Opinion
Opinion By: Andy Beshear,Attorney General;James M. Herrick,Assistant Attorney General
Open Meetings Decision
The question presented in this appeal is whether the City of La Grange violated the provisions of the Open Meetings Act when, during a regularly-scheduled meeting on January 7, 2019, it went into executive session pursuant to KRS 61.810(1)(b) to discuss the future acquisition of real property. For the reasons that follow, we find no violation of the Act.
On January 16, 2019, Mayor John Black signed a contract on behalf of the City of La Grange to purchase a parcel of land. In a complaint to Mayor John Black dated February 7, 2019, Amanda Manning, News Editor for The Oldham Era , alleged that the La Grange City Council on January 7, 2019, had unlawfully taken final action when, in executive session, it "reached a consensus on an amount of money that could be spent to purchase a property located at 309 Main Street." By way of evidence, she quoted a statement by Mayor Black at the council's subsequent meeting on February 4, 2019: "Through the approval of the city council during the closed session, they gave me the approval to go up to $ 35,000 if I can get this property acquired." As a remedy for the alleged violation, she proposed that the council discuss in public the matters discussed in the closed session, issue a written apology, and promise future compliance.
On February 11, 2019, City Attorney Beach Craigmyle responded on behalf of the city, stating that "it would not have been prudent to openly discuss the possible acquisition of the real estate . . . and amounts the City was willing to offer to acquire it as that would have likely affected the value and marketability of the property." While the city "acknowledged that the mayor's use of the term 'approved' to describe what happened in the closed session was perhaps not the best choice of words," Mr. Craigmyle stated, "I was present in the room and . . . no vote was taken nor any action taken." Rather, "[t]here was a meeting of the minds that the Mayor should have discretion to negotiate for the purchase of the property within broad parameters of $ 35,000 to $ 50,000."
The response further stated that the mayor had "advised that he had a verbal commitment from [the] new owner to sell the property to the City, but felt it was important to enter into a contract for deed quickly before the owner changed his mind or raised the price since several other people were interested in the property at that time." The city asserted that it gave proper notice by announcing the closed session "pursuant to the provisions of KRS 61.810(1)(b) for the purpose of 'deliberations on future acquisition of real property by a public agency' for the reasons given above that publicity would have likely affected the value or availability of that specific piece of property which was under consideration for a public purpose."
Ms. Manning initiated this appeal on February 22, 2019. She argued that "reaching a consensus [in closed session] on an amount the mayor could spend on a piece of property was a violation of KRS 61.815(1)(c) ."
On February 28, 2019, the City of La Grange responded to the appeal, stating that the closed session on January 7, 2019, was merely "a general discussion as to the possible value of the property with the Mayor feeling out the members as to what might be a reasonable offering price . . . to assist the Mayor in the negotiating process." This discussion resulted in a "general consensus" that a reasonable price was "in the neighborhood of $ 35,000 to $ 50,000." The city asserted that the council took no vote or "straw vote" in the closed session, and that the mayor neither sought nor obtained the council's "approval" to sign a contract to purchase the land, since "the mayor already had executive authority to make and enter into contracts and authority to administer funds" under KRS 83A.130. Lastly, the city argued that "public disclosure of the offer could easily have affected the valuation of the property" because "a third party [could have] snatched away the property by offering a few dollars more than announced to the public."
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 [.]
Ms. Manning does not appear to dispute the city's position that publicizing the council's discussions would have been likely to affect the value of the property. Indeed, the facts in this appeal are more amenable to the application of KRS 61.810(1)(b) than 02-OMD-166, in which the Georgetown City Council lawfully discussed in closed session an offer of sale already "on the table" at a specific purchase price, which the council accepted immediately upon returning to open session. Since the council in 02-OMD-166 had the option to accept, reject, or modify the terms of the offer, we found that "[p]ublic discussion of these options might well have compromised a significant governmental interest by signaling the council's specific intentions with respect to the property, or stimulating interest in the purchase of the property by competing interests." 02-ORD-166. Here, in contrast, no specific sale price was under consideration for an imminent decision; rather, the mayor and council merely discussed what price range would be a fair offer. Discussions of this nature are the essence of deliberations on the future acquisition of real property.
