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OML-AO-4574

March 3, 2008

 

 

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

Dear

As you are aware, I have received your letter in which you referred to an opinion rendered on October 3 of last year in which it was advised that the Board of Directors of Western New York Health System (“WNYHS”) constitutes a “public body” required to comply with the Open Meetings Law. The basis of the opinion involved the fact that every member of the Board had been designated by the Commissioner of Health, and that the Board was charged with the responsibility to “bring about a single unified joint governance” as the result of a merger of the Erie County Medical Center and Kaleida Health. You wrote that you serve as a member of the Board and asked that I reaffirm that meetings of the Board are subject to the Open Meetings Law.

When the October 3 opinion was prepared the entity at issue had not been incorporated. However, you wrote that WNYHS was incorporated as a not-for-profit corporation on October 25. You added that:

“All of the existing board members were appointed by the N.Y. Commissioner of Health, Richard F. Daines, M.D. Seven of those appointees serve in official capacity to represent public institutions at his direction (Erie County Medical Center Corporation and the State University of New York at Buffalo are the public institutions involved). Although there are representatives of public institutions and the receipt of public money for purposes of public good is contemplated, counsel for WNYHS has verbally advised the Board that in his opinion the Open Meetings Law does not apply because WNYHS is a not-for-profit organization.”

I respectfully disagree with that conclusion.

Once again, the Open Meetings Law is applicable to meetings of public bodies, and §102(2) defines the phrase “public body” 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."

Based upon the language quoted above, a public body, in brief, is an entity consisting of two or more members that conducts public business and performs a governmental function for one or more governmental entities.

Its companion, the Freedom of Information Law, is applicable to agency records, and §86(3) 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 consideration of the foregoing, as a general matter, the Freedom of Information Law pertains to entities of state and local government in New York.

Although not-for-profit corporations typically are not governmental entities and, therefore, fall beyond the scope of the Freedom of Information and Open Meetings Laws, the courts have found that the incorporation status of those entities is, alone, not determinative of their status under the statutes in question. Rather, they have considered the extent to which there is governmental control over those corporations in determining whether they fall within the coverage of those statutes.

In the first such decision, Westchester-Rockland Newspapers v. Kimball [50 NY2d 575 (1980)], the issue involved access to records relating to a lottery conducted by a volunteer fire company, the Court of Appeals 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 another decision rendered by the Court of Appeals, Buffalo News v. Buffalo Enterprise Development Corporation [84 NY 2d 488 (1994)], the Court found 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).

More recently, in a case involving a not-for-profit corporation, the “CRDC”, the court found that:’

“The CRDC denies the City has a controlling interest in the corporation. Presently the Board has eleven members, all of whom were appointed by the City (see Resolution #99-083). The Board is empowered to fill any vacancies of six members not reserved for City appointment. Of those reserved to the City, two are paid City employees and the other three include the City mayor and council members. Formerly the Canandaigua City Manager was president of the CRDC. Additionally, the number of members may be reduced to nine by a board vote (see Amended Certificate of Incorporation Article V(a)). Thus the CRDC’s claim that the City lacks control is at best questionable...

I note that the Appellate Division unanimously affirmed the findings of the Supreme Court regarding the foregoing [292 AD2d 825 (2002)].

In short, the Commissioner of Health has complete control over the membership of the Board of Directors of WNYHS. That being so, and in consideration of the judicial decisions cited earlier, I believe that the Board of Directors of WNYHS remains a “public body” required to comply with the Open Meetings Law, despite its status as a not-for-profit corporation.

I hope that I have been of assistance.

Sincerely,

Robert J. Freeman
Executive Director

RJF:tt

cc: Thomas Conway, General Counsel