baltimore finance board violations, maryland open meetings act, july 2013

7/27/2019 Baltimore Finance Board Violations, Maryland Open Meetings Act, July 2013

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MARTIN O'MALLEYGovernorANTHONY G . BROWNLt. Governor

ELIZABETH L. NILSON, ESQUIREChai

COURTNEY J.MCKELDINJULIO MORA LES, ESQUIRE

STATEF MARYLANDOPENMEET INGS COMPLIANCE BOARD

July 25,201 3The H onorable Stephanie Rawlings-BlakeCity Hall, Room 250100 North H olliday StreetBaltimore, Maryland 2 1202

Re: Open Meetings Act Com plaint: Baltimore City Board of FinanceStephen Janis and Melissa Roeder (270x45) and Luke Broadwater(The Baltimore Sun), Com plainantsDear Mayor Raw lings-Blake:

Enclosed please find the Com pliance Board's opinion in this matter.

Very truly yours,. -,zAnn ~ i c ~ e i l l eAssistant Attorney G eneralCounsel, Open Meetings Com pliance Board

cc: Stephen JanisMelissa RoederLuke BroadwaterJoann E. Levin, EsquireElizabeth Nilson, EsquireCourtney J. McKeldinJulio A. M orales, Esquire

- - Assistant Attorney General Ann MacNeille, Counsel200 Saint Paul Place +Baltimore, Maryland, 21202-2021Telephone Numbers: (410) 576-6327 + (888) 743-0023 + D.C. Me tro (301) 470-7534Telephone for Deaf (410) 576-6372


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MARTIN O'MALLEYGovernorANTHONY G. BROWNLt. Governor

ELIZABETH L. NILSON, ESQUIREChai

COURTNEY J. MCKELDINJULIO MOR ALES, ESQUIRE

STATEOFMARYLANDOPENMEETINGS COMPLIANCE BOARD

9 Official Opinions of the Compliance Board 15 (2013)Re: Board of Finance of Baltimore City(Stephen Janis and Melissa Roeder (Fox4.5)and Luke Broadwater (The Baltimore Sun), Com plainants

July 25 ,2013

We conclude t h ~ the FinanceBoard violated tbe Act b closing the meeting to thepublic befme makin the discfosures required by the Act an by discussingmatters thatt i

Bdid not fallwithin e statutory provisions, or "exw tions," that the Finance Board hiidinitially cited as authority for excluding the public. fVe dsb conclude that not all of thediscussion feu ridthin he exception that the Finance Board later asserted as a basis for~c1uditl8he public. From the Momation provided to us, we find that the public wasentitled to 0b-e at least p a of the Finance Board's May 20 meeting and to beapp-, in advance, of he Fmmm Board's reasons for closing it.Background

A. The Finance BoardThe Finance Board was established by the Bdtimcrre City Charter ('"Charter'') to"advise the Department [ofFinance and exercise those powers and peifom those dutiesprovided by law." Charter&t. WIsb 19. TheFinance Board eon&ists f five members-

theMayor, the Coxnp&oUer,and three others--and must degi te a clerk to "keep itsaccounts and a re& of its roceedings~ d . ,i 2000 (c). E e a y o rerves as ~eFinance Bbard's President. Pd. When the Mayor is abse_nt,the Vice-president "sW1exercise the powers of the Board President." Id., 9 20 (b).

As an entity created by the Charter, the Finance Board is a "public body" subject tothe Open Meetings Act. See State Governmen t Article ("SG") 8 10-502(h) (2) (iii).- - -- ssistant Attorney General Ann ~ a z e i l l e ,ounsel - - -200 Saint Paul Place + Baltimore, Maryland, 21202 -2021Telephone Num bers: (410) 576-6327 + (888) 743-0023 +D.C. Metro (301) 470-7534Telephone for Deaf (4 10) 576-6372


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9 Official Opinions of the Compliance Board 15 (2013)July 25,20 13Page 2B. The City 's procedure for the approval o f TI Fpr ojects , and the Finance

Board's role in itThe alle ations necessitate a general understanding of the TIF financing methodauthorized by W rt. 11, 5 62 of the City Charter and the role the Finance Board lays in theBoard5 Tax increment Financing Policy (January 23, 20 12) explains, Rity's legislative approval o f the issuance of 'TIF bon ds. "In gene ral," t e Fin ance

