Shepherd
TO:
Sunshine Committee – via The Honorable Judge Michael Schwab, Chair; & Ms. Rebecca Podszus, Administrative Staff to Committee
FROM: Margaret Shepherd, Director of State Relations, University of Washington RE:
Exemption for Real Estate Appraisals in RCW 42.56.260, and Proposed Amendment Retain Exemption The University of Washington recommends retaining the existing exemption for real estate appraisals as set forth in RCW 42.56.260. The statute exempts appraisals until the property has been purchased or sold. This is appropriate and necessary, because disclosure of an appraisal before the transaction is completed could have a negative impact on the public agency’s ability to negotiate and a detrimental price impact to the public agency. The public is protected by ensuring that negotiations for the purchase or sale of public property have certain exemptions from disclosure. After the transaction is completed, or if it is abandoned, then the appraisal is subject to disclosure, per the current statute. This is reasonable. The public interest in obtaining a fair price is unlikely to be impacted at this point. In any event, the statute requires disclosure no later than three years after the appraisal, which is also a reasonable requirement. By this date an appraisal will probably be stale, and there is minimal risk of negative impact on negotiations. As a result, the potential for harm is low that there would be negative impact on a public agency’s purchase or sale of real estate. Amendment The University of Washington also recommends an amendment to the statute to create consistency with the Open Public Meetings Act (OPMA). The state has established a public policy of protecting taxpayers from paying too much for property or selling for too low, by exempting discussions regarding negotiations when buying, selling or leasing real property. This policy is set forth in the OPMA, RCW 42.30. Executive Sessions are described in RCW 42.30.110, allowing discussion to take place without public knowledge. Final action requires a meeting open to the public.
Because the Public Records Act exempts only appraisals, but not any other documents used for negotiating purposes, it is not consistent with the Open Public Meetings Act. The result is a gap which creates risk that the public may be harmed by disclosure of records used by the public agency to determine its bargaining position. An amendment to RCW 42.56.260 would bridge this gap. The proposed amendment is: Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, or other documents with details regarding the terms of a real property transaction, the disclosure of which might negatively impact the price or value of property to be sold, purchased or leased by a public agency, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, are exempt from disclosure under this chapter. In no event may disclosure be denied for more than three years after the appraisal. Conclusion All elements of the current statute are appropriate and necessary to protect the public’s interest in obtaining a fair value for the purchase or sale of real estate owned or to be owned by a public agency. The exemption for real estate appraisals should be retained. In addition, the statute should be amended for consistency with the policy of the Open Public Meetings Act. This would protect the public interest by exempting other records that pertain to a public agency’s negotiations for purchase, sale or lease of real property.
Sunshine Committee – via The Honorable Judge Michael Schwab, Chair; & Ms. Rebecca Podszus, Administrative Staff to Committee
FROM: Margaret Shepherd, Director of State Relations, University of Washington RE:
Exemption for Real Estate Appraisals in RCW 42.56.260, and Proposed Amendment Retain Exemption The University of Washington recommends retaining the existing exemption for real estate appraisals as set forth in RCW 42.56.260. The statute exempts appraisals until the property has been purchased or sold. This is appropriate and necessary, because disclosure of an appraisal before the transaction is completed could have a negative impact on the public agency’s ability to negotiate and a detrimental price impact to the public agency. The public is protected by ensuring that negotiations for the purchase or sale of public property have certain exemptions from disclosure. After the transaction is completed, or if it is abandoned, then the appraisal is subject to disclosure, per the current statute. This is reasonable. The public interest in obtaining a fair price is unlikely to be impacted at this point. In any event, the statute requires disclosure no later than three years after the appraisal, which is also a reasonable requirement. By this date an appraisal will probably be stale, and there is minimal risk of negative impact on negotiations. As a result, the potential for harm is low that there would be negative impact on a public agency’s purchase or sale of real estate. Amendment The University of Washington also recommends an amendment to the statute to create consistency with the Open Public Meetings Act (OPMA). The state has established a public policy of protecting taxpayers from paying too much for property or selling for too low, by exempting discussions regarding negotiations when buying, selling or leasing real property. This policy is set forth in the OPMA, RCW 42.30. Executive Sessions are described in RCW 42.30.110, allowing discussion to take place without public knowledge. Final action requires a meeting open to the public.
Because the Public Records Act exempts only appraisals, but not any other documents used for negotiating purposes, it is not consistent with the Open Public Meetings Act. The result is a gap which creates risk that the public may be harmed by disclosure of records used by the public agency to determine its bargaining position. An amendment to RCW 42.56.260 would bridge this gap. The proposed amendment is: Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, or other documents with details regarding the terms of a real property transaction, the disclosure of which might negatively impact the price or value of property to be sold, purchased or leased by a public agency, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, are exempt from disclosure under this chapter. In no event may disclosure be denied for more than three years after the appraisal. Conclusion All elements of the current statute are appropriate and necessary to protect the public’s interest in obtaining a fair value for the purchase or sale of real estate owned or to be owned by a public agency. The exemption for real estate appraisals should be retained. In addition, the statute should be amended for consistency with the policy of the Open Public Meetings Act. This would protect the public interest by exempting other records that pertain to a public agency’s negotiations for purchase, sale or lease of real property.
