of the principal subjects anticipated to be considered at the meeting, but this requirement shall not limit the ability of a governing body to consider additional subjects.

(2) If an executive session only will be held, the notice shall be given to the members of the governing body, to the general public and to news media which have requested notice, stating the specific provision of law authorizing the executive session.

(3) No special meeting shall be held without at least 24 hours’ notice to the members of the governing body, the news media which have requested notice and the general public. In case of an actual emergency, a meeting may be held upon such notice as is appropriate to the circumstances, but the minutes for such a meeting shall describe the emergency justifying less than 24 hours’ notice. [1973 c.172 §4; 1979 c.644 §3; 1981 c.182 §1]

192.660 Executive sessions permitted on certain matters; procedures; news media representatives’ attendance; limits.
(1) ORS 192.610 to 192.690 do not prevent the governing body of a public body from holding executive session during a regular, special or emergency meeting, after the presiding officer has identified the authorization under ORS 192.610 to 192.690 for holding the executive session.

(2) The governing body of a public body may hold an executive session:

(a) To consider the employment of a public officer, employee, staff member or individual agent.

(b) To consider the dismissal or disciplining of, or to hear complaints or charges brought against, a public officer, employee, staff member or individual agent who does not request an open hearing.

(c) To consider matters pertaining to the function of the medical staff of a public hospital licensed pursuant to ORS 441.015 to 441.063, 441.085, 441.087 and 441.990 (3) including, but not limited to, all clinical committees, executive, credentials, utilization review, peer review committees and all other matters relating to medical competency in the hospital.

(d) To conduct deliberations with persons designated by the governing body to carry on labor negotiations.

(e) To conduct deliberations with persons designated by the governing body to negotiate real property transactions.

(f) To consider information or records that are exempt by law from public inspection.

(g) To consider preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations.

(h) To consult with counsel concerning the legal rights and duties of a public body with regard to current litigation or litigation likely to be filed.
(NOTE: there are more reasons listed but the specific wording the City Council uses is usually "Executive Session pursuant to ORS 192.660 (2) (a through h)")

Now let's review how the City Council notices Executive Sessions--they use a single sentence in notices of Regular Sessions or BURA Sessions that reads as follows:

Executive Session pursuant to ORS 192.660 (2) (a through h)

They also hold Executive Sessions after Regular Sessions, but before the Regular Session is adjourned, with no written notice. I personally witnessed this at the last two Council sessions I attended.

The specific wording used by Mayor Abernethy to announce the Executive Session is "The Council will now go into Executive Session pursuant to ORS 192.660 (2) (a through h) to discuss real estate matters." And fifteen to twenty people march into the conference room just off the Council Chambers. You can walk around the building and see them all in there through the window. I've been tempted to snap a picture of the scene.

Is this all legal?

The source regarded as the golden guide is the Oregon Attorney General's Public Records and Meetings Manual. Regarding notice of Executive Sessions, this manual states on B-6, in its Checklist for Executive Session, that the Council must:

Provide notice of an executive session in the same manner you give notice of a public meeting. The notice must cite the specific statutory provision(s) authorizing the executive session.

(snip of the list of reasons)

Announce that you are going into executive session pursuant to ORS 192.660 and cite the specific reason(s) and statute(s) that authorize the executive session for each subject to be discussed. See sample script on p. B-9. (NOTE: Emphasis in original)

Additionally, on A-4 we read:

Q. Must a notice be provided for a meeting that is exclusively an executive session?

A. Yes. The notice requirements are the same and must include statutory authority for the executive session.

Q. Is a meeting without proper notice an illegal meeting?

A. A meeting without notice violates the Public Meetings Law. See discussion of Enforcement of the Law.

And on page F-6, we see:

Letter of Advice(OP-6376), May 18, 1990

A governing body may meet in executive session to "conduct deliberations with persons designated by the governing body to negotiate real property transactions." ORS 192.660(1)(e). The apparent policy underlying this provision is to permit public bodies to protect their negotiating position in real estate transactions by keeping certain information confidential. This provision does not permit a governing body to discuss long-term space needs or general lease site selection policies in executive session.

So let's posit a few specific questions and I'll answer them as I read the relevant law:

1) Can the Council legally give such a broad statutory reason as "ORS 192.660 (2) (a through h)"?

