Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Meetings Decision
The question presented in this appeal is whether the Kentucky Bourbon Festival, Inc., is a public agency for purposes of the Open Meetings Act, and its meetings are subject to the requirements found in the Act. For the reasons that follow, we find that KBF, a private non-profit corporation formed for the purpose of "directing the celebration and annual promotion of all facets of the Bourbon Industry," is not a public agency as defined in KRS 61.805(2), and is not bound by the requirements of the Act.
On January 30, 2001, Kentucky Standard Publisher David E. Greer submitted a written complaint to Mary Nancy Todd, Chairperson of the KBF's Board of Directors, in which he expressed the view that the board "qualifies as a public agency under KRS 61.805(2)(e) and KRS 61.805(2)(f)." Mr. Greer argued:
Paragraph "e" of KRS 61.805 states that a public agency is any body created by or pursuant to state or local statute, executive order . . . .
Also, the Open Meetings Law defines a public agency as any body established, created and controlled by a public agency. As you know, Nelson Fiscal Court directed the Bardstown-Nelson County Tourism & Convention Commission, a public agency, to resume financial oversight of KBF. That was provided for in the agreement between KBF and the local tourism commission.
Paragraph "f" of KRS 61.805 states that a public agency is any entity when the majority of its governing body is appointed by a "public agency" . . . .
He maintained that in closing its board meetings, the KBF violates the Open Meetings Act. As a means of remedying this violation, Mr. Greer proposed that the KBF open future board meetings to the public.
In a response dated February 2, 2001, Ms. Todd denied that the KBF falls within the statutory definition of public agency set forth at KRS 61.805. With reference to each of the arguments Mr. Greer advanced, she reasoned:
First, you have correctly observed that KRS 61.805(2)(e) provides that ". . . a public agency includes any body created by or pursuant to state or local statute, executive order . . . ." Unfortunately, you fail to point out, and I am not aware of the existence of, any such statute or executive order creating or giving rise to the KBF. Accordingly, this provision of the statutory definition is not applicable to the KBF.
You next imply, in the fourth literary paragraph of your letter, that the KBF may be a public agency by virtue of having been ". . . established, created and controlled by a public agency. " My review of your complaint fails to reveal any factual basis alleged to support a contention that KBF was established or created by a public agency. The only fact you allege in support of this contention is that the Nelson Fiscal Court directed the Bardstown-Nelson-County Tourism & Convention Commission (the "Tourism Commission") to resume financial oversight of KBF. Although it is true that a "Loan Agreement" was entered into between the KBF and Tourism Commission, that Agreement does not in any way vest control of the KBF in the Tourism Commission. To the contrary, the Loan Agreement simply provides for financial reporting by the KBF to the Tourism Commission, and other assurances of repayment of the loan. We have been advised that these provisions are all common to commercial loans among financial institutions and private enterprise. It is ludicrous to suggest that a mere loan between entities of any type, public or private, constitutes "control" over the borrower in the manner contemplated within the Kentucky Open Meetings Law.
You next recite that "Paragraph "f" of KRS 61.805(2) states that a public agency is any entity when the majority of its governing body is appointed by a "public agency. " Although that is a correct quote from the cited statute, you again fail to allege any facts that bring the KBF within that definition. Actually, only five (5) of the fifteen (15) members of the KBF Board of Directors are appointed by a "public agency. "
Notwithstanding the fact that the KBF does not believe itself to be a public agency for purposes of the Open Meetings Act, Ms. Todd acknowledged the corporation's obligation to provide complete financial records to the public "for the duration of the Loan Agreement with the Tourism Commission . . . upon their acceptance by the Tourism Commission in open meetings," and its willingness to "accept written requests for information from the news media." This appeal followed.
In a supplemental response directed to this office following commencement of Mr. Greer's appeal, James P. Willett, III, an attorney representing the KBF, elaborated on his client's position. He objected to the inclusion of the KBF's articles of incorporation, dated September 25, 1997, and bylaws, dated March 15, 1999, in Mr. Greer's letter of appeal, noting that the materials were not included in the original complaint, and that the KBF therefore had not been afforded a fair opportunity to respond. By way of example, he explained that the 1999 bylaws were amended in January, 2001, and now provide that only five of the fifteen members of the KBF Board of Directors are appointed by a public agency. Mr. Willett furnished this office with a copy of the amended bylaws. In addition, he provided us with copies of various instruments documenting the loan transaction between the KBF and the Bardstown-Nelson County Tourist and Convention Commission, asserting that the documents "do not in any way vest control of the KBF in the Tourism Commission." In closing, Mr. Willett reiterated that Mr. Greer's complaint fails to state "any legal or factual basis on which to classify the KBF as a 'public agency' under the statutory definition set forth in KRS 61.805(2)." We find the KBF's arguments persuasive, and conclude, on the record presented, that it is not a public agency for purposes of the Open Meetings Act.
