15-OMD-114
July 1, 2015
In re: Freddie Travis/Glasgow Independent School Board
Summary: Glasgow Independent School Board failed to establish that the value of property would be affected by discussing an offer of donation in open session, and further violated the Open Meetings Act by discussing the renaming of an elementary school during a closed session pursuant to KRS 61.810(1)(b).
Open Meetings Decision
The question presented in this appeal is whether the Glasgow Independent School Board violated provisions of the Open Meetings Act when, on March 30, 2015, it went into executive session pursuant to KRS 61.810(1)(b) to discuss the future acquisition of real property, and subsequently in closed session discussed changing the name of a school. For the reasons that follow, we find that the Board members’ actions contravened the Act.
In a complaint dated May 19, 2015, addressed to Board Chair Dr. Amelia Kiser, Freddie Travis alleged that the Glasgow Independent School Board unlawfully entered a closed session at its meeting on March 30, 2015, pursuant to KRS 61.810(1)(b), to discuss the acceptance of a donation of real property, and while in closed session discussed changing the name of South Green Elementary School to Reddy Elementary. He further alleged that the intended name change, which had been presented by the donor of the property as a condition placed upon the donation, was never mentioned in open session at the March 30 meeting, as attested by the entry in the meeting minutes:
Item IV. (1) Motion to accept an offer of property by Doctors Narasimha and Sreeja Reddy Family to donate what is formerly known as the “Foster Property”, a 6 acre parcel adjacent to South Green Elementary and further direct Board Chair Dr. Amelia Kiser to execute all legal documents; passed with a motion by Mr. Leigh Lessenberry and a second by Dr. Alison Campbell.
As a remedy, Mr. Travis proposed that the board discuss all relevant matters “in an open and public session.” The record does not reflect when the complaint was mailed or received.
On May 26, 2015, Dr. Kiser responded to Mr. Travis’ complaint, denying any violation of the Open Meetings Act. She stated in substantial part:
On March 25, 2015, Dr. Narasimha Reddy and Dr. A. Sreejaya Reddy, acting on behalf of Reddy Farms, LLC, executed a proposed Real Estate Agreement setting forth the terms and conditions required for the donation of real estate to the Glasgow Board of Education. The proposed agreement provided that a material term of the consideration for the donation was the renaming of South Green Elementary. In the event the offer of donation by the Reddy family had not been accepted, the Board would have been required to attempt to acquire the real estate by purchase or otherwise forfeit the opportunity to acquire the real estate.
Aside from the careful consideration of the offer of donation, the name change condition set forth in the Real Estate Agreement and the value of the real estate to the District, no action was taken by the Board in closed session. In an open and public session conducted subsequent to the closed session, the Board voted unanimously to accept the donation of the real estate.
The real estate agreement, including the terms and conditions of the donation, and the deed have been recorded in the office of the Barren County Clerk. Subsequent to accepting the donation of real estate, a public comment session was placed on the Board Meeting agenda. Members of the public were given the opportunity to address the Board with regard to the real estate donation by the Reddy family. …
….
The Board appropriately considered, discussed and deliberated in closed session with regard to the acquisition of real estate from the Reddy family because the publicity associated with a public discussion would have likely affected the value and cost of the real estate to the Board. The public ridicule directed to the Reddy family by you and others confirms that this proposed donation would have likely been withdrawn or otherwise would have affected the value of the real estate if the Board had failed to go into closed session pursuant to KRS 61.810(1)(b).
Mr. Travis initiated an appeal to this office on June 9, 2015.
On June 17, 2015, board attorney Thomas W. Davis responded to Mr. Travis’ appeal. He states that “numerous communications” occurred between board counsel and Dr. Narasimha Reddy or his representatives in the months leading up to the March 25, 2015, Real Estate Agreement, followed by the March 30 meeting:
The Board entered into closed session for discussion on the future acquisition of real property by a public agency pursuant to KRS 61.810(1)(b). The terms and conditions of the donation, including the name change provision was set forth in a proposed Real Estate Agreement. … The terms and conditions were presented and explained by the Board Attorney. The Board carefully deliberated, considered and discussed the terms set forth in the proposed Real Estate Agreement. No action was taken by the Board during this closed session.
