Opinion
Opinion By: Jack Conway, Attorney General; Amye L. Bensenhaver, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Campbell County Fiscal Court violated the Open Records Act in denying Kevin J. Gordon's July 16, 2012, request for a copy "of the report(s) that provide the basis for the $ 5,400,000 (approx.) estimate for the renovation of Lakeside Terrace Apartments." 1 Because the sale of the apartments had not been finalized at the time of Mr. Gordon's request, we affirm the fiscal court's decision to withhold the report on the basis of KRS 61.878(1)(i) and (j).
On July 19, 2012, the Campbell County Fiscal Court notified Mr. Gordon that no final action had been taken on the requested report and that his request was therefore denied pursuant to KRS 61.878(1)(i) authorizing nondisclosure of, among other things, "preliminary drafts." Shortly thereafter, Mr. Gordon requested that the fiscal court reconsider its position in light of the fact that the report(s) " have resulted in certain final actions by Judge Executive Pendery and County Administrator Horine," including the decision to provide "year-ahead notice . . . of the intention to end a site-based Section 8 low-income housing voucher for residents, " the decision to terminate the county's contract with the Kentucky Housing Corporation and thus "giv[e] the county flexibility to consider other options for the building's future," and the decision to "stop[] taking applications for Lakeside Terrace residents. " (Emphasis in original.)
The fiscal court promptly denied Mr. Gordon's request for reconsideration, explaining:
The report was prepared for negotiations of the sale of the Lakeside Terrace Apartments. The sale of the property is not complete. There is no contract for the sale of the property and the County has not made a final decision. After the final action has occurred, the report will be made available for public inspection. The report you have requested is exempt from inspection pursuant to KRS 61.878(1)(i) which exempts preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of a final action of a public agency.
Mr. Gordon subsequently initiated this appeal.
In correspondence directed to this office following receipt of notification of Mr. Gordon's appeal the fiscal court amplified on its earlier statement:
The report in question was prepared for a potential purchaser with the acquiescence of the County and presented opinions on the costs to renovate the Lakeside Terrace Apartments for the purpose of negotiating a sales price for the facility. However, to date, no offer to purchase or sell has been entered into nor any final determination has been made to sell or not to sell the property. At this point, the County considers the report to be opinions and recommendations for the refurbishing of the apartment complex. Should this sale not be consummated with the current prospective buyer, the premature release of this report will have a detrimental effect of attempting to develop interest from other potential purchasers. The County could suffer irreparable injury by a premature release of this report.
The fiscal court asked the Attorney General to affirm its position on the basis of KRS 61.878(1)(i) and (j) 2 and referenced open records decisions construing these exceptions. Additionally, the fiscal court asked the Attorney General to extend continuing protection to the report, 3 pursuant to KRS 61.878(1)(j), "whether or not a sale is consummated. " 4
To facilitate review of the issues on appeal, the Attorney General requested additional information from the fiscal court pursuant to KRS 61.880(2)(c). 5 In response to questions concerning the fiscal court's "acquiescence" in, and financial responsibility for, the report, as well as contemplated "final action" relative to the report, the fiscal court advised:
The fiscal court through its Administrator, Robert Horine, was requested by the potential buyer to allow an inspection of the property as part of the buyer's due diligence in determining a fair price to acquire the property. The fiscal court authorized the potential buyer to have full access to the property, including removal of bricks on a wall, to perform a structural inspection. Had the fiscal court not consented to the inspection of the property the reports could not have been prepared and the potential purchaser would probably have not considered a purchase of the property. The reports in question were prepared from this authorized inspection and the fiscal court was provided copies of the reports for its review in assessing the fair market value of the property. In essence, the reports were prepared both for the benefit of the fiscal court and the potential buyer. The fiscal court did not pay for the reports and can only assume that the potential buyer paid any consideration for the reports.
. . .
Because the reports were obtained for purposes of assessing the value of the property for its sale, and for no other purpose, the "final action" by the fiscal court will be a vote approving the sale of Lakeside Terrace.
