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Rigor in County Contracts

Article Date: 
29 October, 2010 - 06:00

There was some debate on Tuesday night in council meeting about what is likely a relatively innocuous contract. The debate, however, may be a reflection of challenges the county will continue to face when approving contracts.
Over the past several years the county has signed contracts which later proved to be significant problems. In the case of Morgan Valley Partners, the county executed an agreement where the guarantee for performance on the agreement was from the same entity with which the agreement was executed. If Morgan Valley Partners did not perform in the agreement, the county could only turn to Morgan Valley Partners themselves to guarantee performance. In hindsight, several council members have commented that this was a poor practice and they have since changed the policy.
The county also executed an agreement with the developer of Rollins Ranch which has left the county with an unfinished subdivision and residents not receiving service. The county is working with the developer now, but has a very limited set of tools to try to enforce the contract and the completion of the subdivision. In hindsight the council members have commented that this contract should not have been executed as it was and have taken steps to ensure that this is not repeated.
The process used by the county in the past has not seemed to consistently produce contracts that have the language and the design to protect the county. Based on the discussion in council meeting on Tuesday there seems to be a lingering question as to whether or not this is still true.
The issue raised was an agreement between the Sewer Special Services District and the County to use additional land for the Kent Smith Park. The contract, it appeared, was not prepared by a lawyer. When commenting upon the contract Attorney Jann Farris said, “[It is] Pretty much just a gentleman’s agreement. I mentioned to Karen, I could probably bog it down with another ten or fifteen pages of legalese, but it wouldn’t really get us any farther than we are now. Mr. Baldwin, I think, made a good effort into his proposal, so as not to offend him I can’t think of a reason we couldn’t move forward with this.”
Member Lundgren disagreed. He said, “I am in favor of the concept. I have some concerns about the language in this lease.” Member Lundgren then expressed concerns about the lack of specificity on the term termination clauses and further said, “I am concerned about under the section that says improvements, the district is expected to install a six foot chain link[fence]. Apparently the district has agreed to [this]. The word expected doesn’t require them to do anything, it is simply an expectation. Words in contracts have important meanings… Lastly I am concerned about the last paragraph called future note. It states, ‘It should be an objective of the county to obtain acreage just west of the district property.’ If the county signs off on that it seems like this is binding us to a future county policy.”
The question Lundgren raised was whether the county ought to be binding itself to a new policy inside a lease agreement. The county has expended significant effort in the creation of area plans that set the county’s future policy for land use. The process of creating the area plan included review and debate with citizens and the council. Stating a policy like this in a lease agreement does seem to be consistent with the process the county has used to determine future direction in land use.
In the end, the lease was approved. It seemed that the council was interested in expediency rather than precise language in the contract. The contract only requires the county to pay $1.00 for the lease and this was stated as one reason that the contract had little risk. The question is whether the provisions of the contract and the loose language will create problems for the county at a later stage.
The larger issue may be whether the county has processes that produce tight legal agreements. The question, which only be answered by time, is whether the county attorney will provide commentary on more than the form contracts, and whether the council and the attorney will take more care in the review and precision of language in other contracts than they did in this case.