NO. It must give a specific statute for each specific item discussed.

2) Can the Council not say what the specific items discussed are-can it legally state the broad line "real estate issues" when it announces it is going into Executive Session?

NO. The only "real estate issue" that can legally be discussed in executive session is specifically to "conduct deliberations with persons designated by the governing body to negotiate real property transactions". Presumably this limits discussions regarding anything else, including zoning, funding, DDA's, etc., with persons (like Ray Garzini or Juniper Ridge Partners) designated as such.

Also, all items discussed must be specifically enumerated, both in the public notice and in the announcement of going into Executive Session.

I will clear these questions up with a call to the Oregon Government Standards and Practices Commission. In fact, I'll review this entire blog entry with them and publish their answers to these questions.

And if the Council is disregarding the law, there are Enforcement provisions, including some that hold them personally liable and subject to financial penalties. That section is covered in ORS 192.680 to 192.695, which we will review as necessary. Right now I wish to clarify these points with the OGSP Commission and educate our councilors on the finer points of the laws they operate under.

And perhaps, with the help of my readers, shine a whole lot more sunlight on the whole Juniper Ridge process.

CC discussion on additional debt for JR

Short answer: there was zero discussion.

Sonia Andrews read the long title of the resolution:

CONSIDER A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BEND, OREGON, AUTHORIZING THE EXECUTION AND DELIVERY OF AN INTERGOVERNMENTAL AGREEMENT, TAXEXEMPT FINANCING AGREEMENT, ESCROW AGREEMENT, AND RELATED SALE DOCUMENTS; AUTHORIZING THE EXECUTION AND DELIVERY OF THE CITY OF BEND, OREGON FULL FAITH AND CREDIT OBLIGATIONS, IN ONE OR MORE SERIES, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $5,000,000 TO FINANCE STREET REALIGNMENT AND IMPROVEMENTS; ACQUISITION OF A STORM WATER MAINTENANCE VEHICLE; THE CONSTRUCTION, REMODELING AND EQUIPPING OF AN EXPANSION TO CITY POLICE FACILITIES; THE ACQUISITION OF FIRE AND INTERFACE ENGINES AND OTHER PUBLIC SAFETY EQUIPMENT; AND TO AUTHORIZE, EXECUTE AND DELIVER FULL FAITH AND CREDIT REFUNDING OBLIGATIONS, IN ONE OR MORE SERIES, TO ADVANCE REFUND ONE OR MORE SERIES OF OUTSTANDING FULL FAITH AND CREDIT OBLIGATIONS; AUTHORIZING SUBMISSION OF AN ADVANCE REFUNDING PLAN TO THE OREGON STATE TREASURER; DECLARING INTENT TO REIMBURSE; DESIGNATING AUTHORIZED REPRESENTATIVES AND DELEGATING AUTHORITY; AND RELATED MATTERS.

And the council members kind of laughed at its length, and then promptly passed it 5-0. The title reading took longer than the vote. Just like that, another $3.725 million for the Les Schwab driveway.

The only other mention of it the entire night was my own rather muddled statement imploring the Council to delay this funding measure until Les Schwab actually delivers that Contingency Removal Notice and we know they are going to actually buy the land. It fell on deaf ears.

Of course, since I broke my lower partial eating Thanksgiving dinner, I am feeling pretty shy in public and look pretty stupid. Hopefully I'll have that corrected by Christmas.

I also had a couple of discussions with Bend City Attorney Pete Schannauer about the validity of bloggers as members of the press. He basically thought it was a joke when I tried to get into the Executive Session with my Press Pass. He also approached me after the Regular Meeting, just as they were going back into Executive Session, and talked about how I wasn't being picked on because their had been someone on the Chamber of Commerce that had a "little newsletter" that was also refused entry as media into Executive Sessions. His take was that the number of readers has a direct effect on whether he considers someone legitimate media or not. Still, he seems like a nice enough guy.


I looked up the law and it says:

"...person connected with, employed by or engaged in any medium of communication to the public.."

I am researching it further. Pete gave me his number if I wanted to discuss it further, and stated that a couple of days notice would be nice. It's something to work on.