Responding to our request that it amplify on its stated belief that "premature release of this report will have a detrimental effect on . . . other potential purchasers, " should the sale with the current prospective buyer not be consummated, the fiscal court explained:
The public dissemination of the reports will create the effect that this property is a dinosaur and deter interest in the property. The fiscal court will not have the ability to attract other purchasers if the reports are published before a potential purchaser has the opportunity to assess the property on their own. At this time, the fiscal court does not concede that the report is accurate, but the public disclosure will have the effect that the fiscal court does adopt the reports as accurate. No owner trying to sell property would want such a negative report published in the public before a potential buyer has the opportunity to inspect the property and determine if the property has value to them notwithstanding the needed repairs.
Our review of the disputed report, obtained under authority of KRS 61.880(2)(c), confirms the fiscal court's position.
We find that the report that "provide[s] the basis for the $ 5,400,000 . . . estimate for the renovation of Lakeside Terrace Apartments" is a preliminary document within the meaning and scope of KRS 61.878(1)(i) and (j). In so holding, we are guided by the legislative statement of policy codified at KRS 61.871, declaring that "free and open examination of public records is in the public interest and the exceptions provided for by KRS 61.878 or otherwise provided by law shall be strictly construed, " as well as by the Kentucky Supreme Court's holding in
Board of Examiners of Psychologists v. Courier-Journal, 826 S.W.2d 324, 327 (Ky. 1992), that the Open Records Act "exhibits a general bias favoring disclosure. " Nevertheless, we are fully cognizant of that fact that:
[d]espite its manifest intention to enact a disclosure statute, the General Assembly determined that certain public records should be excluded from disclosure. Among such records are . . . "Preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency; " and "Preliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated are recommended. " KRS 61.878(1)[(i) - (j)]. From these exclusions we must conclude that with respect to certain records, the General Assembly has determined that the public's right to know is subservient to . . . the need for governmental confidentiality.
Beckham v. Board of Education of Jefferson County, 873 S.W.2d 575, 577-578 (Ky. 1994); see also,
Courier-Journal and Louisville Times Co. v. Jones, 895 S.W.2d 6, 8 (Ky. App. 1995) (recognizing that "the concept of governmental confidentiality has not been totally diluted by the Open Records Act" ).
Guided by these principles, as well as an evolving body of case law, the Attorney General has long recognized that public records that are preliminary in nature forfeit their exempt status only after they are adopted by the agency as part of its final action.
City of Louisville v. Courier-Journal and Louisville Time, 637 S.W.2d 658 (Ky. App. 1982);
Kentucky State Board of Medical Licensure v. Courier-Journal and Louisville Times Co., 663 S.W.2d 953 (Ky. App. 1983);
University of Kentucky v. Courier-Journal and Louisville Times Co., 830 S.W.2d 373 (Ky. 1992);
Baker v. Jones, 199 S.W.3d 749 (Ky. App. 2006). Mr. Gordon asserts that in this case final action occurred when the fiscal court approved a resolution declaring the intent to close Lakeside Terrace Apartments, if not before. We disagree and find instead that final action will occur when the sale of the property is approved by the fiscal court. Until such time, the report is shielded from disclosure by KRS 61.878(1)(i) and (j).
In its supplemental response to Mr. Gordon's appeal, the fiscal court cites a number of past decisions of this office affirming nondisclosure of draft documents and preliminary memoranda in which opinions are expressed or policies formulated or recommended. In some instances, these open records decisions involved reports and analyses prepared by outside agencies, as well as outside consultants, on behalf of a public agency. These decisions are summarized in 93-ORD-125. At pages 6 and 7 of that decision, we observed:
[I]n OAG 82-450, we held that a "Development Potential Analysis" prepared for Jefferson County by the Real Estate Research Corporation was exempt from public inspection under KRS 61.878(1)(j). At page 2 of that opinion we held:
Similarly, in OAG 84-337, we held that a completed report of SRI International of Menlo Park, California, on plans for future economic development in Louisville was excluded from public inspection because it contained opinion and recommendations which the public agency could accept or disregard in taking final action. In OAG 85-96, we reached the same conclusion, holding that a feasibility report on the construction of a high-rise office building prepared by Coldwell Realty under a contract with the City of Louisville could properly be withheld pursuant to KRS 61.878(1)(j) since it was preliminary in nature, "setting forth opinions and recommendations for review and consideration by the city." OAG 85-96, at p. 3. Finally, in OAG 88-60, we held that a public official properly denied a request to inspect a draft audit prepared by the E.P.A. and sent to the City of Owensboro, pursuant to KRS 61.878(1)(i) and (j), insofar as the audit was a preliminary report containing opinions and observations.
