Opinion
Opinion By: Gregory D. Stumbo, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
At issue in this appeal is whether Masonville Fire Department, Inc. violated the Kentucky Open Records Act in denying the request of Mike Nance for copies of all records concerning an automobile accident that occurred "on or about the evening of" May 30, 2002, or May 31, 2001, between "22:30 hours (10:30 PM) and 22:45 hours (10:45 PM)" approximately "1/2 mile north of the Pleasant [R]idge Station on US Hwy 231." More specifically, the question presented is whether the MFD is properly characterized as a public agency within the meaning of KRS 61.870(1) . Based upon the evidence of record, the MFD appears to be a private agency that does not derive any of the funds expended by it in the Commonwealth of Kentucky from state or local authority funds, or otherwise qualify as a public agency for purposes of the Open Records Act. Accordingly, the MFD was not statutorily obligated to honor Mr. Nance's request.
Having received no response to his request dated December 20, 2005, Mr. Nance resubmitted his request to Chief Mark Luckett on January 7, 2006. In a handwritten response dated January 18, 2006, Chief Luckett advised Mr. Nance that any additional requests "on this fire run" must be directed to the Office of the Daviess County Attorney, attaching a copy of 99-ORD-208 (McDaniels Fire and Rescue Department, a nonprofit corporation organized by private individuals, is not public agency within the meaning of KRS 61.8701(1) because the funds "upon which the Department operates are from membership dues, donations, ambulance fees, insurance payments, and patient payments" rather than state or local authority funds) as the basis for his implicit denial. Although this response would be procedurally deficient if KRS 61.880(1) applied, the record is devoid of evidence conclusively establishing that MFD is a public agency.
By letter dated February 2, 2006, Mr. Nance initiated this appeal, arguing that MFD received more than twenty-five percent of its "revenue from state, federal, and local governments." Attached to Mr. Nance's letter of appeal is a document entitled "2004 AFG [Assistance to Firefighters Grant] Awards," which Mr. Nance apparently obtained from the Homeland Security (Preparedness Directorate's Office of Grants and Training) website on January 27, 2006; MFD received a Federal Share of $ 101,739.00. According to Mr. Nance, the annual fire dues of the MFD "are placed on the county tax bills, collected by the Sheriff of Daviess County and dispersed by the Daviess County Sheriff['s] Department"; the Department collected over fifty-five thousand dollars for the MFD in fiscal year 2004-2005. Additionally, the MFD "has two fire truck [s] provided to them by the Daviess Fiscal Court" worth in excess of $ 300,000.00, and the county "owns the property and build[ings]" which house the MFD according to "the county property valuation office." In Mr. Nance's view, the decision upon which the MFD relies is distinguishable insofar as the department in question does not derive funds from private donations and charitable events rather than state or local authorities. Contrary to the Chief's assertion during a telephone conversation on February 1, 2006, volunteers of county government "must and will be accountable just as paid personnel."
Upon receiving notification of Mr. Nance's appeal from this office, Robert M. Kirtley, Daviess County Attorney, responded on behalf of the MFD. Although his office did not receive the request at issue, nor does Mr. Kirtley as County Attorney represent the MFD, Mr. Kirtley reviewed KRS 61.870 "and determined that since the Masonville Volunteer Fire Dept. does not receive 25% of its funds from state or local authority funds, the [MFD] is not a public agency" for purposes of the Open Records Act; Mr. Kirtley's secretary notified Mr. Nance of his opinion by telephone the next day. 1 However, Mr. Kirtley's secretary further advised Mr. Nance that "he could contact Paul Nave with the Daviess County Sheriff's Dept. Dispatch and obtain the requested record as that agency was the custodian of same and is a public agency as defined in the statute." Enclosed with Mr. Kirtley's response was a copy of the current (period ending September 30, 2005) income statement for the MFD, reflecting that 39% of the MFD revenue is derived from "membership charges," which "pursuant to KRS 75.450(7) are added to property tax bills," while 52% is derived from "federal grant funds." 2
Unable to resolve the threshold issue of whether the MFD is a public agency based upon the limited evidence of record, this office requested additional documentation from the MFD pursuant to KRS 61.880(2)(c) and 40 KAR 1:030, Section 3. More specifically, the undersigned asked the following of Mr. Kirtley:
On appeal, Mr. Nance contends that "two fire trucks were provided to the MFD by Daviess Fiscal Court worth in excess of $ 300,000.00; please confirm or deny this assertion. Assuming Mr. Nance's contention is correct, please advise this office of the fiscal year in which the trucks were provided to the MFD. In addition, please elaborate upon your assertion that charges or fees collected pursuant to KRS 75.450(7) are not state or local authority funds. More specifically, please explain the distinction between taxes like the one at issue in Citizens for a Better Environment, Inc. v. Ohio County Industrial Foundation, Inc., Ky. App., 156 S.W.3d 307 (2004), a copy of which is attached for your consideration, and "membership charges" like those received by the MFD in your view. Please include any additional information or supporting documentation that will assist this office in determining whether the MFD is properly characterized as a public agency within the meaning of KRS 61.870.