TIF Bonds are special obligations of the City secured by th eincremental increase in property taxes resulting from the proposedi~nprovement .The City utilizes this financing option by designating withinits borders a TIF district. The base roperty valuation (assessable base) isthen established and cert if ied, and t ~ eproperty taxes from that assessablebase continue to be collected and used Tor general governmental purposes.As the assessed valuation within the district increases, the laxes derivedfrom the increased valuation (tax increment) pay debt service on the bondsused to fund TIF project costs within the district. W hen the TIF debt isrepaid, the district is dissolved and the taxes collected from the increasedassessed valuation flow directly to the City's general fund .Policy, p. 3. Logistically, the tax increment is paid into a special fund. The TIFbonds are to he "payable From and secured by" that fund, and may also be aid by otherPeans, including met l~odshat might be estahIished by an agreement with t le developer.Art. 11, 4 62(a), In the event that th e TIF proiect does not result in a higher tax base forthe distdct and thus does not generate a tax increase sufficient to pay the debt service, theCity "in most cases" will require that the bonds be secured by a tax levied in th e district

to make up the shortfall. To accommodate that possibility, the City creates a special taxdistrict for th e project. Policy, p, 2.The Policy establishes a four-step rocess for th e Finance Board's approval of aTIF roject, The first step, in which the inance Board does not play a role, consists ofj, Jthe eveloprnent of the plan an d proposal by th e appropriate City coordinating agency,such as the Baltimore Development Corporation ("BDC' ) or Department of Housing andCommunity Development, for presentation to the Finance Board in the second step.In th e second ste , he proposed TIF is resented to the Finance Board for its"conceptual a proval,'. i th e purpose o l "con?rm[ing] that the proposed TIF will beconsistent wit the Cit ' s policies regarding TIFs early In the process before significant"ity efforts are expen ed preparing le islation and moving forward." Policy, p. 7 . The

Policy states, "[als the City's financiaf advisor, the Board of Finance is responsible forapproving al l TIF propqsals prior to consideration by the City Council or Board ofEs~irna~es."olicy, p. 3. The Policy spells out seven criteria for the approval of a TIFI According to the Policy, "TIF debt is considered by the rating agencies as debt of the C ity, andincluded in the calculation of the City's tax supported debt burden." Policy, p. 4. The Finance


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9 Official Opinions of the C omplian ce Board 15 (2013)July 25,2013Page 3proposaI . Those criteria include whether the prqject "[a]dvances the City's strategic landuse, economic development and public improvement goals," whether i t '"[is not feasibleand would not be completed (within a reasonable time frame) without the roposed TIFassistance ('but for' test) an d assistance is limited to the amount require2 to make th eproject reasible," w h e ~ h e rt '"sllatisfies economic and risk requirements," and whether it"[w]ill create positive tax revenues to the City, taking into consideration the casts ofpublic services t o be provided . . . and the tax increment revenues that will be required topay the bonds." Policy, p. 1. Under the Policy, the Fin ance Board "reserves the right, at~ t sole discretion, to amend or waive certain provisions in these guidelines, when it isdetermined to be in the best interest of the City."

The step two submissions must contain information responsive to 13 topics.Polic , p. 8-1 1. Among other things, the coordinating agency must describe t h e projectsite, l o t h in terms of the existing uses and rhe proposed uses, required governmentalapprovals and permits, intended financial arrangements, consistcncy with th e City's"economic development an d pubIic improvement objectives," eviden ce to establish "whythe project would no1 occur 'but for' the TIF funding," and "public purpose benefit."Policy, pp. 9-10. The Policy states that th e need for information may vary according tothe project.

In the third step, th e "proposed legislative package creatin th e TIF (and relatedspecial taxin district" an d updates on the applicat~on re presente to the Finance BoardB f"for approva ." The coordinating City agency is then to scl~e-dule nd obtain approvalfrom the City's Board of Estimates and City Council "as requircd." Policy, p. 7. Thelegislative package generally consists ofi ( 1 ) an ordinance that designates thedeveIoprnent dis tr~ct , 2) an ordinance that creates the special fund for receipt of th e ta xincrement; and (3) an "enabling ordinance" that specifies th eoi' the bonds to be issued an d that describes th eincrement to the special fund. The enabling ordinanceBoard "by resolution to specify and prescribe" a number of terms as the Finance Board"deems appropriate to effect the financing or refinancing" of a TIF project.The fourth step occurs after the enactment of the legislative package. That stepcomprises the submission, for a proval by the Finance Board, of the documentsauthorizing th e issuance of the Te : bonds. The submissions are to include financialprojections, including a "description of the risks associated with the project and howthose risks are mitigated." PoIicy, p. 7. If so authorized by the enabling ordinance, theFinance Board may prescribe terms such as the principal amount, interest rate, and tennsof sale an d issuance of the bonds, and "the provisions of any development agreement to

be executed by the Mayor and City Council of Baltimore and any person in connectionwith the issuance of such bonds." Art. 11, $ 62 (d), (e), (f).

