Opinion
Opinion By: Albert B. Chandler III, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
This matter comes to the Attorney General as a consolidated open records and open meetings appeal arising from the actions of the Fayette County Rural Land Management Board. The following questions are presented to this office for dispute resolution:
1. Whether the Board violated the Open Records Act in refusing to disclose certain records in its custody.
2. Whether the Board violated the Open Meetings Act in conducting unauthorized closed session discussions.
Having reviewed the record on appeal, and existing authority, we conclude that questions one and two must both be answered in the affirmative.
The first question presented in this appeal is whether the Fayette County Rural Land Management Board violated the Open Records Act in denying Lexington Herald-Leader reporter Mary Meehan's requests for records relating to the Purchase of Development Rights Program the Board oversees. Over a period of time extending from January 2001 to January 2002, Ms. Meehan requested, and was denied access to, various records generated by and for the Board. On appeal, The Herald-Leader challenges the Board's denial of her request for PDR applications. For the reasons that follow, we extend the reasoning found in 99-ORD-220 to the records at issue in this appeal and conclude that the Board improperly denied Ms. Meehan access to the PDR applications.
The second question presented in this appeal is whether the Fayette County Rural Land Management Board violated the Open Meetings Act by excluding the public from meetings at which public business was discussed. Acknowledging that Ms. Meehan did not observe the procedural requirements for initiating an open meetings appeal, The Herald-Leader asserts that the record, on appeal, is nevertheless complete. Because the Board elected to treat Ms. Meehan's February 18, 2002 letter of appeal as an open meetings complaint, without objection, and responded accordingly, we proceed to an analysis of whether the Board properly closed its meeting to discuss the mathematical formula used in making offers to PDR applicants. For the reasons that follow, we find that no statutory authority exists for the closed session discussion.
On January 30, 2001, Ms. Meehan requested access to "[a]ny and all applications and supporting materials submitted by Jan 31, 5 p.m. to the county government and the PDR board as applications for the Purchase of Development Rights Program." In a response dated February 2, 2001, Lexington-Fayette Urban County Government Corporate Counsel Glenda Humphrey George denied Ms. Meehan's request. Ms. George briefly described the Board's function:
Under the terms of Chapter 26 of the Code [of Ordinances] , an owner of agricultural, rural or natural lands within Fayette County may offer to sell a 'conservation easement' in his or its property to the RLMB by filing an 'application.' Pursuant to Code Section 26-11, the Rural Land Staff reviews and prioritizes the applications and then the RLMB determines with whom to begin negotiations since it is not required to follow the exact order of priority established by the Staff. Once a tentative agreement as to the terms of a conservation easement is reached with a property owner, the RLMB will then proceed pursuant to Code Section 26-13(1) to have an appraisal made to determine the conservation easement value. Afterwards, if the property owner and the RLMB reach an agreement as to purchase price, Code Section 26-14(2) authorizes the RLMB to acquire the interest in the real property.
Relying on KRS 61.878(1)(i), authorizing nondisclosure of "correspondence with private individuals," Ms. George asserted that the requested applications "are preliminary until the RLMB processes the applications, determines the priorities, and negotiates a final purchase price with the landowners. " She noted that when final purchase prices have been negotiated, "all applications, not just those resulting in purchases, will be made available for public inspection" subject to the remaining exemptions codified at KRS 61.878.
As additional support for the Board's denial of Ms. Meehan's request, Ms. George invoked KRS 61.878(1)(f), excluding from public inspection "[t]he contents of real estate appraisals . . . made by or for a public agency relative to the acquisition of property, until such time as all of the property has been acquired." She explained that "[b]ecause selected application must go through the appraisal process, the applications are also exempt . . . ." Finally, Ms. George asserted that because the applications were submitted for a grant, they qualify for exclusion under KRS 61.878(1)(c)2.a., relating to records confidentially disclosed to an agency "[i]n conjunction with an application for or the administration of a loan or grant," that are generally recognized as confidential or proprietary. 1
Ms. George responded to a legal opinion prepared by Herald-Leader counsel, Hanly A. Ingram, in which Mr. Ingram concluded that the application must be disclosed based on the reasoning contained in 99-ORD-220 and 97-ORD-1. She stated:
First, in 99-ORD-220, . . . the Attorney General specifically limited that opinion to applications to do business. At pages 5 and 6, the Attorney General stated as follows:
Second, 97-ORD-1 . . . is also distinguishable from our situation. In that opinion, the Attorney General opined that the letters of intent to the PACE board were open for public inspection because the board had read each letter at a public meeting of the PACE board, had voted at that meeting to accept those farms which had sent letters for consideration in the program, and had used the letters in a federal grant application. The Government has already stated that once the RLMB takes final action with respect to its applications, that they will be made available for public inspection, but not before.