…. During the open session, a Motion was made by Wade Stone to accept an offer of property by the Doctors Narasimha and Sreejaya Reddy Family to donate what was formerly known as the “Foster Property”, a 6 acre parcel adjacent to South Green Elementary and further direct Board Chair Dr. Amelia Kiser to execute all legal documents. Upon second by Leigh Lessenberry, this motion unanimously passed. …
On Wednesday, April 1, 2015, Superintendent Sean Howard and two board members, Amelia Kiser and Allison Campbell, met with the Principal, teachers and staff in the media center at South Green Elementary. … Mr. Howard advised those in attendance that the Board had voted to accept the offer to convey the Foster property to the Board by the Reddy Family. The Daily Times described the meeting as intense. “Several teachers at SGE School voiced dismay about a decision to rename the school during a sometimes-intense meeting Wednesday morning with Glasgow Independent School officials, who said the change is stipulated in an agreement.” …
….
The agenda for the April 21, 2015 of the Glasgow Board of Education afforded members of the public an opportunity to comment and address the Board with regard to the acquisition of the Foster property and the school name change. …
Mr. Davis advises that on April 2, 2015, the board sought approval from the Kentucky Department of Education for acquisition of the property, and approval was granted on April 30. The Real Estate Agreement and the deed were recorded in the office of the Barren County Clerk on May 12, 2015.
KRS 61.810(1)(b) allows the following to occur in a closed session:
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[.]
Mr. Travis argues that this subsection cannot apply in the case of real property that is donated to the public agency. We do not agree with this construction, since we recognize that circumstances may exist in which an “acquisition” of property by donation could meet the requirements of subsection (1)(b). In this case, however, such circumstances have not been shown to exist; furthermore, the board discussed the additional matter of renaming the elementary school.
The board offers the following justification for the discussions held in the closed session:
The disclosure of the identity of real estate during deliberations and prior to the acquisition of the subject real estate by a public agency would allow a third party to potentially purchase or acquire an option to purchase the real estate. If identification of the real estate were to occur prior to actual acquisition, the public agency could forfeit the opportunity to acquire the real estate or otherwise be required to pay more to acquire the real estate from an intervening third party. …
….
In the event that the identity of the Reddy real estate had been made public at an open meeting prior to acquisition of the real estate, the publicity and attendant information could have been utilized by a third party to purchase the subject real estate. Likewise, if the insults and public ridicule directed to the Reddy Family had occurred prior to the acquisition, the Reddy Family may have withdrawn the offer to donate and convey the real estate. Accordingly, the cost of the real estate to the Board could have been adversely impacted by failing to deliberate and consider the terms and conditions of the real estate acquisition in a closed session pursuant to KRS 61.810(1)(b).
There are two distinct but interrelated issues in this appeal: whether the discussion of the property donation was properly held in closed session, and whether renaming the school could be discussed in closed session.
KRS 61.810(1)(b) does not lend itself to an interpretation that all property acquisitions are subject to the exception. The severely limiting language “but only when” denotes that the following clause (“publicity would be likely to affect the value of a specific piece of property”) is not merely explanatory, but rather requires the public agency invoking the subsection to satisfy a certain burden of proof. The fact that the school district might have had to look for another solution to its overcrowding problem if this agreement fell through does not satisfy the agency’s burden of showing a direct effect of publicity on the value of this “specific piece of property.”
There is nothing in the record to indicate that the value of the Foster property would have been affected by an open discussion of the donation offer made by the Reddy family. There is no suggestion that the Reddy family intended to place the property on the market for sale or would even have considered an offer of purchase at that time. On the contrary, Dr. Narasimha Reddy was quoted as saying that the motive for donating the property was the family’s appreciation of the education received from the Glasgow schools:
In a telephone interview[, Dr.] Reddy said … his family is giving the property to the district because his daughters got their start at the school and have gone on to be successful.
