Request By:
[NO REQUESTBY IN ORIGINAL]
Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Finance and Administration Cabinet violated the Open Records Act in partially denying State Journal reporter Susan Allen's August 6, 1999, request to inspect "any and all invoices or correspondence received by the Finance Cabinet related to the renovation and landscaping of the home of Kentucky State University President George W. Reid . . ., [and] all bids received by the Cabinet regarding the renovation project." For the reasons that follow, we conclude that the Finance Cabinet cannot be said to have violated the Act in partially denying Ms. Allen's request because the disputed records, namely records reflecting the cost of individual items, including but not limited to subcontractor invoices, are not "prepared, owned, used, in the possession of, or retained by a public agency, " namely the Cabinet.
Over a period of time extending from the date of her original open records request to September 8, 1999, the Finance Cabinet permitted Ms. Allen to inspect "all records relating to the procurement of the contract for the renovation and landscaping" of President Reid's home, including the invitation for bids, bids received, contractor payment documents, and contractor invoices. Ultimately, however, that Cabinet did not fully honor her request. Finance and Administration Cabinet General Counsel Karen A. Powell advised that "the Cabinet does not receive copies of [records reflecting individual item costs, including] the invoices submitted by a subcontractor to the contractor, " and therefore could not afford Ms. Allen access to these records. In a supplemental letter directed to this office, Ms. Powell explained:
There are no requirements that the contractor provide the Cabinet with pay documents showing what he paid for each individual item that makes up the project because the contractor must perform the work in the contract for the bid amount. Individual item costs are not relevant. (This is analogous to buying a car; one is not concerned aobut the cost of the tires, seats, radio, wheels, etc.) Should any of the work or items that are outlined in the IFB specifications fail to meet the standards of the contract, then the cabinet has several options. These include requiring the contractor to remove the work and redo it, deducting the cost of fixing the item from his contract amount and redoing the work, taking the contractor to court to enforce the contract, or applying a combination of these options.
The open records dispute before us centers on the availability of these records for public inspection.
We share Ms. Allen's concern that invoices submitted by a subcontractor to a contractor under contract with the state are records in which the public has a legitimate interest, and are, ostensibly at least, public in character insofar as they reflect the expenditure of public funds. There can be no doubt that had these records been submitted to the Cabinet, they would be accessible as non-exempt public records. As we have noted on several occasions, "amounts paid from public coffers are perhaps uniquely of public concern . . .[, and] the public is entitled to inspect records documenting exact amounts paid from public monies. . . ." OAG 90-30, p. 3; see also 92-ORD-1274; 93-ORD-89; 95-ORD-18; 97-ORD-85. Moreover, "[a] contractor to a governmental entity . . . must accept certain necessary consequences of involvement in public affairs . . . [including] the risk of closer public scrutiny than might otherwise be the case." OAG 90-7, p. 6. Nevertheless, we are not empowered to declare, in the context of an open records appeal, that the Finance Cabinet's failure to require that the records be submitted to it, and managed and maintained as public records, constitutes a violation of the Open Records Act.
Although the intent of the Open Records Act has been statutorily linked to the intent of Chapter 171 of the Kentucky Revised Statutes, pertaining to management of public records, the Act regulates access to public records as that term is expansively defined in KRS 61.870(2). 1 KRS 61.8715. Our decisions in open records disputes are generally limited to two questions: whether the public agency prepared, owned, used, possessed, or retained the requested record, and, if so, whether the record is subject to public inspection. Thus, in an early opinion, the Attorney General observed:
There are two legal thresholds which must be crossed by a person seeking to compel access to documents under the Open Records Law, KRS 61.870 to 61.884; (1) the custodian of the records must be a "public agency" as defined in KRS 61.870(1), and (2) the documents to be inspected must be "public records" as defined in subsection (2) of the same statute. Unless and until those thresholds are crossed it is not necessary to consider the provisions of the law pertaining to exemptions (KRS 61.878) or pertaining to an unreasonable burden in producing voluminous public records (KRS 61.872(6)).
OAG 82-27, p. 3 (overruled on other grounds in OAG 82-277). In the appeal before us, the "custodians" of the disputed records are companies under contract with the Finance and Administration Cabinet. These contractors cannot be characterized as public agencies for purposes of the Open Records Act. KRS 61.870(1). The disputed records themselves are not public records, as defined in KRS 61.870(2), because they are not "prepared, owned, used, in the possession of or retained by a public agency. " Prior decisions of this office support this view.
In 95-ORD-125, this office held that the Louisville Firefighter Pension Fund properly denied a request for confirmation tickets reflecting investment transactions made on its behalf by a private corporation with which the Fund had contracted to manage its assets. Because the confirmation tickets were neither possessed nor used by the Fund, we concluded that they could not be characterized as "public records" as defined in KRS 61.870(2). At page 6 of that decision, we reasoned:
Although the Fund was entitled to the confirmation tickets from the investment company, it determined they were not needed because information contained in them [was] adequately set out in the monthly accounting statements.
It is not the function of this office, in an open records appeal, to substitute its judgment or the judgment of a third party for that of a public agency's in deciding what records need to be created or retained. Under the facts of this case, the Fund acted consistently with the provisions of the Open Records Act.
