A Newport City Councilor said the City Manager is culpable of "insubordination and willful disobedience" by what he claimed was a failure to renegotiate the Newport Yacht Club lease, despite a council resolution.
The city of Newport is in the 20th year of a 30-year lease agreement with the yacht club.
The lease specifies that every 10 years, either party may request to review the annual payment. On April 24, past Commodore John Ellis wrote a letter to Mayor Harry Winthrop stating this fact and said he was designated to "represent the club in any discussion or negations the city wishes to have concerning the agreement."
In a 5-0 vote, the council approved a resolution (2013-123) that stated "based upon a letter dated April 14, 2013, from the Newport Yacht Club requesting to enter into negotiations, the city manager is directed to renegotiate the lease and bring to the city council a revised agreement no later than October 15, 2013."
Mayor Harry Winthrop and Vice Chairwoman Naomi Neville recused themselves because both have family members who had memberships at the club. The Rhode Island Ethics Commission later ruled neither Winthrop nor Neville should be prohibited from participating in city council matters involving the Newport Yacht Club based on the disclosed memberships.
As a response to the resolution, Newport City Manager Jane Howington authored a report that stated there were no “substantial deviations” from the original lease. She presented her findings to city council at the Oct. 9 meeting.
Councilor Michael Farley said resolution 2013-123 specifically asked her to renegotiate the lease, not present a report. He proposed a resolution stating “the City Manager is admonished for insubordination and willful disobedience of a lawful directive of the Council based upon her failure to renegotiate the lease by October 15.” The resolution is on the docket for the next council meeting.
"An admonishment just means it's a formal acknowledgement that she did not do the task,” said Farley. “When she doesn't do what is directed by council, our system of government breaks down. I just hope someone can second the resolution, so we can discuss."
In what might be considered a contradictory resolution, councilors will also be asked to vote on and accept the city manager's report at the next meeting.
Farley said the city manager's report was incorrect because it did not take into consideration the current assessed value of the land. When the lease was signed in 1993, the club paid the city $32,500 a year, or $2,708 a month, plus intangible benefits. That amount was based on 5 percent of the assessed value, according to the lease.
Although the rent is adjusted annually, Farley said those increases did not keep up with the assessed value. He said if the 5 percent rule was applied today, the rent — which was $50,103 in 2012, or $4,175 per month — would double.
"Unfortunately, the city manager never bothered to learn that the land is currently assessed at over $2 million, and that the lease payment now represents 2.3 percent of the assessed value," said Farley. "So, if the 5 percent rule were actually applied today, the lease payment for that acre of land with 404 feet of waterfront access would double to $102,505 per year instead of $50,103 per year."