By letter dated March 15, 2006, Mr. Kirtley advised this office that Mr. Nance's request concerns "an event that took place in May 2001 involving the [MFD]." According to Mr. Kirtley, the MFD "operates on a calendar year basis." In 2000, the MFD "received $ 8,692.12 from Daviess County Fiscal Court, and for 2001 the MFD received $ 8,492.19"; copies of the MFD "Statement of Receipts and Disbursements" for each calendar year are attached to Mr. Kirtley's response. With respect to Mr. Nance's allegation concerning the fire truck (s), Mr. Kirtley notes that in 2001 the MFD "spent $ 204, 762.70 [as reflected on the 2001 Financial Statement] for new equipment with money the [MFD] had been saving from prior years['] membership fees in anticipation of purchasing this truck. " In addition, the MFD "had to borrow an additional $ 75,000[.00] from the Kentucky Fire Commission to purchase same." Neither the MFD nor the Fiscal Court have "any records that reflect 'two fire trucks were provided to the MFD by Daviess County Fiscal Court worth in excess of $ 300,000.00.'" To the contrary, the Fiscal Court "provided no funding other than the funds reflected above." 3
Citing 99-ORD-208, Mr. Kirtley correctly observes that "the test for determining whether the [MFD] is a public agency is [whether] the amount of local and state funds provided [to] the agency [is 25% or more of the total funds expended by it in the Commonwealth]"; the financial statements provided "clearly reflect that the MFD did not receive more than 25% of its operating expenses from state or local funds." Daviess County Ordinance KOC 310.2 (2003), a copy of which is attached to Mr. Kirtley's response, "which pursuant to KRS 75.450 allows the placement of the subscriber fees or membership charges [] on property tax bills, was not adopted until September 5, 2003[.]" 4
In defending his position relative to the characterization of the membership fees, Mr. Kirtley asserts that Ohio County Industrial Foundation, supra, is distinguishable insofar as the case "deals with an occupational tax which provides revenue for a local government, and that local government provides agency funding from the tax collected. " Here, the fire dues "do not belong to Daviess County or the Commonwealth of Kentucky"; the funds "belong to the [MFD]." In Mr. Kirtley's view, the "manner of collected dues is not . . . any test at all as to whether or not these membership dues become a tax of local or state government. The real test is the source of authorized funding. " To summarize, the MFD was "not a public agency subject to the [O]pen [R]ecords [A]ct in 2001 nor is it today." By letter dated March 29, 2006, Mr. Nance reiterated his previous arguments concerning the status of the MFD, emphasizing that neither Mr. Kirtley nor the MFD refuted that Daviess County Fiscal Court "owns the property where the [MFD] is located." When viewed in light of the relevant authorities, the evidence of record validates the position of the MFD.
