Opinion
Opinion By: Jack Conway, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
At issue in this appeal is whether Tri-County Electric Membership Corporation violated the Kentucky Open Records Act in the disposition of Trustee Dave Gholson's December 1, 2010, and December 20, 2010, requests for the "maintenance history for the years 2009 and 2010 concerning any Tri-County Electric equipment located on the [First United Methodist Church in Scottsville, Kentucky] property," any "records of maintenance and repair during the month[s] of April, May and October, 2010 for work performed on the power service that connects [namely, 'outage reports and service orders']" to FUMC, any "records for the months of April, May and October, 2010 that reflect[] any voltage irregularities for the above branch line," and "all reports, notes and evidence of [the Tri-County] investigation and the name of the Tri-County employee/employees who interviewed the elevator technician" on October 14, 2010. More precisely, the determinative question presented is whether Tri-County, a private, non-profit corporation headquartered in Tennessee, can be properly characterized as a "public agency" for purposes of the Kentucky Open Records Act. Because the limited evidence presented, as well as independent research of publicly available tax information, confirms that none of Tri-County's funding is derived from state or local authorities, this office finds that Tri-County is not a "public agency" within the meaning of KRS 61.870(1)(h). Nor does it otherwise qualify as a "public agency" under KRS 61.870(1); accordingly, Tri-County is not subject to, and therefore cannot be said to have violated the provisions of the Act.
In a timely written response, Director of Operations Ralph Law responded to Mr. Gholson's December 1 request, providing him with some documentation but advising that Tri-County's "investigation found the air condition[ing] had failed from a bad bearing which main purpose [sic] was to protect the elevator equipment from overheating. . . . [Tri-County] concluded this was the cause for [the] malfunction of the elevator. Other equipment in the church was connected to the same power source and did not incur damage[]." By letter dated December 20, 2010, Mr. Gholson resubmitted his request, emphasizing that Tri-County had provided "an Incident/Loss report for 10-26 and Outage Reports for 6-3 and 11-16 and 12-5, which were not requested." Mr. Law subsequently provided Mr. Gholson with "copies of the requested service orders relative to [FUMC] for the month of October 2010" and requested "copies of the data used by Elevator Controls Corporation's staff to reach their conclusion." Mr. Law also explained that Tri-County "has absolutely no evidence to support the claim that any action we have taken resulted in damage to property at [FUMC]." By undated letter, which this office received on February 24, 2011, Mr. Gholson initiated this appeal, requesting this office to determine whether Tri-County is a public agency under the Kentucky Open Records Act and, if so, whether his requests were "proper in terms of clarity."
Upon receiving notification of Mr. Gholson's appeal from this office, Ken Witcher, counsel for Tri-County, responded on behalf of his client, simply advising that Tri-County "is a Tennessee corporation. Tri-County is not a 'public agency' under either Tennessee law or Kentucky law and it is, therefore, not subject to the Kentucky Open Records Act. " 1 Unable to conclusively resolve the threshold question of whether Tri-County is a "public agency" for purposes of the Kentucky Open Records Act given the lack of supporting documentation or explanation, the undersigned counsel asked Mr. Witcher to supplement his response in accordance with KRS 61.880(2)(c) and 40 KAR 1:030, Section 3. More specifically, this office requested that Mr. Witcher advise whether Tri-County "derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds." KRS 61.870(1)(h). 2 This office also requested that Mr. Witcher "please include any financial documentation that would support the conclusion that Tri-County is not a 'public agency' within the meaning of KRS 61.870(1)(h)."
By letter dated March 14, 2011, Mr. Witcher advised that Tri-County "does not derive at least 25% of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds." In support of this position, Mr. Witcher provided "a copy of three pages from Tri-County's most recent annual audit." Page 5 of the Audit Report, Mr. Witcher explained, "is the Balance Sheet which shows notes payable of $ 26,241,678." Page 12 of the Report, he continued, "has the breakdown of that long term debt which shows the various sources of Tri-County's loan funds." Because none of those long-term debt funds came from state or local authorities, Mr. Witcher asserted that Tri-County is not a "public agency" within the meaning of KRS 61.870(1)(h).
