Information from a closed session of the Highlands Board of Commissioners has created a stir after an attorney representing a company that submitted a proposal to become the town’s fiber network administrator issued a letter asking the board of commissioners to throw out the project bids.
Attorney Chad S. Wachter submitted a letter on behalf of North Carolina Broadband Group to Highlands attorney Jay Coward prior to the town board’s January meeting. In the letter, NCBG “requests herein that the Town of Highlands suspend or terminate negotiations and/or performance pursuant to the Town of Highlands Broadband Initiative.”
Wachter asserted that the town required a commitment by the bidders to complete the remaining 17 percent of the network at their expense by constructing the underground and aerial build-out areas inside the city limits of Highlands serviced by outside electric utilities. The town reinforced the requirements at the time the town issued to the public the requirement for the request for proposal.
“Subsequently, it appears, per public records and comments made by public officials, that the Town of Highlands is modifying or eliminating the criteria of the winning bidder bearing the expense described above, after the town announced the winning bidder,” Wachter said. “In changing the terms and/or the conditions of the accepted bid, the Town of Highlands is abusing its discretion to act in the best interest of the citizens of Highlands and using its authority in a manner that is unfair to the bids that were not accepted.”
In a response letter to Wachter and North Carolina Broadband Group, Coward noted that the information Wachter was using to make his assertions was not part of any public records because it was discussed in closed session for attorney client privilege. Thus implying that the information was likely leaked to NCBG by someone who was privy to the closed session discussion.
“Your allegations that the Town of Highlands is ‘modifying or eliminating the criteria of the winning bidder’ and ‘effectively amending its selection criteria after receiving the bids’ are false,” Coward said. “The statement that your allegation is based on comments made by a public official is true. Someone, in violation of the laws of North Carolina and the oath they gave to support those laws, leaked you confidential, privileged information discussed in a legally convened closed session of the board on the 17th of December.”
Coward pointed out that Hotwire Communications suggested the idea of selling the underground portion of the network and the drops yet to be built in an attachment to their official proposal submission. Town manager Josh Ward and IT Director Matt Shuler met with three attorneys (Jim Baller, Gabrielle Du Sablon and Sean Stokes) along with Coward to determine if the attachment represented a substantial change to the overall bid.
The attorneys determined that the attachment would represent a substantial change if the suggestion was approved, and that the bid should conform to the Town’s bid package without the attachment. The town board took no action on the attachment. Hotwire will construct and own the underground infrastructure as bid and has been informed of the town’s decision, according to Coward.
In a second letter to the town board members and Town of Highlands administration, Coward showed dismay regarding how NCBG acquired information that was only discussed during a closed session pursuant to attorney client privilege.
“(Wachter’s) letter is troubling, not only for its content. In fact, he states that his letter is based on ‘public records and comments made by public officials’,” Coward said. “How that information was obtained is what troubles me.”
Coward pointed out that Hotwire’s proposal and the forementioned attachment was discussed during a closed session following the December board meeting. Because the board advised Coward to consult with additional attorneys, and report back in January, there were no public records of what was said or any records to indicate that the town would potentially modify or eliminate the criteria of the winning bidder.
Coward went on to note that there are two ways that Wachter could have gained his information – either he spoke with town staff or board members during contractor meetings, which Coward deemed unlikely since no board members were present at those meetings, or Wachter gained his information from someone who was present during the December closed session.
North Carolina General Statutes lay out the permitted purposes for going into a closed session relevant to the matter at hand. Coward made clear that the board could go into closed session to; consult with an attorney, discuss the location of industry or business within town limits, to instruct staff about the terms of negotiation for the acquisition of property or the terms of employment.
“It follows that a board member who is privy to this information is not at liberty to divulge it to the public,” Coward said. “The NCBG letter reveals to the board that some member has failed in his/her duty to follow the law. This failure is not a crime. There are no reported cases which address it. The School of Government has no meaningful guidance about what to do when it occurs. It is so fundamental a principle that it goes without saying. But in my opinion it is a violation of the Oath of Office in the North Carolina Constitution Article VI -7.”
Following a closed session on Jan. 21, the board voted unanimously to allow Coward to respond to Wachter regarding the town’s procedure for developing a contract with Hotwire Communications. In a second motion, the board directed town staff to continue developing said contract with Hotwire by a 3-1 vote. Commissioner Marc Hehn cast the dissenting vote and commissioner Donnie Calloway was absent from the meeting due to illness.