Opinion
Opinion By: Andy Beshear, Attorney General; Michelle D. Harrison, Assistant Attorney General
Open Records Decision
The question presented in this appeal is whether the Kentucky Public Service Commission ("PSC") violated the Open Records Act in partially denying Mary Varson Cromer's September 5, 2019, request for "[a]ll work papers and other records prepared or compiled by Commission Staff that form the basis of calculations of revenue requirements identified in the Staff Report in Case No. 2018-00017," and the "Staff Reports prepared in conjunction with the March 16 and November 5, 2018 rate orders in that case." (Emphasis added.) In a timely written response per KRS 61.880(1), Executive Director Gwen R. Pinson provided nine PDF files containing financial documents the PSC used in the formulation of calculations of revenue requirements in PSC Case No. 2019-00017; she further stated that a search of Commission records confirmed that no responsive Staff Reports existed. 1 Lastly, she denied the request as to "responsive records prepared in support of the calculation of the revenue requirements of the Staff Report filed into the record of Case No. 2018-00017[,]" specifically, "work papers" because, in the PSC's view, those records were protected from disclosure under KRS 61.878(1)(i) and (j). Ms. Pinson stated, "Although the work papers were used to calculate the revenue requirement in the Commission Staff Report," in the November 5, 2018, Order in which PSC "established rates for water service for Martin County Water District ['District']," PSC did " not adopt the rates that Commission Staff had proposed in its [May 22, 2018,] Staff Report." (Emphasis added.) Based upon the following, this office finds that with regard to any existing responsive documents upon which PSC did not rely as the basis for its November 5, 2018, Order, existing legal authority validates the agency's denial.
By letter dated September 11, 2019, Ms. Cromer, Appalachian Citizens' Law Center, initiated the instant appeal on behalf of Martin County Concerned Citizens, Inc. ("MCCC"). She quoted the following excerpt from the November 5 Order (copy of record), which both parties agree constituted the final action:
The [PSC] accepts the findings contained in the Staff Report but makes modifications to take into consideration additional evidence presented by Martin District in its response to the Staff Report and response to the Staff's requests for information as explained below.
First, she asserted, the Order "adjusts operating expenses to account for an increase in the CERA contribution rate. . . . The Order explains that this adjustment is based on [the District's] response to the Staff Report. . . . Second, the Order adjusts the revenue requirement to include only retail sales." She noted the PSC also seemed to make the latter change in response to the District's response to the Staff Report. " Other than those two modifications ," she argued, both of which PSC based on the information it received in response to the Staff Report , the Order relied upon and incorporated the Staff Report's Revenue Requirement calculations. (Emphasis added). Acknowledging it "may be true that the [PSC] did not adopt the exact revenue requirement determined by the staff, " she nevertheless maintained, "the Order demonstrates that the Staff Report formed the basis for the PSC's final action. "
Upon receiving notification of this appeal, Director Pinson elaborated upon the agency's position. She first provided the following context:
The proceeding before the [PSC] at issue in this appeal is the application for a rate increase by [the] District. [The] District filed its application pursuant to 807 KAR 5:076, the [PSC's] alternative rate adjustment procedure for small utilities. As part of this procedure and as it did in Case No. 2018-00017, [PSC Staff] prepares a Staff Report pursuant to 807 KAR 5:076 Section 11[(2)(b)]. [PSC Staff] then files the Staff Report into the record of the case, with a copy to all parties of record. The Staff Report contains, "staff's findings and recommendations regarding the proposed rates" pursuant to 807 KAR 5:076 Section 3(4). The Staff Report entered in Case No. 2018-00017 contains, inter alia , [PSC Staff's] calculations regarding [the] District's revenue requirement, as well as recommended rates for [the] District.
