I’ve been reviewing the Agreement between PSE and the City of Tacoma, signed by PSE on 9/15/2015. I write this with some trepidation. I am no legal expert, but understand contracts well enough to see some issues with the Agreement. I’m going to try and unpack some of the language and point out where I think we should be concerned and asking questions.
This Agreement is foundational to all the issues that we are facing, and will continue to face, as a community concerned with disappearing democratic processes. Based on the way this agreement is written, I am deeply concerned that the City knowingly signed up to silence the voices of the citizens. I will lay out my concerns in this article. I may be off base on some of the facts, but I encourage open and frank discussion regarding these facts. The copy of the Agreement I have doesn’t have TC Broadnax’s signature, so I have requested one with signatures from the City.
In September of 2015, the City signed an Agreement with PSE that, at first glance, appears to be a standard contract between entities. There are your typical recitals and clauses regarding survival of the terms and conditions, indemnification, communication, etc. However, in context of time and everything that has taken place over the last two years, these clauses now appear much more problematic than I initially thought.
Section 9 of the agreement is the Indemnification clause. Indemnification, as a verb, compensates someone for harm or loss. In this case, the language sounds excessively protective.
“The City shall protect, defend, indemnify and hold PSE, its officers, officials, employees and agents, while acting within the scope of their employment as such, harmless from any costs, claims, damages, causes of action, or judgments arising out of, or related to, the City’s obligations under the terms of this Agreement and authority to participate in this Agreement.” The next sentence serves to document PSEs reciprocity of indemnification toward the City.
Usually, these types of clauses discuss “reasonable” claims. This agreement indemnifies for ANY ‘costs, claims damages, causes of action, or judgments’. Additionally, the trigger appears to be claims “arising out of, or related to, the City’s obligations under the terms of this Agreement”. What are the City’s obligations under the term of this Agreement? For the purpose of this blog post, I want to focus on the City’s obligation to follow the processes allowing for public comment and participation in the review. I will focus on this because the administrative elements of their obligations are more easily managed. The public element was not going to be so easily managed. And I think that this document has driven the City’s behavior toward public participation.
Timing of notifications
In September 2014, the city reportedly sent out notices about the scoping period for the project. They received 8 letters from the community and have documented in their summary that there were more responses from those who attended in person, however, they don’t enumerate how many or what kinds of responses, from what I have found.
In July of 2015, there was a public meeting to discuss the Draft Environmental Impact Statement. 28 people attended, including representatives from the City and PSE. I think it is important to note here that there are 20,000 people living in NE Tacoma. They received 27 letters / written comments, 8 of whom opposed the project. That’s an incredibly small response for such a massive project. The majority of responses in favor of the project came from people and agencies whose ability to provide neutral input is questionable.
Why was this such a small response? The City supposedly sent out notifications to people / organizations / addresses within 400 feet of the project. No one knows for sure, I don’t think anyone has ever seen such a notice. There are no residences within 400 feet of the proposed project. Apparently, the City also published the notice in a journal that requires a subscription. The City followed the letter of the law and completely ignored the spirit of the law. Public participation is so messy.
In October of 2016, I presented a petition to the City with 525 signatures stating opposition to the LNG plant. 180 of those signatures were from people who live in the 98422/NE Tacoma zip code. 336 signatures were from people who listed their city as Tacoma. There were 148 comments, 88 of whom were Tacoma residents. The petition was circulated via social media for about two months in order to make sure that enough people could respond. The City has never formally acknowledged this petition or the comments presented to them.
It is my belief that because of Section 9, Indemnification Clause, the City will not make any course correction to this mistake of inadequate public notification. But, they had to have known exactly what they were signing up for when they signed the Agreement. Which brings us to the next section,
Section 11(e) is the Fair Construction clause. Normally, the Fair Construction clause memorializes the fact that both parties have had legal representation / guidance in the interpretation and understanding of the contract. In this Agreement, this clause states:
“The Parties hereby acknowledge and agree that each was properly represented by counsel and this Agreement was negotiated and drafted at arms’ length so that the judicial rule of construction to the effect that any ambiguities are to be construed against the drafting party shall be inapplicable in the interpretation of this Agreement.”
The problem I see with this language is that there hasn’t been much of an “at arms’ length” relationship between City, Port and PSE officials.
In fact, the relationship has been so cozy that City and Port officials, on several occasions, both presented ‘research material’ that was generated by PSE. In March of 2017, Shirley Schultz, Principal Planner with the Planning and Development Services department at the City presented at a “Permitting Strategies for Large, Controversial Projects in Washington State and the Northwest” to industry representatives in a session titled “Permitting Large Port Projects”. The summarized intent of this conference:
“Permitting large infrastructure projects in Washington State has long been a complex process involving state, local and federal agencies with overlapping land use and environmental regulatory authority. The recent emergence of new major project proposals has been driven in large part by new/revised federal and state air and climate change policies and regulations, as well as by Washington’s proximity to Asian markets and inexpensive North American natural resources. While each of these drivers presents an opportunity to effect change, it has become more challenging to successfully navigate the permit process. Recent controversy surrounding coal, methanol, and other energy projects in the Pacific Northwest have made what has always been a difficult process, even more protracted, polarized and litigation-prone than ever before. Join us for an informative and stimulating seminar that will teach you not only the permitting “A-B-C’s” in this complicated setting, but will also provide strategies of engagement and planning that can facilitate the successful procurement of large project permits while ensuring that environmental considerations are met.”
To my mind, the City has been doing everything possible to frustrate and silence the will of the people. They have worked in concert with the Port and the Economic Development Board of Pierce County to eliminate the pesky public participation paradigm in order to feather their caps. In fact, I don’t think it’s too wide of a net to cast to say that our government has not just made it easier for industry to operate, our governing agencies have surrendered to industry and given them the reigns, while making it appear everything is in order.
Section 11(h) is the Severability clause, titled “Severability; Material Alteration/Frustration of Purpose”. The language in this clause that concerns me:
“Any severance of the Agreement that results in the taxation of the Project or PSE’s LNG business activities related thereto such that PSE loses the benefits of the long term certainty as to the tax exemption of PSE’s LNG business activities provided by this Agreement constitutes a material alteration and frustration of purpose of this Agreement.”
This agreement had to have been reviewed by City attorneys. I would be interested in understanding the justifications for the language issues I have pointed out here.
In Section 5 – “Amendments” the clause states “The Parties hereby agree that the only representatives of the City authorized to sign this Agreement or any amendment, modification, or change to the terms and conditions of this Agreement are the Manager of the City or his/her duly appointed designee.” We must remember to start paying attention to what the City Manager is doing, as well as the attorneys and the council.
There is a lot of attention on the upcoming election. The choices are not ideal. Really, though, no matter who wins those offices, they will all be subject to the Indemnification clause. No matter how they really feel about PSE’s fracked gas plant. The cozy relationships that exist between politicians and industry is only going to get more cozy. The voice of the people will continue to be silenced, minimized or risk having their character assassinated.
We can change this. We may not be able to change it with our vote this fall, but when we keep showing up and keep demanding transparency, we can change the way business is done in this city.