Discussion of hotel contract change must be conducted in open meetings — State AG compliance panel

Mayor Randy McClement and his director of economic development Richard Griffin may have violated state law in the spring of this year by conducting behind-closed-door discussions on changes to the City contract with Plamondon Hospitality Partners (Plamondon), a legal expert tells us. The state Open Meetings Act requires officials to conduct all discussion of proposed changes to a City contract at open public meetings.

City’s fall gal

This ‘open government’ measure is to prevent precisely the kind of sleazy behavior under the McClement Administration of the faux-competition orchestrated behind closed doors by its Hotel Advisory Committee (HAC,) the shadowy group which the City Attorney has now, hilariously, contrived to claim before the State AG’s compliance panel is really run by the County Chamber of Commerce!

Tall tales out of City Attorney’s office

“Elizabeth Cromwell dun it,” says the City Attorney trying to shuck off City responsibility.

Anyway, even if the City contract arises out of the activities of a Chamber of Commerce-membered entity, all the City staffers attending as mere ‘attendees’ not members, in the tall tale being told to the State compliance board by the City Attorney, the City contract remains a City contract.

The City contract in question is the Memorandum of Understanding (MOU) with Plamondon signed December 23, 2015 in which the City accepted Plamondon’s downtown hotel & conference center proposal as selected in City procurement RFP14J of 2014. The MOU has been described by City officials as the “controlling legal document” or contract for the project in support of which the City is seeking some $30m in upfront public assistance (State, County and City.)

MOU: http://www.cityoffrederick.com/DocumentCenter/View/7108

Big changes in funding split, size, configuration

Mayor McClement points to model after May 18 announcement of changes

May 18, 2017 in a celebratory event for the unveiling of architects’ models at the Delaplaine Center, Mayor McClement announced a new funding arrangement, what the Frederick News-Post called a “new funding breakdown” and a “new segregation of public and private dollars.”

https://www.fredericknewspost.com/news/continuing_coverage/downtown_hotel/fewer-rooms-more-parking-new-funding-breakdown-included-in-latest/article_0623ac3d-7208-5dce-88ac-32f1629797df.html

Specifically the Mayor said he was proud to be able to announce that no public money would go to construction of the conference center portion of the project, meaning Plamondon the developer would assume this responsibility. That this would be a major change in the contractual arrangement between the City and Plamondon is illustrated by the assignment of conference center costs in the 2015 MOU in its Appendix C. This shows the conference center as costing $13,229,763 to be fully financed by TIF bonds issued by the County and the City, a County hotel tax appropriation, state DHCD grants and Maryland Stadium Authority funds — all public funding (see nearby.)

About another $18 million of public funds was to go to other capital costs associated with the City-sponsored project.

Other changes to contract envisaged

Apart from the developer’s assumption of conference center costs, the Mayor announced at the May meeting a reduction in the size of the hotel to 180 rooms as compared to 207 in the MOU at Appendix C. Also the size of the conference center was reduced, while the number of parking spaces was increased. Quite new: the underground parking garage would be enlarged to provide, in effect, a foundation platform for the whole of the privately built conference center hotel above. In building such a large underground parking structure the City would apparently be assuming all the uncertainties and costs of construction in the Carroll Creek floodplain (deep pilings etc), any hazardous materials cleanup, and the costs of archeological and historic preservation mitigation work required by the historic preservation agencies.

The new underground responsibilities being shouldered by the City are apparently an offset to the $13.23m cost of the conference center being assumed by Plamondon, the hotel developer.

A prominent member of the City’s Hotel Advisory Committee (HAC) and County Director of Tourism, John Fieseler expressed it this way: “the new design incorporates an even cleaner distinction between the public and private components of this project. The public dollars will pay for the land, road improvements, and build the underground public parking. The private dollars will build and maintain the hotel and meeting space on top. This arrangement will be incorporated into the next legal agreement with the developer.” (LTE Frederick News-Post Jun 7, 2017)

The May 2017 statement by Mayor McClement revealed major changes in moves toward a quite new contract from that arising out of 2014’s RFP14J and reflected in the December 2015 MOU.