Director Pinson further explained that PSC Staff "created 'work papers' to calculate the revenue requirement and other aspects of Martin District's finances." The final calculations are publicly available, but its "notes and work papers used in preparation of the Staff Report are not." Rather, "the information contained therein was taken from records/information provided by Martin District in Case No. 2018-00017." 2 PSC maintained, "The responsive records did not lose their status as 'preliminary drafts, notes . . ." etc., regardless of whether [it] adopted the rates as proposed by [PSC Staff] in the Staff Report." Under its reasoning, "the responsive records remained preliminary as the records do not constitute the final product put forth by the [PSC Staff] as [S]taff's position as to [the] District's revenue requirement in Case No. 2018-00017." 3
In the alternative, PSC argued that even if KRS 61.878(1)(i) does not control here, KRS 61.878(1)(j) exempts from disclosure "[p]reliminary recommendations, and preliminary memoranda in which opinions are expressed or policies formulated or recommended, " 4 and its November 5, 2018, Order " did not adopt the rates or revenue requirement that [PSC Staff] had proposed in its Staff Report." (Emphasis added.) Based upon the following, this office affirms the denial by PSC as to responsive documents that did not form the basis of its final action.
"Despite its manifest intention to enact a disclosure statute," the General Assembly determined that certain public records should be excluded from disclosure.
Beckham v. Bd. of Educ. of Jefferson Cty., 873 S.W.2d 575, 577-578 (Ky. 1994);
Courier-Journal and Louisville Times Co. v. Jones, 895 S.W.2d 6-8 (Ky. App. 1995). Among those records excluded from disclosure, in the absence of a court order authorizing inspection, are those identified at KRS 61.878(1)(i) and (j). 5 Beckham, 873 S.W.2d at 578; Courier-Journal and Louisville Times Co. , S.W.2d at 6-8. Both the courts and this office have applied the language of KRS 61.878(1)(i) and (j) in a variety of contexts but little has changed regarding the relevant analysis. See
City of Louisville v. Courier-Journal and Louisville Times Co., 637 S.W.2d 658 (Ky. App. 1982);
Kentucky State Bd. of Medical Licensure v. Courier-Journal and Louisville Times Co., 663 S.W.2d 953 (Ky. App. 1983);
University of Ky. v. Courier-Journal & Louisville Times Co., 830 S.W.2d 373, 378 (Ky. 1992);
Courier-Journal and Louisville Times Co. v. Jones, 895 S.W.2d 6 (Ky. App. 1995);
Palmer v. Driggers, 60 S.W.3d 591 (Ky. App. 2001);
Univ. of Louisville v. Sharp, 416 S.W.3d 313, 315 (Ky. 2013); 99-ORD-220; 02-ORD-86; 07-ORD-156; 11-ORD-052; 17-ORD-156.
A record "is adopted as the basis of final action insofar as the final action 'necessarily stem[s] from' that document." 10-ORD-034, p. 11 (quoting City of Louisville, 637 S.W.2d at 660). "It is not necessary that the record be explicitly adopted or incorporated by reference, so long as it constitutes the basis for the final agency action. 16-ORD-256, p. 4. "In our view, the courts purposefully employed the broader concept of 'adoption' rather than 'incorporation,' relative to preliminary investigative reports and records, to avoid a narrow, legalistic interpretation." 01-ORD-83, p. 14 (citing City of Louisville, supra). Thus, "'our analysis does not end with a determination that documents are preliminary in character, but instead also requires a determination of whether such documents, or portions thereof, were ultimately adopted as the basis or a part of the agency's final action. '" 15-ORD-067, p. 3 (citing 11-ORD-052); 18-ORD-131. The Kentucky Court of Appeals reaffirmed this controlling line of authority earlier this year in
Univ. of Ky. v. Lexington H-L Services, Inc., 579 S.W.3d 858 (Ky. App. 2018). In rejecting the agency's position that certain documents retained their preliminary status merely because it never "incorporated" the documents into a final action, the court held the Open Records Act "does not require that an agency reference or incorporated specific documents in order for those records to be adopted into the final agency action. Rather, we agree with the Attorney General that preliminary records which form the basis for the agency's final action are subject to disclosure. "
Univ. of Ky. v. Lexington H-L Services, Inc., 579 S.W.3d 858 at 863.
