Lawmakers in 2012 departed from the old adage “where public funds go, the public’s interest follows” when they amended KRS 61.870(1)(h).
That statute was originally enacted to expand the scope of the open records law to records in the possession of private entities that receive 25 percent or more of their funding from state or local government that relate to publicly funded functions, activities, programs or operations.
The 2012 amendment excluded from the 25 percent calculations public funds these entities receive in compensation for goods or services they provide under a public competitively bid contract. The backstory is unclear, but what is clear is that one such entity, Utility Management Group, LLC, greatly benefited from the amendment.
UMG is a privately owned for profit company which provides management services to public waterworks under competitively bid contracts with local agencies. It receives virtually all of its revenue from these agencies for its services, but has evaded public scrutiny since 2011 when it first disputed its status as a public agency in an appeal to the Kentucky attorney general that was resolved against UMG under the pre-amendment statute in 11-ORD-143.
The resulting legal challenge in the courts continues to the present.
Two unsuccessful attempts have been made to address this inequity legislatively. In 2016 and 2017 Rep. Chris Harris, D-Forest Hills, introduced legislation aimed at modifying the 2012 amendment to recapture public funds received by private entities, like UMG, in compensation for services performed for public agencies “relating to public utilities, water and wastewater services, fire protection, corrections and incarceration, law enforcement, tax assessment and collection, or waste management.”
Whether the proposed amendment is sufficient to rectify the inequity created by the 2012 amendment is uncertain. It is, at least, a step in the right direction.
An open records decision issued last week by the attorney general resurrected the issue.
In 17-ORD-106, an inmate submitted a request to Community Transitional Services, LLC — a private limited liability company which operates a halfway house under a contract with the Kentucky Department of Corrections — for records relating to an incident that occurred while he was a resident in which he fell.
CTS resisted disclosure of the requested records to its former resident, asserting that it is not a public agency because the public funds it receives from the Department of Corrections compensate it for services provided under a public competitively bid contract.
The inmate was thus denied access to records that almost certainly would have been accessible to him if the incident had occurred in a state facility. See, for example, 09-ORD-209, in which an inmate was afforded access to records relating to his fall in a jail shower.
Whatever the inmate’s interest in those records might be — and the open records law does not permit inquiry into the requester’s intended use of the records he seeks — the public’s interest is substantial.
Conditions in the wholly or partially state funded halfway house that may have contributed to the incident are a matter of legitimate public inquiry. So, too, is the manner in which state funds are expended by the halfway house — a contractor to a public agency — including records that might relate to funds expended to ensure resident safety.
Unfortunately, as the law currently stands the public is foreclosed from accessing records in CTS’s possession that reflect how state funds are being expended.
Whatever the reasons for the 2012 amendment to KRS 61.870(1 )(h), the fact remains “where public funds go, the public’s interest follows.”
An in-depth analysis of this issue can be found here.