Request By:
[NO REQUESTBY IN ORIGINAL]
Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Meetings Decision
The question presented in this appeal is whether the Henderson City Commission violated the Open Meetings Act when it went into closed session at the end of its January 11, 2000, regular meeting for the stated purpose of discussing "the future acquisition or sale of real property. " For the reasons that follow, we find that the Commission properly relied on KRS 61.810(1)(b) in conducting its closed session discussion of issues relating to the purchase of the Peabody building.
On January 15, 2000, Gleaner staff writer Frank Boyett submitted a written complaint to Joan Hoffman, Mayor of the City of Henderson, in which he alleged that the Commission's 80-minute closed session discussion of the purchase of the Peabody building constituted a violation of the Open Meetings Act. Mr. Boyett argued that KRS 61.810(1)(b), the exception for closed session discussions of real estate purchases, could properly be invoked "only when publicity would be likely to affect the value of a specific piece of property to be acquired for public use. . . ." The Commission's reliance on the exception to justify its actions was misplaced, Mr. Boyett argued, because an offer on the building had been made and accepted. In support, he cited City Commission Memorandum 00-18 which was circulated among the commission members during the closed session, and which discussed the terms of the unexecuted agreement to purchase the property, including the proposed purchase price.
As means of remedying this violation, Mr. Boyett recommended that before going into closed session the Commission thenceforward strictly comply with KRS 61.815(1)(a) by not only reciting the language of the exception authorizing the closed session, but also indicating the general nature of the business to be discussed and the reason for the closed session. He acknowledged that this proposed remedy would not correct the January 11 violation, but was instead aimed at "raising the consciousness of the commission as it pertains to its responsibilities under the Open Meetings Act. "
On behalf of Mayor Hoffman, city attorney Joseph E. Ternes, Jr., responded to Mr. Boyett's complaint in a letter dated January 24, 2000. Mr. Ternes denied that the Commission violated the Open Meetings Act at its January 11 meeting. He explained:
It is incorrect to assume that the price of the property was not an issue during the closed session. As you know, the price had two components. One for the purchase of the east wing/foyer of the building, and another price for the option of the west wing. These amounts had been negotiated with the sellers by the City Manager and myself, explicitly subject to board approval, and had not been made public prior to the meeting. Furthermore, the sellers had conditioned their acceptance of the offered price upon additional terms with financial implications, which meant that the entire transaction, including price, was still in negotiation at the time of the meeting.
Mr. Ternes stated that Memorandum 00-18, and an accompanying resolution:
had been prepared prior to the meeting so that if the Board of Commissioners approved the purchase of the property, which approval was a condition of the offer to purchase, it could readily do so in open session by formally adopting the resolution as final action on the matter.
He affirmed the Commission's position that the closed session was proper.
With respect to Mr. Boyett's proposed remedy, Mr. Ternes again denied that any violation had occurred, but indicated that the Commission "will always endeavor to meet the letter as well as the spirit of [KRS 61.815(1)(a)]." In support of the Commission's interpretation of this statute, he cited OAG 83-377 and OAG 80-248 as "authoritative recognition that requiring details to be given prior to a closed session defeats the purpose of having it." This appeal followed.
In a supplemental response directed to this office, Mr. Ternes elaborated on the Commission's position. He explained:
The statement in Memorandum [00-18] regarding the commission's awareness of an agreement certainly does not mean that the terms affecting the price were not discussed in the closed meeting. On the contrary, at the time the commission convened in closed session, the entire purchase and sale was still negotiable since it was specifically conditioned on the commission's approval. Furthermore, the seller had placed a condition on its acceptance of the City's offer demanding the payment of utilities by the City during the option term for the west wing which amounted to several thousand dollars and which obviously affected the value to the City.
Also, the discussion regarding the primary tenant centered around lease payments amounting to tens of thousands of dollars, and whether the City should negotiate new terms with the tenant if it purchased the property at the offered price. This related specifically to the net value or price of the property to the City which if openly discussed could have adversely affected its financial interest, and falls squarely within the exception permitted by KRS 61.810(1)(b).
Mr. Ternes disputed Mr. Boyett's argument on appeal that the Commission loosely construes the requirements of the Open Meetings Act, and the exceptions to the general rule of open meetings.
Having considered the arguments advanced by the Commission in support of its closed session discussion of the purchase of the Peabody building, and bearing in mind that the exceptions to the Open Meetings Act "must [be] narrowly construed and applied . . . so as to avoid improper or unauthorized closed, executive, or secret meetings," Floyd County Board of Education v. Ratliff, Ky., 955 S.W.2d 921, 923 (1997), we affirm the actions of the Henderson City Commission on the basis of KRS 61.810(1)(b).
KRS 61.810(1)(b) excludes from the general rule of openness:
Deliberations on the future acquisition or sale of real property by a public agency, but only when publicity would be likely to affect the value of a specific piece of property to be acquired for public use or sold by a public agency [.]
In construing this provision, the Attorney General has observed:
Only when a public agency is discussing a specific piece of property relative to whether the agency will buy or sell that property and the discussion if made public would likely affect the price of that property, can the matter be discussed in a closed session. Confidentiality is only permissible when the public interest will be directly affected financially.