Several months later, Ms. Meehan initiated this appeal contesting the Board's position that "it cannot release information on any of the 36 applicants until all deals are finalized," and questioning "how the Board came to determine the process for devising its bid on the properties which have applied to the program. With respect to the latter issue, Ms. Meehan observed:
The ordinance outlining the board's duties define the value of a conservation easement. But in the course of doing business the board appears to have created a new definition, in a closed meeting. The PDR ordinance, which was approved two years ago, states that the value of the easements would be the difference between the Aug. 26, 1998, price of land for 10-acre lots and current land prices for 40-acre lots. Instead of using that formula, the Rural Land Management Board, which oversees the program, used a percentage of the property's value under the assumption that the property was available for development into 10-acre tracts in 1998. Each farmer with more than 40 acres was given two offers, one based on 28 percent of the 1998 value and one for 48 percent of the value. Board Chairman Margaret Graves said in a public meeting on Feb. 7 that figure was determined in a closed session of the board and no vote was taken. She also said there was also no vote taken in a public meeting to determine the new formula. She said it wasn't necessary.
It is this closed meeting, along with the denial of her request for PDR applications, that Ms. Meehan challenges on appeal.
In a supplemental response directed to this office following commencement of Ms. Meehan's appeal, Ms. George described the events that have unfolded since Ms. Meehan's January 2001 request for PDR application. She indicated that offers have been extended, but no contracts of sale have been finalized. She therefore maintained that "the negotiations are still preliminary and documents relating to the applications are exempt from public inspection. "
Denying Ms. Meehan's allegation that the Board improperly conducted a closed session "to develop a new formula to determine the amount to offer the farmers for the conservation easements, " Ms. George argued that a new formula was not adopted, "and the calculations concerning the offer amounts were consistent with Section 26-14(2) . . . ." She defended closed session "review of the initial appraisals and the discussion with the review appraiser to determine the amount to offer each landowner, " and maintained that "the actions taken by the RLMB must be upheld."
Shortly after Ms. George filed her supplemental response on behalf of the Board, Mr. Ingram issued a rebuttal on behalf of The Herald-Leader. With reference to the issue of access to the PDR applications, Mr. Ingram rejected the Board's attempts to distinguish 99-ORD-220 and 97-ORD-1, characterizing the records at issue in the latter decision as "nearly on all fours with the PDR applications," and concluded that these decisions confirm that the applications must be disclosed.
With reference to the second issue, Mr. Ingram conceded that Ms. Meehan did not submit a formal complaint under KRS 61.846(1), but noted that the Board nevertheless addressed the open meetings issue raised in her appeal in its March 7, 2002 response. He therefore asserted that the issue "is ripe for . . . review." Mr. Ingram observed:
Critical to whether the RLMB is fairly, equitably, and properly fulfilling its public duties in the PDR Program is an understanding of how the prices of the easements to be purchased are determined. Generally, the value of the easements is reached by subtracting the value of the land after the development restriction is in place (the "after value") from the value of the land without the development restriction (the "before value"). Two rounds of appraisals were performed to arrive at the easement values - an initial appraisal and a review appraisal.
The City explains that the "before values" were adopted as determined by the initial appraisals. However, the RLMB rejected the "after values" as determined by the initial appraisers. Instead of using these specific "after values," the RLMB adopted a general concept recommended by the review appraisers - mathematical formula to be applied equally to all PDR participants. This formula calculates the "after values" based upon "a 28% diminution in value if the farmers retained their rights to divide their farms into . . . forty acre farms and a 48% diminution in value if the farmers agreed not to divide their farms" at all (the "48%-28% Formula" ). City's March 7, 2002, letter, p. 11. The rejection of the initial appraisers' "after values" and the adoption of the 48%-28% Formula took place in closed session. 2
It was his position that the Board violated the Open Meetings Act by excluding the public from its general discussion of the 48%-28% formula. 3
PDR Applications and Open Records Issues
It is the opinion of this office that none of the cited exemptions authorize nondisclosure of the PDF applications, and that 99-ORD-220 and 97-ORD-1 compel their release. The Board chiefly relies on KRS 61.878(1)(i), authorizing nondisclosure of:
Preliminary drafts, notes, correspondence with private individuals other than correspondence which is intended to give notice of final action of a public agency.
