FOI Advisory Council Opinion AO-09-05
AO-09-05
July 19, 2005
Andrew Beaujon
Richmond, Virginia
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 received June 7, 2005 and electronic mail of June 22, 2005.
Dear Mr. Beaujon:
You have asked whether the Virginia Performing Arts Foundation (the Foundation) is a public body subject to the requirements of the Virginia Freedom of Information Act (FOIA). You indicated that you had made a request for certain records from the Foundation, but the Foundation denied your request on the basis that it is not a public body subject to FOIA. Your request was for bank statements and copies of bills and accounts payable in amounts over $500. You further indicated that you believe the Foundation to be a public body as defined in § 2.2-3701 of the Code of Virginia, which includes other organizations, corporations or agencies in the Commonwealth supported wholly or principally by public funds. Additionally, you stated that by City Ordinance No. 2005-136-79 (the Ordinance) two members of the Richmond City Council (the Council) have been added to the Foundation's Board of Directors (the Board) and the Board's Executive Committee.
First addressing the Ordinance, subsection b of § 2 states that the Foundation shall cause [two named Council members] to be named members with vote on the Foundation's Board of Directors and its Executive Committee. The provisions of § 1 of the Ordinance are conditioned upon the Foundation's satisfaction of all of the provisions of § 2, including subsection b of § 2. However, it is clear that the power to name Directors is still a power of the Board, not a power of the Council. The Council has directed the Board to exercise that power in a certain manner in exchange for certain consideration by the Council, but the ultimate decision whether to do so still rests with the Board. Additionally, although two Council members are to be named to the Board, nothing in the facts presented indicates that the Council members so named have also been designated or appointed as a committee, subcommittee, or other entity of the Council that is performing a delegated function of the Council or advising the Council. Even if the two Council members were such a committee of the Council, that would only mean that when together they would be a public body subject to FOIA, not that the Foundation or its Board would become a public body subject to FOIA. That two members of a public body also serve as members of the board of a private entity does not by itself transform that private entity into a public body subject to FOIA.
Turning to the question of whether the Foundation is supported principally by public funds, FOIA does not provide a specific definition for the phrase supported wholly or principally by public funds. It is clear that supported wholly...by public funds indicates that an entity receives all of its funding (100%) from public sources. However, FOIA does not specify what amount of public funding an entity must receive to be considered supported...principally by public funds, nor is public funds itself a defined term. This office has indicated 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.1 Each situation must be addressed on a case-by-case basis depending upon the particular facts involved.2 Prior opinions have indicated that money received from competitive public grants and from procurement transactions should not be considered public funds for the purpose of determining whether the entity is a public body subject to FOIA.3 Whether an entity is considered a public body at any given time depends on the status of the entity (e.g., whether it is wholly or principally supported by public funds) at the time a request for records is made under FOIA.4 Additionally, measures that are variable, such as the proceeds of procurement transactions that may vary monthly, should not be used to determine an entity's level of public funding. The use of such variable measures may lead to the untenable result that the entity may be subject to FOIA one month then exempt from FOIA the next.5 In the case of procurements and grants, a requester can generally obtain financial records from the public body on one side of the transaction without seeking records from the private party on the other side of the transaction.6
As factual background you included a large volume of financial documents and a description of the Foundation's financial status, and indicated that the Foundation's true financial position has been difficult to ascertain. You have provided three alternative measures of the Foundation's finances: (1) the amount raised to date; (2) the amount received to date; and (3) the amount reflected on a tax filing, IRS Form 990, submitted by the Foundation to the Internal Revenue Service (IRS) for the 2003-2004 fiscal year. You indicated that the amount raised includes funds received and spent in previous years as well as pledges and other commitments not yet received. Based upon the information you have provided, it appears that as of May 20, 2005, the Foundation had raised $ 23.1 million in private funds. As of the same date, the Foundation had raised $ 39.9 million in public funds and an additional $ 4.9 million in historic tax credits. Of the total amount raised by the Foundation ($ 67.9 million), $ 44.8 million, or 65.98%, is derived from public funds, if the historic tax credit is counted as a public fund. Private sources account for 34.02% of the amount raised. By contrast, if one considers the amount actually received rather than the amount raised, the amounts from public and private sources are almost identical: $ 11.2 million and $ 11.1 million, or 50.2% and 49.8%, respectively. These amounts include all funds received to date over the several years since the inception of the Foundation. The tax filing you provided indicates that the Foundation reported total support of approximately $ 7.1 million, of which $ 4.5 million (63%) came from a single public source, the City of Richmond, for the 2003-2004 fiscal year. Other public sources also contributed funds to the Foundation, bringing the total public funding as reported on this tax filing to 64.7%. You further indicate that the Foundation has a pending request to draw more than $ 2 million from the money allocated to it by the City of Richmond, and that an $ 8.5 million grant from the Commonwealth became available on July 1, 2005. It appears that there are additional proposals pending which might further increase the percentage of public funding received by the Foundation. Additionally, the Foundation continues to seek and receive increased private funding. Thus it appears that the Foundation's funding levels are changing rather rapidly as new contributions from both private donors and public sources are received.
