Request By:
Hon. Patrick Watts
General Counsel
Department of Insurance
P.O. Box 517
Frankfort, Kentucky 40602
Opinion
Opinion By: Frederic J. Cowan, Attorney General; William B. Pettus, Assistant Attorney General
James L. Thomerson, on behalf of his client, the Lexington Herald-Leader, has appealed to the Attorney General pursuant to KRS 61.880(4) the reasonableness of fees charged by the Department of Insurance for a copy of public records stored on a database.
On October 25, 1990, the Department of Insurance received a letter dated October 22, 1990, from Kit Wagar, staff writer for the Lexington Herald-Leader. This letter was an open records request seeking access to the following computer records:
1. All insurance policies currently in force that were purchased by the Commonwealth though private insurance agents.
2. Corresponding policies that provided coverage to the same person, place or thing at any time during 1987.
This open records request sought a copy of these computer records in the form of a "flat file electronic American Standard Code for Information Interchange (ASCII)" disk pursuant to KRS 61.975(2).
By letter dated October 26, 1990, the Department of Insurance responded to this open records request indicating that the records sought were available and would be provided, but the Department was uncertain whether all of the information sought had been entered into the Department's computer system. Kit Wagar was informed that the information could be made available on a magnetic tape at a cost of $ 500 pursuant to 806 KAR 4:010 Section 1(20)(e).
By letter dated November 19, 1990, the Department of Insurance informed Kit Wagar that the information requested had been prepared and was available. The Department of Insurance further stated that it was necessary to create a non-standardized unique, custom-made record. Instead of charging $ 500 for a copy of existing records on magnetic tape pursuant to 806 KAR 4:010 Section 1(20)(e), the Department of Insurance indicated that the fee for production of this custom-made record would be $ 350 of which $ 100 was for computer time and printing and $ 250 was for 15 hours of staff time for programming.
By letter dated December 4, 1990, Kit Wagar enclosed a check for $ 350 and requested delivery of the computer disk which had been specially prepared for Kit Wagar by the Department of Insurance. Mr. Wagar also protested the amount of the fee and requested the Department of Insurance to reconsider the fee and eliminate the cost of staff time pursuant to KRS 61.975(2) and recalculate the fee to bring it more in line with the fees charged by other state agencies. Mr. Wagar further stated that he did not want any information excluded and wanted all the information available regarding the Commonwealth's purchase of insurance coverage.
By letter dated December 7, 1990, the Department of Insurance responded to Mr. Wagar's December 4, 1990, letter. The Department of Insurance explained the basis for its $ 350 fee and stated that the Department would contact Mr. Wagar when a floppy disk containing the additional information sought was available.
On December 10, 1990, Mr. Wagar telephoned the Department of Insurance and stated that he did not want any additional information because the custom-made disk sent to him by the Department of Insurance had all the information he needed. Apparently Mr. Wagar received the custom-made disk some time between December 7, 1990, and the December 10, 1990, telephone call.
By letter dated January 3, 1991, and received by this Office on January 4, 1991, Mr. Thomerson filed an appeal pursuant to KRS 61.880(4) on behalf of the Lexington Herald-Leader. The Lexington Herald-Leader argues that the $ 350 fee was excessive for two reasons. First, the Lexington Herald-Leader argues that the Department of Insurance misunderstood the open records request and unnecessarily created a non-standardized unique, custom-made record pursuant to KRS 61.975(3) instead of merely providing a copy of an existing record pursuant to KRS 61.975(2). The Lexington Herald-Leader argues that it should not be penalized for this error by the Department of Insurance. Second, the Lexington Herald-Leader argues that even if the fee was properly based upon KRS 61.975(3), $ 350 is an "exorbitant" sum for producing this specialized record. The Lexington Herald-Leader also refers this Office to OAG 88-74 wherein this Office concluded that the Department of Insurance charged an excessive fee for copies of public records. The Lexington Herald-Leader requests that this Office issue an opinion finding that the fee in this case should have been assessed pursuant to KRS 61.975(2) or alternatively that the fee charged pursuant to KRS 61.975(3) was unreasonable.
At the invitation of the undersigned Assistant Attorney General, the Department of Insurance responded to the January 3, 1991, appeal by the Lexington Herald-Leader. In this written response dated January 14, 1991, the Department of Insurance summarized the events that occured and explained that the Department of Insurance was required to do specialized computer programming to produce the information sought by the Lexington Herald-Leader. In a supplemental response dated January 16, 1991, the Department of Insurance itemized and further explained its $ 350 fee as follows:
As to the amount of the programming charges for programming services, the Herald-Leader was charged for two days of programming work (i.e., 15 hours, or two 7.5 hour days). The charge for these services was $ 250. This means that the Herald-Leader was charged $ 16.66 per hour for programming services.
According to the Department of Information Systems, its charges for programming services performed for other state agencies for fiscal year 1990 was $ 33.00 per hour for a program analyst and $ 37.50 per hour for a programming analyst senior. For contract services outside state government, the charges were $ 29.50 per hour and $ 35.00 per hour, respectively.
The program involved extraction of the information sought by the Herald-Leader from our system. Programming was also involved to "down load" the information to a format which could be used on personal computers.
As to "machine time," that is, processing time for the computer, there is really no way to compare the Department's system with other systems. This is because each system is unique.
As to printing time, the material printed included instructions to show the Herald-Leader the information it was receiving and the format in which it appears. Such "system documentation" is a necessary aid to the person who will be using the information.
