City leaders admit error in Deciphera tax deal
City leaders didn't handle a tax rebate deal the way they should have - that's the word from Lawrence City Manager David Corliss on a series of closed-door sessions to keep a startup company from leaving town. Enlarge video
Deciphera Pharmaceuticals
A unique deal that will provide a tax break to a promising Lawrence startup company was not handled as well as it should have been, City Manager David Corliss conceded Friday.
But Corliss insists that the city did not violate the Kansas Open Meetings Act by discussing in a closed-door executive session a deal to give Deciphera Pharmaceuticals a tax rebate.
"But in retrospect, we should have highlighted the agreement and we should have stopped and explained it to the public," Corliss said.
Commissioners approved the deal Tuesday. But the details of the agreement were hardly discussed during the open meeting. Not once was the idea of a tax rebate - a device never before used in Lawrence - mentioned during the meeting.
Instead, the concept was approved with a simple motion authorizing the vice mayor to sign a packet of documents containing more than 20 pages of legal language. One of those pages contained a single paragraph authorizing the unique tax rebate provision.
Originally, the item was placed on the consent agenda, which normally is reserved for routine items that are expected to not generate discussion.
Corliss said he was the one who decided to put the item on the consent agenda. He said he placed it there because he was confident commissioners were well versed on the details of the agreement. But he said he now realizes the public was not.
"It should have been on the regular agenda all along," Corliss said.
Commissioners had a good understanding of the agreement because they were briefed about it during several executive sessions. Corliss said that was legal under a provision in the Kansas Open Meetings Act that allows the commission to discuss with their attorney matters that would be deemed privileged in the attorney-client relationship.
Mike Merriam, a Topeka-based attorney specializing in media law who also does work for the Kansas Press Association, said he was concerned that Lavern Squier, the president and chief executive officer of the Lawrence Chamber of Commerce, attended those closed-door meetings. He said because Squier isn't a member of the City Commission, he is not a client of the attorney. Thus any conversation had in his presence would not be privileged.
But Corliss counters that Squier's presence was permissible because the city contracts with the Chamber of Commerce to provide the city with economic development marketing services.
Merriam said another concern is what exactly was discussed during the executive session.
"The policy discussion must be had in an open meeting," Merriam said. "The legality of the process could be discussed in executive session."
Corliss said he did not believe policy issues were discussed during the executive sessions.
"It is a fine line between what is a policy issue and what is a legal matter," Corliss said.
There is no way to verify the conversations that took place in the executive sessions because Kansas law does not require governments to tape the sessions.
But if a policy discussion did not take place in the executive sessions, then the City Commission as a group did not discuss it at all. There was no substantive policy discussion at Tuesday's meeting.
The Tuesday meeting was the only public review the unique property tax rebate provision received. That is in stark contrast to a typical tax abatement. Tax abatements are required to be reviewed by the city's Public Incentives Review Committee. A cost-benefit analysis also is required to be performed for all tax abatement requests. Because the Deciphera deal was a tax rebate - meaning the company will receive a rebate check rather than being allowed to not pay the tax at all - none of the reviews were required.
Comments
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merrill (anonymous) says…
Reschedule the whole event. That is the only right thing to do. Mayor Hack has a personal invvestment in this matter and Commissioner Bob Johnson has been involved with East Hills Business Park for years. If the deal falls through that's what happens when bad judgement takes precedent over proper procedure.
Bring it back for a complete review for the sake of transparency. There is no fast track policy on the books that anyone is aware of so far that is known. Apologies and explanations are not good enough for that is no assurance it cannot happen again. I respectfully submit that Commissioners Bob Johnson and Sue Hack recuse themselves from the entire process.
Ragingbear (anonymous) says…
I have suspected Corliss of being corrupt and receiving kickbacks since the day he got into office. This does nothing to take that suspicion away.
ashmole (anonymous) says…
Dirty, dirty, dirty. Do we have no accountability for elected and appointed officials in this city?
geekin_topekan (anonymous) says…
You're doing a great job Hackie!!
But,who cares/It's a done deal.The important part is from what happens from this day forward.Fool me once...
erod0723 (anonymous) says…
It is time for a recall election of Hack, Johnson, Dever, and Chestnut. a grand jury needs to be convened to investigate possible illegal activities by this city commission. Get rid of Corliss.
toefungus (anonymous) says…
Our city commission does not want to deal with the public on public issues. They waste our tax dollars and make secret deals. Lawrence keeps sinking lower and lower. Trust is to easily lost and hard won. I have no respect for our city commission and management and will vote against any tax increase and sign any petition to roll back any non-vote tax increases. I guess I needed this event to energize me to do something.
pomegranate (anonymous) says…
I am with yoou toefungus. I also will reject ANY tax increase or "fees", or probably any bond issues.
Ragingbear (anonymous) says…
Perhaps a petition for an External Audit (a audit not under any control by the local government or businesses) could shed some light on the city's budgeting woes.
fetch (anonymous) says…
wow. I thought the community wanted to attract high-value biosciences jobs.
Ragingbear (anonymous) says…
What exactly is bioscience? From what I can tell, it is manufacturing of vaccines, new microbes, stem cell research and genetic engineering? Does Lawrence have CHUDS in it's sewers? That might explain their sewer fixation.
camper (anonymous) says…
is this a "avoid the red tape" deal. Or an "under the table" deal. Maybe I watch the Sopranos too much.