Board issued the Policy in part "to ensure that TIF projects, when added to other tax supporteddebt, do not negatively impact the City's general debt ratings." Policy, pp. 2 ,4 .


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9 Official Opinions of the Complianc e Board 15 (2013)July 25,20 13Page 4The Finance Board's Policy thus gives the Finance Board an integral role in the

legislative process by which th e C ~ t yuthorizes the issuance of TIF bonds and then in thedetermination of how, and on what terms, those bonds are to be m arketed.C. The May 20, 2013 meeting - acts and allegationsA quorum of the members of the Finance Board met on May 20, 2013. TheFina nce Bo ard's Clerk also attended. In th e Mayor" absence, the vice-presidentpresided. According to the Finance Board's draft minutes of the open art of theBeeting, the members addressed several matters before turning to an item escribed as"Consider Le islation for the Harbor Point Tax Increment Financing." The draftEinutes give t is account of the way in which th e meeting was closed:[The Clerk], in accordance with M d. Co de, State Government, 5 10-508(a)(4) an d (14) requested the Board consider a motion for a closed doorsession to discuss th e ap roval of legislation for the Harbor Point TaxIncrement Financing. T1e Board approved the closed session on the~not Ion of Mr. Black, seconded by Mr. Silverstein. Mr. Broadw aterobjected to the closing of the meeting. The meeting was closed to thepublic. Ms. Roeder, Mr. Janis and a cameraman then entered theconference room and objected to the closing of the meeting. [The Clerk]explained that if th e Board of Finance a proves th e submission of the TIFlegislation to the City CounciI, th e pubPc will have full public access toinformation during th e City Council's public hearing process. A "WrittenStatement for Closing a Meeting under the Open Meet~ngsAct" is attachedhereto . . . ."According to the Finance B oard, the written statement to which the draft minutesrefer was "executed" after the meeting. The written statement bears the Clerk 's si nature

tY tn the line provided for the signature of the presiding officer. The Cit states t at theClerk had "made the statement on the record although he neglected to 111 out a writtenform."The written statement is not consistent with the draft minutes. SG 5 10-508(a)(141, th e exception cited in the draft minutes as a basis for closing th e meeting, pertains tothe contents of a bid or pro osal and other rnatters related to a competitive procurement.

!n the written statement, t e Finance Board instead claimed SG 3 10-508(a)(6), whicherlnits a public body to close a ineetin to "consider the marketing of public securities."!he Finance Board cited SG 8 10-508? )(4) both times; that exception permits a publicbody to close a meeting "to consider a matter that concerns the proposal lo r a business orindustrid organization to locate, expand, or remain in the State."

The written statement provides the following information under the heading on theform for "reasons for closing and topics to be d iscussed":


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9 Official Opinions of the Compliance Board 15 (2013)July 25, 2013Page 5(4,6) For the consideration of the conceptual approval of the Harbor PointTax Increment financing including legislation prior to introduction to theCity Council authorizing ( I ) an amendment to the Harbor PointDevelopment District, (2) creation of the Harbor Point Special TaxingDistrict and levy of a special tax, and (3) issuance of special obligationbonds.(4 , 6) The discussion included issues relatin to the issuance of taxincrement debt securities and the expan sion an relocation of Exelon andother businesses within Baltimore C ity. %