A review of the sections of the "Balance Sheets" and the "Notes to Financial Statements" provided, in short, confirms that Tri-County's "long-term debt," which does, in fact, equal the amount identified as "notes payable, " is to either private or federal entities, 3 from which Mr. Witcher presumably intended for us to infer that none of its funding is derived from state or local authorities. Having independently located tax information which enabled us to further confirm that not only are the funds characterized as "long-term debt" not derived from state or local authorities, but none of Tri-County's funding is derived therefrom, this office concludes that Tri-County is not a "public agency" within the meaning of KRS 61.870(1)(h).
In relevant part, KRS 61.872(1) provides that "[a]ll public records shall be open for inspection by any person . . . and suitable facilities shall be made available by each public agency for the exercise of this right." Pursuant to KRS 61.870(2), "public record" means:
all books, papers, maps, photographs, cards, tapes, 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. "Public record" shall not include any records owned or maintained by or for a body referred to in subsection (1)(h) of this section that are not related to functions, activities, programs, or operations funded by state or local authority.
Resolution of the question presented, as previously indicated, turns on whether Tri-County is a public agency within the meaning of KRS 61.870(1), which broadly defines public agency to include:
(a) Every state or local government officer;
(b) Every state or local government department, division, bureau, board, commission, and authority;
(c) Every state or local legislative board, commission, committee, and officer;
(d) Every county and city governing body, council, school district board, special district board, and municipal corporation;
(e) Every state or local court or judicial agency;
(f) 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;
(g) Any body created by state or local authority in any branch of government;
(h) Any body which derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds;
(i) Any entity where the majority of its governing body is appointed by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (j), or (k) of this subsection; by a member or employee of such a public agency; or by any combination thereof;
(j) Any board, commission, committee, subcommittee, ad hoc committee, advisory committee, council, or agency, except for a committee of a hospital medical staff, established, created, and controlled by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (k) of this subsection; and
(k) Any interagency body of two (2) or more public agencies here each public agency is defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (j) of this subsection[.]
Despite the expansive language of these provisions, which operate in tandem, and the clearly expressed legislative intent that the Open Records Act must be strictly construed so as to ensure the broadest possible access to public records, 4 the Attorney General has recognized, on a number of occasions, that a private, non-profit corporation is not a public agency for purposes of the Open Records Act unless it "derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds." KRS 61.870(1) as construed in OAG 81-377; OAG 82-216; OAG 84-237; OAG 88-61; 92-ORD-1114; 94-ORD-98; 96-ORD-99; 99-ORD-65; 06-ORD-162; 09-ORD-042; 09-ORD-083; 11-ORD-021.
It is readily apparent that Tri-County does not qualify as a public agency under KRS 61.870(1)(a), (b), (c), (d), (e), (f), (g), (j), or (k). Likewise, 61.870(1)(i) is facially inapplicable given that Tri-County's governing body is not appointed by a public agency. Though not dispositive standing alone, information publicly available on the website of the Kentucky Secretary of State (http://www.sos.ky.gov)) reveals that Tri-County is a "Non-profit, " "Foreign Corporation," with "Active" status that is currently in "Good" standing. Its principal office is located in Lafayette, Tennessee. Tri-County also has a registered agent, files annual reports, and has a board of directors. By all conventional indications, in other words, Tri-County is a private corporation that is not subject to the Open Records Act. KRS 61.870(1)(h) is the only definitional provision which is potentially applicable on the facts presented.
When, as here, evidence is introduced that an otherwise private corporation receives less than 25% of its funds from state or local authorities, the Attorney General has consistently held that it cannot be properly characterized as a public agency. 93-ORD-90; 96-ORD-127; 09-ORD-083. In this case, legal counsel for Tri-County ultimately provided this office with selective financial documentation from the 2009-2010 fiscal year establishing that all of its long-term debt was owed to federal or private entities and none was owed to state or local authorities. To confirm that Tri-County does not derive any of its funding from state or local authorities, this office independently located publicly available tax information, a review of which further confirmed that Tri-County did not receive any state or local grants or loans during the relevant time frame nor was Tri-County indebted to any state or local authorities. The majority of its revenue is derived from service fees paid by members. Inasmuch as Tri-County does not derive any of its funding from state or local authorities, the remainder of the KRS 61.870(1)(h) inquiry, relating to how much Tri-County expends in the Commonwealth of Kentucky, is rendered moot. Given this determination, Tri-County cannot be properly characterized as a "public agency" within the meaning of KRS 61.870(1)(h), and is therefore not subject to, and cannot be said to have violated the provisions of the Kentucky Open Records Act.
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.
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