In 00-ORD-168, this office held that KRS 61.878(1)(i), insofar as it extends protection to "correspondence with private individuals," is generally reserved for that narrow category of public records that reflects letters exchanged by private citizens and public agencies or officials under conditions in which the candor of the correspondents depends on assurances of confidentiality." 00-ORD-168, p. 2. Clearly the exception does not extend to "all writings from individuals to a government agency . . . ." OAG 90-142, p. 6. In the latter opinion, the Attorney General concluded:
Writings from private citizens to government agencies are not considered correspondence from private citizens where an agency is expected to rely on the correspondence to take some action, such as to take disciplinary action against a licensee, or enter into a government contract based on bids.
In 99-ORD-220, we applied this reasoning to applications from private entities or individuals to a governmental agency for licenses to do business, modifying OAG 90-142 to the extent that the opinion held that disclosure was mandatory only after final governmental action, and determining that the applications become open records upon submission. Today, we apply this reasoning to applications for the purchase of conservation easements through the Purchase of Development Rights Program, and hold that the applications do not qualify for exclusion from public inspection as correspondence with private individuals pursuant to KRS 61.878(1)(i), but instead become open records upon submission to the Board. We believe that 99-ORD-220, a copy of which is attached hereto and incorporated by reference, is controlling.
In support, we note that in 97-ORD-1 this office held that the Department of Agriculture improperly relied on KRS 61.878(1)(i) in denying a request for letters of interest submitted to the Purchase of Agricultural Conservation Easement Corporation by farm or landowners in lieu of application. Relying on OAG 90-142, we held that because the letters of interest were written with the expectation that PACE would take some action thereon, they could not be withheld as correspondence with private individuals. 97-ORD-1 predates this office's modification of OAG 90-142, relative to the requirement of final action as a precondition to disclosure, and therefore reflects the same flawed reasoning. To this extent, 97-ORD-1 is also modified. Because the letters of interest could not properly be characterized as correspondence with private individuals, "the question of whether final action ha[d] been taken by the agency [became] irrelevant." 99-ORD-220, p. 7. The letters of interest were open records upon submission.
We are aware that our holding in 99-ORD-220 was limited to applications for licenses to do business in the Commonwealth. Expressing concern about the unforeseeable consequences that might flow from a broader holding, we nevertheless left the door ajar for a case by case analysis of the propriety of an agency's invocation of KRS 61.878(1)(i) to justify nondisclosure of correspondence from private individuals that is submitted to a public agency with the expectation that the agency will take some action upon it. Guided by our decision in 97-ORD-1, and the statement of legislative policy codified at KRS 61.871, we conclude that the PDR applications are not exempt from public inspection pursuant to KRS 61.878(1)(i). As The Herald-Leader correctly observes, "there is no meaningful distinction between the PACE letters of interest and the PDR applications because they both express an interest in the purchase of conservation easements under each program." Accordingly, it is not a short step, but no step at all, to this conclusion.
Having concluded that the PDR applications cannot be withheld under KRS 61.878(1)(i), we turn to the question of whether the applications may properly be withheld from public inspection under KRS 61.878(1)(f), because selected applications must go through the appraisal process," and KRS 61.878(1)(c)2.a., because they were submitted in conjunction with the application for a grant. We find these arguments legally unsupportable.
KRS 61.878(1)(f) excludes from public inspection:
The contents of real estate appraisals, engineering or feasibility estimates and evaluations made by or for a public agency relative to acquisition of property, until such time as all of the property has been acquired. The law of eminent domain shall not be affected by this provision.
We find that the Board's reliance on KRS 61.878(1)(f) reflects a liberal construction of the exception that is not warranted by its express language or the weight of legal authority construing it. We adopt in full the reasoning set forth in 98-ORD-175, as it relates to the limited scope of this exception. A copy of that decision is attached hereto and incorporated by reference. It is apparent that the PDR applications were submitted prior to, rather than as an integral part of, the appraisal process. Based on the authorities cited in 98-ORD-175, we find the Board's argument unpersuasive.
