#EM2019 – CC Question – Transparency

I would like to understand why companies request non-disclosure agreements when negotiating with a city they are interested in locating to. I don’t see the need for this and it reduces government transparency around those negotiations. When the public doesn’t know the name or nature of the business, they are unable to express their opposition or support. The level of support or opposition that the company has should affect the incentives that are offered by the city. The city misses out on public input when non-disclosure agreements are allowed and the residents are left in the dark until it is too late to object.

Non-disclosure agreements are a protection for purchasers of real estate to prevent sellers from escalating prices of land because of who the potential buyer may be and enables fair market value to be established. Unfortunately, city councils get in the middle of this private transaction when they have been a part of the process to bring companies here. As such, they sign nondisclosure agreements to keep from giving an advantage to either party of a private transaction.

In general I believe that a government should be transparent. If there is a lack of transparency it does not allow for public input and hinders the people from being informed or being involved in the decision making process. I do understand that there are certain times when that cannot happen, but I would prefer openness and transparency.

As I have been involved in bringing both Facebook and Tyson to Eagle Mountain, I have been in the thick of this NDA issue. The transparency in these cases was something that I struggled with as I always want as much information in the public as possible. I don’t like the way the state creates code names and has set up its process on economic development, but we really have two options: refuse to play and allow economic development to go elsewhere, or play within the system and work to be as transparent as possible. I have elected to use the second method because the reality is without it, we don’t get economic development to aid the city in keeping resident’s taxes low. While it is a difficult issue, please keep in mind the following: 1) The type of business and all financial information relating to an economic development project is released to the public before voting occurs. The only thing not available to the public in the packet is the company’s name itself. 2) We have a Republic form of government. There are and will always be issues (such as economic development, land sales, and litigation, etc.) that can never be completely open publicly for legitimate reasons. We elect individuals to represent us, not because they are better or smarter, but in order for them to delve into the details of issues for us. While I am serving on city council, that will be my role. Once I am not, that role will pass to another individual and I will not be privy to some of the information that I would be privy to now. We can and should expect those we elect to do the research and make informed decisions, then account for those decisions. With both Facebook and Tyson, I have tried to account in every aspect to the public where I am allowed. I have worked to answer every question or concern raised in order to help share with the public as much of the information as I can from the information I gathered and was given that came into play while making those decisions. 3) Your tax dollars are never given away as incentive. The incentive comes by virtue of the investment by the company. If the company did not relocate to Eagle Mountain, there would be no tax money from the company’s operation coming in. The idea is that the incentive helps to cover the large capital cost a company is faced with when relocating. In order to remove that barrier so they can create jobs and tax revenue, the future tax revenues (that they generate by virtue of them being in the city) are shared with them. Not every project gives everything back, and most projects only give some back. Ultimately, my belief is that when it comes to economic incentives the two most important questions are: would it come without the incentive? and is the incentive commensurate with the value they bring? In the cases of Tyson and Facebook, the ROI for Eagle Mountain and her residents is much better than any incentive given. It’s really an investment in our community.

Firstly let me say that government transparency is very important to me. Increasing it is one of my top priorities. That said there are cases where companies (particularly large ones) will require city staff to sign NDAs that prevent transparency as a precondition of business. There are various reasons for this that vary between competitive advantage and also board requirements. Most are legitimate reasons and are standard legal procedure. Unfortunately for those of us who value transparency, this is a fact of life. Even though I don’t like it, I acknowledge that sometimes there is no way around it. However, I will do what I can to ensure that only information that is absolutely necessary is kept secret, and that when the information is revealed it is done so in time for citizens to weigh in. After that fact, I will also push to release all the information so that there can still be accountability for past decisions, even if it is a bit late in that particular case to reverse it. The people are entitled to know what their government is doing, and to hold that government accountable if they aren’t acting in the people’s best interest and in good faith.

The purpose of NDA’s is to mainly gain favor for corporations by the local governments in the area in which they want to build up their facilities and to do it in a quick and more efficient manner. The local governments offer tax breaks to these companies in order to get to a deal quicker. What that does is put more of a burden of taxes on the people that live in the same area. This also causes our local government to not be transparent with the governed. Transparency is necessary to ensure a free society. The government sharing information with the people is what keeps them honest and accountable for their actions. We need a government that keeps the people involved in the decision process because the choices that the government makes affects the people.

Though rare, non-disclosure agreements can be important. The purpose of these is never to keep secrets from the public, but to provide a certain level of legal privacy to certain private entities within the agreement. It is entirely possible for a government agency to remain transparent about what is happening, even with an NDA.

The role of a non disclosure agreement is to protect buyers and sellers in real estate transactions. I don’t think it affects transparency at all. For example, we have recently had 2 very prominent businesses move to Eagle Mountain. I won’t use those, but fictitious ones for example. Lets say we just got Ford motor company (manufacturing) and Google (data center). One would be thrilled, while others wished it was Chrysler, and Yahoo. What I think this question goes into is personal property rights. So whether we knew the company or not, the NDA only protected the buyer and seller and their rights. Transparency would only be violated if government said it was Yahoo and it turned out to be Google. The transaction itself was legal, the NDA protected the parties, not the people. Transparency is it’s own separate issue, not related to NDA’s. I 100% believe in government transparency. I also hold personal property rights very highly.