It thus ap ears that the meeting involved both the second step of the TIF process-Poncep tua approval-and the third step-the approv al of the legislative packag e.The Finance Board's response describes the topics discussed this way:"Representatives of the Baltimore Develo ment Corporation and Municap, Inc., publicfinance consultants, presented financial &ta and projections relating to the proposedprqjecl. . . . The financial feasibility study and preliminary financial projectionsdiscussed at th e meeting contain sensitive financial data . . . "The response also statestha t tllc Clerk cited exception (a) (14) in error and that exception (a) (6) was theapplicable exception.The Finance Board provided us with the sealed minutes of its closed session.'The closed minutes confirm the Finance Board's disclosure that it discussed conceptualmatters relating to th e financing of the pro-iect and also a? roved th e introduction of thethree bilIs needed to implement the financing. The CP rk introduced the proposedlegislation, ave th e history of the ordinance that had established the development d~s t r ic tEhat would e altered by one of the biIls, explained BDC's approval of the TIF prqiectapplication, referred to the financial rejections an d other application docu~nents7rovided by BDC, and summarized the c latlges th at had been made to th e developmentsite lan since it was last been presented to the Finance Board. The infrastructure needsRS t e site and pro-ject phases were explained, and questions were asked about variousassumptions contained In BDC" analysis. The meeting w as attended by Finance Board~nembers nd staff and BDC staff and consultants. From the draft minutes, it does notappea r that any m embers of the general public w ere permitted to attend.Shortly after th e meeting had adjourned, the Finance Board's counsel sent toComplainants Broadwater and Janis an e-mail in which she stated that the meeting hadbeen closed under exceptions (a)(4) and (6). Th e e-mail did not contain any other

information.2 The Act entitles us to review sealed minutes pertinent to a complaint, but we are to keep thecontents confidential. SG 10-502.5(c)(3)(iii). W e refer only generically to the topics describedin sealed minutes.


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9 Official Opinions of the Compliance Board 15 (2013)July 25, 2013Page 6The Complainants allege that they were improperly excluded from the closed

session. Complainants Janis and Ro eder allege that the relationship of exceptions (a) (4)and ( 6 ) to the matter at hand was "tangential at best," that the Finance Board closed thesession without issuing a written statement, that the Finance Board's discussions involvedtax and land use policy, issues that should have been discussed in an open meeting, andthat the meeting was closed to members of th e press, but not to others. ComplainantBroadwater alleges that exceptions (a) (4) and (6) would only apply i f they interpretedoverly broadly. We alleges that Exelon was the business being "relocated" and that it had"already colnrnitted to building a new regional headquarters in Flarbor Point."D. The TIF legislation introduced in the C ity Coun cil on June 3, 2013

The TIF Ie islative package--C ouncil Bills No s. 13-0 232, 0233 , and 0234-wasintroduced in the ( 'ity Council on June 3, 2013. On Ju ne 18, the bills' sponsor, BaltimoreDevelopment Corporation ('73DC"). submitted to the Council a memorandum andvarious doc~lrnents in sup ort of the legislation. Already pending in th e Council,according to BDC, was RI!P o. 13-0 195, a land use bill proposed to establish a PlannedUnit Developm ent ("PUD") that wou ld "authorize the owner of th e property to developthe site as an app roximately 3,020,000 square-foot mixed-use neigl~borhood."

BDC's memorandum summarizes each bill in the June 3 package. Bill No. 13-0232 would enlarge the development district created in 2010 "to include additionalpro erties," "change certain parcel references due to a subdivision action," and "repealan clarify certain provisions related to state obligations." Bill No. 13-0233 wouldestablish a special tax district to guarantee th e City's ability to repay the holders of ?'IFbonds if the tax increment were insufficient to meet th e debt service on th e TIF bonds.Bill No. 13-0234, the bond ordinance, would "authorize th e City, on terms to beapproved b th e Board of Finance, to issue [TIF] bonds, in an amount not to exceed6125,000,0&l for the purpose of financing necessary and critical infrastructureimprovements and casts of bond issuance*' related to the project, pledge the anticipatedtax increment and special tax revenues to the repayment of the T F bonds, and authorizeth e Finance Board to specify the terms of' the TIT: bond issuance, sale, and pa ment.Yection 9 of the bill authorizes the Finance Board to "prescribe or approve by reso ution .. . the rate or rates of interest the Bonds are to bear or th e method for determining thesame, provided that the rate or rates of interest shall not exceed a maximum of 7%." BillNo . 13-0234. In a June 4, 2013 mem orandum on that bill, the Finance Board's Clerkstated to the President and Members of the City Council: "The Board of Finance has

considered an d approved the TIF] Bo nd request" and "ap roved the submission of this6 Pegislation to the President an mem bers of the City Cou nci of Baltimore."Among the documents submitted to the City Council were the "TIF financialmodel prepared for the Board of Finance," a "Fiscal Impact Analysis," and a "Harbor


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9 Official Opinions of the Compliance Board 15 (2013)July 25,201 3Page 7Point Total Project Cash Flow," described as the City's financial consultant's ' ' ~ a l y s i s fthe developer return on its equity investment, both with and without TIF." The TIFfinancial model bears a date of Ma y 17, 201 3. Its cover page bears various"assumptions," including "Developer I-Ield Bonds." The BDC memorandum explains:"The Bonds are anticipated to be issued initially directly to the Developer as a privateplacement issuance and will be remarketed to public bond purchasers once significantcomponents of the Prqiect have been co~npleted nd Tax Increment Revenues have beenreceived." As we understand it , the "market" planned for the TIF bonds is the developerof the project.

