November 11, 1996

In re: Don Wiggins/Winchester Municipal Utilities

Open Records Decision

This matter comes to the Attorney General on appeal from Winchester Municipal Utilities' denial of Don Wiggins's renewed request for copies of “monthly water and sewer bills paid by the Kroger Co. and the Martek Co. for a six month period.” On behalf of Winchester Municipal Utilities (WMU), Bill Bunch, director of administrative services, again denied Mr. Wiggins's request. Relying on KRS 61.878(1)(a), and this office's decision in 96-ORD-176, Mr. Bunch maintained:

The requested records, specific to two industrial customers, contain personal, private, and confidential information as to the amount of water required for the manufacturing process, the amount of sewer discharge of the manufacturing process, and the rates being paid for water, sewer, and solid waste utility services.

Because this information “could be used to infer information about the manufacturing processes used by the industries,” thereby suggesting their competitive positions, it “would likely be considered sensitive and private (personal in nature) by the industries in question. . . .” WMU agreed to provide Mr. Wiggins with generic billing information for all industrial customers for a six month period to verify billing methodology and calculations. However, Mr. Bunch indicated, “the results of this analysis would be subject to review before release to insure the privacy of individual billing records is not violated.”

In his letter of appeal, Mr. Wiggins asserts that generic “information on a class or group of industrial customers would not devulge [sic] any special billing privileges to any particular customer of WMU.” He reiterates that he is not concerned with verifying billing methodology and calculations, but with determining the existence of, and compliance with, agreements by which billing privileges are conferred on these industrial customers. He notes that Kroger and Martek are chiefly responsible for high concentrations of certain constituents in Winchester's sewer system, a fact substantiated by the 1993 proposal submitted by Quest Engineers to WMU, and a copy of which he encloses. Mr. Wiggins also attaches a copy of an agreement between Kroger, WMU, and the City of Winchester under the terms of which certain billing privileges are extended to Kroger. In exchange for the sale and transfer of a wastewater treatment lagoon system, the city and WMU agree to allow Kroger “to discharge into the Public Sanitary Sewer System up to the maximum levels [of BODs, CODs, and TSSs] set forth [in the agreement] without incurring any surcharge or other charge other than as . . . prescribed . . . for a period of sixteen years.” By examining Kroger and Martek's specific billing records, Mr. Wiggins argues, the public can ascertain their water usage, and determine if WMU “has exceeded the billing privileges in their contract with Kroger and . . . if the Martek Co. may have been given certain billing privileges they should not have been given.”

In a follow-up letter to this office, Mr. Bunch reaffirmed WMU's position that the requested records are private, personal, and exempt from public inspection pursuant to KRS 61.878(1)(a). He observes:

The industries for which Mr. Wiggins has requested billing and usage information are major Winchester industries and, as such, are among the largest customers of WMU. Both of the industries could be considered “high water” users with water, and consequently, sewer discharge being primary components of the manufacturing processes. To make public information regarding water and sewer billing information for these customers would violate the industries [sic] expectation of privacy regarding these records. Making this type of information public would expose these industries to unfair business competition by divulging information about their respective manufacturing processes such as the amount of water used, the amount of sewer discharge, and rates being paid for water, sewer, and other utility services. These industries have an expectation that this type of information be guarded and held confidential. Release of this type of information would result in an unwarranted invasion of privacy for the industries in question.

Generic billing information, without individual customer names or other identifiers, which could be used to verify billing methodology and calculations for all customers in a particular class or group has not been requested by Mr. Wiggins. Mr. Wiggins asserts in his August 27, 1996 letter of appeal to the Attorney General that information of this type “would not divulge any special billing privileges to any particular customer of WMU.” WMU concurs with this assertion and would further state that the analysis of generic billing information would prove that all WMU bills are calculated correctly, not just the bills of two select customers.

As an alternative to inspection of specific billing records, Mr. Bunch suggests other means of verifying the accuracy of billing calculations.

We are asked to determine if WMU properly relied on KRS 61.878(1)(a) in denying Mr. Wiggins's renewed request for monthly water and sewer bills for the Kroger and Martek companies. Although we believe that WMU relied, in good faith, on KRS 61.878(1)(a) and 96-ORD-176 in denying Mr. Wiggins's request, we find that because the Kroger Company has contracted with the city and WMU to avail itself of billing privileges, WMU erred in withholding Kroger's billing records. In the absence of proof that similar billing privileges have been extended to the Martek Company, we find that WMU properly withheld Martek's billing records.

