City: Deciphera tax break not handled well

Media lawyer questions legality of executive sessions

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.