Similarly, we are not persuaded that KRS 61.878(1)(c)2.a. authorizes nondisclosure of the applications. That provision authorizes public agencies to withhold:
[R]ecords confidentially disclosed to an agency or required by an agency to be disclosed to it, generally recognized as confidential or proprietary, which are compiled and maintained:
a. In conjunction with an application for or the administration of a loan or grant[.]
There is nothing in the record before us that supports the Board's position that the applications were disclosed to it in confidence, or that the information they contain is generally recognized as confidential or proprietary. Section 26-9 of the ordinance governing the Board, and establishing application procedures, does not provide any assurance of confidentiality. Moreover, much of the information Section 26-9 requires the applicant to submit, such as deeds and lists of liens and encumbrances, is a matter of public record. The Board presents no proof that the remaining information is generally recognized as confidential or proprietary. It is not enough that the applications were submitted in conjunction with an application for a grant. The Board has the burden of establishing that the applications were confidentially disclosed and are generally recognized as confidential or proprietary. KRS 61.880(2)(c); see 99-ORD-99; 00-ORD-117. It has not met this burden of proof. Accordingly, we find that the PDR applications are not exempt from public inspection pursuant to KRS 61.878(1)(f) or (1)(c)2.a., and must be disclosed.
48%-28% Formula and Open Meetings Issues
In her letter of appeal, Ms. Meehan first presented the issue of whether the 48%-28% formula used by the Board in making its offers was improperly discussed and adopted in a closed session. Raising no objection to Ms. Meehan's failure to submit a formal complaint to the presiding officer of the Rural Land Management Board, pursuant to KRS 61.846(1), the Board responded:
Section 26-13 provides that the appraisal methodology be determined by the RLMB with certain guidelines. The RLMB followed those guidelines and relied on the "before" values determined by the initial evaluations. However, it was the opinion of the RLMB that the "after" values determined by the initial appraisals were inadequate and were, therefore, rejected. In order to determine the "after" value, the RLMB considered input from the review appraiser. According to the review appraiser, the "after" value should be calculated on a 28% diminution in value if the farmers retained their rights to divide their farms into smaller forty acre farms and a 48% diminution in value if the farmers agreed not to divide their farms. These percentages were based on the initial appraisal data, the review appraiser's analysis, knowledge and experience and other available information. The review of the initial appraisals and the discussions with the review appraiser to determine the amount to offer each landowner were conducted in closed session.
It was the Board's position that this was not a new formula, but a formula that was consistent with Section 26-14(2) which provides that in determining to purchase a conservation easement on a parcel of land at a specified price, the Board "may consider the application, the report of the rural land staff, any inspection of the parcel of land . . ., appraisals . . , and any additional points awarded pursuant to subsection (1) of this section."
While it may be true that the 48%-28% formula adopted and employed by the Board in calculating the purchase price for the conservation easements is consistent with Section 26-14(2), that section of the ordinance does not expressly prescribe the formula. Some discussion of the formula between the Board and the review appraiser must have occurred to enable the Board to understand why, as opposed to other percentages in value assigned, "the 'after' value should be calculated on a 28% diminution in value if the farmers retained their rights to divide their farms in smaller forty acre farms and a 48% diminution in value if the farmers agreed not to divide their farms. " In its response, the Board acknowledges closed session "discussion with the review appraiser to determine the amount to offer each landowner. " The minutes of the Board's February 7, 2002 meeting reflect that in response to a question from a guest at the meeting, Chair Graves stated that the 48%-28% formula used in making offers "was discussed during a closed session where the Board was considering acquisition of easements . . .," that authority existed for the formula under the ordinance, and that therefore no public discussion or vote on the formula was necessary. We disagree.
In analyzing the propriety of a public agency's conduct under the Open Meetings Act, we are guided by the statement of legislative policy, codified at KRS 61.800, recognizing that "the formation of public policy is public business and shall not be conducted in secret." As a means of implementing this policy, at KRS 61.810 the General Assembly declares:
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 the agency, shall be public meetings, open to the public at all times[.]
Among those meetings which are excepted from the general rule of openness are meetings involving:
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 [.]
KRS 61.810(1)(b). This, along with the other eleven exceptions to the Open Meetings Act, "must [be] narrowly construe[d] and appl[ied] . . . so as to avoid improper or unauthorized closed, executive or secret meetings."
Floyd County Board of Education v. Ratliff, Ky., 955 S.W.2d 921, 923 (1997). Matters properly discussed in closed session under KRS 61.810(1)(b) "must not be expanded to include general discussions of 'everything tangential to the topic.'" Id. at 924.
