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 Princeton Electric Plant Board violated the Open Records Act in the disposition of Randy Hollis' August 2, 2001, request for records relating to the Plant Board. Based on this office's decision in 01-ORD-87, and the authorities cited therein, we conclude that the Plant Board's reliance on KRS 61.878(1)(c)1. as the basis for denying, in part, Mr. Hollis' request for minutes of meetings held from August, 1999 to the present, and as the basis for denying, in full, Mr. Hollis' request for financial statements generated from January, 1999, to the present, was misplaced.
In his August 2 request, Mr. Hollis, Government and Community Relations Manager for Mediacom Communications Corporation, asked that the Plant Board furnish him with copies of, inter alia:
. . .
2. Electric Plant Board meeting minutes for all meetings held between August 1999 to Present that mentioned or discussed the construction, financing, operation or any other aspect of a cable television system, communications system or broadband network to be owned and/or operated by the City or the Electric Plant Board[;]
. . .
9. Profit and loss statements, audited financial statements and interim financial statements created by the Electric Plant Board or created at its direction since January 1999 to present. 1
On August 8, John Humphries, General Manager of the Princeton Electric Plant Board, partially denied Mr. Hollis' request. Although he provided Mr. Hollis with copies of board minutes "as described in item 2 of Mediacom's request," Mr. Humphries advised that "the minutes for June 26, 2000, September 19, 2000, October 23, 2000, and May 29, 2001, contain information" for which exemption was claimed under KRS 61.878(1)(c). He explained that this information was redacted, and the remaining records transmitted to Mr. Hollis. Mr. Humphries denied the request for financial statements, maintaining that these are:
Records which are generally recognized as confidential or proprietary and which, if openly disclosed, would permit an unfair commercial advantage to competitors of the Princeton Electric Plant Board, as well as the entity responsible for the original preparation and compilation of the requested information. Accordingly, Mediacom's request for these items is being denied. Marina Management Services, Inc. v. Cabinet for Tourism, Ky., 906 S.W.2d 318 (1995) and Hoy v. Kentucky Industrial Revitalization Authority, Ky., 907 S.W.2d 766 (1995).
Shortly thereafter, Eric E. Breisach, an attorney representing Mediacom, initiated this open records appeal, asserting that this office's decision in 01-ORD-87 compels disclosure of the disputed records. We agree.
In 01-ORD-87, the Attorney General rejected the Franklin Electric Plant Board's claim that KRS 61.878(1)(c)1. authorized partial nondisclosure of the minutes of regular meetings that contained "financial information concerning the inner workings of the . . . Plant Board in the telecommunications areas, as well as customer identity information," and total nondisclosure of financial projections relating to expansion of existing services that were provided by an outside consultant at the Plant Board's expense. KRS 61.878(1)(c)1. authorizes public agencies to withhold:
records confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which if openly disclosed would permit an unfair commercial advantage to competitors of the entity that disclosed the records.
At page 5 through 7 of 01-ORD-87, we undertook an examination of case law interpreting KRS 61.878(1)(c)1., noting that on at least two occasions the Kentucky Supreme Court had affirmed public agency reliance on the exemption as a basis for denying open records requests.
Marina Management Services, Inc. v. Cabinet for Tourism, Ky., 906 S.W.2d 318 (1995); 2
Hoy v. Kentucky Industrial Revitalization Authority, Ky., 907 S.W.2d 766 (1995); 3 see also,
Southeastern United Medigroup v. Hughes, Ky., 952 S.W.2d 195 (1997). 4
We nevertheless concluded that the Plant Board had erroneously relied on KRS 61.878(1)(c)1., reasoning:
These cases, along with the cited open records decisions, demonstrate that the burden of proving that the records withheld qualify for exclusion under KRS 61.878(1)(c)1. rests with the public agency. That exception, as noted above, "is aimed at protecting records of private entities which, by virtue of involvement in public affairs, must disclose confidential or proprietary records to a public agency, if disclosure of those records would place the private entities at a competitive disadvantage. " 97-ORD-66, p. 10 (emphasis added). It is, in general, inapplicable to records generated by or for a public agency. "The exemptions protection simply does not extend to the agency's own records," such as minutes of the agency's public meetings. Id. Nor, we would hasten to note, does its protection extend to a consultant's report prepared for the agency at agency expense. The Franklin Electric Plant Board had not established that disclosure of the meeting minutes or financial projections "would permit an unfair commercial advantage to competitors of the entity that disclosed the records. "
In the case of financial projections, the "entity that disclosed the records" is the outside consultant, a sister electric plant board. No claim is made that the sister plant board would be competitively disadvantaged by disclosure, and none could be made since the financial projections relate to the Franklin Electric Plant Board. [Footnote omitted.] In the case of minutes of regular meetings, such records are not "confidentially disclosed to an agency or required by an agency to be disclosed to it" nor are they "generally recognized as confidential or propriety." The fact that comments were ill-advisedly made in the course of an open, public meeting that placed the Board at a risk of competitive harm is not enough to bring minutes reflecting those comments within the scope of KRS 61.878(1)(c)1. Bearing in mind that "the exceptions provided for by KRS 61.878 . . . shall be strictly construed," we find that the Franklin Electric Plant Board improperly relied on this exemption. KRS 61.871.