DiscussionThe complaints raise three separate questions: (1) whether the Finance Boardclosed the May 20 meeting to the public in accordance with he procedures mandated by

the Act; (2) whether the discussion fell within th e exceptions claimed b th e Financeioard before it closed the meeting; and (3) whether th e discussion wou d have fallenwithin the exception the Finance Board later stated that it had intended to claim.A. Whether the Finance Board closed the meeting in accordance with theprocedures mandated by the ActThe Act requires a public body's presiding officer to perform two tasks before thepublic body meets In closed session. First, the presiding officer "shall cond uct a recordedvote on the closing of the session." SG 9 10-508(d) (2) (i). The d raft minutes reflect thatth e presiding oiXcer performed that task.Second, the presiding officer "shall make a written statement," or "closingstatement," that states the "reason for closing the meeting," including a citation of theapplicable statutor exception and a list of the topics to be discussed. SG 5 10-F08(d)(2)(ii). The inance Board concedes that no written statement was prepared beforethe closed session and thus concedes that it violated the section.That is where our discussion might have stopped; usual1 , when a public bodyYcknowledges a violation and undertakes to address the prob em , we have little todiscuss. Here, how ever, the Finance Board's res onse suggests that it believes that itsPral disclosures met the objectives of the Act and t at the violation was only one of form.The res onse asserts that the Clerk's oral annor~nccment substantially complied with thefateria requirel~lentsof Section 10-508 of the Acl," ascribes to the Clerk the "neglect"to make the written statement. describes the violation as "technical," and suggests that its

- .

Com plainant Janis provided us with these docum ents shortly after BDC submitted them to theCity Council. The Finance Board urges us to disregard them as "not material to the decisionbefore the [Compliance Board] relating to conduct of the May 20, 2013 meeting of the Board ofFinance." We do not disregard them; they clearly bear on the Finance Board's role in thelegislative process for the TIF bills at issue here.


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9 Official Opinions of the Comp liance Board 15 (2013)July 25,20 13Page 8post-meetin issuance of a written statement "ensure[dJm hat the Finance Board's

%onduct of usiness was "transparent also to members of th e public who are unable toattend its meetings." I n fact, n e ~ t h e rhe oraI statement recounted in the draA minutes northe posf hoc written statement establishes substantial corn liance with the Act. BecausePhese assertions do not assure us that the Finance Board ulIy understands how and whyto com ply with the "written statement" requirement of th e Act, we elaborate.The Act written statement" that specifiesboth the SG 5 10-508(d)(2)(ii). As mightbe inferred from the assigned to the presiding officer theduty to make the written statement, the performan ce of that duty is not a mere forinality.A pro erly-completed written statement serves to prompt "each member of' the p u b l~ ceody, efare voting, to consider whether the reason is sufficient to depart from the Act'snorm of openness." 4 OMCB 0 nions 46, 48 (2004 . It "he1 s members of the public

who will be barred from the ce sed session to und rstand tRat this exce tion to thePrinciple of openness is well-grounded." I t serves as an accountability to o , because itenabIes th e public to compare the pre-meetin disclosures with the minutes summarizingth e actual: conduct of the meeting and there%y to assess whether the discussion sta edwithin the exceptions that th e public body had claimed. 4 OMCB Opinions 48. inthe event that a complaint is filed, it tells us that the members o f the public bodyconsidered the legality 01' closing the meeting and gives us their reason at th e time fordoing so. An after-the-fact jus~il icat ion or closing a meeting is not a good substitute forthat information.The public body's reasons for excluding the public should be apparent from th ewritten statement itself. See, e.g., 4 OMCB Opinions 49 (stating that th e fact that th ereason for closin "may be apparent upon reflection is no excuse for omitting it").fometimes, a va id reason for closing a meeting can be discerned from the topicdiscussed, as when a pubIic body closes a meeting under SG 8 10-508(a)(l) to discussdiscipline matters respecting individual employ ees. In those circumstances, we have notfound a public body in vioIation fo r merely stating the "topic." See, e.g., 4 OMCBOpinions 188, 196 (2005). Either wa , he reason must be articulated. Here, the draftminutes show only that the Clerk cited wo exceptions and stated that the meeting wouldbe closed to discuss "the appr-oval of legislation for the Harbor Point Tax IncrementFinancing." That description provides no information about the Finance Board's reasonsfor precludin the public from observing the discussion. Indeed, nothing before us show sthat the mem6ers aciually considered, before they voted on the motion to close, why theywere departing f ro ~ nhe norm of' openness. The Finance Board thus did not substantiallycomply with the statutory requirement that it articulate its reasons for excluding the

