Request By:
Claude M. Witt/Kentucky Lottery Corporation
Opinion
Opinion By: CHRIS GORMAN, ATTORNEY GENERAL; AMYE B. MAJORS, ASSISTANT ATTORNEY GENERAL
OPEN RECORDS DECISION
This matter comes to the Attorney General on appeal from the Kentucky Lottery Corporation's partial denial of Mr. Claude M. Witt's January 26, 1993, request to inspect certain records in the Lottery Corporation's custody. Those records are identified as:
1. A complete listing of all retail outlets by mailing address where lottery retail sales are made in the Commonwealth of Kentucky. If [the Lottery Corporation] can adopt a format by county and ZIP that would be most helpful.
2. A complete listing of sales to each retailer for the period of 1-1-92 through 12-31-92.
At the suggestion of Mr. Greg Donaldson, Media Relations Director, Mr. Witt enclosed a $100 check to cover "production costs."
On behalf of the Lottery Corporation, Mr. Keith B. Hunter, General Counsel, partially denied Mr. Witt's request. Although he provided Mr. Witt with a list of retail outlets, Mr. Hunter denied his request for records relating to sales to retailers. It was Mr. Hunter's position that the information contained in those records "is not subject to disclosure pursuant to KRS 154A.040(c) . . . ." He did not offer any further explanation for the Lottery Corporation's position. KRS 154A.040(c) authorizes the Lottery Corporation to withhold records the disclosure of which would "endanger the security of the lottery or its retailers. "
In a follow up letter to this Office, Mr. Hunter reasserted his earlier arguments. Again citing KRS 154A.040(c), he stated:
All lottery transactions are made on a cash basis. It is obvious that on any given day, particularly a Wednesday or Saturday, which are Lotto drawing days, this retailer has considerable funds available at the retail establishment. For example, in calendar year 1992, retailer xyz sold approximately $1,549,526.00 in instant and on-line lottery tickets. The dissemination of these figures would present a clear and unwarranted security risk. The release of detailed cash sales by retailer could easily make the retailer the unsuspecting target of armed robbers, particularly at times late at night when quite often there is only one employee operating the business. The potential for loss of life or bodily injury as a result of disclosure of the requested information is significant.
He maintains that the clear intent of KRS 154A.040(1)(c) "was to preclude the release of financial information that would jeopardize the security of lottery retailers. "
In defense of the $100 fee assessed by the Lottery Corporation for the list of lottery retailers, Mr. Hunter explains that the list had to be specially prepared. Continuing, he notes:
The cost is based upon the time it takes to prepare the list, e.g. programming of the data entry retrieval system to generate the specific information requested and the editing of the list. Only a small percentage of the fee reflects the ten cent fee for copying the pages.
It is therefore his position that the fee was a reasonable one, and did not violate KRS 61.874(2).
In his letter of appeal to this Office, Mr. Witt argues that he should not be denied access to "what should be public information concerning different aspects of business records . . . ." He also objects to the $100 "production cost" which was assessed without discussion, noting that the fee was "far in excess of cost involved in supplying our request." Mr. Witt urges this Office to issue a decision consistent with these views.
We are asked to determine if the Lottery Corporation improperly relied on KRS 154A.040(c) in denying Mr. Witt's request for a copy of a list of lottery cash sales by retailer. We are also asked to decide if the $100 "production charge" assessed by the Corporation was unreasonable, and therefore violative of KRS 61.874(2). For the reasons set forth below, we answer both of these questions in the affirmative, and direct the Lottery Corporation to release the disputed records. The Lottery Corporation is also directed to reevaluate its policies relative to reproduction costs in light of KRS 61.874(2).
We acknowledge that there is scant authority on the substantive issues raised in this open records appeal. In OAG 89-43 and OAG 89-44, this Office recognized that the Kentucky Lottery Corporation is a public agency for purposes of the Open Records Law, and that its records are, in general, subject to inspection. We incorporated into those opinions the principle set forth at KRS 154A.020(1), which provides:
[T]he Kentucky Lottery Corporation should be accountable to the Governor, the General Assembly and the people of the Commonwealth through a system of audits, reports and thorough financial disclosure . . . .
(Emphasis added.) We held that the Corporation improperly withheld records containing end prices submitted to it for major elements of a procurement pursuant to KRS 154A.040(1)(b), authorizing nondisclosure of trade secrets of the corporation or a vendor.
