Request By:
Rachel Stanley
Roger Ford
Howard Keith Hall
Opinion
Opinion By: Jack Conway, Attorney General; James M. Ringo, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Forward Pike County Foundation, Inc. (FPCF) is a public agency for purposes of the Open Records Act. For the reasons that follow, we conclude that FPCF, a private non-profit corporation, formed pursuant to KRS Chapter 273, whose purpose is to promote economic development in Pike County, is not a public agency as defined in KRS 61.870(1) and, is therefore, not bound by the requirements of the Act.
By letter dated January 30, 2008, Russ Cassady, Staff Writer, Appalachian News-Express , submitted a letter to the Forward Pike County Foundation, Inc., requesting copies of the following records:
. All financial records of the Forward Pike County Foundation, Inc., including but not limited to names of donors, amounts donated, any disbursements of funds by the organization or its members and any records regarding payments to or expenses of any member of the board of directors or any agent of the Forward Pike County Foundation, Inc.
. The names of all members of the Forward Pike County Foundation, Inc., including but not limited to members of the board of directors, registered agents, employees of or anyone authorized to make decisions regarding the actions of the organization.
. Any documentation regarding financial contributions given to the organization to be used for public purposes, i.e. money collected by the Forward Pike County Foundation to be passed on to a government agency, such as the Pike County Fiscal Court.
. The records of any past meetings of the Forward Pike County Foundation and the meeting dates and times of any upcoming meeting.
By letter dated February 4, 2008, Roger Ford, Chairman of the Board, Forward Pike County Foundation, Inc., denied Mr. Cassady's request, advising him that the FPCF was not a public agency as defined under KRS 61.870. In support of this position, he advised in relevant part:
? The Forward Pike County Foundation, Inc., ? was not created by any federal, state or local government agency nor does it receive any of its funds from either a federal or state governmental source. Further, the members of the governing body are not appointed by any governmental agency. . . .
To document our assertions that the FPCF, Inc., is not a public agency, we have gone to the extent of I, as the chairman of the board of FPCF, Inc., making a sworn affidavit in regard to the same. FPCF, Inc., is simply a foundation which hopes that in some small way it can help expedite economic development within Pike County, Kentucky. This is done on a completely voluntarily basis by the board members of the foundation who are willing to devote their time for this purpose. The minimal amount of money that has been raised from private sources has been used only for the purpose of covering expenses in connection with these promotional activities and has not been used any way for re-numeration of any of the board members.
By letter dated February 5, 2008, Rachel C. Stanley, Editor, Appalachian News-Express , filed an appeal of FPCF's denial of Mr. Cassady's request, asking this office to determine whether FPCF was subject to the Open Records Act. In support of the newspaper's contention that FPCF was a public agency, Ms. Stanley argued:
First, it was incorporated by Pike County Court officials, and everyone involved has close ties to the Pike Fiscal Court. The three incorporators are: Pike Deputy Judge-Executive John Doug Hays; Pike Economic Development Director Roger Ford; and Kim Carter, the daughter of Pike Judge-Executive Wayne T. Rutherford, who works in the office of Pike County Clerk Lillian Pearl Elliot.
Second, in the Foundation's articles of incorporation, filed with the Kentucky Secretary of State, all three incorporators listed their addresses as 146 Main Street, second floor, which is the address of the Pike County Fiscal Court.
Third, the one donor we have confirmed is Pike Judge-Executive Wayne T. Rutherford, who recently donated his '98 Lexus sedan to the Forward Pike County Foundation.
Fourth, the money appears to be used for public purposes. In one particular case, the News-Express published an article in May 2007 detailing an area in Pike County where residents don't have running water. Court officials, when asked about the water problem, named it as one of the reasons the Forward Pike County Foundations was created. As reported in the News-Express, McCoy Elkhorn, a company has accepted potential liability for the water problems there, can donate to the foundation and receive a tax deduction, Deputy Judge-Executive John Doug Hays said, whereas donations made by the company to the county or water district would not be tax deductible.
In a supplemental response to this office, Mr. Ford indicated that FPCF is a private non-profit, non-stock corporation. Adopting the FPCF's initial response denying the request, he reiterated that the corporation is not a public agency within the meaning of the Open Records Act as it was not created by any public agency or receive any funds whatsoever from any public agency. Responding to the newspaper's argument that board members are employed by public agencies, he advised:
? While the board members of the instant corporation are in part employed by public agencies, the corporation was not created by a government agency. Furthermore, the directors and officers of this corporation were appointed by no one but simply chose to create a corporation because the directors recognized the need for such a corporation.
Pursuant to KRS 61.880(2)(c), and to facilitate our review of the issues on appeal, we requested that the FPCF provide this office with additional information to substantiate its position that it is not a "public agency, " as defined by KRS 61.870(1), and thus not subject to the Open Records Act. In response to questions posed by this office, the FPCF provided the following responses:
1. Please explain by what mechanism the Foundation was created and whence it derives its source of funding?
2. Is the Foundation controlled by a public agency or public official?
3. Who are the members of the Board of Directors of the Foundation and how are they appointed?
The question before us is whether the Forward Pike County Foundation, Inc. (FPCF) is a public agency for purposes of the Open Records Act. Our starting point is the definition of the term "public agency" that appears at KRS 61.870(1):
"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 subjection[.]
