Legislation on secret purchases by public stalled

  • The State House dome in downtown Concord. GEOFF FORESTER

For The Laconia Daily Sun
Published: 6/10/2021 5:16:10 PM

Legislation to reduce secrecy around municipal land purchases – such as $1.4 million in deals city officials conducted behind closed doors – has stalled in the state Senate after opposition from the New Hampshire Municipal Association.

Advocates for government transparency found it notable that an association whose funding derives from taxpayers should argue against taxpayers having greater knowledge of and input into how public money is spent.

Republican Rep. Gregg Hough of Laconia sponsored the bill after citizens complained about secret actions of city officials, including the extraordinary step of labeling a budget entry only as “XYZ” to disguise a bond for acquiring church property.

Hough said the concept behind his bill is simple.

“People should have a right to know where their money is being spent,” Hough said. “It shouldn’t be allowed for a municipality to do whatever it wants with taxpayer money without the knowledge of the taxpayer.”

Opposition from the municipal association, which receives more than $16,000 in yearly dues from Laconia city coffers, was a factor in the bill not advancing this year, he said. The legislation could come up again next year.

“The lobbyist from the municipal association was very much against it,” Hough said. “They are on the side of people who are in government. They say they are for transparency, but they are not a lobbyist group for the public, they are for various government organizations. They fought this pretty much the whole way.”

Cutting a deal

The association contends cities get better prices on property by keeping the public out of the know before the purchase is made.

“It’s not about keeping secrets from the public,” said Cordell Johnston, a lobbyist with the association. “It’s about not giving up an advantage to someone you’re negotiating a deal with.”

If general discussion about property purchases were held in public, landowners might be emboldened to drive a harder bargain, he said.

“If I’m the guy wanting to sell and I hear them say we want this at any cost, I raise the price by 50 percent,” he said. “It’s just like if you go to buy a car or house, the conventional wisdom is you act like you’re not all that interested. The more eager you seem, the worse deal you’re likely to get.”

He said his group wouldn’t object to a requirement that a governmental body notify the public after a deal has been reached.

Open meetings requirement

New Hampshire’s Right to Know Law lists exceptions to open meeting requirements, including one that allows for non-public sessions for “consideration of the acquisition, sale, or lease of real or personal property which, if discussed in public, would likely benefit a party or parties whose interests are adverse to those of the general community.”

Hough’s legislation, House Bill 232, would have altered that provision. General discussion of whether to proceed with property purchases would be in public, while price discussions would be outside of the public’s eye.

“This just says you cannot go behind closed doors and say, ‘We’re going to go and buy this,’ ” Hough said. “It doesn’t curtail the City Council or whoever from being able to negotiate a price.

“It just gives everybody a heads up. At least the public would know. Now they are basically saying they would rather ask for forgiveness than permission. It’s not a good look for a government of elected people to be on board with hiding what they are doing.”

Balancing act

Republican Rep. Norm Silber of Gilford voted in favor of the legislation, which passed the House on a largely party-line vote of 183-164 before the measure was held up in the Senate Judiciary Committee.

“As soon as they focus on a specific property, will the price move up? Possibly, but you have to balance that with the public’s right to know,” Silber said. “What you’re doing is deciding to spend the public’s money, you’re not spending your own money.

“If the public’s right to know drives the price up a little bit, that’s the price you have to pay for living in a state where the public has a right to know.”

He also took the municipal association to task.

“I philosophically object to having taxpayer money used to support lobbying groups of any sort,” Silber said. “I don’t have much respect for their position.”

The non-profit association derives its revenue from the cities and towns that are its members.

‘Brazen contempt’

In written testimony, the New Hampshire Press Association said concern over a property’s price does not trump government transparency, especially since the price isn’t the only financial consideration. Long-term impact on tax base and maintenance costs are two such considerations.

“This is exactly why the public has a compelling interest to be informed when its governing bodies explore the acquisition, sale, or lease of real or personal property,” the association stated. “The law now allows government officials to conduct business in ways that are convenient for them or that allow them to pursue policies as if they were the directors of a private corporation and not representatives of the people they serve.”

The lengths that Laconia city officials went to keep purchases private, even after deals were reached, speaks to a need for a change in the law, the press association said.

“Certainly, such brazen contempt for the people’s right-to-know is not in the spirit of the law, but sadly it’s within the letter of the law and that is why this legislation is necessary,” the press association said.

Philip Kincade, executive director of the press association, said the group was disappointed the bill got held up in the Senate and would like to see it pass next year.

“Under current law, municipalities are exempt from informing taxpayers when they discuss the acquisition, sale, or lease of real or personal property,” he said.

“That tramples the notion that citizens have a right to know what their government does. In the Laconia instance, hundreds of thousands of taxpayer dollars exchanged hands in secret. That may be legal now, but it’s not ethical.”

Secret deals

Over the last three years, Laconia city councilors agreed in non-public sessions to spend the public’s money on land near a pond, a lot close to a city facility and property next to St. Joseph Church.

The city paid the Catholic Diocese of Manchester $1.14 million for the Holy Trinity School Building and for the historic Busiel House, which had served as the church rectory.

City officials say the church properties will yield more than 80 new downtown public parking spaces and much-needed new housing units, which they viewed as a greater priority than to try to get top dollar for the school. The deal also provided a way to protect the historic church itself from demolition.

The City Council sold the Busiel House to a Gilford couple for $480,000 and the school to an apartment developer for $1.

Hough said taxpayers deserved better.

“Selling property for a dollar is not a reasonable return on investment,” he said. “It’s not the City Council’s money. Their job is to make sure roads are decent and things like that. Just look at the Veterans Memorial across from the library. There’s vegetation overgrowing monuments, fungus and crap all over that stuff.

“Maybe if we didn’t spend a million dollars on property, our parks would be in better shape.”

Republican Sen. Harold French of Franklin, who is on the Senate Judiciary Committee, said Hough’s bill will come up again next year and might benefit from minor revision.

“My concern is to make sure it works for everybody,” French said. “I want transparency in government, but at the same time, I don’t want to cost municipalities. Overall it’s a good bill that would bring more transparency.”

These articles are being shared by partners in The Granite State News Collaborative. For more information, visit collaborativenh.org.

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