OAG 80-530, p. 3; see, e.g., 93-OMD-56 (holding that Board of Commissioners of the Allen County War Memorial Hospital did not violate the Open Meetings Act when it went into closed session to deliberate the proposed sale of the hospital building and the property on which it was located since publicity would likely affect the value); 94-OMD-22 (holding that Anderson County Board of Education properly conducted closed session to discuss theacquisition of property since publicity would be likely to affect the property's value); 98-OMD-147 (holding that City of Sebree properly relied on KRS 61.810(1)(b) in conducting closed session discussion of sale price offered in settlement negotiations) ; compare 95-OMD-57 (holding that the Lexington-Fayette Urban County Government improperly invoked KRS 61.810(1)(b) since LFUCG was obligated under a previously released memorandum of understanding with the state to reimburse the state for property acquired by the state on a particular date and at a particular price); 99-OMD-104 (holding that Marion City Council was not justified in conducting a closed session discussion of the purchase of property on the basis of KRS 61.810(1)(b) when a purchase price had been agreed to, budgeted for, and publicized).
In both 95-OMD-57 and 99-OMD-104, this office was unable to discern how the price of the property at issue could be affected by public discussion since the terms of the purchase had been previously disclosed. Under these circumstances, we concluded that confidentiality could afford no material advantage to the public interest. In the appeal before us, the proposed purchase price was not publicly disclosed prior to the closed session, was contingent on a collateral agreement which affected the property's value to the city, and was subject to the Commission's approval. As Mr. Ternes amply documents, at the time of the Commission's closed session, "the purchase and sale was still being negotiated, and Commission approval of all terms, including price, was required as a condition of the City's offer to the seller. " The fact that a memorandum had been drafted prior to the meeting to facilitate final action by the Commission in the event the commissioners approved the purchase for the negotiated purchase price, and subject to the collateral agreements affecting the value of the property, does not alter our conclusion. Had the commissioners withheld their approval for any reason, that memorandum could have simply been withdrawn, and the negotiations begun anew. Discussion in open session of the commissioners' objections and concerns relative to the negotiated price might well have compromised the public's financial interests. We believe that the facts of this appeal are more closely akin to the facts of the appeals which were resolved in favor of the public agencies in 93-OMD-56, 94-OMD-22, and 98-OMD-147. We therefore conclude that the Henderson City Commission properly relied on KRS 61.810(1)(b) in excluding the public from its discussion of the purchase of the Peabody building.
Having determined that the Commission did not violate the Open Meetings Act at is January 11, 2000, regular meeting, our duties under KRS 61.846(2) have been discharged. That statute directs the Attorney General to "review the [open meetings] complaint and denial and issue within ten (10) days, excepting Saturdays, Sundays, and legal holidays, a written decision that states whether the agency violated the provisions of KRS 61.805 to 61.850." Nevertheless, Mr. Boyett urges the Attorney General to clarify "exactly what the Kentucky Supreme Court intended when it mandated 'specific and complete notifications ion the open meeting of any and all topics which are to be discussed during the closed meeting" in conjunction with the requirements for going into closed session codified at KRS 61.815(1)(a). In his response to Mr. Boyett's appeal, Mr. Ternes indicates that "the City would also welcome [the Attorney General's] opinion setting forth and clarifying the notice requirements which are necessary prior to a closed session. " Relying on prior opinions of this office, Mr. Ternes maintains that if too much detail is provided by the public agency to justify going into closed session, the purpose underlying the exception authorizing the closed session is defeated. Mr. Boyett responds that if the General Assembly intended public agencies to merely recite the exception, why did it also include the requirement that the agencies give public notice of the general nature of the business to be discussed and the reason for the closed session. It is his position that the language of the statute, coupled with the Kentucky Supreme Court's decision in Ratliff , above, and recent decisions of this office, "require a greater degree of specificity than the Henderson City Commission historically has provided when going into secret session."
It is the opinion of this office that the Open Meetings Act, and in particular KRS 61.815(1)(a), contemplates more than agency recitation of language of the exception authorizing the closed session, but less than a detailed description of the matter to be discussed. In construing KRS 61.805 to 61.850, the Supreme Court observed:
The express purpose of the Open Meetings Act is to maximize notice of public meetings and actions. The failure to comply with the strict letter of the law in conducting meetings of a public agency violates the public good.
Ratliff at 923. With specific reference to KRS 61.815, the Court declared that prior to going into closed session, the public agency "must state the specific exception contained in the statute which it relied upon," and give "specific and complete notification . . . of any and all topics which are to be discussed during the closed meeting. " Id. at 924 (emphasis added). In view of the disparate nature of the twelve exceptions, there can be no bright line test for determining if specific and complete notification has been given. However, consistent with the right of the people to "remain[] informed so that they retain control over the instruments they have created" (1974 HB 100, Preamble), we believe that the notification must include both a statement of the exception authorizing the closed session and a description of the business to be discussed couched in sufficiently specific terms to enable the public to assess the propriety of the agency's actions.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.846(4)(a). The Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.