pub l~c .As noted above, the Act requires the presiding officer to make the writtenstatement. SG 8 10-508(6)(2). W e deem that requirement to have been met when thepresidink ofiicer, at the time of the vote, either prepares the statement or ratifies a pre-prepare< statement as still accurate; either way, the presiding officer will go into theclosed session with a precisc understanding of the ioplcs that ih e members may discuss


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9 Official O pinions of the Comp liance Board 15 (2013)July 25, 2013Page 9there. 7 OMCB Opinions 226, 227 (201 1). The public body, not its staff, is answerablefo r compliance with the Act. See 7 OMCB Opinions at 227 ("Neither th e presidingofficer's duty to make the closing statement nor the members' duty to c o n t ~ n eheirclosed-session discussions to the listed topics may be delegated to staff."). Under the Act,the responsibility for making the final wnlten statement did not lie with the Clerk, who isnot a member 01 th e Finance Board,

We encoura e the Finance Board not to view the written-statement requirement asa merely "technicak' duty to be performed by its Clerk alone. Pro erly used, the writtenstatement can both prevent violations an d shield the pub lic body ?oln the suspicion thatits closed sessions are illegal. When, as here, Ih e Finance Board's Policy makes itsapproval of legislation part of the legislative process, and th e discussion involvesi ~ ~ f o r ~ n a t i o nhat will be pubIicly presented to the City Council at th e next step, the publicmight fair1 question the need for secrecy. The Act entitles the public to a writtenitatement t at provides the answer.B. Whether the discussion fell within the exceptions claimed by the Finance Boardbefore it closed the meeting

W hen a public bod is performing a function subject to the Act, the discussion in7he closed session must fa 1 within the sco pe of the exception an d topics that the presidingofficer has cited on the closing statem ent. See SG 5 10-508(b), (d) (restrictingdiscussions to those within a statutory exception; conditioning the closed session ondisclosures of the topics and claimed statutory au thority).The Finance Board asserts generally that exception SG 5 10-508(a) (4), the"business location" or "relocation" exception that it chimed orally, ap lied to its

the proposal for businesses to locate in the Harbor Point site." Idiscussion of the tax increment financing, which concerns a, subsidy direct y related toIn 201 1, we issued an opinion in which we reviewed all of the matters in which wehad addressed the business relocation excep tion. W e noted that we had never stated that

the exception "could shield decisions and deliberations on pending legislation frompublic view." W e nevertheless expressed concern that our opinions had been construedto allow substantial closed-meeting deliberations on legislation, 7 OMCB Opinions 148,I62 (201 I ). W e therefore reiterated the purpose and liinits of the exception. As relevanthere, we explained:We begin with the principle that the Court of Appeals has stated

variously as part of the "touchstone" or "heart" of the Act: "It is . . . thedeliberative and decision-making process in its entirety which must beconducted in meetings open to the public since every step of the process,4 The Finance Board states that the oral citation to exception (a) (14) was "in error," and theexception in fact bears no apparent relation to the topics mentioned in the sealed minutes.


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9 Official Opinions of the Compliance Board 15 (2013)July 25, 2013Page 10including the final decision itself, constitutes the consideration ortransaction of public business." . . , J I P.DeE lze Limited Partnership v.B bayor and City of Frederick, 396 Md. 180, 2 0, 13 A,2d 28 (2006) . . . .The Court . . . reiterated . . . that "one pur ose of the government in theP Pen Meetings Act was to prevent at nonpub ic meetings the crystallizationo secret decisions to a point just short of ceremonial acceptance." . . .

