Request By:
Mr. Eric L. Ison
Greenebaum, Doll & McDonald
Attorneys at Law
3300 First National Tower
Louisville, Kentucky 40202
Opinion
Opinion By: Steven L. Beshear, Attorney General; Carl Miller, Assistant Attorney General
As an attorney representing a public agency covered by the Kentucky Open Meetings Law, KRS 61.805-61.850, you have requested an opinion of the Attorney General on three questions dealing with two exceptions to the Open Meetings requirement set forth in KRS 61.810. The pertinent part of that statute reads as follows:
"All meetings of a quorum of the members of any public agency at which any public business is discussed or at which any action is taken by such agency, are declared to be public meetings, open to the public at all times, except for the following:
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"(2) 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.
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"(7) meetings between public agencies and industrial prospects."
We will state and answer your questions seriatim.
"(1) Where individual members or representatives of the agency have conducted negotiations with an industrial prospect and report the substance of the negotiations to a quorum of the agency, must the meeting be open to the public if a representative of the industrial prospect is not actually present at the meeting in order to comply with the exception of KRS 61.810(7)?"
Answer. We believe that the exception provided by KRS 61.810(7) applies only in a case where a representative of an industrial prospect is present at a meeting with the governing body of a public agency. The meeting must be between the public agency and the industrial prospect.
A meeting with an industrial prospect is held only occasionally by some governing bodies such as those of a city or a county. A meeting with an industrial prospect would never be held by some agencies such as school boards. On the other hand, some public agencies created by statute exist primarily for the purpose of promoting industrial development and their main occupation is dealing with industrial prospects. (e.g., local industrial development authorities, KRS 152.820.) Applying this exception to all discussions concerning industrial prospects would virtually provide a cloak of secrecy to a proponderance of the agency's activities. We believe that this would defeat the intent and purpose of the Open Meetings Law.
"(2) When a quorum of the agency deliberates on the future sale of real estate and publicity of some of the discussion (i.e., the purchase price) may affect the value of the property but discussions of related matters (identity of the industrial prospect, etc.) would not necessarily affect the value of the property, although publicity of which would destroy the confidentiality of pending negotiations, is the agency required to open the meeting to the public or are such related matters included under the exception of KRS 61.810(2)?"
Answer. It is our opinion that only when an agency is discussing a specific piece of property as to whether it will buy or sell that particular property and the discussion, if made public, would affect the purchase or sale price of that property or other property to be bought or sold on the same project, the agency may discuss the matter in a closed session. We think that the wording of the statute makes this clear. Confidentiality per se is not the purpose of KRS 61.810(2)(7). Confidentiality is only permissible when the public interest will be directly affected financially. Private businesses, when dealing with a public agency, must expect that the transaction take place in the open where it is subject to public scrutiny. [If bonds are to be issued for a public project, KRS 103.210 provides that the bond authorizing ordinance or resolution shall be effective only after publication, in a newspaper authorized to publish official advertisements for the issuer, of the title to said ordinance or said resolution, together with a statement signed by the clerk of the issuer setting forth the amount of the issue, the name of the lessee corporation, and the fact that the bonds are to be retired from the proceeds of the lease payments.]
"(3) When a quorum of the agency deliberates on the future lease of real property under a long term lease and/or a lease with an option to purchase, and the deliberations may or may not affect the value of the property, although publicity again would destroy the confidentiality of pending negotiations, do such deliberations without the industrial prospect being present fall under the exception of either KRS 61.810(2) or 61.810(7)?"
Answer. Your question is difficult to answer in the abstract. This is particularly so because of the decision of the Kentucky Court of Appeals in Jefferson County Board of Education v. Courier Journal, Ky.App. 551 S.W.2d 25 (1977). That case dealt with, inter alia, the exception provided by KRS 61.810(5), "Collective bargaining negotiations between public employers and their employees or their representatives." First the Court said that the exception
"does not embrace everything tangential to the topic. . . . We do not believe that the legislature intended 'reports' or status briefings on labor negotiations to be held in privacy. . . . On the other hand, whenever a public agency is formulating its demands or position preparatory to collective bargaining negotiations, either by way of deliberations or instructions to its advocates, then we believe these types of sessions are within the purview of KRS 61.810(5)." (Emphasis in original.)
The opinion of the Court indicates that when active bargaining is in progress a public agency has the right to formulate its proposals and its strategy in a closed session. We can only speculate that the Court would apply this principle to bargaining with industrial prospects the same as it did to labor negotiations. We repeat, confidentiality is not a luxury afforded public agencies and private businesses dealing with them. It is only when confidentiality affords some material advantage to the public interest that an exception to the open meetings requirement is allowed.
The preamble to 1974 HB 100, the Open Meetings Law, reads as follows:
"WHEREAS, it is the policy of the Commonwealth that the formulation of public policy is public business and may not be conducted in secret; and
"WHEREAS, the legislature finds and declares that public agencies in this Commonwealth exist to aid in the conduct of the public's business; and
"WHEREAS, the people of this Commonwealth do not yield their sovereignty to the agencies which serve them; the people, in delegating authority, do not give their public servants the right to decide what is good for the public to know and what is not good for them to know; the people insist on remaining informed so they may retain control over the instruments they have created."
See OAG 74-441.