Opinion
Opinion By: Jack Conway, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether EOP Architects, PSC, a private for-profit Kentucky Professional Services Corporation based in Lexington, Kentucky, violated the Kentucky Open Records Act in denying John Rogers' September 30, 2011, request for "a list of expenditures of your company, including check number, date, amount and payee for all checks written from January 1, 2011 to August 31, 2011[, including but not limited to], checks written to consultants, salaried individuals and organizations." 1 More precisely, the question presented is whether EOP is a "public agency" within the meaning of KRS 61.870(1). Resolution of this determinative question turns on the application of KRS 61.870(1)(h), as reinterpreted in 09-ORD-033, to EOP. However, EOP has declined to provide this office with any evidence, such as an affidavit, regarding what percentage of the funds it expends in the Commonwealth of Kentucky is derived from state or local authority funds, despite being afforded three opportunities to do so. Because EOP has implicitly acknowledged that at least some of the funds it expends in the Commonwealth are derived from state or local authority funds, the Attorney General finds that EOP is a "public agency" within the meaning of KRS 61.870(1)(h) if those funds constitute twenty-five percent (25%) or more of the funds it expends in the Commonwealth, and thus must disclose records documenting the expenditure of those public funds, i.e. , funds derived from a contract(s) with a state or local authority or those otherwise derived from a state or local authority, which are, by definition, public records per KRS 61.870(2). 11-ORD-199, p. 3. Conversely, if those funds do not constitute 25% of the funds EOP expends in the Commonwealth, EOP cannot properly be characterized as a "public agency" for purposes of the Open Records Act, nor can it be said to have violated the provisions thereof in denying Mr. Rogers' request.
In responding to Mr. Rogers' written request, legal counsel for EOP did "not concede that it is a [p]ublic [a]gency as defined by the Open Records Act . . ., KRS 61.870(1)(h)[,] because it does not work exclusively for state or local authorities. " To the extent any of the records being sought are "public records, " counsel advised, "the records you request include records which are not public records or are exempt from disclosure for" the reasons outlined in his October 5 response. Upon receiving notification of Mr. Rogers' October 12 appeal, EOP's legal counsel merely reiterated his earlier substantive arguments, 2 further noting that EOP "is a private architectural and design firm which competes with many other firms in difficult and shrinking market conditions and the disclosure of these records would permit competitors of EOP an unfair commercial advantage." This fact has no bearing on the relevant legal analysis.
Given the scarcity of relevant evidence presented, this office requested, in accordance with KRS 61.880(2)(c) and 40 KAR 1:030, Section 3, that EOP "provide us with an affidavit and available documentation supporting its position that it is not a public agency as defined in KRS 61.870(1)(h) or any other provision of KRS 61.870(1)." In so doing, the Attorney General acknowledged that EOP "does not work exclusively for state or local authorities, " but emphasized that this office must nevertheless resolve the question of whether EOP "derives at least 25% of the funds it expends in the Commonwealth of Kentucky from state or local authority funds." EOP did not choose to respond on or before November 11 as requested nor did it request additional time in which to respond.
This office subsequently renewed its request for assistance by letter dated November 16, 2011, "in order to ensure that a correct resolution of this matter is reached." Again, the Attorney General acknowledged the assertion by EOP that it "does not work exclusively for state or local authorities, " but expressly clarified "that fact is not dispositive; rather, the dispositive question under KRS 61.870(1) is whether EOP derived at least twenty-five percent (25%) of the funds it expended in the Commonwealth of Kentucky from state or local authority funds during the current fiscal year." Because the Attorney General "is charged with making that determination based exclusively upon the written record," this office again respectfully requested that EOP:
. . . provide us with an affidavit from the Chief Financial Officer of EOP advising what percentage of the funds it expended in the Commonwealth during the relevant time frame was derived from state or local authorities, regardless of whether those funds were received as payment for services rendered on specific projects in accordance with contracts between EOP and state or local authorities or derived from state or local authorities by other means. If you are unable to determine with certainty the exact percentage, please advise whether the percentage is below or above the 25% threshold of KRS 61.870(1)(h).
