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August 8, 2000

FOIL-AO-12272

The staff of the Committee on Open Government is authorized to issue advisory opinions.
The ensuing staff advisory opinion is based solely upon the information presented in your
correspondence.

Dear

I have received your letter of July 5 in which you questioned the status of the
Canandaigua Recreation Development Corporation ("the Corporation"), which was
established by the City of Canandaigua. You wrote that the City "wants to build a water park
financed by bonds using I.R.S. ruling 63-20" and that in order to comply with the tax ruling,
the city established the corporation...." A document prepared by the City's Office of
Development and Planning indicates that the City Council adopted resolutions to appoint the
members of the Corporation's Board of Directors.

In this regard, judicial decisions indicate that not-for-profit- corporations that are
creations of government are subject to both the Open Meetings Law and the Freedom of
Information Law. That being so, from my perspective, the Corporation is required to comply
with those statutes.

By way of background, the Freedom of Information Law pertains to agency records,
and §86(3) of that statute defines the term "agency" to mean:

"any state or municipal department, board, bureau, division,
commission, committee, public authority, public corporation,
council, office or other governmental entity performing a
governmental or proprietary function for the state or any one or
more municipalities thereof, except the judiciary or the state
legislature."

In view of the foregoing, an "agency" generally is an entity of state or local government.
Typically, a private entity or a not-for-profit corporation would not constitute an agency, for
it would not be a governmental entity.

However, there is precedent indicating that in some instances a not-for-profit
corporation may indeed be an "agency" required to comply with the Freedom of Information
Law. In Westchester-Rockland Newspapers v. Kimball [50 NY2d 575 (1980)], a case
involving access to records relating to a lottery conducted by a volunteer fire company, the
Court of Appeals, the state's highest court, found that volunteer fire companies, despite their
status as not-for-profit corporations, are "agencies" subject to the Freedom of Information
Law. In so holding, the Court stated that:

"We begin by rejecting respondent's contention that, in
applying the Freedom of Information Law, a distinction is to be
made between a volunteer organization on which a local
government relies for performance of an essential public
service, as is true of the fire department here, and on the other
hand, an organic arm of government, when that is the channel
through which such services are delivered. Key is the
Legislature's own unmistakably broad declaration that, '[a]s
state and local government services increase and public
problems become more sophisticated and complex and
therefore harder to solve, and with the resultant increase in
revenues and expenditures, it is incumbent upon the state and
its localities to extend public accountability wherever and
whenever feasible' (emphasis added; Public Officers Law,
§84).

For the successful implementation of the policies motivating
the enactment of the Freedom of Information Law centers on
goals as broad as the achievement of a more informed
electorate and a more responsible and responsive officialdom.
By their very nature such objections cannot hope to be attained
unless the measures taken to bring them about permeate the
body politic to a point where they become the rule rather than
the exception. The phrase 'public accountability wherever and
whenever feasible' therefore merely punctuates with
explicitness what in any event is implicit" (id. at 579].

In the same decision, the Court noted that:

"...not only are the expanding boundaries of governmental
activity increasingly difficult to draw, but in perception, if not
in actuality, there is bound to be considerable crossover
between governmental and nongovernmental activities,
especially where both are carried on by the same person or
persons" (id., 581).

The point made in the final sentence of the passage quoted above appears to be especially
relevant, for there is clearly "considerable crossover" in the activities of City officials in the
performance of their duties for the City government and the Corporation.

More recently, in Buffalo News v. Buffalo Enterprise Development Corporation [84
NY 2d 488 (1994)], the Court of Appeals found again that a not-for-profit corporation, based
on its relationship to an agency, was itself an agency subject to the Freedom of Information
Law. The decision indicates that:

"The BEDC principally pegs its argument for nondisclosure on
the feature that an entity qualifies as an 'agency' only if there is
substantial governmental control over its daily operations (see,
e.g., Irwin Mem. Blood Bank of San Francisco Med. Socy. v
American Natl. Red Cross, 640 F2d 1051; Rocap v Indiek, 519
F2d 174). The Buffalo News counters by arguing that the City
of Buffalo is 'inextricably involved in the core planning and
execution of the agency's [BEDC] program'; thus, the BEDC is
a 'governmental entity' performing a governmental function for
the City of Buffalo, within the statutory definition.

"The BEDC's purpose is undeniably governmental. It was
created exclusively by and for the City of Buffalo...In sum, the
constricted construction urged by appellant BEDC would
contradict the expansive public policy dictates underpinning
FOIL. Thus, we reject appellant's arguments," (id., 492-493).

Based on the foregoing, since the relationship between the Corporation and the City
of Canandaigua is analogous to that of the BEDC and the City of Buffalo, I believe that the
Corporation constitutes an "agency" required to comply with the Freedom of Information
Law.

Because the City Council appoints the members of the Corporation's Board of
Directors, it is clear that the City exercises substantial control over the Corporation. If that is
so, I believe that the Corporation constitutes an "agency" required to comply with the
Freedom of Information Law. In brief, that statute is based upon a presumption of access.
Stated differently, all records of an agency are available, except to the extent that records or
portions thereof fall within one or more grounds for denial appearing in §87(2)(a) through (i)
of the Law.

If the Corporation is an agency that falls within the scope of the Freedom of
Information Law, I believe that its Board of Directors would constitute a "public body" for
purposes of the Open Meetings Law. Section 102(2) defines that phrase to mean:

"...any entity for which a quorum is required in order to
conduct public business and which consists of two or more
members, performing a governmental function for the state or
for an agency or department thereof, or for a public corporation
as defined in section sixty-six of the general construction law,
or committee or subcommittee or other similar body of such
public body."

By breaking the definition into its components, I believe that each condition necessary to a
finding that the board of the Corporation is a "public body" may be met. It is an entity for
which a quorum is required pursuant to the provisions of the Not-for-Profit Corporation Law.
It consists of more than two members. In view of its membership the degree of governmental
control exercised by the City, I believe that it conducts public business and performs a
governmental function for a public corporation, in this instance, the City of Canandaigua. It
is noted, too, that the same conclusion was reached recently in VanNess v. The Center for
Animal Control (Supreme Court, New York County, January 28, 1999). In that instance,
"The Center is a not-for profit corporation with its four Board members appointed by the
Mayor, with three New York City Commissioners also sitting as ex officio Board members."

Like the Freedom of Information Law, the Open Meetings Law is based on a
presumption of openness. Meetings of public bodies must be conducted open to the public,
except to the extent that an executive session may be conducted in accordance with the
provisions of paragraphs (a) through (h) of §105(1) of that statute.

In an effort to share the foregoing with City officials, a copy of this opinion will be
forwarded to the City Council.

I hope that I have been of assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

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cc: City Council