OPINION OF THE ATTORNEY GENERAL
One of the disputes between the Lexington Herald-Leader and the Department of Insurance is whether or not it was necessary for the Department of Insurance to create a "non-standardized unique, custom-made" record pursuant to KRS 61.975(3) or whether the information sought by Kit Wagar of the Lexington Herald-Leader could have been made available by providing a copy of existing records on a "flat file electronic American Standard Code for Information Interchange (ASCII) format" disk pursuant to KRS 61.975(2). The Department of Insurance insists that it was necessary to produce a specialized product pursuant to KRS 61.975(3) in order to provide all of the information requested by Kit Wagar. This Office accepts and agrees with this assertion and is unpersuaded by the Lexington Herald-Leader's arguments to the contrary.
Furthermore, this Office is of the opinion that the Lexington Herald-Leader is estopped or precluded from raising this argument by its request for and acceptance of the custom-made record in Kit Wagar's December 4, 1990, letter. If the Lexington Herald-Leader did not want a custom-made record, then the Lexington Herald-Leader should have insisted on being provided with a copy of an existing record pursuant to KRS 61.975(2) and filed an open records appeal with this Office or the Franklin Circuit Court if the Department of Insurance refused to provide a copy of an existing record. The Lexington Herald-Leader was offered a custom-made product by the Department of Insurance and accepted this offer by tendering a check for $ 350 and requesting delivery of the computer disk in its letter of December 4, 1990. The Lexington Herald-Leader has no legitimate basis to complain that it did not really request or intend to accept this custom-made computer disk.
If the Department of Insurance had provided a copy of an existing record pursuant to KRS 61.975(2), then the fee charged to the Lexington Herald-Leader would have been $ 500 pursuant to 806 KAR 4:010 Section 1(20)(e) which provides as follows:
The commissioner shall collect in advance fees as follows :
Computer printouts of list, computer printouts of mailing labels, and magnetic tapes:
Other printouts or magnetic tapes not specified above , if the request is approved by the commissioner, $ 500 .
806 KAR 4:010 Section 1(20)(e). [Emphasis added.] Since this Office concludes that the Department of Insurance properly assessed its fee pursuant to KRS 61.975(3), it is not necessary to rule on whether 80 KAR 4:010 Section 1(20)(e), which establishes a flat fee of $ 500 for a copy of records on magnetic tape regardless of actual cost, is contrary to KRS 61.975(2), which requires that the fee charged shall be reasonable, exclude the cost of staff time, and not exceed the actual cost of copying.
KRS 61.975(3) provides as follows:
A public agency, acting alone or in cooperation with other public agencies or private parties, when providing services and products available through a database or a geographic information system, which services and products require the creation of non-standardized unique, custom-made records, may impose and collect reasonable fees for creating such products. For purposes of this section, any request for a public record in a form other than the form described in subsection (2) of this section, shall be considered non-standardized. Fees under this subsection shall not exceed the reasonable cost of computer and personnel time and printing cost needed to produce such products .
KRS 61.975(3). [Emphasis added.]
The Lexington Herald-Leader argues that the $ 350 fee charged by the Department of Insurance for the custom-designed product was unreasonable and "exorbitant. " The primary basis for this argument is that other state agencies (Secretary of State, Finance and Administration Cabinet, and Transportation Cabinet) have only charged $ 175 to $ 250 for purportedly granting similar requests. The Lexington Herald-Leader further argues as follows:
Prior to being allowed to charge such exorbitant sums for producing public records, the Department should be required to itemize its expenses in greater detail. Charges of $ 100.00 for 'computer time and printing' and $ 250.00 for fifteen hours of 'staff time and programming' should be fully explained before being considered reasonable under KRS 61.975(3). Unless and until the Department can justify the imposition of such charges, they should be deemed unreasonable and, therefore, improper under KRS 61.975.
This Office concludes that the $ 350 fee charged by the Department of Insurance for the creation of a non-standardized record was a reasonable fee within the meaning of KRS 61.975(3) and has been sufficiently itemized, explained, and justified. A reasonable fee pursuant to KRS 61.975(3) is not synonymous with the actual cost of "computer and personnel time and printing. " There is certainly nothing unreasonable about charging less than $ 17 per hour for programming services when compared with the hourly rates charged by the Department of Information Systems to other state agencies for programming services. [$ 33 per hour for program analyst and $ 37.50 per hour for program analyst senior.] Furthermore, this Office concludes that 15 hours of programming time is reasonable for developing a program to extract the information sought by the Lexington Herald-Leader from the Department of Insurance computer database and "down loading" the extracted information in a format which could be used on a personal computer. The Lexington Herald-Leader has offered no evidence that the special programming project did not actually take 15 hours of programming time, but rather implies that the project should have been completed in less time. This Office will not second guess the efficiency of the programming personnel for the Department of Insurance.
Finally, $ 100 is not a patently unreasonable fee for the computer time, cost of printing the instructions or "system documentation, " and "printing" the information on a disk. Such charges are obviously difficult to estimate or compare. However, the Lexington Herald-Leader has not offered any persuasive evidence that this $ 100 charge is unreasonable, notwithstanding the previous conclusion in OAG 88-74 which is not controlling in this situation.
This Office concludes that the Department of Insurance has sufficiently justified its $ 350 fee. This fee is therefore deemed reasonable and proper under KRS 61.975(3). This Office encourages the Department of Insurance and other agencies to provide detailed itemization and explanation of fees charged pursuant to KRS 61.975(3) at the time the fee is quoted. This should reduce the number of appeals concerning the reasonableness of fees charged pursuant to KRS 61.975.
As required by statute, a copy of this opinion is being mailed to James L. Thomerson, counsel for the Lexington Herald-Leader Company. The Lexington Herald-Leader may institute proceedings within 30 days for injunctive or declaratory relief in the circuit court of the district where the public records are maintained pursuant to KRS 61.880(5).