Ms. Cromer asked for the work papers and records that PSC Staff prepared or compiled and that formed "the basis of calculations of revenue requirements identified in the Staff Report ." (Emphasis added). Our assessment is "confined to the four corners" of the original request notwithstanding any subsequent attempts to modify the description contained therein. 13-ORD-015, p. 2; 14-ORD-073; 17-ORD-116; 19-ORD-166. Any records created following issuance of the Staff Report, i.e. , the records and information that Martin County Water District provided to PSC in response to its May 22, 2018, Staff Report, and which PSC ultimately relied upon as the basis for two modifications to its November 5, 2018, Order, are not responsive to her September 5 request. Conversely, the "work papers" in dispute fall within the parameters of that request and the final action inquiry is dispositive. 6 The undisputed facts presented here confirm that PSC did not rely upon the findings and recommendations of Staff regarding the revenue requirement in the Order, i.e. , final action regarding this matter. Accordingly, the documents retain their preliminary character to that extent and PSC did not violate the Act in denying access under KRS 61.878(1)(i) and/or (j).
In summary, those records or portions thereof, which did not form the basis of the agency's final action, maintained their preliminary characterization whereas existing responsive documents, or portions thereof, upon which PSC did. rely, if any, forfeited their preliminary status and must be separated and provided to Ms. Cromer in accordance with KRS 61.878(4). See 15-ORD-067; 17-ORD-156; 19-ORD-146.
Either party may appeal this decision by initiating action in the appropriate circuit court per 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.
Footnotes
Footnotes
1 The right to inspect records, and the corollary right to receive copies, only attaches if the records being sought are "prepared, owned, used, in the possession of or retained by a public agency." KRS 61.870(2); 02-ORD-120, p. 10; 04-ORD-205; 18-ORD-126. A public agency cannot produce that which it does not have nor is a public agency required to "prove a negative" in order to refute an unsubstantiated claim that certain records exist. See Bowling v. Lexington-Fayette Urban Cty. Gov't., 172 S.W.3d 333, 341 (Ky. 2005); 11-ORD-037. Compare Eplion v. Burchett, 354 S.W.3d 598, 604 (Ky. App. 2011); Cabinet for Health and Family Servs. v. Todd Cty. Std., 488 S.W.3d 1 (Ky. App. 2016)
2 PSC further asserted that Ms. Cromer's client was a party to Case No. 2018-00017 and was therefore "served with testimony, exhibits, pleadings, correspondence, and all other documents filed by [the] District in support of its Application for Rate Adjustment . . . including information responsive to data requests." In other words, PSC has already provided "[a]ll records/information relied upon by [PSC] Staff to prepare the Staff Report[.]" However, the fact PSC may have already provided Ms. Cromer with a copy of some or all of existing responsive documents in her capacity as counsel for MCCC in a separate but related proceeding "is not a legally recognized basis for denying an open records request." 99-ORD-121, p. 9; 14-ORD-226.
3 Existing legal authority refutes the position of PSC in this regard, as the remainder of this decision will establish. However, PSC is not required to provide records that are not responsive to Ms. Cromer's request, i.e. , information and records that PSC received from the District following issuance of the Staff Report. Any records that postdate the Staff Report, by definition, could not have formed the basis of the Staff Report. Our analysis focuses exclusively on whether PSC erred in withholding "[a]ll work papers and other records prepared or compiled by Commission Staff" and whether those records formed "the basis of calculations of revenue requirements identified in the Staff Report ." (Emphasis added).
4 This office has noted that a "draft" is defined as "a preliminary version of a plan, document, or picture." 14-ORD-017, p. 4 (citing The American Heritage College Dictionary 495 (4th ed. 2002). 97-ORD-183, p. 4; 18-ORD-131. A "note," on the other hand, is defined as a "brief record, esp. one written down to aid the memory." Id. at 951; 97-ORD-183, p. 4; 19-ORD-085. In the alternative, a "note" is "created as the basis for a fuller statement, as are, for example, written or shorthand notes taken at a meeting." Id. (Citations omitted); 19-ORD-085.
5 KRS 61.878(1)(i) and (j), respectively, exclude from disclosure:
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 or recommended.
6 This office recently noted "the fact that the recommendations made, or memoranda prepared, are final as to the person making or preparing them is irrelevant" as to whether the public agency has taken final action that deprives the document of its former preliminary character. 17-ORD-141, p. 6 (emphasis omitted)(citing OAG 90-97); 18-ORD-028.