Request By:
Mr. Terry A. Stratton
President
Aviation Constructors, Inc.
2690 Cumberland Parkway, Suite 200
Atlanta, Georgia 30339
Opinion
Opinion By: Frederic J. Cowan, Attorney General; Amye B. Majors, Assistant Attorney General
Mr. Harvey Adams, business representative for the Kentucky State District Council of Carpenters, has appealed to the Attorney General pursuant to KRS 61.880 your response to his August 15, 1991, open records request for access to documents identified as, "[t]he final bid results in regards to the 'ACI' project . . . [including] excavation, concrete, electrical and plumbing."
You responded to Mr. Adams' request in a letter dated August 23, 1991, indicating that in your view, Aviation Constructors, Inc., was not obligated to provide him the opportunity to inspect or copy the documents requested, since ACI is "not a public agency subject to the Kentucky Open Records Act. "
The facts which give rise to this appeal may be briefly summarized as follows. On November 19, 1990, the Kenton County Airport Board entered into an agreement with Delta Air Lines, Inc., under the terms of which the Board would, pursuant to KRS 103.200, act as a conduit for Delta by issuing special facilities revenue bonds to finance the construction and acquisition of a major terminal and related facilities for Delta's possession and use at the Greater Cincinnati Northern Kentucky Airport. Shortly thereafter, Delta retained the services of a number of project managers, including Aviation Constructors, Inc. (ACI), an Atlanta corporation. ACI then solicited bids for the construction of the terminal. The documents generated in the course of the bidding process, specifically the final bid results, are the subject of this appeal.
In his letter of appeal to this Office, Mr. Adams acknowledges that ACI is a private corporation and is therefore not bound by the Open Records Act. Nevertheless, it is his position that because the project for which the bids were solicited is a "public project, " within the meaning of KRS 183.186(2) and KRS 103.200(3), those bids should be treated as public records. In further support of his position, he cites Faulconer v. City of Danville, 313 Ky. 468, 232 S.W.2d 80 (1950) and OAG 80-327. He asks that this Office review your response to his request to determine if Aviation Constructors, Inc., acted consistently with the Open Records Act. For the reasons set forth below, we conclude that your assertion that ACI is not a "public agency" within the meaning of KRS 61.870(1) is correct, and that the records it maintains, including bid documents, are not "public records" within the meaning of KRS 61.870(2).
OPINION OF THE ATTORNEY GENERAL
For purposes of the Open Records Act, a "public agency" is defined, inter alia, as any body "which is created by state or local authority in any branch of government or which derives at least twenty-five percent (25%) of its funds from state or local authority. " This Office has previously recognized that a local airport board, such as the Kenton County Airport Board, is a public agency. OAG 89-53. This issue is not in dispute. The question raised in this appeal is whether the Open Records Act is applicable to the construction bids which are in the sole possession of ACI.
KRS 61.870(2) defines a "public record" as "all books, papers, maps, photographs, cards, tapes, discs, diskettes, recordings or other documentary materials regardless of physical form or characteristics, which are prepared, owned, used, in the possession of or retained by a public agency. " (Emphasis added.) Specifically excluded from this definition are " records owned by a private person or corporation that are not related to functions, activities, programs or operations funded by state or local authority. " KRS 61.870(2). (Emphasis added.) This Office has consistently held that records which are not in the possession of, or retained by, a public agency, are private records beyond the reach of the Open Records Act. OAG 82-316; OAG 88-44; OAG 89-7; OAG 89-55; OAG 91-15.
Mr. Adams nevertheless maintains that the Delta airport project is a "public project, " pursuant to Chapters 183 and 103 of the Kentucky Revised Statutes, and the Kentucky Court of Appeals decision in Faulconer v. City of Danville, supra. He argues that the final bid results should therefore be treated as public records and made available for public inspection under authority of OAG 80-327.
