Request By:
Kimberly K. Greene, Esq.
Wyatt, Tarrant & Combs
Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Nathan Goldman, Assistant Attorney General
This is in reply to your recent letter in which you state that as legal counsel for The Lebanon Enterprise and The Courier-Journal you are requesting formal opinions under both the Open Meetings Law and the Open Records Law concerning the right of public access to the records and meetings of the Lebanon Water Works Company.
We will first deal with your question as it pertains to the Open Meetings Act. We will then discuss your question from the standpoint of the Open Records Act. Any party who disagrees with the findings and conclusions of this office in regard to the interpretation of the Open Records Act may appeal that portion of this opinion to the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882.
The Open Meetings Act
An Act of the 1883-1884 session of the Kentucky Legislature, approved March 6, 1884, an Act to incorporate the Lebanon Water Works Company, created a body corporate and politic under the name of the Lebanon Water Works Company. The authorized capital stock of the corporation was $100,000. Whenever $10,000 of said capital shall have been subscribed, the corporation could organize and commence business. The business of the corporation shall be the building of reservoirs, the laying of water pipes and the furnishing of water to the town of Lebanon, to other companies or individuals. The affairs of the corporation are to be under the management of a board of directors consisting of five stockholders.
An Act of the 1885-1886 session of the Kentucky Legislature (Chapter 117) approved March 2, 1886, an Act to amend an Act entitled "An Act To Incorporate the Lebanon Waterworks Company," approved March 6, 1884, provided in part as follows:
"That the city of Lebanon, through its board of trustees, by proper ordinance, may subscribe for capital stock in said company to any amount not exceeding seven hundred and fifty shares of one hundred dollars each, and may issue the bonds of the city in any amount not exceeding seventy-five thousand dollars, and may sell the same for the purpose of raising money to purchase and pay for said stock."
The city of Lebanon did pursuant to the above quoted provision buy the capital stock of the corporation including, apparently, any shares which might originally have been issued to the incorporators or other persons. Thus, at some point the city became the sole shareholder in the corporate entity.
An Act of the 1889-1890 session of the Kentucky Legislature (Chapter 1156), approved April 30, 1890, an Act to amend an Act entitled "An Act To Incorporate the Lebanon Water Works Company," provided that the affairs of the corporation shall be under the control and management of a board of directors consisting of five persons, who shall be either shareholders in the corporation or resident citizen taxpayers and property owners in the town of Lebanon. A "conflict of interest" provision was inserted whereby no member of the board of trustees of Lebanon was eligible to serve as a director of the water company.
KRS 96.350 permits a city of the fourth class, as Lebanon is, to acquire a waterworks. KRS Chapter 106 also deals with a city's authority to acquire a waterworks.
The term "public agency" is defined in KRS 61.805(2) of the Open Meetings Act as follows:
"'Public agency' means any state legislative, executive, administrative or advisory board, commission, committee, policy making board of an institution of education or other state agency which is created by or pursuant to statute or executive order (other than judicial or quasi-judicial bodies); any county, city, school district, special purpose district boards, public commissions, councils, offices or other municipal corporation or political subdivision of the state; any committee, ad hoc committee, subcommittee, subagency or advisory body of a public agency which is created by or pursuant to statute, executive order, local ordinance or resolution or other legislative act, including but not limited to planning commissions, library or park boards and other boards, commissions and agencies;"
As concerns the Lebanon Water Works Company in particular, two cases mandate that the company is a public agency as an agency of the city. Commonwealth v. Sinking Fund Commissioners of Lebanon Waterworks Co., 130 Ky. 61, 112 S.W. 1128 (1908) held that a sinking fund created to liquidate the bonded debt incurred by the city of Lebanon in the purchase of the waterworks was so much taxes and collected to liquidate a debt incurred for a public purpose. Property of the sinking fund, stocks and bonds were exempt from property tax as public property used for public purposes. In Yowell v. Lebanon Waterworks Co., 254 Ky. 345, 71 S.W.2d 658 (1934) the Court had before it the question of the liability of the waterworks in furnishing water to put out a fire. The Court stated:
"While the waterworks system is operated in the name of the waterworks company, it is only a part of the city government. The mere form in which the city operates the system does not in any wise effect the rights of the parties. Under the well-settled rule if the city operates this system in the name of the city, the action could not be maintained against it. To allow the plaintiffs to maintain the action and recover against the waterworks company would be simply to allow them to maintain an action against a branch of the city government. "
Id. at 659.
Based on the clear reasoning of these two cases, it is our opinion that the Lebanon Waterworks is a public agency.
The Open Records Act
Ms. Ninie Glasscock of The Lebanon Enterprise in a letter to Mr. Spragens, dated March 21, 1988, requested copies of various documents relating to the Lebanon Water Works Company. There was no reference to the Open Records Act in that letter.
Mr. Spragens responded to Ms. Glasscock in a letter dated March 25, 1988, and advised her part as follows:
"Finally, and the only other thing which occurs to me, and which makes any sense at all, is that your letter is intended to be a request made pursuant to KRS 61.872, and that it is made in order to see whether the Lebanon Water Works Company, for purposes of our 'open records law,' likewise considers itself to be other than a 'public agency, ' and inasmuch as the definition of a 'public agency' differs slightly from the 'open meetings' to the 'open records' statutes. I would have been happy to have told you informally, and will tell you now, that the position of the Lebanon Water Works Company is consistent in that the Company is aware that it is not, either for 'open meetings' or 'open records' purposes, a 'public agency. ' Thus, if what you really want is a denial of a request for the privilege of inspection of corporate records, you now have that at the direction of the Board of Directors of the Lebanon Water Works Company."
Ms. Pam Luecke of The Courier Journal, in a letter to Mr. Spragens, dated August 30, 1988, requested information pertaining to regular and special meetings of the Lebanon Water Works Company as well as copies of the minutes of certain designated meetings of the company.
Mr. Spragens responded to Ms. Luecke in a letter dated September 6, 1988, and advised her that even if the statutory provisions of the Open Meetings and Open Records Acts were applicable to the water company, he is not the custodian of the corporate records. He suggested that she contact the corporate secretary whose name and address were set forth in his letter.
As far as we can determine, Ms. Luecke never directed her requests to the corporate secretary. Thus she has never had her requests for documents rejected by the custodian of those documents. No final decision has been made on her requests by the water company pursuant to KRS 61.880(1). You, nevertheless, have appealed to this office on Ms. Luecke's behalf and have joined her "appeal" with that of Ms. Glasscock of The Lebanon Enterprise.
The term "public agency" is for purposes of the Open Records Act defined in KRS 61.870(1) as follows:
"'Public agency' means every state or local officer, state department, division, bureau, board, commission and authority; every legislative board, commission, committee and officer; every county and city governing body, council, school district board, special district board, municipal corporation, court or judicial agency, and any board, department, commission, committee, subcommittee, ad hoc committee, council or agency thereof; and any other body which is created by state or local authority in any branch of government or which derives at least twenty-five percent (25%) of its funds from state or local authority; "
You maintain that the water company is "any other body which is created by state or local authority in any branch of government. "
It is the opinion of this office that the Lebanon Water Works Company is a public agency within the meaning of KRS 61.870(1). The reasoning set forth in that part of this opinion pertaining to the discussion of the Open Meetings Act, and whether the water company is a public agency under that Act, is applicable in regard to the issue of whether the company is a public agency under the Open Records Act. However, Ms. Luecke should address her request to the proper custodian of the records.