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Hearing on complex objection to be held

October 30, 2012


The city of Starkville is going to court at 9:30 a.m. Thursday to fight an objection against recently approved plans to fund a new municipal complex.

William McGovern filed an objection to the validation of certificates of participation bonds to fund $8 million for the construction of a new municipal facility to be located at the former site of the Starkville Electric Department and the renovation to the current City Hall building to convert it to an expanded police station in September. The hearing was reset from its initial Oct. 10 date.

Fourteenth Chancery District Judge Jim Davidson Jr. will hear the case after Judge Kenneth Burns recused himself.

McGovern alleges in his objection that members of the board of aldermen held clandestine meetings with city officials, financial consultants, bond attorneys and architects to develop the municipal construction plan and states, “… it is reported that votes were taken” by those in attendance. He does not cite in the objection any substantial evidence of those reports.

The board approved of a plan in its regular meeting on June 5 to a 20-year-lease-purchase agreement with West Brothers Construction by a 4-3 vote.

McGovern previously filed a complaint to the Mississippi Ethics Commission accusing the city of violating Open Meetings Law, which is pending. An answer and set of motions to McGovern’s objection filed by City Attorney Chris Latimer last week on behalf of Starkville states MEC has to make a ruling before McGovern can appeal to Chancery Court for relief.

Latimer cites McGovern’s arguments that members of the board held illegal meetings and the board failed to compile minutes of its January retreat are void under the judgment of Shipman v. North Panola Consol. Sch. Dist., in which the Mississippi Supreme Court held that “violations of the Open Meetings Act with respect to notice and minutes … do not invalidate public financing for a project.”

He also cited Citizens for Equal Prop. Rights v. Bd. of Supervisors of Lowndes County to argue that McGovern’s objection should be nullified on the grounds that substantial compliance, not strict compliance, with the Open Meetings Act is the standard to be met.

A project team consisting of Rob Winklepleck of West Brothers, Briar Jones of architecture firm Thomas Jones and Associates, Starkville financing counsel Keith Parsons and Randy Wall and financial consultant Demery Grubbs presented a detailed construction plan, including construction layout, floor plans and financial planning to the board before it debated and voted.

Through local attorney Charles Yoste, McGovern has subpoenaed Winklepleck, Jones, all seven aldermen, Mayor Parker Wiseman, Chief Administrative Officer Lynn Spruill, and former acting City Clerk Emma Gandy.

Latimer makes a motion in his answer asking the court to quash the subpoenas on the grounds that they’re based on McGovern’s complaints regarding Open Meetings Law, which does not fall under Chancery Court jurisdiction and are unrelated to the legal merits of the court’s decision. Open Meetings Law falls strictly under MEC jurisdiction, he said.

“… (A)ll of these witnesses have been subpoenaed for a political sideshow on the Open Meetings Act questions that have nothing to do with the legal merits of the court’s decision,” Latimer states.

Yoste said all board meetings, be it retreats or meetings among board committees which do not constitute a quorum, should have minutes. The fact that these meetings were not properly documented should result in a dismissal of the approved complex plan, he said.

“(During) the Dec. 6 (2011) meeting (board members) passed a resolution authorizing the placement to request for public proposals on the lease of a building by the city of Starkville. All they requested was a building they could lease,” he said. “They were supposed to submit that to the city, and West Brothers submitted a 3-inch booklet in January. And then they had in February a selection site committee composed of several of the aldermen. When they met, that was a meeting that was required to be publicly noticed; minutes taken and then reported back to the board. Negative. (They) didn’t do any of that.”

Latimer also makes a motion for summary judgment. Yoste said Friday that this case cannot be decided on summary judgment because Mississippi statute does not allow it.

Yoste said there were alterations between the initial public release of the board of aldermen’s e-packet in advance of its June 5 meeting and the version of the public-private partnership proposal in the documents aldermen had at the meeting itself.

“It was changed to where they were going to have a non-profit corporation established by the city composed and directed by the mayor, city clerk and chief administrative officer as its officers that was going to own the building. That was illegal,” Yoste said. “The request for proposals on Dec. 6 (2011) that the (city) put in the paper … requested, ‘Come propose to us a building that you’ll lease to us.’ June 5 comes along (and) the city has … changed everything. They’re going to issue $8 million in bonds to pay for the construction of the building and lease it from somebody else. That doesn’t make sense. After whatever time period they’re looking at establishing a public-private partnership. They’re going to lease a building. Now they’re going to build a building and lease it back, and nobody in the city knew that the city is fixing to spend $8 million and build a building and lease it back on a monthly basis for 20 years.”

Latimer’s answer and motion states that McGovern’s argument that the corporation acting as the lessor for the lease-purchase as well as the building to be leased itself are unidentified by name and that citizens of Starkville have no knowledge of the project’s cost “misses the mark both factually and legally.”

“… The fact that some items in the financing documents were not explicitly approved does not invalidate the financing as a matter of law. To establish the validity of a governmental debt obligation, it is necessary only to show that the purpose for which the financing is authorized is within the statutory purpose for which such obligations may be issued,” Latimer states. “Those are authorized purposes under the statute. The question of validity of the financing instrument does not require the approval to be more specific.”

As to the accusation that there was no transparency regarding project cost, Latimer rebutted that the resolution expressly capped the project at $8 million and it was discussed where the new facility would be located.

“… (I)t was listed … in the Proposal that West Brothers Construction and Thomas Jones and Associates presented in response to the (request for proposal), in the power-point presentation … during the Board meeting of June 5, 2012, and in the architect contract that the Board approved the same night,” he stated. “… (T)he Project Team specifically explained during the … meeting why the term ‘Lessor’ was not specifically defined as West Brothers Construction in the financing documents,” Latimer said. “It explained that West Brothers Construction was not named in the documents as lessor because consideration was being given to West Brothers Construction assigning its right to be lessor of the project to a special purpose financing entity, such as a nonprofit corporation or a limited liability company, for tax and financing reasons, and that a final decision had not been made on this point.”

Latimer said he could not comment directly on the city’s answer and motions as per the policy of the law firm for which he is employed.

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