The case brought by the Pike County Fiscal Court to force Utility Management Group, which managed the day-to-day operations of the Mountain Water District, to submit its financial records was heard by the Kentucky Supreme Court Friday.
Kentucky law requires that any company that receives 25 percent of its funding from public funds must provide its records, under Kentucky’s Open Records Act.
A revision to the Open Records Act said that a public agency was any body which, within any fiscal year, derives at least 25 percent of funds expended by it from state or local government.
But, the revision states, any funds derived from a state or local government which pays a contract obtained through a bidding process would not be included in the determination of whether that contractor is a public agency. UMG maintains that they should not be subject to an open records request, arguing that the Open Records Act “was never intended to go after any part of a private company that might, at some point, be doing business with a government agency.”
During arguments, Kevin Burke, attorney for UMG, argued that the revision, when it stated that any body which receives 25 percent of its funding has to submit to an open records request, was not intended to apply to private companies. The justices asked and discussed whether the term “body” applies to public bodies, such as “bodies politic,” only, or to companies such as UMG.
It was also argued that, if UMG were to makes its financial records public, competing companies could use that information in order to underbid UMG for projects.
David Kaplan, attorney for the fiscal court, argued that rulings which used the term “body” should include UMG, as the attorney general ruled that it would apply to any company which derives 25 percent of its funding from public funds. He argued that companies such as Passport, a healthcare company and the Kentucky Association of Counties were required to make its records public upon request.
Greg May, CEO of UMG, said that the money MWD paid to the company to manage the district was not money derived from public funds.
“They (the county) are saying it’s public funds,” May said. “But, it’s not really public funds. It’s ratepayer funds. MWD is a public agency. But everyone in the public doesn’t have to take (their service) and pay a water bill.”
Rep. Chris Harris was a magistrate on the Pike County Fiscal Court when the court requested UMG’s records, and has spearheaded efforts to have the company submit to the Open Records request. He was at the hearing, and said he hopes the taxpayers of the county will have access to UMG’s financial records.
“It’s been a long journey just to see how our own public utility spends our money,” Harris said. “I was encouraged by several of the supreme court justices questions during the hearing and hope they rule in favor of the people and their right to know how their money’s spent.”
Pike County Assistant County Attorney John Doug Hays said it is hard to gauge how the court would rule.
“This was a hard case,” Hays said. “I felt like several of the justices, in asking the questions and making observations, were well-versed on briefs and the legal issues involved. Those are complex legal issues.”