NOT TO BE PUBLISHED
95-ORD-65
April 26, 1995
In re: Pulaski Week/The Adanta Group
OPEN RECORDS DECISION
This appeal originated in the submission of a request for records by Mr. John A. Nelson, editor and publisher of Pulaski Week, to the Adanta Group. On January 25, 1995, Mr. Nelson requested access to "the document(s) outlining the terms of any settlement reached between The Adanta Group or its agents--including attorneys and insurance companies--and [its] former employees, Beverly Harvey and Tammy Helton." On January 30, Mr. Charles J. McEnroe, an attorney representing the Adanta Group, denied Mr. Nelson's request advising him:
The Adanta Group is not a public agency subject to the open records law. Even if The Adanta Group were subject to the open records law, the documents requested are of a personal nature, the disclosure of which would invade the privacy of Ms. Harvey and Ms. Helton.
In addition, Mr. McEnroe noted that the requested records "are not in the possession of the Adanta Group, but in the possession of a private party."
On February 21, this office requested additional information from the Adanta Group pursuant to KRS 61.880(2)(c) and 40 KAR 1:030, Section 3. In an attempt to resolve the threshold issue of whether the Adanta Group is a public agency for purposes of the Open Records Act, we asked that Mr. McEnroe, or a representative of the Adanta Group, explain by what mechanism it was created and from what sources it derives its funding. In a response dated March 2, Mr. C. Thomas Hectus replied that the Adanta Group is a private nonprofit corporation which receives less than 25% of its funding from state or local authority funds. Continuing, he observed:
I understand "funding" to be the provision of monies from state and local governments set apart for a specific objective. The remainder of the Adanta Group's income I do not consider to be "funding," but is derived from payment of bills to third-party payors for services rendered to individuals. A large part of the services of the Adanta Group are rendered to Medicaid patients. However, I do not believe the mere fact that a significant part of the Adanta Group's income is derived from third-party Medicaid payments transforms the agency into a "public" agency for purpose [sic] of the open records act, any more than a private physician who derives more than 25% of his income from Medicaid becomes a "public agency" for purposes of the open records act.
Because, Mr. Hectus concluded, the Adanta Group is not a public agency, it is not required to comply with the requirements of the Act in denying access to its records.
We are asked to determine if the Adanta Group violated provisions of KRS 61.870 to 61.884 in responding to Mr. Nelson's request. We must first determine whether it is a public agency for purposes of the Open Records Act. Having examined Adanta's articles of incorporation, its contract with the state, the statutes under which it was formed, and records reflecting the amount of state funding it receives, we conclude that it is not a public agency within the meaning of KRS 61.870(1) and is not subject to the Open Records Act.
KRS 61.870(1) defines the term "public agency" as:
(a) Every state or local government officer;
(b) Every state or local government department, division, bureau, board, commission, and authority;
(c) Every state or local legislative board, commission, committee, and officer;
(d) Every county and city governing body, council, school district board, special district board, and municipal corporation;
(e) Every state or local court or judicial agency;
(f) Every state or local government agency, including the policy-making board of an institution of education, created by or pursuant to state or local statute, executive order, ordinance, resolution, or other legislative act;
(g) Any body created by state or local authority in any branch of government;
(h) Any body which derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds;
(i) Any entity where the majority of its governing body is appointed by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (j) or (k) of this subsection; by a member or employee of such a public agency; or by any combination thereof;
(j) Any board, commission, subcommittee, ad hoc committee, advisory committee, council, or agency, except for a committee of a hospital medical staff, established, created, and controlled by a public agency as defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (k) of this subsection; and
(k) Any interagency body of two (2) or more public agencies where each public agency is defined in paragraph (a), (b), (c), (d), (e), (f), (g), (h), (i), or (j) of this subsection[.]
If an entity falls within this definition, it is subject to the Open Records Act, and is required to comply with the requirements of the law.
The Adanta Group, also known as the Lake Cumberland Regional Mental Health - Mental Retardation Board, Inc., was established in 1966 as a nonprofit corporation to provide mental health care and mental retardation services in the ten county Lake Cumberland region under authority of KRS 210.370. That statute provides:
Any combination of cities or counties of over fifty thousand (50,000) population, and upon the consent of the secretary for human resources, any combination of cities or counties with less that fifty thousand (50,000) population, may establish a regional community mental health and mental retardation services program and staff same with persons specially trained in psychiatry and related fields. Such programs and clinics may be administered by a community mental health-mental retardation board established pursuant to KRS 210.370 to 210.460, or by a nonprofit corporation.
In OAG 75-402, this office held that community mental health boards which manage regional community health programs and are created by statute, are public agencies under the Open Meetings Act. [1] We carefully distinguished these boards from boards established by a nonprofit corporation, concluding that the latter boards could not be treated as public agencies for purposes of the Open Meetings Law. This opinion was premised on the notion that, as a general proposition, "Private, nonprofit corporations are not public agencies and need not comply with the Open Meetings Law." OAG 75-402, p. 1.