We begin with an examination of KRS Chapters 183, which relates to airports, airport facilities and air navigation facilities. As correctly noted by Mr. Adams, such facilities are deemed "public projects." However, the provision cited by Mr. Adams, KRS 183.136(2), authorizes an airport board to issue bonds and other obligations for the financing of its own airport facilities, as opposed to those of a private corporation. These facilities are paid for by the board itself, as a governmental entity, and are considered public facilities constructed for a public purpose. They are therefore subject to competitive bidding laws, as well as the Open Records law. Inspection of records generated in that bidding process must be permitted after a vendor is selected. OAG 80-327; OAG 84-284; OAG 89-31.
The bonds which will be issued by the Kenton County Airport Board to Delta will be issued under Chapter 103 of the Kentucky Revised Statutes. Such bonds are referred to as "special facilities revenue bonds," and are payable solely by Delta from lease payments on the financed facilities made to a private bond trustee. They are issued to finance "industrial" facilities for Delta's possession and business use. The Board will not contribute any funds for the cost of the project.
In OAG 80-320, this Office addressed the constitutionality of KRS 103.200 et seq. vis-a-vis the anti-lending of credit provisions of the Kentucky Constitution, Sections 177 and 179. There we held that because the bonds are payable solely from the revenue derived from the project, neither the city nor the county incur any indebtedness within the meaning of the Constitution. Continuing, the Attorney General observed:
The money loaned is the money from the proceeds of the bond sale. The loan in no way involves the use of tax revenues, either city, county or state. Thus we see no meaningful distinction between the issuer of the bonds acquiring the property and leasing the building to a corporation and the issuer of the bonds merely lending the bond sale money to a corporation or person to finance the acquisition or construction of the building [or project] by such corporation or person.
OAG 80-320, p. 2. The opinion borrows liberally from the language of Faulconer v. Danville, supra, at 84:
It is expressly stated in the statute, ordinance and bonds, that they do not constitute an obligation of the city. Nor is there any lending of credit in other form. There is only the lending of the city's name and its commitment to render the described services and to lease the property for a consideration . . . The public treasury cannot be opened under the present statute, ordinance or contracts. The city's hand collects and dispenses the rents. It becomes a trustee but not a creditor or guarantor.
Given the private proprietary nature of the Delta project, the Kenton County Airport Board was not involved in the bidding process, which was entirely controlled by ACI and Delta, and does not have in its possession any documents generated in the process. The Board reviewed the project plan to determine whether it was compatible with other facilities at the airport, but this was the full extent of its involvement. Although a lease relationship will exist between Delta and the Board, the Board bears no relationship, contractual or otherwise with ACI, upon which the open records request was served. Nor can it be persuasively argued that ACI's records are public records. In OAG 91-15, this Office held that the existence of a lease between a public agency and a private individual or entity did not transform the records maintained by that individual or entity into public records. The records at issue in this appeal are even more attenuated than those at issue in OAG 91-15 since ACI is in a business relationship with the lessee, Delta, rather than itself being the lessee. Clearly, its records are not "public records" within the meaning of KRS 61.870(2).
We do not find the authority cited by Mr. Adams to be dispositive of this appeal. Faulconer v. Danville, supra, supports the opposite view. Although the court found a public purpose in describing the character of the financing facilitated by KRS Chapter 103, it did not declare a private project thus financed to be a public work. Rather, the court held that the relief of unemployment by the creation of employment opportunities through the financing of industrial facilities for use by private industrial concerns constituted a valid public purpose warranting the issuance of bonds by governmental units as conduits to promote this purpose. Similarly, OAG 80-327 does not support Mr. Adams view insofar as it pertains to public bidding by the Department of Finance. As noted, here the bidding was privately conducted.
We therefore conclude that you properly advised Mr. Adams that ACI is not a public agency and its records are not public records. The definition of "public records" expressly excludes records owned by private persons or corporations that are unrelated to functions or operations funded by state or local authority. The funding for the project undertaken by Delta at the Greater Cincinnati Northern Kentucky Airport will be entirely provided by Delta, for which ACI is a project manager. ACI's records are therefore excluded from the application of KRS 61.870 et seq.
As required by statute, a copy of this opinion will be sent to the requesting party, Mr. Harvey Adams. Mr. Adams may challenge it in the appropriate circuit court pursuant to KRS 61.880(5).