TO BE PUBLISHED
May 10, 1993
IN RE: David C.L. Bauer/William P. Hagenbuch, Jr., Esq.
OPEN MEETINGS DECISION
This matter comes to the Attorney General as an appeal by David C.L. Bauer of the Daily News concerning activities of the Board of Commissioners of the Allen County War Memorial Hospital. Mr. Bauer complains of a closed session of the Board of Commissioners to discuss what he terms a "transfer of assets."
In a letter to the chairperson of the Board of Commissioners of the Allen County War Memorial Hospital, dated April 16, 1993, Mr. Bauer referred to a meeting of the Board held on April 12, 1993. During that meeting the Commissioners went into a closed session to discuss the specifics of an agreement involving a "transfer of assets."
A reporter for the Daily News objected to the closed session on the grounds that it did not come within any of the exceptions to the Open Meetings Act. Mr. Bauer stated that the County Attorney said the closed session was conducted under the authority of KRS 61.810(1)(b). Mr. Bauer maintained that an open discussion would not affect the sale price as the only thing involved is a pledge of assets as opposed to any new dollars.
Mr. Bauer further stated that the closed session was illegal and that any action resulting from that session should be declared void. He requested that any records, reports, transcripts or other documents discussed or gathered during the closed session be made available to his newspaper. He maintained that any future meetings involving discussions on this topic should be conducted in open and public meetings.
In a letter to Mr. Bauer, dated April 21, 1993, Allen County Attorney William P. Hagenbuch, Jr., stated that the Board of Commissioners acted properly. In his opinion, KRS 61.810(1)(b) authorizes the Board to go into a closed session where the acquisition or sale of real estate by a public agency is involved and publicity would be likely to affect the value of the property to be acquired or sold.
Mr. Hagenbuch stated that a private entity has proposed to purchase the assets of the hospital and this involves the purchase of the hospital building and the property on which it is located. The sale of real estate is involved and the Board was of the opinion that public deliberations would be likely to have an adverse effect on the sale price. The Board thought public deliberations might cause the buyer to adopt a "take it or leave it" stance in negotiations. Also, public disclosure of the potential price would assure that no other potential purchaser would pay a substantially higher price.
Mr. Hagenbuch also cited KRS 61.810(1)(g) in support of the Board's decision to close that portion of the meeting relating to the sale of the hospital.
In his letter of appeal to the Attorney General, dated April 23, 1993, Mr. Bauer basically repeated what he had set forth in his letter of April 16, 1993. He again concluded that the closed session was illegal.
KRS 61.810, in part, sets forth the exceptions to open and public meetings. Among those exceptions which permit the closing of an otherwise public meeting is KRS 61.810(1)(b) which provides that, "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."
In OAG 80-350, copy enclosed, at page three, we dealt with the exception to open meetings pertaining to the sale or acquisition of real estate. At that time the exception in question was codified as KRS 61.810(2). We said that only when a public agency is discussing a specific piece of property relative to whether the agency will buy or sell that property and the discussion if made public would likely affect the price of that property, can the matter be discussed in a closed session. Confidentiality is only permissible when the public interest will be directly affected financially.
The county attorney and the Board maintain that the sale of real estate is involved since a private entity has proposed purchasing the hospital building and the property on which it is located. They also state that a public discussion of the proposed purchase would likely affect the sale price of the facilities in question. The applicable statutory exception refers in part to the sale of real property when publicity would be likely to affect the value of that property.
While the county attorney refers to the sale of real estate, Mr. Bauer labels the proposed transaction a "transfer of assets." In our opinion, on the basis of the limited facts presented, a transfer of assets is included within the term "sale of real property."
In Black's Law Dictionary, Sixth Edition, 1990, the word "transfer" is defined in part as follows:
An act of the parties, or of the law, by which the title to property is conveyed from one person to another. The sale and every other method, direct or indirect, of disposing of or parting with property or with an interest therein, or with the possession thereof, or of fixing a lien upon property or upon an interest therein,
absolutely or conditionally, voluntarily or involuntarily, by or without judicial proceedings, as a conveyance, sale, payment, pledge, mortgage, lien, encumbrance, gift, security or otherwise.
In meeting the statutory obligation imposed upon the Attorney General under KRS 61.846(2) to determine if the public agency violated the Open Meetings Act, it is our decision that the Board of Commissioners of the Allen County War Memorial Hospital did not violate the Open Meetings Act when the Board went into a closed session to deliberate the proposed sale of the hospital building and the property on which it is located as the Board was of the opinion that publicity would likely affect the value of the property to be sold.
Mr. Bauer or the Daily News may challenge this decision by filing an appeal with the appropriate circuit court within thirty days from the date of this decision. See KRS 61.846(4)(a) and KRS 61.848.
Thomas R. Emerson
Assistant Attorney General
Copies of this decision
have been mailed to:
David C.L. Bauer
P.O. Box 90012
Bowling Green, Kentucky 42102-9012
William P. Hagenbuch, Jr., Esq.
Allen County Attorney
Read Building, Public Square
P.O. Box 130
Scottsville, Kentucky 42164