In relevant part, KRS 61.872(1) provides that all "public records shall be open for inspection by any person, except as otherwise provided by [the Open Records Act] , and suitable facilities shall be made available by each public agency for the exercise of this right." Resolution of the sole issue presented hinges upon whether the requested records are public records within the meaning of KRS 61.870(2), 5 which, in turn, depends upon whether the MFD is a "public agency" under KRS 61.870(1) , pursuant to which:
"Public agency" means:
(a) Every state or local government officer;
(b) Every state or local government department, division, bureau, board, commission, and authority;
(c) Every state or local legislative board, commission, committee, and officer;
(d) Every county and city governing body, council, school, district board, special district board, and municipal corporation;
(e) Every state or local court or judicial agency;
(f) Every state or local government agency, including the policy-making board of an institution of education, created by or pursuant to state or local statute, executive order, ordinances, resolution, or other legislative act;
(g) Any body created by state or local authority in any branch of government;
(h) Any body which derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds;
(i) Any entity where the majority of its governing body is appointed by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (j), or (k) of this subsection; by a member or employee of such a public agency; or by any combination thereof;
(j) Any board, commission, committee, subcommittee, ad hoc committee, advisory committee, council, or agency, except for a committee of a hospital medical staff, established, created, and controlled by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (k) of this subsection; and
(k) Any interagency body of two (2) or more public agencies where each public agency is defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (j) of this subsection[.]
Relying upon KRS 61.878(1)(h), this office has consistently recognized that "a private agency does not come within the purview of the Open Records Act unless it derives at least twenty-five percent of the funds expended by it in the Commonwealth from state or local authority funds." 97-ORD-114, p. 1; 95-ORD-79.
In 96-ORD-120, the Attorney General described the various types of fire departments (city fire departments, county fire departments, and fire district fire departments) , noting that each would "be a public agency as the term is defined in KRS 61.870(1) and thus subject to the terms and provisions of the Open Records Act. " Id., p. 2. With respect to the status of volunteer fire departments such as the MFD, this office held:
A fourth type of fire department is a volunteer fire department, sometimes organized as a nonprofit corporation, which is an independent organization, disassociated from the city or county, except insofar as a contractual relationship is concerned. The only way this type of fire department could be considered a public agency is if it derives at least 25% of its funds expended in the state from state or local authority funds. See KRS 61.878(1)(h) and 94-ORD-16 [].
Id. See also 00-ORD-93. Because the MFD does not derive at least 25% of the funds expended by it in the Commonwealth from state or local authority funds, as evidenced by the record, the MFD did not violate the Open Records Act in denying Mr. Nance's request.
On appeal, Mr. Nance relies primarily upon the amount of federal grant funds awarded to the MFD, and the cumulative amount of "membership charges" paid by affected property owners, in asserting the MFD is properly characterized as a public agency for purposes of the Open Records Act. By its express terms, KRS 61.878(1)(h) encompasses only state or local authority funds; the percentage of funding derived from other sources, including federal, is irrelevant. In short, "it is neither the duty nor the prerogative of the judiciary [or this office] to breathe into the statute that which the Legislature has not put there."
Commonwealth of Kentucky v. Gaitherwright, Ky., 70 S.W.3d 411, 413 (2002), citing
Gateway Construction Company v. Wallbaum, Ky., 356 S.W.2d 247 (1962). That being the case, the question becomes whether the membership charges/subscriber fees authorized by KRS 75.450 are properly characterized as local authority funds (since the MFD admittedly derived 39% of the funds expended by it in the Commonwealth from this source) which, in turn, depends upon whether the charges/fees are the functional equivalent of taxes.
To begin, the MFD is a volunteer fire department, organized as a nonprofit corporation, which is not empowered to impose taxes; the record does not contain, nor has our research revealed, any legal authority to the contrary. Although various definitions of "tax" have been provided by the courts, "'any payment exacted by the state or its municipal subdivisions as a contribution toward the cost of maintaining governmental functions, where the special benefits derived from their performance is merged in the general benefit, is a tax.'"