Due to the time constraints imposed on this office per KRS 61.880(2), the Attorney General asked EOP to ensure that its written response was received on or before December 5; however, EOP again failed to comply with our KRS 61.880(2)(c) request. As of this date, EOP has not provided this office with any further information.
"Public agency" is broadly defined at KRS 61.870(1) in eleven different ways codified at subsections (a)-(k). Despite the expansive language of KRS 61.870(1), its companion, KRS 61.870(2) (broadly defining "public records" ), 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, 3 the Attorney General has recognized, on a number of occasions, that a private corporation or company, whether not-for-profit or for-profit, 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." See KRS 61.870(1) as construed in 97-ORD-114; 99-ORD-65; 02-ORD-41; 05-ORD-012; 06-ORD-220; 08-ORD-024; 09-ORD-033; 09-ORD-083; 11-ORD-021; 11-ORD-040; 11-ORD-142. No evidence has been presented to suggest that EOP would qualify as a public agency under KRS 61.870(1)(a), (b), (c), (d), (e), (f), (g), (j), or (k); 4 likewise, 61.870(1)(i) is facially inapplicable to EOP given that its governing body is apparently not appointed by a public agency. Thus, KRS 61.870(1)(h) is the only subsection that is potentially applicable.
In 09-ORD-033 (Deborah H. Patterson/M.A. Mortenson Company, issued February 19, 2009), the Open Records Decision which culminated in William H. Chilton, III v. M.A. Mortenson Company , 09-CI-02749 (Jefferson Circuit Court-Division Thirteen, November 24, 2009)(holding that KRS 61.870(1)(h) is unconstitutional), 5 this office was asked to determine whether Mortenson, the "Construction Manager-at-Risk" for the Louisville Arena Authority, was a "public agency" within the meaning of KRS 61.870(1)(h). This office adopted the interpretation of KRS 61.878(1)(h) set forth by the appellant, which admittedly represented "a significant departure from prior decisions in which the 'expended by it in the Commonwealth' language was not meaningfully applied." 6 09-ORD-033, p. 6.
In that appeal, the Attorney General acknowledged that KRS 61.870(1)(h) "lacks specific parameters for analysis, and that this office lacks authority to compel disclosure of documents from 'bodies' disputing their status as public agencies," ultimately concluding, based on the affidavit of Mortenson's Chief Financial Officer, which the appellant presented "insufficient probative evidence to refute," that Mortenson was not a "public agency" within the meaning of KRS 61.870(1)(h). A copy of that decision is attached hereto and incorporated by reference. This office reached the same conclusion based upon the unrefuted affidavit provided on behalf of the "body" whose status was in dispute on several recent occasions. See 09-ORD-083; 09-ORD-085; 09-ORD-096; 10-ORD-113; 11-ORD-109; 11-ORD-142. Most recently, this office concluded that Abel Construction Company, Inc. is not a "public agency" within the meaning of KRS 61.870(1)(h) based upon the unrefuted affidavit of its Vice President and Chief Financial Officer, which confirmed that Abel did not satisfy the 25% threshold of that provision. 11-ORD-191 (In re: John Rogers/Abel Construction Company, Inc., issued November 15, 2011), p. 6. A copy of the latter decision is also enclosed for the parties' reference. See also 11-ORD-197 (In re: John Rogers/Peel & Holland, Inc., issued November 21, 2011); 11-ORD-203 (In re: John Rogers/Arnold Consulting Engineering Services, Inc., issued December 2, 2011); 11-ORD-204 (In re: John Rogers/Gresham, Smith and Partners, issued December 2, 2011); 11-ORD-206 (John Rogers/Sullivan & Cozart, Inc., issued December 7, 2011).