With specific reference to the question before us in 93-ORD-125, we observed:
Contrary to [the] assertion that the courts and this office have applied these exceptions only to internal preliminary investigative materials, this Office has recognized that the rationale underlying the exceptions is equally compelling regardless of whether the communications are within an agency or between agencies. While we acknowledge that the exceptions to the Open Records Law must be strictly construed to facilitate the widest possible dissemination of public records, we believe that [the proposed] construction of KRS 61.878(1)(i) and (j) is unduly narrow and inconsistent with a long line of opinions issued by this Office.
93-ORD-125, p. 7, 8; see also 96-ORD-38 (report prepared by a private attorney retained by the City of Louisville evaluating the Louisville Policemen's Retirement Fund and submitting recommendations) ; 96-ORD-121 and 96-ORD-122 (study prepared by an outside consultant hired by the Hardin County Schools examining the organizational and pay structure of administrators, classified staff, and teachers); 98-ORD-70 (analysis prepared by a private corporation under contract with the Transportation Cabinet evaluating alternative for the design of a connector road); and 08-ORD-46 (presidential performance review prepared by an outside consultant for Kentucky State University). In each of these cases, the Attorney General affirmed agency denial of an open records request for the report, study, or analysis, notwithstanding the fact that they were prepared by an outside agency or consultant, because no final action had taken place at the time the open records request was made.
With respect to the appeal before us, the record reflects a series of events leading up to the decision to close Lakeside Terrace Apartments. The report at issue, however, relates only indirectly to that decision insofar as the fiscal court has acknowledged its inability to incur the expense associated with effecting the needed renovations. Rather, it relates directly to the decision to sell the property to a prospective buyer. That buyer procured the report to facilitate assessment of the property's fair market value. Until the fiscal court and the prospective buyer conclude the sale, final action as to the report will not occur. As a draft document consisting largely of opinion and recommendation as to the needed renovations, the report falls squarely within the parameters of KRS 61.878(1)(i) and (j), and the Campbell County Fiscal Court cannot be said to have violated the Open Records Act in denying Mr. Gordon access to it. Accord, 12-ORD-213 (letters of intent to lease office space from public agency are preliminary to negotiation of an actual lease agreement).
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:
Kevin J. GordonMelissa A. WilliamsRobert HorineRobert E. List
Footnotes
Footnotes
1 Mr. Gordon also requested a "list of professionals who provided the estimates for the renovation of Lakeside Terrace Apartments." The fiscal court advised him that no such list exists. Mr. Gordon did not pursue this issue on appeal, and we do not address it.
2 The fiscal court invoked KRS 61.878(1)(j) for the first time in this supplemental response. That provision excludes from public inspection "[p]reliminary recommendations and preliminary memoranda in which opinions are expressed or policies formulated or recommended."
3 This office cannot, of course, commit to a position on the propriety of nondisclosure of the report in the event of future open records appeals involving access to the same document.
4 On September 22, Mr. Gordon notified this office that the fiscal court approved a resolution declaring the intent to close Lakeside Terrace Apartments.
5 KRS 61.880(2)(c) provides:
On the day that the Attorney General renders his decision, he shall mail a copy to the agency and a copy to the person who requested the record in question. The burden of proof in sustaining the action shall rest with the agency, and the Attorney General may request additional documentation from the agency for substantiation. The Attorney General may also request a copy of the records involved but they shall not be disclosed.