Dickson v. Jefferson County Board of Education, 311 Ky. 781, 786, 225 S.W.2d 672, 675 (1949)(citation omitted). On the other hand, a "fee is generally regarded as a charge for some particular service." Id. Such is the case here. To summarize, the essential characteristics of a tax are that it is "not a voluntary payment of donation, but an enforced contribution, exacted pursuant to a legislative authority in the exercise of the taxing power." McQuillan, Municipal Corporations, § 44.02 (3rd ed. 2003). 6
While taxes come in many forms, "taxes" do not include "fire and flood service fees." Id. In our view, the membership charges or subscriber fees at issue are, by definition, not taxes, as the clerk adds the charges/fees to the tax bills of the affected property owners (members/subscribers) only; KRS 75.450(2) lists the fees charged for services rendered to nonmembers or nonsubscribers, with the necessary implication being that belonging/subscribing is voluntary. By enacting KRS 75.450(7) and (8), the General Assembly created a mechanism by which the charges/fees shall be collected and distributed, implicitly distinguishing same from the fire district tax or fire subdistrict tax listed separately on the tax bills pursuant to KRS 75.450(7); the character of the funds is not determined by the manner in which the charges/fees are collected and distributed. When evidence has been introduced that a corporation derives less than 25% of its funding from state or local authorities, as is the case here, the Attorney General has recognized that the corporation cannot properly be characterized as a public agency. 05-ORD-097; 99-ORD-152; 96-ORD-127; 93-ORD-90.
Because the membership charges or subscriber fees received by the MFD are not properly characterized as local authority funds, nor does the MFD otherwise derive at least 25% of the funds expended by it in the Commonwealth from state or local authority funds, the MFD is not a public agency subject to the provisions of the Open Records Act. In light of this determination, the MFD cannot be said to have violated the Act in declining to honor Mr. Nance's request.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), 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.
Footnotes
Footnotes
1 Absent objective evidence to the contrary, this office has no reason to question whether the MFD is properly characterized as a nonprofit organization composed of volunteers; Mr. Nance does not challenge this assertion. However, this status is not determinative standing alone.
2 In relevant part, KRS 75.540 provides:
(7) If a fire department collects membership charges or subscriber fees, the fiscal court may adopt an ordinance to require the annual membership charges or subscriber fees to be added to property tax bills. In any county where the fiscal court has adopted such an ordinance, the county clerk shall add the annual membership charges or subscriber fees to the tax bills of the affected property owners in a place separate from the bill of the fire district tax or fire subdistrict tax so that ratepayers can ascertain the amount of the membership charges or subscriber fees apart from the fire district tax.
(8) The membership charges or subscriber fees shall be collected and distributed by the sheriff to the appropriate fire departments in the same manner as the other taxes on the bill and unpaid fees or charges shall bear the same penalty as general state and county taxes. This shall be a lien on the property against which it is levied from the time of the levy.
(Emphasis added).
3 Although the relevant time period is that during which Mr. Nance submitted his request (2005), the record also substantiates Mr. Kirtley's assertion regarding the status of the MFD in 2000 and 2001; further elaboration is unwarranted.
4 KOC 310.2 (2003) is entitled, "An Ordinance Relating to Authorization and Collection of Annual Membership Fees for Certified Volunteer Fire Departments, As Amended by KOC 310.3 (2003)." MFD is named as one of "the ten (10) certified volunteer fire departments in Daviess County" to which the ordinance applies.
5 Pursuant to KRS 61.870(2):
"Public record" means all books, papers, maps, photographs, cards, tapes, discs, diskettes, recordings, software, or other documentation regardless of physical form or characteristics, which are prepared, owned, used, in the possession of or retained by a public agency.
(Emphasis added).
6 "The key distinction between a fee and a tax is that fees are voluntary and benefit particular individuals in a manner not shared by others in the public." Jasinski v. City of Miami, 269 F.Supp.2d 1341, 1348 (S.D. Fla. 2003)(citation omitted). Unlike fees, which are voluntary and benefit specific individuals, a tax is "'a forced charge or imposition, it operates whether we like it or not and in no sense depends on the will or contract of the one on whom it is imposed.'" Id.See Board of Education of Fayette County v. Lexington-Fayette Urban County Government, Ky.App., 691 S.W.2d 218 (1985).