Opinion
Opinion By: Jack Conway, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
At issue in this appeal is whether Pathways, Inc. violated the Kentucky Open Records Act in failing to issue a written response to Charles R. Salyers' written request for "[a]ny and all documents pertaining to employee Juanita Napier, R.N. including, but not limited to, personnel records, training, education, experience, work assignments, certifications, trial testimony experience and legal action[s] and/or complaints filed against the employee." More precisely, the determinative question presented is whether Pathways, a private, nonprofit corporation, "the purpose and function of which is to provide mental health services to the general populace in eastern Kentucky," can properly be characterized as a "public agency" for purposes of the Open Records Act. Because the record on appeal establishes that Pathways does not derive at least 25% of the funds it expends in Kentucky from state or local authority funds, and therefore does not fall within the parameters of KRS 61.870(1)(h), nor does it otherwise qualify as a "public agency" within the meaning of KRS 61.870(1), it follows that Pathways is not subject to, and therefore cannot be said to have violated the provisions of the Act.
Upon receiving notification of Mr. Salyers' appeal from this office, Wendell S. Roberts, of Gray, Woods & Cooper, submitted a response on behalf of his client, Pathways. Mr. Roberts explained that Pathways "engages in the testing, evaluation, counseling, prevention and treatment of mental and emotional problems and disorders, as well as related conditions, and other services. It employs psychotherapists, psychiatrists, psychologists, clinical social workers, counselors, outpatient therapists and others." Reiterating that Pathways is a private, nonprofit corporation, Mr. Roberts further observed that "Pathways is a private, nonprofit corporation. The operations of Pathways, Inc. [are] overseen by its Board of Directors. The Board selects its own members. When a vacancy on the Board exists, the names of prospective members are submitted to the Board by the Board's Nominating Committee. Members of the Board are volunteers from the community." Mr. Roberts argued that Pathways cannot properly be characterized as a "public agency" under the reasoning set forth in 95-ORD-65 (holding that "Medicare and Medicaid funds do not constitute 'state or local authority funds' in determining whether a body receives 25% or more of its funds from public coffers" and that body established as a private, nonprofit corporation "whose board is not appointed by a public agency" and which does not satisfy the 25% threshold of KRS 61.870(1)(h) is not a "public agency" ).
Unable to resolve the determinative question of whether Pathways is a public agency within the meaning of KRS 61.870(1), based upon the limited evidence presented, this office requested additional information from Pathways to assist in resolving this matter pursuant to KRS 61.880(2)(c) and 40 KAR 1:030, Section 3. More specifically, this office asked Mr. Roberts, "in accordance with 09-ORD-033, [to] provide the amount of funds expended by Pathways in the Commonwealth of Kentucky (as opposed to its total revenue) during the most recent fiscal year, and the percentage of that amount derived from state or local authority funds." 1 In a response dated May 21, 2009, Mr. Roberts reiterated some of his earlier arguments, but also submitted the affidavit of Thomas Leach, Chief Financial Officer, to substantiate his assertion that Pathways is not a public agency under the interpretation of KRS 61.870(1)(h) adopted in 09-ORD-033.
In relevant part, KRS 61.872(1) provides that "[a]ll public records shall be open for inspection by any person . . . and suitable facilities shall be made available by each public agency for the exercise of this right." 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. "Public record" shall not include any records owned or maintained by or for a body referred to in subsection (1)(h) of this section that are not related to functions, activities, programs, or operations funded by state or local authority.
Resolution of the question presented turns on whether Pathways is a public agency within the meaning of KRS 61.870(1), which broadly defines public agency to include:
(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, ordinance, 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 here each public agency is defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (j) of this subsection[.]
Despite the expansive language of these provisions, which operate in tandem, and the clearly expressed legislative intent that the Open Records Act must be strictly construed so as to ensure the broadest possible access to public records, 2 the Attorney General has recognized, on a number of occasions, that a private, nonprofit corporation is not a public agency for purposes of the Open Records Act unless it "derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds." KRS 61.870(1) as construed in OAG 81-377; OAG 82-216; OAG 84-237; OAG 88-61; 92-ORD-1114; 94-ORD-98; 96-ORD-99; 97-ORD-65; 99-ORD-65; 06-ORD-162; 09-ORD-042. It is apparent that Pathways does not qualify as a public agency under KRS 61.870(1)(a), (b), (c), (d), (e), (f), (g), (j), or (k). Likewise, 61.870(1)(i) is facially inapplicable given that Pathways' governing body, the Board, is not appointed by a public agency. In sum, KRS 61.870(1)(h) is the only definitional provision which is potentially applicable on the facts presented.
When evidence is introduced that an otherwise private corporation receives less than 25% of its funds from state or local authorities, the Attorney General has consistently held that it cannot properly be characterized as a public agency. 93-ORD-90; 96-ORD-127. Here, Pathways ultimately provided evidence in the form of an affidavit from its CFO, Thomas Leach, who "has been continuously employed by Pathways, Inc. since 1987 in the capacity of Controller or Chief Financial Officer." In this capacity, Mr. Leach is "knowledgeable as to the amount of funds expended by Pathways, Inc. in the Commonwealth of Kentucky which amount for the fiscal year ended June 30, 2008, was $ 24,569,443." According to Mr. Leach, the amount of funds expended by Pathways in the Commonwealth of Kentucky "which were derived from state or local authority funds . . . amounted to $ 4,296,013 for fiscal year ended June 30, 2008. . . . Accordingly, for the fiscal year ended June 30, 2008, 17% of funds expended by Pathways, Inc. in Kentucky were derived from state and/or local authority funds." In the absence of any objective proof to the contrary, this office has no basis upon which to question the accuracy of these figures, and the calculation is correct. Further analysis is unwarranted.
Based upon the evidence presented, this office concludes that Pathways, Inc. does not derive at least 25% of the funds "expended by it in the Commonwealth of Kentucky from state or local authority funds." Accordingly, Pathways is not a "public agency" within the meaning of KRS 61.870(1)(h). Because Pathways does not qualify under any of the other definitional provisions found at KRS 61.870(1), it cannot properly be characterized as a public agency for purposes of the Open Records Act. 3 No violation occurred.
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.
Distributed to:
Charles R. Salyers, #197255John ParksWendell S. Roberts
Footnotes
Footnotes
1 In 09-ORD-033, which admittedly represented a "significant departure from prior decisions in which the 'expended by it in the Commonwealth' language" found in KRS 61.870(1)(h) "was not meaningfully applied," the Attorney General reversed that line of decisions, finding that KRS 61.870(1)(h) "must be construed in a manner that gives full legal effect" to the apparent legislative intent. Having reevaluated and modified its position, and fully acknowledged the lack of specific parameters to assist in the statutory analysis, the Attorney General now "looks to the amount of state or local authority funds expended by the 'body' in the Commonwealth as well as the amount of funds derived from state or local authorities. " Id., p. 9 (original emphasis). Our holding today does not otherwise alter the validity of 95-ORD-65, upon which Pathways relied. See 08-ORD-084.
2 KRS 61.871.
3 Given this determination regarding the status of Pathways, consideration of the substantive arguments raised on appeal is unwarranted.