Further, reaching a consensus on a reasonable offer did not constitute "action taken" by the city council. KRS 61.810(1) provides that "[a]ll 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," except as authorized by an exception to the Open Meetings Act. (Emphasis added.) Pursuant to KRS 61.815(1)(c), "[n]o final action may be taken at a closed session. "
"Action taken" means a collective decision, a commitment or promise to make a positive or negative decision, or an actual vote by a majority of the members of the governmental body[.]
KRS 61.805(3). It is well established in our decisions that reaching a consensus in closed session does not constitute "action taken" in violation of the Open Meetings Act, provided the agency subsequently takes final action in open session with each member's vote recorded in the minutes. 12-OMD-143; 17-OMD-124. Under the mayor-council plan, the executive authority of a city is "vested in and exercised by the mayor." KRS 83A.130(3). Pursuant to KRS 83A.130(8), all "contracts and written obligations of the city shall be made and executed by the mayor or his agent designated by executive order." 1
We therefore find that the Mayor of La Grange, possessing full executive authority and the power to enter into contracts, was not required to obtain any advance approval from the La Grange City Council to extend an offer for a land purchase and execute a land sale contract. See OAG 09-007 (construing analogous provisions of KRS 67C.105 ). Although the appropriation of funds for the contract would ultimately require council approval, the mayor obtained that approval at the subsequent open meeting on February 4, 2019. "[T]here is no controlling authority which requires one of these two prerequisites [ i.e. , making the contract and appropriating the funds] to be completed before the other." OAG 09-007. Thus, no "action" by the city council needed to be taken prior to the mayor's execution of the contract.
In Bd. of Comm'rs of City of Danville v. Advocate Comnc'ns, Inc., 527 S.W.3d 803 (Ky. 2017), the Supreme Court of Kentucky held that Danville's board of commissioners improperly invoked KRS 61.810(1)(b) to hold a closed session in which the board authorized the mayor to bid on and buy property being sold at an absolute auction. We distinguish that case in two respects. First, the City of Danville was operating under the city manager system, so that executive authority was vested in the board of commissioners, not the mayor; thus, the mayor could only bid on the property with the board's authorization. See id. at 805. Second, Danville purchased the land at an absolute public auction rather than through a private sale, so that "any privacy regarding the City's intention to bid was gone" prior to the auction, when "the mayor and the bidding agent both signed the auctioneer's registration form. " Id. at 807. Thus, the rationale of not publicizing Danville's interest in the property no longer existed.
Given the nature of an absolute auction, the Court found that Danville's bid was "an acceptance" rather than an offer, so that at the fall of the hammer Danville was obligated to purchase the property "with the decision to bid on and buy the property [already] having been made in closed session in violation of the Act." Id. As such, "[t]he Board's post-auction approvals, albeit conducted in public, were window-dressing." Id.
In the present case, the City of La Grange's interest in confidentiality was not forfeited prior to the contract of sale, since the private sale required no execution of a public registration form that would have revealed the city's intentions toward the property. Nor was the mayor, as chief executive under KRS 83A.130(3), required to have authorization from the city council prior to making the contract of sale. Thus, we find that the final action by the council was its approval of the contract on February 4, 2019, not its consensus as to a price range reached on January 7, 2019.
In Bd. of Comm'rs of City of Danville , the Court noted that "[t]he closed portion of the meeting [lawfully] could have been used to discuss bidding strategy and the maximum price the mayor, or other bidding agent, would have been authorized to bid. " 527 S.W.3d at 807 (emphasis added). That is essentially the type of discussion that took place in this case (aside from the fact that the Mayor of La Grange needed no advance "authoriz[ation]" to make a purchase offer on behalf of the city). Since the La Grange City Council took no final action in the closed session on January 7, 2019, but merely conducted deliberations pursuant to KRS 61.810(1)(b), we find no violation of the Open Meetings Act.
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 shall be notified of any action in circuit court, but shall not be named as a party in that action or in any subsequent proceedings.
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