One year later this office was presented with the question of whether a regional mental health - mental retardation board, established as a nonprofit corporation, was a public agency for purposes of the Open Records Act. At page 2 of OAG 76-648,the Attorney General observed:
[T]he Open Records Law, KRS 61.870 - 61.884, contains a different definition of a public agency in that it includes "any other body which is created by state or local authority in any branch of government or which derives at least 25 percent of its funds from state or local authority." KRS 61.870(1). This provision is not contained in the Open Meetings Law, and therefore some organizations which are not under the purview of the Open Meetings Law may be under the purview of the Open Records Law.
As far as open records are concerned, it is apparently the policy of the Legislature that wherever public funds go, public interest follows.
We concluded that because the mental health - mental retardation board at issue in that appeal received more than 25 percent of its funds from state or local authorities, it was a public agency under the Open Records Act.
Like the mental health - mental retardation board which was the subject of OAG 76-648, the Adanta Group was established as a private, nonprofit corporation. Unlike the board in OAG 76-648, it does not appear to derive 25 percent or more of its funds from state or local authority funds. Accordingly, we find that it is not a public agency for purposes of the Open Records Act.
In state fiscal year 1994, the Adanta Group received $1,993,687.30 from the Department for Mental Health and Mental Retardation Services for a variety of services. This constitutes approximately 15.78% of its total revenue of $12,630,976. Adanta received an additional $888,757.00 from the Department for Social Services for special placements. These combined sums represent approximately 22.82% of its total revenue. In a conversation with the undersigned on April 6, 1995, Mr. Roland Mullins, Adanta's C.E.O., stated that although eligible Adanta receives no local funding.
In addition to the state funds identified above, Adanta receives approximately $2,952,399.22 from the state in the form of Medicaid reimbursement payments. If this figure were calculated into the figures set forth above, it would clearly exceed the 25 percent state funding threshold found in KRS 61.870(1)(h). However, in 93-ORD-90, this office expressly rejected the argument that the receipt of reimbursement for professional services through Medicare and Medicaid transforms a private entity into a public agency per KRS 61.870(1)(h). It is instructive to quote from that decision:
KRS 61.870(1)(h) defines a "public agency" as:
Any body which derives at least twenty-five percent (25%) of its funds expended by it in the Commonwealth of Kentucky from state or local authority funds[.]
In our view, the provision was intended to insure that bodies which receive 25% or more of their funding from state or local authority funds could be held publicly accountable for those funds. It was not intended to subject to public scrutiny the records of private physicians who receive state or federal funds as reimbursement for their services. Other mechanisms exist for holding these individuals accountable for the funds they receive. See, e.g., KRS 205.845 et seq. If . . . private physicians and hospitals were treated as "public agencies," subject to the Open Records Law, because they receive government funds as direct payment for services rendered to patients, they would be discouraged from serving senior citizens and the poor, who benefit from the Medicare and Medicaid programs. We therefore hold that Medicare and Medicaid funds do not constitute "state or local authority funds" in determining whether a body receives 25% or more of its funds from public coffers.
93-ORD-90, p. 10. Consistent with the converse of the view expressed at page 2 of OAG 76-648 that it is the legislative policy that wherever public funds go, public interest follows, we believe that 93-ORD-90 is dispositive of this appeal.
We acknowledge that the state is actively engaged in overseeing the Adanta Group, to which it is contractually bound. We also acknowledge that the amount of state funds received by Adanta closely approaches the 25 percent threshold found at KRS 61.870(1)(h). Nevertheless, we believe that because it was established as a private, nonprofit corporation whose board is not appointed by a public agency and because it does not receive 25 percent or more of its funds from state or local authority, the Adanta Group is not a public agency under the Open Records Act. Compare, regional community mental health and mental retardation services programs established by cities and counties whose board members are selected by a selection committee appointed by the chief executive officers of participating cities and counties per KRS 210.380. KRS 61.870(1)(i).
In OAG 88-64, this office expounded upon its limitations in resolving open records disputes. At page 2 of that opinion, we observed:
Given the limited role for the Attorney General contemplated by the statutes and the office's limited resources, the Attorney General cannot truly be a 'judge' in the sense of reviewing volumes of documents, listening to testimony, considering briefs, etc. In the final analysis, the application and meaning of the Open Records Act can only be determined by a court of law.
As is so often the case, there are factual issues present in this appeal which we are not equipped to resolve. The overwhelming weight of the evidence suggests to us, however, that the Adanta Group is not a "public agency" within the meaning of KRS 61.870(1), and is therefore not subject to the Open Records Law.
Mr. Nelson may challenge this decision by initiating action in the appropriate circuit court. 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 proceedings.
CHRIS GORMAN
ATTORNEY GENERAL
AMYE B. MAJORS
ASSISTANT ATTORNEY GENERAL
res/197
Distributed to:
Hon. C. Thomas Hectus
One Oxmoor Place
101 Bullitt Lane, Suite 202
Louisville, KY 40222
Mr. John A. Nelson
Publisher
Pulaski Week
P.O. Box 1565
Somerset, KY 42502
Hon. Charles J. McEnroe
117 North Main Street
P.O. Drawer 10
Somerset, KY 42502
Mr. Roland Mullins, C.E.O
The Adanta Group, Inc.
Somerset, KY 42501
[1]In 1992, the definition of public agency which appears at KRS 61.805(2) was amended. The cited opinion was rendered under the definition of that term as it appeared in the statute prior to amendment. Since the question has not been presented in this appeal, we do not address whether the result would be the same under the statute as amended.