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The Problem with a Ten Year Lease, Part Four |
Bill Hudson | 10/14/08
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Read Part One
As noted yesterday, the Pagosa Springs Town Council appeared to be of one opinion concerning the basic concept of the geothermal lease with the Springs Resort. Over and over during Tuesday’s meeting, the audience was reminded by Council members that the Springs Resort has already-approved plans to expand its resort over the next ten or twenty years, to the tune of a promised $250 million worth of new facilities, hotel rooms, commercial sites and timeshare living spaces.
That expansion is based on one simple attraction: geothermal “healing water”. With its own current water rights from the Great Pagosa Hot Spring, plus its current 200 GPM lease from the Town, the resort is serving about 50 rooms worth of guests. The proposed resort expansion shows about 310 additional rooms to be added to the inventory — a six fold increase in rooms, and presumably a need for six times as much hot, "healing" mineral water flowing through the resort.
There was at least one thing that the Council did not like about the lease proposed last Tuesday, however: The amount of water to be leased was not connected to requirements of actual development. This was a point brought up by audience member J.R. Ford, and echoed by Councilors Mark Weiler and Stan Holt. Continued...
Developer J.R. Ford, right, addresses the Town Council on Tuesday — suggesting changes to a proposed lease of geothermal water to the Springs Resort. Ford's suggestions were echoed by other members of the public and by some Councilors. |
“We’ve been giving this lease a lot of thought for a year now,” said Council Holt. “This isn’t something that just popped up. It’s been on our table, and been in our thoughts and our minds for a long time. We’re at the point where we have to have a motion and do something. We’ve talked it and talked it, and we’re still talking it.
"Mr. Mayor, I make a motion that we continue this discussion until our mid-month meeting, so [interim Town Manager Tamra Allen] can contact [Town Attorney Bob Cole] and get these changes made, including the addition in the lease that the water [increase] is staggered as they develop. Get that back into the lease, and get these other little things that [Councilor Shari Pierce] is concerned about. Get that cleaned up and then let’s take another look at it, at our mid-month meeting.”
The “other little things” brought up by Councilor Pierce included concerns that the lease allowed the Springs resort to renegotiate its lease every year — meaning that each year could mean another brand new ten-year term, the maximum term allowed by the Town Charter. Pierce was also concerned that the Springs Resort was still proceeding with its water rights filing on the Town’s waste water, despite specific demands by the Town that the filings be dropped.
Pierce continued: “Then the lease says, under permits, it says ‘The Corporation shall deliver any treated portion of the 400 GPM after use into the river.” I’m wondering what ‘treated’ means, and are they allowed to put that in the river? Then it goes on to say that any untreated portion would be put back into the Great Spring — but in the Beagles' letter from 2000, it says that putting the water back into the Great Spring is, quote, ‘not believed to be a beneficial use of the geothermal water.’ So I don’t know if they can put it back into the Great Spring. I’d like to clarify that before we go through with any lease.”
 According to the Springs Resort’s pool designer, Matt Mees, the resort has for many years been putting water, from its current 200 GPM geothermal lease, back into the Great Spring — presumably to keep the water from visibly dropping below historic levels. The resort has no meters on its current water pipes, so no one knows exactly how much water has been dumped back into the Great Spring.
As the Tuesday lease discussions wound to a close, Councilor Jerry Jackson took the opportunity to criticize the public participants.
“I think any organization or any group... I think we’d like to occasionally hear that we are doing a good job. We’ve worked on this for a long time, and this is not untypical — that we work on something for a long time, and then in the ninth inning, everybody comes in and says, 'Well, you need to be looking at this..."
“It just would help us out an awful lot if you guys would come in during the first go-round and help us out. And somewhere in there, tell us we’re doing a good job. We’d appreciate it. We’re doing the best we can.”
Jackson’s comments were, in this case, somewhat disingenuous, however. Almost all of the lease negotiations on the Springs Resort issue have, in fact, happened behind closed doors, thanks to several Executive Sessions called by the Council since April.
That in itself is an interesting story.
Executive Sessions are a mechanism allowed by Colorado state “sunshine laws” to allow a public body to meet privately, out of public view, for two basic privacy purposes: to allow the body to discuss personnel issues, and to allow the body to privately formulate negotiating positions related to property purchases, sales and leases.
According to the published Town Council minutes from 2006 and 2007, the Pagosa Springs Town Council did not once convene an Executive Session — not even during two separate discussions of employees Joe Lister and Tamra Allen — during all of 2006 and 2007.
Following the election of Councilors Jerry Jackson and Shari Pierce last April, however, the Council began, somewhat suddenly, scheduling almost regular Executive Sessions — a total of nine such sessions since the election — including four Executive Sessions dealing with the Springs Resort expansion. It is my understanding that the current version of the lease discussed last Tuesday resulted from decisions made during an Executive Session held on September 26. Obviously, Jackson’s comments — criticizing the public for stepping up to the plate “in the ninth inning” — are at least a bit unfair, considering that — even at last Tuesday's meeting — the public was not shown a full version of the lease.
Even more startling, however, is the fact that Springs Resort representatives have been invited to participate in a least two Executive Sessions dealing with the Springs Resort expansion.
The Colorado state statutes outlining the proper use of the Executive Session by a government body are clear about their intention to assure that government meetings remain open to the public whenever possible. Here is Section 2:
(2) (a) All meetings of two or more members of any state public body at which any public business is discussed or at which any formal action may be taken are declared to be public meetings open to the public at all times.
(b) All meetings of a quorum or three or more members of any local public body, whichever is fewer, at which any public business is discussed or at which any formal action may be taken are declared to be public meetings open to the public at all times.
(c) Any meetings at which the adoption of any proposed policy, position, resolution, rule, regulation, or formal action occurs or at which a majority or quorum of the body is in attendance, or is expected to be in attendance, shall be held only after full and timely notice to the public.
CRS states that a public body “may hold an executive session only at a regular or special meeting and for the sole purpose of considering any of the following matters..." and then lists
CRS also gives a clear indication of why a public body might use an Executive Session to discuss a proposed property lease or sale:
“(I) The purchase of property for public purposes, or the sale of property at competitive bidding, if premature disclosure of information would give an unfair competitive or bargaining advantage to a person whose personal, private interest is adverse to the general public interest. No member of the state public body shall use this paragraph (a) as a subterfuge for providing covert information to prospective buyers or sellers.”
In other words, it's perfectly proper for our Councilors to meet privately — in order to discuss their negotiating strategy and in order to give Pagosa citizens the best possible bargaining position in a lease negotiation.
In that light, some may question whether the presence of Spring Resort representatives at two Executive Sessions may possibly have compromised the Town’s ability to privately develop a negotiating strategy or bargaining advantage with respect to the proposed lease of 400 GPM of highly valuable mineral-rich geothermal water. Rather, such an arrangement could conceivably have given the Springs Resort inside information about the Town's position — and an unfair bargaining advantage.
But perhaps the Council thought it more important to accommodate to a successful local business than to assure the bargaining position of Town citizens? |
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