FOI Advisory Council Opinion AO-28-04

December 29 , 2004

Deborah L. Biggs
Peninsula SPCA
Newport News, Virginia 23601

The staff of the Freedom of Information Advisory Council is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the information presented in your letter of November 12, 2004, and electronic mail of December 8, 2004.

Dear Ms. Biggs:

You have asked whether, under the changed conditions described below, the Peninsula SPCA1 would still be considered a public body under the Virginia Freedom of Information Act ("FOIA"). In a previous opinion, this office concluded that the Peninsula SPCA was a public body under FOIA and therefore subject to its public records and meeting requirements because it was acting as the animal-control arm of several local governments and received 63 percent of its funding from those governmental activities.2 In your letter you indicate that the Peninsula SPCA no longer provides these animal control services and no longer employs any animal control officers. The Peninsula SPCA staff no longer collects stray animals, collects fines, writes summonses or testifies in court. The organization does, however, sell animal licenses for the City of Newport News, but funds collected from these sales are remitted back to the city on a monthly basis. The organization also provides animal sheltering services under separate contracts with the Cities of Hampton and Newport News, the County of York, and the Town of Poquoson. You indicate that the funds collected when residents redeem their animals in connection with these sheltering services are remitted back to the impounding locality. You have also indicated that revenue generated from the animal sheltering contracts comprises approximately 59.5% of the total budget for the Peninsula SPCA. The actual amount received under these contracts varies from month-to-month, depending on the actual costs incurred in sheltering impounded animals. The remainder of the Peninsula SPCA's budget comes from private donations, fees collected from animal adoptions, fund-raising activities, and other non-governmental sources. Due to these changed circumstances you request a new opinion regarding whether the Peninsula SPCA is a public body under FOIA.

Section 2.2-3701 of the Code of Virginia defines a "public body" to include organizations, corporations or agencies in the Commonwealth supported wholly or principally by public funds. Previous opinions of this office have stated that, as a general rule, an entity would have to receive two-thirds of its funding from government sources in order to be considered "principally" supported by public funds. At the same time, a percentage of less than 66 percent could still represent the "principal" source of funds depending upon the particular facts of any given situation.3 In this instance, 59.5% of the Peninsula SPCA's revenue comes from contracts with four localities to provide animal sheltering services. A prior opinion of this office contemplated the possible results if public funding was less than 66 percent. That opinion postulated that if 55 percent of the budget came from public funds and 45 percent from another single source, then the public funds would not be the principal source. However, if the 45 percent came from a number of sources, each representing a relatively small fraction of the overall budget, then the 55 percent from public funds would be the principal source.4 The Peninsula SPCA's budget situation at first appears most similar to the second scenario, because the government contracts appear to represent a larger percentage of the entity's budget than any other single source.

However, there is an important and necessary distinction to be made here regarding interpretation of the phrase "supported wholly or principally by public funds." The Peninsula SPCA is a private entity with which the several localities have contracted to provide certain services. A large portion of the Peninsula SPCA's budget comes from contractual payments made by these localities in return for the animal sheltering services provided by the Peninsula SPCA as authorized by § 3.1-796.96.5 It appears that the Peninsula SPCA receives funds from the government solely through arms-length procurement transactions made in accordance with the Virginia Public Procurement Act (§ 2.2-4300 et seq.). There is no delegation of governmental authority involved, as was present in the facts of the previous opinion regarding the Peninsula SPCA.

The analysis now turns to whether payments made under a public contract should be used in determining whether a private entity is principally supported by public funds. The Council has previously opined that money received through grants "is more akin to a procurement transaction than an appropriation of funds," and concluded that grant money "should not be included in determining whether [a private entity] is wholly or principally supported by public funds."6 The money received by the Peninsula SPCA from government sources is received through arms-length procurement transactions, not appropriations. A private entity does not become a public body solely because the private entity provides goods or services to a public body through a procurement transaction. We concur with the Attorney General's opinion that opening the records of a private business to public scrutiny would likely have a chilling effect on the willingness of private corporations and businesses to enter into contracts with public bodies.7 Requiring public access to the records of private businesses and organizations that contract with government entities would surely discourage private enterprises from doing business with the government, without furthering the public interest. An unstated theme throughout FOIA is the simple concept that the public has the right to know what the government does with its money. In the case of procurement transactions, the public has a right to find out how much the government spent and what goods or services the government received. Those records can be obtained from the government. By contrast, money given through government largess to support a private organization, corporation, or agency without the provision of goods or services in return should be treated differently under FOIA.

Additionally, as noted above, the amount of money received by the Peninsula SPCA through its contracts with the local governing bodies varies monthly according to the number of animals sheltered by the Peninsula SPCA. From a practical point of view, if this money was considered in determining whether the organization is principally supported by public funds, such a determination would have to be re-calculated each time a records request was received. Especially in a borderline situation such as this, the result could easily be that the Peninsula SPCA would be considered a "public body" one month and would not be considered as such the next, all depending on the actual costs of sheltering animals and corresponding payments made by the localities. Such a result is untenable. The remuneration for the number of animals sheltered in any given time period should not be the measure of whether the Peninsula SPCA is a public body under FOIA. Such a variable measure does not further the intent of FOIA. The localities are paying for a particular service at contract prices, and maintain records of those contracts and the payments made to the Peninsula SPCA. The public should thus look to the localities for records of these transactions, as well as records related to the operation of the pound.

In conclusion, the Peninsula SPCA no longer acts as the animal control arm of the various local governing bodies, nor does it perform any governmental function. The issue of whether a private entity that receives less than 66 percent of its budget from governmental sources is principally supported by public funds must be considered on a case-by-case basis. The receipt by a private entity of public money derived from arm's length transactions, without any other source of public funds, should not be included in determining the private entity's status as a public body under FOIA. As such, the Peninsula SPCA is not a "public body" and therefore is not subject to the records and meeting requirements of FOIA.

Thank you for contacting this office. I hope that I have been of assistance.

Sincerely,

Maria J.K. Everett
Executive Director

1Society for the Prevention of Cruelty to Animals.
2Virginia Freedom of Information Advisory Opinion 3 (2004).
3See Virginia Freedom of Information Advisory Opinion 6 (2004); Advisory Opinion 3 (2004); Advisory Opinion 36 (2001).
4Virginia Freedom of Information Advisory Opinion 36 (2001).
5Subsection A of § 3.1-796.96 requires the governing body of each county and city to maintain a pound, but also states that the governing body may contract for its establishment with a private group or in conjunction with one or more other local governing bodies.
6Virginia Freedom of Information Advisory Opinion 6 (2004).
71995 Op. Atty. Gen. Va. 4. This opinion concerned whether a national hotel management corporation should be treated as a "public body" under FOIA because it had contracted to provide services with the Hotel Roanoke Conference Center Commission. The Attorney General opined that the corporation was not a public body.