“Nuffin’ there” says City

So I requested under the Public Information Act (PIA) documentation of the proposed new arrangements between the City and Plamondon by way of emails, memos, draft MOU amendments etc. I was told by the City it had nothing responsive to my request, no documentation of any kind. Unless there was shredding of paper and purging of hard drive files, the basis for the Mayor’s May announcement must have been purely oral —the result of spoken discussion between City officials and Plamondon.

But there must, obviously, have been discussion.

A lawyer advises us that state law requires that discussion of changes to a city contract be conducted in open session. It is a violation of the Open Meetings Act, he says, for any part of contract adoption or amendment to be conducted behind closed doors. The long dismal history of corrupt contracting by city governments has led legislators in most states to outlaw secret meetings by city officials with contractors. And the Maryland Open Meetings Compliance Board recently spelled this out again, saying that no part of the process of deliberating on a new contract or changing a contract may be conducted in secrecy. See 11 Official Opinions of the Compliance Board 65.

http://www.marylandattorneygeneral.gov/Opinions%20OMCB%20Documents/Vol11/11omcb65.pdf

The case concerns the Town Council of Rock Hall, MD — a town of 1,310 people in Kent County on the upper eastern shore of Chesapeake Bay. The Town hired a new law firm and discussed the firm (“received an overview”) before taking the proposed contract to an open meeting. Contracts are defined in the Open Meetings Act as ‘quasi-legislative’ and, with minor exceptions, must be dealt with in open public meetings. It is spelled out in § 3-101(j) (3) “Quasi-legislative function…means the process or act of…(3) approving, disapproving, or amending a contract.”

Key conclusion of the Open Meetings Compliance Board (OMCB) finding was: “The (Open Meetings) Act’s prohibition on the secret conduct of public business extends to every step of the decision-making process, not just the final action.”

Back to Frederick, the proposed changes to the City-sponsored hotel project announced by Mayor McClement May 18, 2017 were clearly an important step toward a new or amended contract between the City and Plamondon. The closed-door discussions leading up to the May 18 changes were a “step of the decision-making process,” to use the phrase of the state compliance board (OMCB) in its Rock Hall case.

CONCLUSION: The City of Frederick’s discussions before the May 18 announcement are apparently yet another violation of the state Open Meetings Act — on top of the seven years of sleazy closed-door meetings of the HAC, the missing minutes and agendas, the suppression of consultant reports, and the fake competed procurement RFP14J, the biased scoring the HAC presided over, and the HAC’s extravagant hucksterish promotion of the project, year after year.

NEW MAYOR: The hotel was a minor issue in the recent election in which Mayor

New Mayor Michael O’Connor – campaign pic

McClement was decisively defeated. It will be interesting to see if his successor Mayor O’Connor will change the way the hotel project is handled. About a year ago as an alderman O’Connor made the comment that he was not going to probe, let alone challenge, proposals coming out of the HAC because “I trust staff.” He trusted people whose preferred habitat is the closed door HAC!

It’s still possible the new administration will experience a great awakening. One can only hope.

BACKGROUND: Here is the Act’s rationale for open meetings:

§ 3-102. LEGISLATIVE POLICY
(a) In general. — It is essential to the maintenance of a democratic society that, except in special and appropriate circumstances:
(1) public business be conducted openly and publicly; and (2) the public be allowed to observe:
(i) the performance of public officials; and
(ii) the deliberations and decisions that the making of public policy involves. (b) Accountability; faith in government; effectiveness of public involvement. —
(1) The ability of the public, its representatives, and the media to attend, report on,
and broadcast meetings of public bodies and to witness the phases of the deliberation, policy formation, and decision making of public bodies ensures the accountability of government to the citizens of the State.
(2) The conduct of public business in open meetings increases the faith of the public in government and enhances the effectiveness of the public in fulfilling its role in a democratic society.

see http://www.marylandattorneygeneral.gov/OpenGov%20Documents/Openmeetings/10_1_16_OPEN_MEETINGS_ACT.pdf

PSam 2017.12.04

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