As the Court explained in Delplzey, however, the Act containsexceptions. So, we look also to the pur ose of [the business relocation]exception, which we must construe strict y and in favor o f open meetings.510-508 (c). In 1 OMCB Opinions at 29, we referred to the Legislature's"understanding that some businesses might be deterred froin makingproposals about relocation, expansion, or retention of an existing facility i fall such discussions were open to public view." In 2 OMCBOpii7ions at 82,we stated that the exception would apply "[Ilf the overall discussionconcerned a business's possible relocat~on o a site in I-IynttsvilIe undercircumstances in which the business insisted on the need forconfidentiality." We have thus interpreted the exception to address thebusiness's interest in protecting its ow n identit and information. We havealso extended the exception to matters that cou7 not have been "practicallyseparated and discussed outside of the context of the specific business" 6 OMCB Opinions at 194, and to the applicability of an existingPl;PiY?hiscussion "tied to" th e prop osal.

Here, the formulation of the County's policy on permissible uses inthe 1,100-acre Industrial District did not fall into the category ofconfidential information belonging to [the business that had made theproposal]. Even if such legislation could be deemed to embody privateInformation (a proposition we doubt), we note that [the business] itself didnot appear to seek secrecy concerning its interest in relocating to theCounty . . . .

We shall therefore draw the line for the "business relocation" exception inth e same place we have drawn it for other exce tions and consistently withthe principles se t forth by th e Court of' Appea?: when a discussion straysbeyond the specific proposal and into even the preliminary stages of a"legislative response," the public body must conduct that discussion in anopen meeting.7 OM CB Opinions at 162 -65 (edited).Accordingly, we will look to whether the Finance Board's overall discussionconcerned a business's possible relocation to the site under circumstances in which thebusiness insisted on the need for confidentiality in ord er to protect the business's ow n


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9 Official Opinions of the Compliance Board 15 (2013)July 25, 2013Page 11identity and information. Next, assuming that the exception applied to some matters, wewill look to whether the discussion of other matters could have been severed from thebusiness location matters and discussed publicly. W e then look to whether the discussionhad traveled be ond a specific proposal to locate or relocate and into the preliminaryYtages of a Iegis ative response.

With respect to the proposing busin ess's need for confidentiality to protect its ownidentity and information, the draft minutes show that the Finance Board closed themeeting to consider a developer's proposal, offered by BDC, that the Finance Boardapprove TIF legislation for a project that had already been the subject of land uselegislation and a prior TIF ordinance. There has been no suggestion that the develo erRished to keep its own identity and intentions ib r the property secret, or that t atinformation was secret. If the Finance Board's discussions about f~n anc ial rojections orthe slides that were shown would have disclosed coni'ldential information about thedevelo er's pros ective tenants' identities and information, the Board might haveP Xroper y exclude the public from that part of the discussion. In fact, the Finance Boardidentifkd one of the prospective tenants in the closing statement it issued after themeeting, and Complainant Broadwater points out that the entity's identity ha d alreadybeen made public. In any event, from the information provided to us, it does not appearthat the Finance Board considered proposals made by businesses whose identities andinformation were confidential. It does appea r that th e Finance Boarcl heard informationthat was already public or did not belong to the developer, such as the history of thepruicct and proposed change in the size of the tax district since the Finance Board andCity Council I ~ a d ast considered the matte r. We find that the business relocationexception did not apply to the entire discussion. We are unable to determine whether itappl~edo any of the discussion.

As for whether some matters could have been severed from any confidentialmatters and discussed publicly, the draft minutes reflect that th e meeting includeddiscussions about the history of the project, th e characteristics of th e site, the changes thathad been made in the master plan tor the site, an d approval of the proposed legislation.While the Finance Board has asserted generally that the topics at th e meeting fell withinthe business relocation exception, it has not explained why i t could not have discussedthese particular matters publicly, and we are addressing these complaints without thebenefit of a written statement tl-lat would have reflected the members' reasons, at thetime, for excluding the public from those discussions. The submissions do not suggestthat these matters were so inextricably bound to any topics that might have fallen withinth e business location ex ception as to have fallen within that exception.With res ect to whether the discussion constituted the early stages of a legislativeresponse, the Anance Board states that "the City's Tax Increment Financing Policyrequires presentation of th e proposed TIF and related legislative packa e to the Board ofBinance to ensure that the request co~npl i e swith its policies be ore legislation isintroduced to the City Council . 'Yhe City has thus assigned to the Finance Board a rolein the legislative process, which, for this project, had regressed to th e point where thePinance Board was meeting to consider its approval o three hills. One of the bills, the


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9 Official Opinions of the C omplian ce Board 15 (2013)July 25, 2013Page 12change in the development district, proposed to amend earlier legislation, and al l of thebills were introduced within three weeks of the May 20 meeting. We conclude that thispub lic bod y's deliberations on the roposed legislation had progressed well pastproposals to locate in the City and ell within the broader question of a legislativeresponse. P

In sum, we must construe the business relocation exception strictly. W e do notconstrue it broadly to apply every time a property owner, its developer, or a coordinatingagency seeks legislation to enable a land use or financing that mi ht in turn generatefroposals from new businesses, Further, we have not, and still o not, construe theexception to extend to steps in the legislative process. Even when the exception applies,it extends to other topics on1 when those topics are so intertwined with the information7f the proposin business t at they cannot be discussed separately. Here, the draftminutes, especia ly read in con'unction with the City's broad dissemination o f the sameinformation soon thereafter, s low that the members considered matters that di d no tappear to implicate the exception.