“They are products of Glasgow school system, so I have always thought highly of it,” Reddy said.
He has owned the property near South Green for about 20 years and has noticed the school system is dealing with overcrowding.
“I’m giving it for the kids,” Reddy said, adding that the school will have access to an extra road behind the school and room to grow in years to come.
He said there will always be people on both sides of an issue, but that it doesn’t bother him because he knows his family is making a gift to the community that has been so kind to him.
“I’m doing it with a good heart, a good feeling about it,” he said.1
(Emphasis added.) These statements not only fail to imply that the Reddy family was considering a sale of the property to other parties, but also contradict the board’s suggestion that an open airing of disagreements over the renaming of the school prior to accepting the offer would have changed the family’s mind about the donation. As in 95-OMD-57 (where an existing memorandum of understanding fixed the purchase price), we conclude that “[a] public discussion … would have no effect on prices of the property in question.” Accordingly, we find that the board has not established the existence of the circumstances required by KRS 61.810(1)(b) to conduct a closed discussion of the property donation.
We additionally find that the board improperly discussed changing the name of the elementary school in closed session. Mr. Davis argues that “[n]o referendum is required” to change the name of a school. Nonetheless, a public meeting is required by KRS 61.810(1): “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,” subject to the statutory exceptions. Furthermore, KRS 61.800 declares that “the formation of public policy is public business and shall not be conducted in secret and the exceptions provided for by KRS 61.810 or otherwise provided for by law shall be strictly construed.” 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 Bd. of Education v. Ratliff, 955 S.W.2d 921, 923 (Ky. 1997).
Even had the circumstances been present to permit the donation of property to be discussed in closed session, KRS 61.810(1)(b) would not extend to the discussion of renaming a school, even if stated as a “condition” by the donor. It is not difficult to imagine any variety of items of public business that could be shielded from public knowledge, if subsection (1)(b) were allowed to operate in this manner, merely by their being proposed as conditions on a property donation: to take two potential examples, the creation of a new staff position or the renewal of a personal service contract. There would be no limit to such secret “conditions” under a subsection that exists essentially to protect the financial details of public land transactions from premature disclosure.
Additionally, we note that the board in this case did not even mention the “condition” when it came out of closed session and voted to accept the donation. From the record, it appears that the name change to Reddy Elementary was only announced the next day. This type of secrecy is not the manner in which the Open Meetings Act requires public business to be conducted. The board’s failure to mention the renaming of the school prior to the vote further diminishes the credibility of its argument that the sole purpose of the closed session was to protect the value of the property.
Our conclusion today is distinguished from 00-OMD-64, in which the Henderson City Commission’s purchase of a building had been made conditional on the city’s payment of utilities and a related issue of lease payments also existed. “Confidentiality is only permissible when the public interest will be directly affected financially.” OAG 80-350 (emphasis added). Utilities and lease payments could be discussed in closed session in 00-OMD-64 because they were monetary factors in the transaction which “related specifically to the net value or price of the property.” In this case, there were no financial details affecting the value of the property, but merely a non-financial executory condition which properly constituted a separate item of public business. If renaming the school was regarded the “purchase price” of the property, it was a price no other purchaser could have matched.
Since the Glasgow Independent School Board has not shown that the monetary value of the property in question would have been directly affected by a closed session, we find that it improperly relied upon KRS 61.810(1)(b). Furthermore, the board could not lawfully discuss the renaming of a school in the closed session, as this was a non-financial matter the discussion of which could not properly be shielded from public scrutiny by KRS 61.810(1)(b).
A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to 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.
Jack Conway
Attorney General
James M. Herrick
Assistant Attorney General
#228
Distributed to:
Mr. Freddie Travis
Dr. Amelia Kiser
D. Sean Howard, Superintendent
Thomas W. Davis, Esq.
[1] “What’s in a name? Some South Green Elementary teachers unhappy about change,” Glasgow Daily Times, April 1, 2015 (online version) (copy included with Mr. Travis’ appeal).