In construing KRS 61.810(1)(b), the Attorney General has repeatedly observed:
Only when a public agency is discussing a specific piece of property relative to whether the agency will buy or sell that property and the discussion if made public would likely affect the price of that property, can the matter be discussed in closed session. Confidentiality is only permissible when the public interest will be directly affected financially.
OAG 80-530, p. 3. In 01-OMD-45, the Attorney General found that the Hopkins Fiscal Court improperly relied on KRS 61.810(1)(b) in excluding the public from a discussion of cost estimates for the remodeling of a public building, concluding that "[a]lthough similar financial interests might be implicated by public disclosure of the cost estimates for remodeling, the protection afforded by KRS 61.810(1)(b) for discussions of the acquisition or sale of real property does not extend to these discussions expressly or impliedly." 01-OMD-45, p. 6. For this reason, "the public's right to observe the proceeding should not have been abridged." A copy of that decision is attached hereto and incorporated by reference.
The Herald-Leader does not dispute the Board's right to discuss the value assigned to particular properties in closed session under KRS 61.810(1)(b). With respect to the 48%-28% formula, however, The Herald-Leader maintains that "[t]he RLMB adopted a general policy relating to all PDR participants and the public is completely in the dark as to why the policy was adopted." We agree. To the extent that the Board's closed session discussions focused on the formula, as opposed to the formula applied to a particular property, it was improper. No matter how brief the discussion, the protection afforded by KRS 61.810(1)(b) did not extend to it. 00-OMD-113; 02-OMD-79. We therefore find that the Board violated the Open Meetings Act when it discussed the 48%-28% formula, without reference to particular properties, in closed session.
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 61.846(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.
Mary Meehan100 Midland AvenueLexington, KY 40508-1999
Glenda Humphrey GeorgeLexington Fayette Urban County Government200 E. Main StreetLexington, KY 40507
Hanly A. IngramStoll, Keenon & Park300 W. Vine Street, Ste. 2100Lexington, KY 40507
Maner FergusonRural Land Management BoardDudley Square380 South Mill Street, Ste. 1-ILexington, KY 40508-2560
Margaret GravesRural Land Management BoardDudley Square380 South Mill Street, Ste. 1-ILexington, KY 40508-2560
Footnotes
Footnotes
1 Ms. George advanced a fourth argument in support of the Board's denial of Ms. Meehan's request. That argument was premised on OAG 78-11 in which the Attorney General recognized that the transcript of a closed disciplinary hearing involving a police office, conducted pursuant to KRS 61.810(6), now (1)(f), could properly be withheld because "[t]he purpose of holding such a hearing in closed session would be defeated if the agency were required to make public a transcript of the hearing." OAG 78-11, p. 2, 3. We do not believe this opinion can properly be interpreted to authorize nondisclosure of records created outside a closed session, such as the applications, even if the applications are to be discussed in a properly conducted closed session. The holding in OAG 78-11 is consistent with the longstanding position of this office that if a record (minutes) of a closed session are recorded, they need not be disclosed insofar as to do so would defeat the purpose for which the closed session was conducted. See, e.g., OAG 85-136.
2 Mr. Ingram referred to the minutes of the Board's February 7, 2002 meeting at which the propriety of the closed session was discussed:
Mr. Schloss [a guest at the meeting] raised objections to the Board's practice of discussing some issues in closed session. Chair Graves responded that the Board was allowed by Kentucky law to discuss the acquisition of property in closed session. Mr. Schloss also questioned how the Board had arrived at the 48%-28% formula used in making its offers. Chair Graves stated that this was discussed during a closed session where the Board was considering acquisition of easements. She added that there were no minutes of closed sessions. She further noted that the Board does not take formal votes on anything during open sessions. Mr. Schloss asked if it would be appropriate to take a vote on that formula during an open session. Chair Graves replied that the Board is not required to do that. The Board took formal votes with respect to the offers that were made on the properties. Mr. Schloss noted that the Board had established a principle using the 48%-28% formula as a fundamental part of the appraisal process. Chair Graves replied that the Board has the authority to do that pursuant to the Ordinance and it had complied with procedural requirements.
3 Mr. Ingram also noted that the minutes do not contain any reference to the specific exception authorizing the closed session discussions in contravention of KRS 61.815(1)(a). He suggested that the only exception that could "conceivably apply" was KRS 61.810(1)(b).