To comply with the Act, the Finance Board should address, in detail, whether eachtopic it will discuss falls within a statutory exception, and, even if so, whether there is areason to exclude ithe public. Before voting to close a meeting under th e businessrelocation exception, the members shouId analyze whose proposal they are addressing,whose information they seek to address, and whether that information is actuallyconfidential. Then its presiding officer s l ~ou l dmake, or ratify, a written statement. Indoing so, the residing ofXcer should aim fbr the basic goal we stated in 4 OMCBOpinions 46, 99 (2004): "Someone reading the written statement ought to have theanswer to two questions: what are [the rnelnbers] planning to talk about ('topics to bediscussed'), an d why should this topic bc discussed in closed session ('the reason fo rclosin the meeting')," During th e closed session, th e presiding officer and ~nernbersBhoulc confine the discussion to the topics stated on the written statement an d re-open themeeting if they need to stray from those topics or the need for confidentiality dissipates.C. Whether the discussion fell with in the ')public securities mar keting" exce ptionclaimed by the Finance Boa rd after it closed the meetingThe Finance Board's counsel informed Complainants Janis an d Broadwater soonafter the meeting that the "meeting was closed today pursuant to [SG] Section 10-508(a)(4) . . . and Section 10-508(a)(6) to consider the marketing of public securities."The statement thus substituted exception (a)(G) for exception (a)(14), the exception onwhich th e Finance Board had relied in voting to exclude the public.The Finance Board violated the Act to the extent that it discussed the marketing ofpublic securities in a closed session without first voting to close the meeting on th e basisof that exception and without disclosing the exception, the topic and the reasons forconllidentialit . That leaves th e question of whether the tnecting could have been closedunder the pug ic securities marketing exception. The City contends that the "financialfeasibility study an d preliminary financial projections discussed at th e rneeting contain


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9 Official Opinion s of the Com pliance Board 15 (2013)July 25, 2013Page 13sensitive financial data which, if made public at this time, could adversely impact themarketability o f the City's future bond issues; for the Harbor Point project."We are unable to assess th e City's contention that the "sensitive financial data"might "adversely affect the marketability" of the TIF bonds. We note that the May 20meeting occurred at step 3 of the TIF approval process-a step at which the City had yetto adopt th e enabling ordinance to authorize th e issuance of any TIF bonds to bemarketed. It also appears from non-confidential documents submitted to us that theproposed initial market is the developer, which itself would hold the bonds. W e cannotdetermine whether that market would be adversely impacted by the disclosure ofinformation about the developer's own project. W e are thus unable to determine whetherthe financial matters discussed by the Firlance Board would have fallen within thesecurities marketing exception had the Finance Board properly cited it.

Even so, the securities marketing exception would not have ap lied to everything1;he members discussed in the closed session on May 20. While the craft minutes showthat the Finance Board was provided financial pro-jections and engaged in somediscussion of marketing matters, the grou p also discussed other topics, such as changesto the site map, th e characteristics of the site an d project, and the q uestion of whether toapprove the legislation.In sum, we find that the Finance Board violated the Act by discussing in closedsession matters to which none of the cited exce ption s would have ap lied. W e cannot

the closed session. fetermine whether the securities marketing exception would have app ied to any part o fConclusion

We find that the Finance Board violated the Act by closing the meeting to thepubIic before making the disclosures required by the Act. We also find that the FinanceBoard violated the Act by discussing matters that fell neither within the statutoryexceptions that the Finance Board initially announced as the authority for excluding the~rbllc or within the exception that it cited after the meeting. W e encourage the FinanceRoard's stated endeavor to make the necessary disclosures about any future meetings itfinds necessary to close.Open M eetings Co mpliance Board

Elizabeth L. Nilson, EsquireCourtney J. McKeldin

baltimore finance board violations, maryland open meetings act, july 2013

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