Opinion
Opinion By: Andy Beshear,Attorney General;James M. Herrick,Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the City of Jeffersontown violated the Open Records Act in its response to a request dated March 12, 2018, on behalf of the website ConstructionMonitor.com ("Construction Monitor") for "a report of ALL issued building permit information for Residential & Commercial Properties [from] 01/01/2018 to 02/28/2018." For the reasons stated below, we find that the city lawfully required a certification as to Construction Monitor's commercial purpose, but attempted to charge improper fees and impose unauthorized conditions on access to public records.
Construction Monitor is a business offering a paid service whereby participants in the construction industry can obtain information on building and solar permits, including "key project data to help building professionals, general contractors, subcontractors and suppliers to better target and reach new customers." 1 Construction Monitor's request to the City of Jeffersontown, made under the name of Cheryl Mount, asked for a report of building permits for January and February 2018, "to Include if Possible: Permit #'s and Dates, Site Addresses, Valuation of Jobs, Description of Work Being Done, Contractor Information & Owner Name." On March 27, 2018, 2 the city replied with a request for "compliance" as follows:
In accordance with KRS 61.874(4), you must provide us with a certified statement describing with specificity the commercial purpose for which the requested information will be used. Please be advised that we will require execution of a contract, and prepayment of a minimum fee of $ 5,000.00, prior to determining whether we even have responsive records . Mandatory terms of the agreement will include, but be not limited to, acknowledgement of our right to audit your books and records to insure that the public's records are used for lawful purposes and to further ensure that the records are not being used in a manner that would fall under subparagraphs (k) through (m) of KRS 61.878(1).
(Emphasis added.)
On May 8, 2018, in response to a request for explanation from Construction Monitor's president David Mineer, Jr., the city stated:
KRS 61.874(4) permits a governmental agency to impose a reasonable fee for the use of public records for a commercial purpose. We have established that $ 5000.00 is a reasonable fee. Our basis for this is several-fold. First, there is a significant cost to the taxpayers to perform governmental services which lead to the generation of records, in terms of fixed overhead , personnel costs, retirement costs , and recurring expenses to create, house and retrieve those records. The records belong, in the end, to Jeffersontown residents and businesses, and they deserve to achieve a return on their investment . Secondarily, [Construction Monitor] intends to use the records to generate profit, and the records will be sold to your subscribers at a substantial markup. . . . Hence, we seek to be paid a fair market price for our information which is intended for resale.
(Emphasis added.) Mr. Mineer initiated this appeal on June 25, 2018. The city has not responded to the appeal. 3
KRS 61.874(4) provides as follows:
(a) Unless an enactment of the General Assembly prohibits the disclosure of public records to persons who intend to use them for commercial purposes, if copies of nonexempt public records are requested for commercial purposes, the public agency may establish a reasonable fee.
(b) The public agency from which copies of nonexempt public records are requested for a commercial purpose may require a certified statement from the requestor stating the commercial purpose for which they shall be used, and may require the requestor to enter into a contract with the agency. The contract shall permit use of the public records for the stated commercial purpose for a specified fee.
(c) The fee provided for in subsection (a) of this section may be based on one or both of the following:
(Emphasis added.) Given the provisions of subsection (4)(a), we find no error in the city's requiring Construction Monitor to give a certified statement of commercial purpose and requiring it to enter into a contract. The proposed terms of the contract, however, are not supported by KRS 61.874(4).
In particular, we find no legal basis for the city's requirement that Construction Monitor allow the city to audit its financial records. KRS 61.874(4) does not authorize a public agency to impose further conditions on commercial access to public records beyond the payment of a reasonable fee as defined in the statute. See Com. v. Chestnut, 250 S.W.3d 655, 662 (Ky. 2008) (public agency receiving request for records cannot "add a requirement not found in the statutes"). 4
Nor do we find any statutory justification for the city's $ 5,000.00 prepaid "minimum fee." A fee for a commercial request must be based on the factors listed in KRS 61.874(4)(c), which include the cost of "media, mechanical processing, and staff required to produce a copy" of the records, and/or the cost of "creation, purchase, or other acquisition" of the records. 17-ORD-157. A fee may not be based on extraneous factors, such as an agency's "fixed overhead, " "retirement costs," or desire to obtain a "fair market price" or a "return on [its] investment."
Furthermore, KRS 61.874(4)(c) expressly links the fee to the costs associated with the particular records provided. For the city to charge an up-front minimum of $ 5,000.00, "prior to determining whether we even have responsive records," is therefore arbitrary and unsupported by statute. See 04-ORD-054, n.4 (fees are to be based on "marginal or . . . average cost in producing the records" and not an attempt "to recoup any costs other than those associated with the disposition of [the] request").
Accordingly, we conclude that the City of Jeffersontown lawfully required Construction Monitor to provide a certified statement of its commercial purpose pursuant to KRS 61.874(4)(a). The contract terms it proposed, however, contained improper fees and unauthorized conditions in excess of the city's authority under KRS 61.874(4)(c).
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 shall be notified of any action in circuit court, but shall not be named as a party in that action or in any subsequent proceeding.
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