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On Friday, the court ruled 4-2 that a Beaver Dam development agency was a “quasi-
governmental” body that was required to follow the open meetings and open records laws — just like local government.
Two justices dissented, arguing that following those laws would put too large a burden on local economic development. They also contended that the court failed to provide guidelines for how such agencies would navigate the “fishbowl” of public attention.
Still, we believe that the existing exemptions in the open meetings law allow enough leeway to balance the complicated issues of openness versus effectiveness in economic development.
Here’s the issue the court addressed. In October 2003, the Beaver Dam City Council approved without discussion a $6 million subsidy to Wal-Mart to build a distribution center on land that would be annexed to the city.
That was the first time Beaver Dam residents knew that Wal-Mart was interested in a development there and that it sought a large taxpayer subsidy to make it happen.
What they didn’t know at that point was that secret negotiations had been going on for a year — between the Beaver Dam Area Development Corp. and Wal-Mart officials.
What is the Beaver Dam Area Development Corp.? It is a private, nonprofit corporation that exists solely to promote economic development for the city of Beaver Dam. It has a board of directors that selects new members; it is paid for entirely through money raised by the city’s tax on hotel room proceeds. Before it was created, its duties were carried out by a city department.
While the corporation may not legally bind the city to a contract, in this case it certainly paved the way toward an agreement. The corporation negotiated the contract with Wal-Mart, and then the mayor signed it, and the council approved it. So, it seemed clear that this private but publicly-funded corporation was carrying out the policies of the city.
After the details of the deal were made known, the state Department of Justice filed suit against the city. That suit was dismissed at the trial court level, but the state appealed. A state appeals court asked the Supreme Court to directly take the case.
There are no perfect rulings, and economic development is a complicated issue that often requires flexibility and confidentiality. But that’s why there are exemptions to the open meetings law. Having a private body doing the city’s work in secret for a year goes beyond the normal need for confidentiality. The court majority was right to make this ruling.