In OAG 93-19, we held that a public official, to whom the Lottery Corporation had disclosed information relating to accounts receivable, could not be prohibited by the Corporation from voluntarily disclosing the information to the public. At page 4 of that opinion we recognized that release of the information would "further the 'free and open examination of public records [that] is in the public interest,' and will help to insure that 'the Kentucky Lottery Corporation [will] be accountable to . . . the people of the Commonwealth through . . . thorough financial disclosure . . .," citing KRS 61.871 and KRS 154A.020(1). Accordingly, there is a strong policy favoring full financial disclosure which is grounded in statute and prior opinions of this Office.
KRS 154A.040 provides:
(1) All records of the [lottery] corporation shall be deemed open records and subject to public inspection, unless:
(a) Such record is deemed privileged pursuant to KRS 61.870 to 61.884;
(b) Such record involves a trade secret of the corporation or of a vendor; or
(c) The disclosure of the record would endanger the security of the lottery or its retailers.
Although there are no cases or prior OAG's directly on point, we believe that the language of KRS 154A.020(1) and KRS 61.871, coupled with the policy expressed in OAG 89-43, OAG 89-44, and OAG 93-19, mandate disclosure of the disputed records.
Mr. Hunter takes the position that disclosure of detailed cash sales by retailer could make the retailer "the unsuspecting target of armed robbers. " This assumes a level of sophistication on the part of armed robbers which we question. Moreover, an individual intent on committing armed robbery could more easily and accurately ascertain cash sales on a given day by "casing" an establishment, i.e., merely observing the number of customers patronizing the store. While it is undoubtedly true that certain retailers enjoy greater success in the sale of lottery tickets than others, and that this is reflected in their records of cash sales, we do not believe that this fact, standing alone, renders them more vulnerable to armed robbery. Certainly, if the Lottery Corporation maintained records containing information on the particular security measures adopted by a retail establishment to protect its cash receipts as well as its employees, such as where its cash receipts are stored prior to being deposited and what defensive steps have been taken to insure the safety of persons handling those receipts, that information might be exempted from disclosure by KRS 154A.040(c). However, we do not believe that that exception can be read so broadly as to be inconsistent with the Lottery Corporation's general duty to make full financial disclosure.
In our view, that exception was intended to protect the internal security of the lottery and its retailers by authorizing the nonrelease of records which might be used to "decode" the games themselves. We believe that KRS 154A.040(1)(c) was enacted in response to a concern that the integrity of the lottery might be compromised by disclosure of information bearing on the games, and not by its concern for the safety of the Corporation's retailers. It is therefore the opinion of this Office that the Lottery Corporation improperly denied Mr. Witt's request for records containing cash sales by retailers, and that it should promptly arrange for inspection of the records.
Turning to the procedural question raised in this open records appeal, we find that the $100 "production cost" fee assessed by the Lottery Corporation was excessive and violative of KRS 61.874(2). That statute provides:
The public agency may prescribe a reasonable fee for making copies of public records which shall not exceed the actual cost not including the cost of staff required.
This provision has been interpreted to mean that the fee charged for copies should be based on the actual expense to the agency, not including the cost of staff. OAG 80-421; OAG 82-396; OAG 84-91; OAG 88-74; OAG 89-9; OAG 91-98; OAG 91-200; OAG 92-79. The fee is thus limited to the cost of maintaining copying equipment by purchase or rental, and the supplies involved. In
Friend v. Rees, Ky. App., 696 S.W.2d 325 (1985), the Kentucky Court of Appeals held that ten cents per page was a reasonable reproduction fee under the Open Records Act.
KRS 61.975(3) authorizes an agency to impose and collect fees not exceeding the reasonable cost of computers, personnel time, and printing costs when a request is made under the Public Access to Governmental Databases Act, found at KRS 61.960 et. seq., for "services and products available through a database . . . which . . . require the creation of nonstandardized unique, custom-made records . . . ." Mr. Witt's request was not made under the Act, and we do not believe the Lottery Corporation was authorized to unilaterally treat it as a request under the Act without discussion and a meeting of the minds. Its imposition of a $100 fee for programming and editing was therefore unwarranted. The Lottery Corporation is directed to recalculate the fees imposed to conform with KRS 61.874(2).
The Kentucky Lottery Corporation may challenge this decision by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882.