This office has consistently recognized that a private company or corporation comes within the purview of the Open Records Act only if it derives at least 25% of its funds from state or local authority funds and otherwise does not fall within the definition of a public agency found at KRS 61.870(1)(a) - (k), 06-ORD-210 and 05-ORD-097. Those opinions were premised on the following definition of "public agency" set out in KRS 61.870(1)(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.
A review of FPCF's Articles of Incorporation, filed with the Kentucky Secretary of State, indicates it was established as a nonprofit corporation, pursuant to KRS Chapter 273, and organized for the purpose of promoting economic development in Pike County. Although incorporated as a non-profit organization, the Board does not owe its existence to the legislative act of any governmental body. In its initial response to the request, the FPCF advised that it was not created by any federal, state or local government agency; that it did not it receive any funds from a governmental source; and the members of the governing body of FPCF are not appointed by any governmental agency. Since FPCF does not derive at least twenty-five (25%) of its funds expended by it in the Commonwealth from state or local funds and otherwise does not fall within the definition of a public agency found at KRS 61.870(1)(a) - (k), the private corporation does not fall within the definition of a "public agency" to which the Open Records Act applies. Accordingly, FPCF is not subject to the provisions of the Open Record Act and its actions relative to the News-Express open records request would not constitute a violation of the Act.
Moreover, no argument is advanced that FPCF is a public agency as defined in KRS 61.870(1)(a) , (b), (c), (d), or (e), and these provisions are facially inapplicable to that entity. As noted above, the FPCF was not created by any federal, state or local government agency; it not did it receive any funds from a governmental source; and the members of the governing body of FPCF are not appointed by any governmental agency. Under these circumstances, the FPCF does not fall within the parameters of KRS 61.870(1)(f), (g), (h), (i), and (j). Nor does it fall within KRS 61.870(1)(k), as it is not an "interagency body of two (2) or more agencies." Thus on the record before us, we conclude that the FPCF is not a public agency as defined in KRS 61.870(1) and, is therefore, not bound by the requirements of the Act.
The Appalachian News-Express points out that the FPCF was incorporated by Pike County Court officials and that three incorporators are the Pike Deputy Judge-Executive, the Pike Economic Development Director, and an employee of the office of Pike County Clerk and all three of these incorporators listed their addresses as 146 Main Street, second floor, which is the address of the Pike County Fiscal Court. The Articles of Incorporation do not state that the incorporators were acting in their official capacities. See, OAG 84-237. We acknowledge that these facts may seem to suggest a nexus between the Pike Fiscal Court and FPCF. However, the record before us does not establish that FPCF falls within one of the sections of KRS 61.870(1), to make it a "public agency, " subject to the operation of the Open Records Act.
In her letter of appeal, Ms. Stanley argues that the cases of Citizens for a Better Environment, Inc. v. Ohio County Industrial Foundation, 156 S.W.3d 307 (Ky. App. 2004) and The University of Louisville Foundation, Inc. v. Cape Publications, d/b/a The Courier-Journal , No. 2002-CA-001590-MR (November 21, 2003) (unpublished) support their position that FPCF is a public agency. Both cases are distinguishable from the instant appeal and, thus, not controlling.
In Citizens , the Court of Appeals found the Ohio County Industrial Foundation to be a public agency under KRS 61.870(1)(h). In that case, the Ohio County Fiscal Court had levied an occupational tax and money generated by the tax in the amount of $ 500,000 per year, was paid to the Foundation, which was in turn paid through to Perdue Farms, and, as such, qualified as public funds and had the effect of establishing the Foundation as a public agency for the purposes of the Open Records Act. In the instant case, the FPCF advised that it received no funds from any governmental source. Thus, Citizens is factually distinguishable and not controlling. We do note that the News Express advised that in May 2007, county officials unveiled a new license plate honoring coal miners, which would be sold for $ 35 with $ 10 of every plate earmarked for the FPCF. Should this occur, an analysis as to whether the FPCF is a public agency would need to be revisited. See, 05-ORD-151. If the funds from the sale of the license plates plus any other state or local funds should amount to at least twenty-five (25%) of its funds expended by it in the Commonwealth from state or local funds, then it would be a public agency under the operation of KRS 61.870(1)(h).
In the University of Louisville Foundation case, the Court of Appeals found that the Foundation was established and created by the members of the Board of Trustees of the University of Louisville, acting in their official capacities, and thus, was a public agency under authority of KRS 61.870(1)(j). In the instant case, the FPCF advised that it was not created by any federal, state or local government agency and the members of the governing body were not appointed by any governmental agency. FPCF indicated the directors and officers of this corporation were appointed by no one but they simply chose to create a corporation and served on the board on a voluntary basis. The FPCF further advised that it was not controlled by any public agency or public official. Here too, University of Louisville Foundation is factually distinguishable from the facts in the instant case and not controlling.
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.