A week after Johannes Troost, Matt Williams, Lorenzo Kristov, and Richard McCann called for reconsideration of the council approval of a Lease Option Agreement with BrightNight for a solar farm on a city owned property, the council heard from a large and diverse group of citizens urging them to rescind the action.
Critics claim that the sole source contract lacked an open process, one that could be publicly vetted, when the council agreed during the fateful first meeting during the COVID-19 shutdown.
The letter from Mr. Troost, et al, argued that the rental rates “are undervalued” and the agreement unreasonably and unnecessarily exposes the city to a variety of risks.
The letter called on council to “direct staff to research the fiscal, legal and business issues identified in this letter,” and “rescind Council’s approval of the Item 9 resolution to allow the City Manager to execute the Lease Option Agreement and Term Sheet with BrightNight” that will “give the solar energy company an Option to Lease up to 235 acres of city-owned land near the City’s Wastewater Treatment Plant on County Road 28H for a Commercial Solar Farm and Solar Energy Testing Facility.”
But it may not be that simple.
Under fire, the city manager announced on Tuesday that the City would be releasing an FAQ information piece on the agreement – to “clear up misunderstandings.”
Following public comment, Mayor Pro Tem Gloria Partida asked City Manager Mike Webb what options the council had at this point.
He said, “Staff has been working on a question and answer piece that we intend to post tomorrow – to answer and respond to many of the questions and views that are out there in the community with hopes that that information will provide greater clarity to the agreement that the city council approved – what it is and what it isn’t.”
The Mayor Pro Tem then asked, “What is the procedure if we wanted to reconsider this? Is that something that can be done? Or are we legally bound by the decision that we made.”
City Attorney Inder Khalsa explained that the option agreement allows the city to negotiate a lease agreement that has not been approved as of yet.
“The option agreement was executed and we are now legally bound by it, therefore there’s no way for council to rescind the option agreement through a motion,” she said. “We would look to the terms of the 
option for termination if the council wished for us to opine on that.”
Councilmember Lucas Frerichs asked, “What does that entail?”
Ms. Khalsa responded, “I haven’t reviewed the termination provisions in the option agreement.” She did note that the “city is not bound by the terms that are laid out in the term sheet,” and those can be negotiated.
During the long range calendar Gloria Partida again expressed the desire to put the matter back on calendar, but Mayor Lee suggested she talk to the City Manager first, and then could put the matter on the agenda if she so desired.
On March 24, the Council voted 4-1, with Lucas Frerichs Voting “no,” on the deal that critics have described as “very favorable for BrightNight” and “crafted completely in secret” with “no commitment to actually provide energy to Davis.
Lorenzo Kristov in a weekend op-ed noted, “Despite the claims by council members and staff of the renewable energy and climate action benefits to the city… the energy from the project, if it is built, will go into PG&E’s grid for sale anywhere in the western regional power grid.”
“The deal was crafted in closed sessions over a period of several months with no information released to the public until the posting of the March 24 Council agenda,” he said. “Over the preceding months, some city commissions were having talks with city staff about potential uses of the property, but there was never a mention of the BrightNight project from the start of talks with the developer last summer or fall until the March 24 staff report.”
The council heard an earful from the public on this issue – it was a large and broadly diverse group of citizens.
Scott Ragsdale told the council that he expressed “considerable and very clear concern about the nature of the lease, how it came about, as well as the nature of the agreement and the fact that it well may be a less than advantageous agreement.”
“It would be best if the council would consider rescinding the agreement,” he added.
Gerry Braun said, “I think it would be very disappointing if after all of the effort that the city has put in… to advocate for community solar… if a solar project that is exactly what would have been the result of all that, would be implemented without the electricity actually being delivered locally and to Davis.”
He noted that the utility commission which has not been consulted on this, “has the expertise to help the city move forward in a good way.”
Linda Deos questioned the city for not utilizing the usual RFP process for selecting the best possible company and agreement. She noted that one of the biggest issues raised by the public “was the need for transparency in government – transparency leads to trust and trust leads to public support of tax measures and new infrastructure projects like the one proposed here.”
She noted that lack of transparency undermined public trust as well as the rise of “conspiracies – real and imagined.”
Kevin Scott from South Davis said, “I’m a little bit suspicious of this. I think we may be giving a way a little too much.”
Elizabeth Lasensky thanked Councilmember Frerichs for his “no vote” on March 24. She argued that they “need to pull that entire contract” and “begin a collaborative process” with the public and commissions to come up with a better agreement.
Francesca Wright argued “we have commissions, we have to use them.” She argued that the very educated public in this system is “being ignored.” “We have a City staff that frankly seems to want to push things through without respect for a good process and getting the expertise that they need.” She said, “It’s the job of the council to go to the community and get the expertise.”
Bill Julian said, “The four members of the council that have supported this action have made a fundamental mistake in the action that they took – both by bypassing the normal processes for a major city action and inviting potential reaction under CEQA.”
Councilmember Will Arnold at the March 24 meeting said, “I think now a bird in the hand is worth maybe more than just two in the bush at this point, because if we were to start an RFP process right now, who knows whether other companies are willing to take the type of risk that this company is willing to take.”
Bill Julian called that comment “ironic” in that “the bird may be an endangered species, the Swainson’s Hawk whose habitat is throughout Eastern Yolo County.”
He cited four errors that the council has made, which he said stem from one underlying problem, “which is a contempt for public planning, for public process and for public decision-making with respect to major infrastructure issues.”
It is unclear how the city will respond to this. While Gloria Partida seemed ready to reconsider, the other members did not respond other than Lucas Frerichs who has already voted no.
—David M. Greenwald reporting
When the FAQ comes out please post a link. I’m interested in the justification for this debacle.