The term "public agency" is expansively defined at KRS 61.805(2) to include:
(a) Every state or local government board, commission, and authority;
(b) Every state or local legislative board, commission, and committee;
(c) Every county and city governing body, council, school board, special district board, and municipal corporation;
(d) 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;
(e) Any body created by or pursuant to state or local statute, executive order, ordinance, resolution, or other legislative act in the legislative or executive branch of government;
(f) Any entity when the majority of its governing body is appointed by a "public agency" as defined in paragraph (a), (b), (c), (d), (e), (g), or (h) of this subsection, a member or employee of a "public agency, " a state or local officer, or any combination thereof;
(g) Any board, commission, committee, subcommittee, ad hoc committee, advisory committee, council, or agency, except for a committee of a hospital medical staff or a committee formed for the purpose of evaluating the qualifications of public agency employees, established, created, and controlled by a "public agency" as defined in paragraph (a), (b), (c), (d), (e), (f), or (h) of this subsection; and
(h) Any interagency body of two (2) or more public agencies where each "public agency" is defined in paragraph (a), (b), (c), (d), (e), (f), or (g) of this subsection[.]
Despite the expansive language of this provision, and the clearly expressed legislative intent that the law is to be strictly construed so as to avoid unauthorized secret meetings of public agencies, the Attorney General has repeatedly recognized that a private, not-for-profit corporation is not a public agency within the scope and meaning of the Act. For example, in 96-OMD-180, this office held that Seven Counties Services, Inc., a private, not-for-profit corporation which provides mental health and mental retardation services, was not a public agency subject to the terms and provisions of the Open Meetings Act. 1 See also, OAG 75-402 (community mental health board established by a not-for-profit corporation is not a public agency) ; OAG 78-395 (county water association that was established as a not-for-profit corporation is not a public agency) ; OAG 79-560 (rural electric cooperative, formed pursuant to KRS Chapter 279 as a not-for-profit corporation, is not subject to the Open Meetings Act) ; OAG 81-266 (county hospital foundation, incorporated as a not-for-profit corporation under KRS Chapter 273 for the purpose of local approval of loans for small businesses is not subject to the Open Meetings Act) ; OAG 84-237 (holding that private, not-for-profit corporation formed under KRS Chapter 273 for the purpose of local approval of loans for small businesses is not subject to the Open Meetings Act) ; and 98-OMD-174 (holding that a committee of a private, non-profit professional association of physicians that oversaw county ambulance service was not a public agency under the Open Meetings Act) . Thus, the overwhelming weight of authority supports the position which the KBF takes.
Moreover, no argument is advanced that the KBF is a public agency as defined in KRS 61.805(2)(a), (b), (c), (d), (g), or (h), and these provisions are facially inapplicable to that entity. Mr. Greer presents no proof to support his allegation that the KBF was "created by or pursuant to state or local statute, executive order, ordinance, resolution, or other legislative act, " and therefore falls within the parameters of KRS 61.805(2)(e). The articles of incorporation he appends to his appeal demonstrate, instead, that it was established as a private, non-profit corporation in 1997, and does not owe its existence to legislative act or executive order. Nor does the record presented support his view that the KBF qualifies as a public agency under KRS 61.805(2)(f). Neither its 1999 bylaws, providing for an eleven member board of directors, five of whom were appointed by a public agency and public officials, nor its 2001 amended bylaws, providing for a fifteen member board of directors, five of whom are appointed by the same public agency and public officials, bring KBF within the definitional reach of KRS 61.805(2)(f), requiring that a majority of its governing body be appointed by a public agency, member or employee of a public agency, state or local officer, or any combination thereof. And although it is true that under its loan agreement with the Bardstown-Nelson County Tourist and Convention Commission, the Commission is assigned an extensive financial oversight role while the KBF loan is outstanding, the record does not support Mr. Greer's allegation that the Commission established and created the KBF, or that it exercises active control of that entity. Accordingly, we affirm the KBF's disposition of Mr. Greer's open meetings complaint.
It follows that the board of directors of the KBF is not required to comply with the requirements of the Open Meetings Act. We proceed no further in our analysis. Because the Kentucky Bourbon Festival, Inc., cannot properly be characterized as a public agency within the meaning of KRS 61.805(2)(a) through (h), its board is not obligated to conduct public meetings. Neither the corporation, nor its board, is governed by the Act.
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.846(4)(a). 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 proceedings.
David E. Greer110 W. Stephen Foster AvenueBardstown, KY 40004
Mary Nancy ToddChairperson, Board of Directors Kentucky Bourbon FestivalP.O. Box 867Bardstown, KY 40004
James P. Willett, IIISaltsman & Willett, P.S.C.212 East Stephen Foster AvenueP.O. Box 327Bardstown, KY 40004
Footnotes
Footnotes
1 It should be noted that a private, non-profit corporation may be a public agency for purposes of the Open Records Act, though it is not a public agency for purposes of the Open Meetings Act. See, e.g., 97-ORD-140 (holding that Seven Counties Services, Inc. is a public agency within the meaning of KRS 61.870(1)(h) in that it derives more than 25% of its funding from state or local authorities). This dichotomy arises from the differences in the definition of "public agency" found in each of the Acts. OAG 76-648.