In 96-ORD-176, this office examined the propriety of WMU's invocation of KRS 61.878(1)(a) to protect private customer billing records, and concluded that because disclosure of those records would not subject agency action to public scrutiny in a meaningful way, the public interest supporting disclosure did not outweigh the privacy interests of individual customers in their billing records. Because information contained in the records could “be used to infer a particular lifestyle of a residential customer or suggest the competitive position of commercial and industrial customers,” we found that disclosure was “simply too invasive.” 96-ORD-176, p. 3, 5. While we continue to ascribe to this view, in general, we believe that because the Kroger Company has entered into a contract with the city and WMU, under the terms of which it receives certain billing privileges, it is subject to greater public scrutiny and a corresponding diminution in its right of privacy.

This office has long recognized that:

A contractor to a governmental entity . . . must accept certain necessary consequences of involvement in public affairs. Such a contractor, whether a corporation or an individual human being, runs the risk of closer public scrutiny than might otherwise be the case.

OAG 90-7, p. 4. In a similar vein, we have also recognized that where an agency is conducting the people's business, “the public has a right to know the identity of the recipients of the benefits of the agency's program which outweighs any privacy interest of the recipients.” OAG 80-310, p. 2. Finally, we have noted that “a business which seeks to avail itself of substantial public benefit runs the risk of closer public scrutiny and should therefore have a reduced expectation of privacy.” OAG 91-105, p. 6.

Thus, in OAG 91-105 we held that the Cabinet for Economic Development improperly relied on KRS 61.878(1)(a) in denying a requester access to records of private businesses within an enterprise zone to the extent that such records permitted the public to determine if the businesses certified for the zones qualified for the benefits received. Such records were “directly relevant to a determination [of] whether the businesses being certified [were] in compliance with the statute. “OAG 91-105, p. 6. See also 93-ORD-85 (holding that invocation of KRS 61.878(1)(a) was appropriate as to a business's private financial records, when the business applied for state tax incentives, but not as to information which was relevant to a determination of whether the business was eligible for the program, and whether the agency was properly discharging its statutory functions relative to approving such applications). No doubt, the private businesses whose records were sought in these appeals considered the information contained in their records “sensitive and private (personal in nature).” They, too, would have preferred that the “information be guarded and held confidential.” Nevertheless, having availed themselves of a public benefit, in the form of tax incentives, they exposed themselves to public oversight.

We believe that the logic of the cited opinions can be extended to the instant appeal. The Kroger Company, having entered into an agreement with the city and WMU under the terms of which it is permitted to discharge maximum levels of BODs, CODs, and TSSs into the public sewers without paying a surcharge, must accept the necessary consequences of involvement with a public agency. To monitor compliance with the terms of the agreement, the public must be afforded access to water and sewer bills reflecting the amount of water used, amount of sewer discharge, and the rates being paid for water and sewer services. Review of these records will disclose whether the terms of the agreement are being strictly enforced. To this extent, the public's interest in disclosure is superior to the Kroger Company's right of privacy. This decision is limited to the specific records identified, and should not be interpreted as a mandate for the blanket release of other records of the business. Accord, OAG 91-105.

We do not believe that the reasoning of the cited opinions can be extended to the Martek Company. Although it, too, has been identified as being responsible for discharging high concentrations of BODs, CODs, and TSSs in the public sewer system, Mr. Wiggins offers no proof that Martek is the recipient of similar billing privileges. Such allegations are, at this point, speculative, and Martek must be treated as any other private customer. Under the rule announced in 96-ORD-176, Martek's billing records are exempt from public inspection pursuant to KRS 61.878(1)(a).

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 should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.

A. B. Chandler III

Attorney General

Amye L. Bensenhaver

Assistant Attorney General


Distributed to:

Don Wiggins

Concerned Citizens of Winchester

79 Mockingbird Valley Road

Winchester KY 40391

Bill Bunch

Director of Administrative Services

Winchester Municipal Utilities

P. O. Box 4177

Winchester KY 40392-4177