See also, 96-ORD-41 (holding that Department of Military Affairs properly denied request for records relating to vending services at an air national guard facility where those records were prepared by, and in the possession of, a private corporation, and were never in the Department's possession); 97-ORD-15 (holding that the University of Kentucky was not obligated to retrieve a fee agreement between a University employee and a private attorney from the attorney in whose custody the document resided); 98-ORD-90 (holding that a correctional facility was not obligated to contact a toothpaste manufacturer to obtain a copy of the material safety data sheet for toothpaste used at the facility in order to satisfy an inmate's open records request).
In a similar vein, the Court of Appeals has held that records of a private insurance company undergoing rehabilitation were the private records of the company despite apparent state involvement in the rehabilitation process.
Kentucky Central Life Insurance Co. ex rel. Stephens v. Park Broadcasting of Kentucky, Inc., Ky.App., 913 S.W.2d 330, 335 (1996). The court expressly stated that "the company's records should not lose their private status simply because the rehabilitator has used, possessed, or has access to them." Id.
This position is generally consistent with the standard articulated by the
United States Supreme Court in Forsham v. Harris, 445 U.S. 169, 186, 100 S. Ct. 978, 987, 63 L. Ed. 2d 293 (1980), and
Kissinger v. Reporters Committee for Freedom of the Press, 445 U.S. 136, 152, 100 S. Ct. 960, 969, 63 L. Ed. 2d 267 (1980). In these opinions, the Court held that "an agency must first either create or obtain a record as a prerequisite to it becoming an 'agency record' within the meaning of the [Freedom of Information Act, 5 USCS § 552]." Forsham at 63 L. Ed. 2d 305. The Court rejected the notion that a public agency's right of access, and its right to obtain custody of records, brought those records within the reach of the Act, concluding that "FOIA applies to records which have been in fact obtained, and not to records which merely could have been obtained." Forsham at 63 L. Ed. 2d 307.
Although we concede that Kentucky's Open Records Act does not track the language of the federal act, the laws are identical in at least one significant respect: Neither law imposes a duty on the public agency to create records. Thus, the Supreme Court's holding that "by ordering [a public agency] to exercise its right of access, we effectively would be compelling the agency to 'create' an agency record since prior to that exercise the record was not a record of the agency[,]" applies with equal force to agencies governed by the Open Records Act. Forsham at 63 L. Ed. 2d 308. Accordingly, we find that [the requester] has not crossed the two legal thresholds identified in OAG 82-27; the custodian of the records he seeks is not a "public agency, " and the documents he wishes to inspect are not "public records. "
Kentucky's Open Records Law applies only to records which are in existence, and in the possession or control of a public agency. It does not impose an obligation on agencies to create, procure, or retrieve a record to accommodate a request. This is not to say that a public agency can somehow secret away public records on private premises, and thus avoid the requirements of the Open Records Act. See, e.g., 95-ORD-126. Our holding is limited to the facts presented in this appeal. Because the records Ms. Allen seeks are not prepared, owned, used, in the possession of or retained by the Cabinet, they are not governed by the Open Records Act. Like the requesters in the decisions cited above, Ms. Allen has not crossed the two legal thresholds established in OAG 82-17. Although the Cabinet has the authority to demand production of the disputed records pursuant to 200 KAR 5:314, it has elected not to do so, satisfied that the available documentation is adequate so long as the contractor performs the work in the contract for the bid amount and in a manner that satisfies the IFB specifications.
Prompted by the Kentucky Supreme Court's decision in
Marina Management Services Inc., et al., v. Commonwealth of Kentucky, Ky., 906 S.W.2d 318 (1995), 2 in 1996 the legislature enacted 200 KAR 5:314, aimed at insuring "the ability of certain governmental oversight agencies to obtain access to financial data of state contractors. " 200 KAR 5:314, Necessity, Function and Conformity. Section 1 of the regulation provides that all state contracts, as defined in KRS 45A.030(5), must contain specific language under the terms of which the contractor:
agrees that the contracting agency, the Finance and Administration Cabinet, the Auditor of Public Accounts and the Legislative Research Commission . . . shall have access to any books, documents, papers, records, or other evidence, which are directly pertinent to [the] contract for the purpose of financial audit or program review.
By virtue of this regulation, the Cabinet may compel the contractor to disgorge all records which are pertinent to the contract, including, presumably, subcontractor invoices, and such records "shall be subject to public disclosure . . . ." 200 KAR 5:314, Section 1. Nevertheless, it is for the Cabinet, and not this office, to determine when the authority granted by this regulation should be exercised.
In the appeal before us, the Cabinet has not exercised its authority to compel production of these records, if in fact the records exist. As in 95-ORD-125, and its progeny, "it is not the function of this office, in an open records appeal, to substitute its judgment or the judgment of a third party for that of a public agency in deciding what records" are necessary to insure full accountability. 95-ORD-125, p.6. We therefore affirm the Finance and Administration Cabinet's partial denial of Ms. Allen's request on the grounds that subcontractors' invoices, and other records reflecting the cost of individual items, are not public records, having never been "prepared, owned, used, in the possession of or retained by" the agency. KRS 61.870(2).
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.
Footnotes
Footnotes
1 KRS 61.870(2) defines the term "public record" as "all books, papers, maps, photographs, cards, types, 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. "
2 In Marina Management , the Court declared that records of a privately owned marina operator under contract with the state could properly be withheld by the agency in whose custody the records resided because disclosure would give an unfair advantage to competitors, and the records were confidentially disclosed. KRS 61.878(1)(c)1.