Opinion
Opinion By: Jack Conway, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether Peel & Holland, Inc. violated the Kentucky Open Records Act in denying John Rogers' October 10, 2011, request for "a list of expenditures of your company, including check number, date, amount and payee for all checks written from January 1, 2011 to August 31, 2011[, including but not limited to], checks written to consultants, salaried individuals and organizations." 1 More precisely, the question presented is whether Peel & Holland, a private, for profit corporation (according to public information accessible on the Kentucky Secretary of State's website) , which is "governed by a Board of Directors and managed by its Officers," and "is not subject to the control of any public agency or official," is a "public agency" within the meaning of KRS 61.870(1). Resolution of this determinative question turns on the application of KRS 61.870(1)(h), as reinterpreted in 09-ORD-033, to Peel & Holland. Based upon the unrefuted evidence of record, which establishes that Peel & Holland did not derive at least twenty-five percent (25%) of the funds it expended in the Commonwealth of Kentucky from state or local authority funds in 2010, nor does it otherwise fall within the parameters of KRS 61.870(1), this office concludes that Peel & Holland is not subject to, and therefore did not violate the provisions of the Open Records Act.
"Public agency" is broadly defined at KRS 61.870(1) in eleven different ways codified at subsections (a)-(k). Despite the expansive language of KRS 61.870(1), its companion, KRS 61.870(2) (broadly defining "public records" ), 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, 2 the Attorney General has recognized, on a number of occasions, that a private corporation, whether not-for-profit or for profit, 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." See KRS 61.870(1) as construed in 97-ORD-114; 99-ORD-65; 05-ORD-012; 06-ORD-162; 09-ORD-033; 09-ORD-042; 09-ORD-083; 11-ORD-021; 11-ORD-040; 11-ORD-142. No evidence has been presented to suggest that Peel & Holland would qualify as a public agency under KRS 61.870(1)(a) , (b), (c), (d), (e), (f), (g), (j), or (k); 3 likewise, 61.870(1)(i) is facially inapplicable given that its governing body is apparently not appointed by a public agency. KRS 61.870(1)(h) is the only subsection that is potentially applicable.
In 09-ORD-033 (Deborah H. Patterson/M.A. Mortenson Company, issued February 19, 2009), the Open Records Decision which culminated in William H. Chilton, III v. M.A. Mortenson Company , 09-CI-02749 (Jefferson Circuit Court-Division Thirteen, November 24, 2009)(holding that KRS 61.870(1)(h) is unconstitutional), 4 this office was asked to determine whether Mortenson, the "Construction Manager-at-Risk" for the Louisville Arena Authority, was a "public agency" within the meaning of KRS 61.870(1)(h). This office adopted the interpretation of KRS 61.878(1)(h) set forth by the appellant, which admittedly represented "a significant departure from prior decisions in which the 'expended by it in the Commonwealth' language was not meaningfully applied." 5 09-ORD-033, p. 6. A copy of that decision is attached hereto and incorporated by reference.
In that appeal, the Attorney General acknowledged that KRS 61.870(1)(h) "lacks specific parameters for analysis, and that this office lacks authority to compel disclosure of documents from 'bodies' disputing their status as public agencies," ultimately concluding, based on the affidavit of Mortenson's Chief Financial Officer, which the appellant presented "insufficient probative evidence to refute, " that Mortenson was not a "public agency" within the meaning of KRS 61.870(1)(h). This office reached the same conclusion based upon the unrefuted affidavit provided on behalf of the "body" whose status was in dispute on several recent occasions. See 09-ORD-083; 09-ORD-085; 09-ORD-096; 10-ORD-113; 11-ORD-109; 11-ORD-142. Most recently, this office concluded that Abel Construction Company, Inc. is not a "public agency" within the meaning of KRS 61.870(1)(h) based upon the unrefuted affidavit of its Vice President and Chief Financial Officer, which confirmed that Abel did not satisfy the 25% threshold of that provision. 11-ORD-191 (In re: John Rogers/Abel Construction Company, Inc., issued November 15, 2011), p. 6. A copy of the latter decision is also enclosed for the parties' reference.
In responding to Mr. Rogers' October 10 request, Peel & Holland advised that it is not a "public agency" within the meaning of KRS 61.870(1)(h) "because it does not derive twenty-five percent (25%) of its funds expended in the Commonwealth of Kentucky from state or local authorities. Actually, the vast majority of funds or revenues derived by Peel & Holland come directly from the multiple insurance companies with whom Peel & Holland has contractual relationships." Upon receiving notification of Mr. Rogers' appeal, Peel & Holland provided this office with an affidavit from its President, Roy Riley. As part of his duties, Mr. Riley attested, he is "well acquainted with the financial and other records of the Corporation" and is "familiar with the annual revenues, financial statements, and other aspects of the Corporation." Mr. Riley further advised that he works "with such matters on a day to day basis," and reviewed same in "the preparation and execution" of his affidavit. Peel & Holland's "predominant source of revenue," Mr. Riley explained, is "commissions from the insurance carriers for whom it acts as agent for various personal, business, and public entity lines of insurance." His review "of the financial records of the Corporation for the year ending December 31, 2010" confirmed that it "derived less than 25% of the funds expended by it directly from state or local authority funds." 6 The record on appeal is devoid of evidence to refute this assertion.
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. 09-ORD-083; 10-ORD-113; 11-ORD-040; 11-ORD-142; 11-ORD-191. Consistent with prior decisions applying KRS 61.870(1)(h), as reinterpreted in 09-ORD-033, "the Attorney General finds that [Peel & Holland] is not a 'public agency' within the meaning of KRS 61.870(1)(h), and its records are not accessible under the Open Records Act, inasmuch as [it] apparently does not derive at least '25% of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds.'" 09-ORD-033, p. 10. Consideration of the substantive arguments raised in support of its denial is therefore unwarranted.
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.
Distributed to:
John RogersG. Eric LongJames L. Deckard
Footnotes
Footnotes