The legal justification for cancelling the BrightNight contract is really quite simple – BrightNight misrepresented their credentials to the City. It is clear as day.
As part of the resolution authoring such a contract award, Council stated – Whereas, BrightNight is an energy company that focuses on delivering safe, reliable, high-value, low-cost renewable energy. BrightNight has developed, financed, constructed and operated more than 3,000 megawatts of renewable energy since 2009.
This information is completely false. And there is no way the City could have gotten this information had not BrightNight given it to them. In fact, BrightNight is NOT a leading solar company as Staff otherwise represented to Council. They are actually a start-up company formed only a little over a year ago in January, 2019 as a Limited Liability Corporation in Delaware. It was only registered in California as a Foreign Limited Liability Corporation on February 11, 2020 which, perhaps not coincidentally, was the very same day that the Council reported out from Closed Session that they had directed staff to move forward to secure a preliminary agreement with BrightNight. BrightNight’s website also only lists a residential home in El Dorado Hills as its sole US office and has no phone number listed.
Further, NONE of the projects listed on BrightNight’s website (at https://brightnightenergy.com/markets-projects/) as evidence of their experience were projects in which BrightNight Energy had actually even participated as a developer or subcontractor. Nor could they have done so because BrightNight was not even in existence at the time the projects were completed!
BrightNight also lists the logos of 40 large energy providers and utilities on its website under the banner heading “Our Experience Helping Major Players in the Energy Market” but does not disclose any actual services they provided to these entities or projects in which they participated. It would be useful to know exactly what goods or services, if any, were actually provided by BrightNight to any of these corporate entities or whether they are similarly claiming corporate experience where none actually exists.
Couuncil clearly relied on the representations of substantial industry experience by BrightNight in their decision to award them the contract to them. Since these representations were fraudulent, the underlying contract can be voided…..easy peasy.
Part of the problem here is that threee of the Counccilmembers obviously do not want to admit they made a somewhat questionabale decision to award the contract. However, there is a great face-saving defense by the City Council and Staff allowing them to backtrack their decision and explain their inexplicable decision,
“We were in the fog of Covid-19…“
What the ??????
Our new in-house counsel, Ms Khalsa, just stated that she allowed Council to sign an agreement which she has not even completely reviewed and opined as to the adequacy and protections afforded to the City! This is certainly NOT a standard operating procedure for any government body to follow when executing contracts.
There is clearly a lot riding on the advice given by our new City Attorney that there is nothing that can be done to rescind the contract and it is obviously being used by Staff and Councilmembers Arnold, Carson, and Lee as a skirt to hide behind. But there is a distinct possibility that her advice is misleading or even just flat out wrong.
I think Councilmembers Frerichs and Partida should demand that the City retain an independent experienced contract attorney who knows the field for a second opinion. We have a wealth of these types of meat-eating attorneys in town from which to choose. I’ll bet there are even a few who would toss in a few hours of review for free just to prevent the City from being locked into a lousy 54-year deal.
I interpreted her comment slightly differently – though no less troubling. I understood it to mean that she hadn’t reviewed it prior to the meeting to recall the exact details. From my view, that’s not okay either since she had to know that question was likely to arise given all of the public stirrings.
I believe this entire BrightNIght transaction points to an even broader, more serious issue, that demands concerted community-wide scrutiny. Namely, this City council and others in recent years have been conducting more and more business behind closed doors or, in council vernacular, “Closed Session.” Citizens who follow council business successfully exposed the city’s practice of “burying” many substantive matters in the “Consent Calendar.” Thanks to those efforts, the publicly-displayed, printed agendas now list all consent items for each council meeting. On the other hand, “closed session” items, still reveal essentially nothing about what council members will be discussing behind closed doors, so the public has no idea about the nature or impacts of such backroom deals – until after the deal has been consummated. That is wrong – pure and simple. I believe it is past time for some community-minded attorney(s) to launch an investigation into this clandestine behavior of the city council and administration. As a community, we deserve the right to know how and why BrightNight came to the attention of the City, why it was discussed behind closed doors and why a backroom deal was made, with no public disclosure or input. And there IS a money trail to be found: who stands to benefit financially, both directly and indirectly, from this deal? We need to know!
Rick
You’re right. There have been several recent examples of abuse of the closed session in approving deals. The Council has considered issues well beyond simple transaction details that should have been open for discussion under the state’s Brown Act. I’d like to know who’s instigating these overly broad sessions.
Are there established criteria for appropriate closed session topics, e.g., contract negotiation, legal suits, etc?
Diane… yes…
(Ralph) Brown Act…
Lots of hits by google, etc…
CA Gov’t code § 54950 et seq.
Forgive me if I don’t drill down to specifics… I do know it is all “of public record” as to when the legislative body can discuss what things, legally, “off the record”… and how the agency must disclose a general nature of the item… but all decisions based on those discussions have to be ‘reported out’, “for the record”… I was sometimes an observer, due to SME, of closed session meetings… never saw a violation of the Brown Act. Never saw a hint of ‘collusion’.
Have no opinion, one way or the other, as to the matter at hand… wasn’t “there”… innuendos are easy… particularly when one disagrees with outcomes… and/or are paranoid, and/or have other “agendas”… the ‘truth’ will out… eventually…
BTW, Dianne… you posed, in my view, an honest and pertinent question… two thumbs up!
Here’ the first in a three-part reply to the City Staff Q&A on the agreement.
https://davisvanguard.org/2020/04/guest-commentary-citys-faq-on-the-brightnight-lease-option-is-misleading-and-factually-incorrect-part-1/
Bill thanks. I would think it would be helpful if our city CC and staff have criteria. It might help them realize what should be kept closed and what needs community input.