The instant appeal is distinguishable from the appeals which resulted in the foregoing decisions in this critical respect. Unlike all of the private corporations or companies referenced above, EOP has declined to provide the requested affidavit or any financial information that would enable us to reach a definitive resolution of this matter. EOP simply asserted repeatedly that it "does not work exclusively for state or local authorities. " The logical implication of this assertion is that EOP does, in fact, derive at least some of the funds it expends in the Commonwealth from state or local authority funds. Accordingly, this office must conclude that EOP is a "public agency" if those funds constitute 25% of the funds it expends in the Commonwealth regardless of whether it "works exclusively for state or local authorities, " which, as previously noted, is not determinative; however, if EOP does not derive at least 25% of the funds it expends in the Commonwealth from state or local authority funds, it cannot be properly characterized as a "public agency" for purposes of the Open Records Act, nor can it be said to have violated the provisions thereof in denying Mr. Rogers' 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.
Distributed to:
John RogersJohn P. Watz
Footnotes
Footnotes
1 This office has long recognized that a "public agency" is not statutorily required to create a record or compile a list in order to comply with a request under the Act; however, in lieu of doing so a "public agency" must provide the requester with an opportunity to inspect existing non-exempt records which may contain the information being sought. See 09-ORD-145, pp. 8-9. Generally speaking, however, the financial and operational records of a "public agency" are open for inspection. 05-ORD-065, p. 9. See OAG 76-648 (holding that "wherever public funds go, public interest follows"); OAG 82-169 (holding that "the contracts, vouchers, and other business records of a public agency are open to public inspection under the Kentucky Open Records Law"); OAG 90-30 (holding that "amounts paid from public coffers are perhaps of uniquely public concern"); OAG 91-7 (holding that "records of bills paid, payroll check stubs or cancelled checks, and all other records which show funds received and disbursed are public records" ). See also 10-ORD-140.
2 This office refers the parties to 11-ORD-199 (In re: John Rogers/Green Construction Co., Inc., issued November 22, 2011), a copy of which is attached hereto and incorporated by reference, and which involved an identical request, for the legal analysis regarding the merits of such arguments, which is equally applicable in this case.
3 KRS 61.871.
4 Though not dispositive standing alone, information publicly available on the Secretary of State's website reveals that EOP is a "Kentucky Professional Services Corporation," with "Active" status, in "Good" standing, whose principal office is located in Lexington, Kentucky. By conventional indicia, in other words, EOP is a private business that is not subject to the Open Records Act unless it satisfies the KRS 61.870(1)(h) threshold. See 11-ORD-040; 11-ORD-142; 11-ORD-191.
5 In University Health Care, Inc. v. The Courier-Journal , No. 10-CI-04753 (Jefferson Circuit Court-Division Twelve, March 11, 2011), another Division of Jefferson Circuit Court acknowledged the holding of William W. Chilton v. M.A. Mortenson Company , above, but went on to find "that, while deference is, of course, given to the decisions of its brothers and sisters on the Bench, those determinations in no way affect the conclusions of this Court." Having done so, the Court ultimately held that KRS 61.870(1)(h) "is not unconstitutionally vague, ambiguous or unintelligible." University Health Care, above, at p. 7. These conflicting opinions from different divisions of the same circuit amply illustrate why this office has taken the approach of continuing to follow existing precedent, both in general, and specifically in relation to KRS 61.870(1)(h), until a published opinion by either the Supreme Court or the Court of Appeals to the contrary is rendered and, relative to KRS 61.870(1)(h) in particular, why this office is compelled to apply it as written until such time as the General Assembly amends it or one of those Courts expressly finds it unconstitutional in a published opinion.
6 In so doing, this office reminded the parties that in Commonwealth v. Chestnut, 250 S.W.3d 655, 663 (Ky. 2008), the Kentucky Supreme Court expressly recognized the prerogative of the Attorney General to depart from precedent, declaring that the "Attorney General was permitted to reexamine -- and even reject -- its former interpretation of the law."