Memorandum 14-066 Lease Committee

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Memorandum 14-066

TO:                      Mayor Wythe and Homer City Council

FROM:               Walt Wrede

DATE                  March 29, 2014

SUBJECT:         Lease Committee

The City Council has been discussing ways to reduce expenditures, redundancy, and overlapping jurisdictions by eliminating some committees and lowering the number of meetings for others. The staff currently spends a very significant amount of time providing support to the various Boards, Commissions, Committees and Task Forces and this can make them less productive with respect to their regular duties.  The City budget cannot accommodate additional staff members so it is wise to maximize the time of the current staff. As one organizational policy expert put it, if your goal is inefficiency, gridlock, and employee burnout then appoint lots of committees!

The Lease Committee is one of the Committees under consideration for elimination; at least in its present form. I have been asked to summarize the reasons given for eliminating this Committee as it is presently structured.

Redundancy: This committee is one of several that has been charged with reviewing the adopted Lease Policies and making recommendations to the Council. The Economic Development Commission and the Port and Harbor Commission have both undergone extensive reviews of the policies. This creates unnecessary confusion. One of the standing Commissions can handle review and recommendations regarding the Lease Policies.
Efficiency: Business people and prospective lessees often complain about how long it takes to get anything done with the City. Streamlining the permitting and leasing process is in line with the “Open for Business” approach espoused by the Council. Lease applications can be reviewed, evaluated, and presented to the Council by the Administration. That is the way it used to be. This would save many weeks and is more consistent with the Administration’s fiduciary duties under the Code.
Legal Concerns:  The City Attorney has expressed concern about having public members on a Lease Committee that reviews, evaluates, and participates in the lease negotiation strategy process. This is the fiduciary responsibility of the City Manager under the Code. According to the City Attorney, inclusion of public members on the Lease Committee is problematic because of the Committee’s role as advisor to the City Manager in the evaluation of lease proposals and the negotiation of lease terms with prospective lessees. In performing these functions, Lease Committee members may become privy to confidential information regarding the business plans, finances and operations of prospective lessees, and the City’s strategy in negotiating with prospective lessees. The likeliest candidates to be public members of the Lease Committee are persons who may have business interests in competition with prospective lessees, or may themselves hold leases of City property in the harbor area, resulting in inherent conflicts of interest, the potential for misuse of confidential information, and opportunities to engage in various forms of anticompetitive behavior. Even if this conduct occurs without the City’s knowledge or consent, the role of the actor as a Lease Committee member could expose the City to potential liability for that conduct.  Another concern is that the Lease Committee, in its present form, may be subject to things like the Open Meetings Act and Ex-Parte Contact. It is impossible for the Staff members of the Committee to comply with those laws because of their other duties in the process, including frequent contact with the applicant and collaboration on evaluating proposals and lease administration generally. In other words, staff members talk to each other regularly and are privy to information that the other members of the Committee are not. Having the Lease Committee return to an Administration function eliminates that concern.



Change the Lease Committee membership by eliminating public members and including only members of the Administration. The revised Lease Committee would have sole responsibility for evaluating lease proposals, negotiating terms, and making recommendations to the Council. The Council could request advice from another standing Commission, like the Port and Harbor Commission, on the Lease Policies, if it thought that to be appropriate.