Moreover, with respect to minutes of an open meeting of a public agency, KRS 61.835 places an affirmative duty on the agency to make those minutes "open to public inspection at reasonable times no later than immediately following the next meeting of the body." No claim is made that these comments were made in a properly conducted closed session, and no statutory basis exists for denying access to all or any part of the minutes of an open, public meeting. We believe that the Board erred in refusing to disclose the minutes in their entirety . . . .
01-ORD-87, p. 7, 8. It is the opinion of this office that 01-ORD-87 is dispositive of the instant appeal.
Neither the minutes of the Princeton Electric Plant Board's meetings, nor financial statements generated by or for it, qualify as records "confidentially disclosed to [the Plant Board] or required by the [Plant Board] to be disclosed to it." KRS 61.878(1)(c)1. They are, instead, in the nature of operational and financial records created by or for the Plant Board in the normal course of business, and therefore "the [Board's] own records" to which the exemption's protection does not extend. 97-ORD-66, p. 10. As noted in 01-ORD-87, in order to qualify for exclusion under KRS 61.878(1)(c)1., a public record must be:
1) confidentially disclosed to an agency or required by an agency to be disclosed to it;
2) generally recognized as confidential or proprietary; and
3) of such a character that disclosure would permit an unfair commercial advantage to competitors of the entity that disclosed them.
See also 96-ORD-135; 97-ORD-66; 97-ORD-132; 01-ORD-143. Because the disputed records do not satisfy the first of these three requirements, KRS 61.878(1)(c)1. is inapposite, and the Princeton Electric Plant Board's reliance upon it is misplaced.
This position was confirmed in a decision issued on August 30, 2001. In 01-ORD-143, this office rejected, in part, the University of Kentucky's reliance on KRS 61.878(1)(c)1. as the basis for denying an open records request for records compiled by its Livestock Disease Diagnostic Center relating to Mare Reproductive Loss Syndrome. There we held that the necropsy report prepared by the Center was the Center's own record, and not a record confidentially disclosed to it. We likened the report to the financial and operational records at issue in 97-ORD-66, and the minutes of agency meetings at issue in 01-ORD-87. Here, as in 01-ORD-143, we apply the rule of strict statutory construction codified at KRS 61.871, and, guided by the recognition that "statutes enacted for the public benefit must be interpreted most favorably to the public,"
Board of Public Instruction v. Doran, Fla., 224 So.2d 693 (1969) cited with approval in
Courier-Journal and Louisville Times v. University of Louisville Board of Trustees, Ky., 569 S.W.2d 374 (1979), we conclude that the Plant Board violated the Open Records Act in partially denying Mr. Hollis' requests.
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 proceedings.
Eric E. BreisachFleischman and Walsh, L.L.P.950 N. 10th Street, Suite 200Kalamazoo, MI 49009
John HumphriesGeneral ManagerPrinceton Electric Plant Board304 E. Legion DriveP.O. Box 608Princeton, KY 42445
Todd WetzelAttorney at LawP. O. Box 644Princeton, KY 42445
Footnotes
Footnotes
1 Mr. Hollis requested copies of seven additional categories of records, but does not appeal the Plant Board's disposition of these requests.
2 At page 319 of that opinion, the Court observed:
The records submitted to the Parks Department include information on asset values, notes payable, rental amounts on houseboats, related party transactions, profit margins, net earnings, and capital income. These are records of privately owned marina operators, disclosure of which would unfairly advantage competing operators. The most obvious disadvantage may be the ability to ascertain the economic status of the entities without the hurdles systematically associated with acquisition of such information about privately owned organizations.
3 In Hoy, above, the Court found:
The financial information required to be submitted by GE in its application to KIRA detailed the company's business and revitalization project. Under administrative regulations adopted by KIRA, such information included a financial history of the corporation, projected cost of the project, the specific amount and timing of capital investment, copies of financial statements and a detailed description of the company's productivity, efficiency and financial stability . . . . It does not take a degree in finance to recognize that such information concerning the inner workings of a corporation is "generally recognized as confidential or proprietary" and falls within the wording of KRS 61.878(1)(c)(2).
4 Recognizing that records of a private health insurer acquired by Department of Insurance in rate proceedings were proprietary, the Court concluded, "If it is established that a document is confidential or proprietary and that disclosure to competitors would give them substantially more than a trivial unfair advantage, the document should be protected from disclosure . . . ." Hughes at 199.