Applying the law to the facts you have presented, none of the measures of the Foundation's funding indicates a total amount of 66% or more, the percentage generally used by this office to indicate whether an entity is principally supported by public funds. The tax filing for 2003-2004 and the amounts raised both indicate that public funding is greater than 60% and significantly larger than any other single source of funds, which is at first persuasive that public funds may be the Foundation's principal support. However, the amounts raised include amounts from past years as well as future amounts that may or may not ever be received (as there are conditions upon receipt that may or may not be met). The tax documents provided reveal information for the 2003-2004 fiscal year, which does not necessarily reflect the Foundation's funding at the time the request was made in May of 2005. Therefore neither of these measures accurately reflects the Foundation's funding levels at the time your request was made, and so neither can be used to determine whether the Foundation was a public body subject to FOIA at the time of the request. There is a similar problem when considering the amount actually received because it reflects amounts received in past years as well as current funding. As the Foundation's funding levels fluctuate as new contributions from both public and private sources are received, it is very difficult to state what the precise status of the Foundation's funding is at any given point in time. Despite the voluminous pages of financial records you provided with your letter, this office cannot make an accurate factual determination regarding the Foundation's funding levels at the time of your request. Such a determination presents questions best answered by a trier of fact rather than this office.
However, much as in the cases of procurement transactions or grants, where a requester may be able to get records from a public entity that is party to a transaction, you should be able to inspect and copy records pertaining to the Foundation from the City of Richmond and other public bodies, rather than from the Foundation itself. Observe that the Ordinance imposes certain reporting requirements upon the Foundation. Section 1 of the Ordinance provides that the Director of Finance shall be entitled to request and receive from the Foundation such documentation, including reports of third parties, as the Director of Finance may consider necessary or appropriate to determine to his satisfaction that the conditions have been met. Subsection a of § 2 of the Ordinance states that the Foundation shall furnish the City Council and the Mayor with monthly written reports comparing all of the Foundation's receipts of funds with all binding commitments and approvals for funds required to complete the construction of the Project...based on then current cost estimates. It is clear that records involving the transaction of public business held by the Director of Finance, the Council, and the Mayor are public records subject to FOIA. We would suggest you might wish to request documents from the City of Richmond and other sources of public funds that reflect what funding they have provided, are providing, or will provide to the Foundation. Such public records, along with the available IRS filings, should prove to be the best measures by which to determine what level of support the Foundation receives from public funds.
In conclusion, this office lacks the financial expertise to fully and accurately determine the Foundation's financial status at the time of the request. Additionally, while this office is authorized by statute to provide advisory opinions regarding FOIA, we do not have the authority to make binding factual determinations regarding the funding provided to the Foundation. This office is not a fact-finding body or trier of fact. Unfortunately, the background materials you provided, while informative regarding some aspects of the Foundation's funding, do not provide the information necessary to describe accurately the Foundation's funding levels at the time of your request. Without that information, this office cannot opine whether the Foundation is principally supported by public funds and thus should be treated as a public body subject to FOIA. We would suggest that you seek further information from public bodies involved in providing funding to the Foundation or that might otherwise have information regarding the Foundation's funding levels, such as the City of Richmond. Additionally, you may wish to retain private legal and financial counsel to provide you with further advice regarding the financial status of the Foundation.
Thank you for contacting this office. I hope that I have been of assistance.
Sincerely,
Maria J.K. Everett
Executive Director
1Virginia Freedom of Information Advisory Opinions 28 (2004), 6 (2004), 3 (2004), and 36 (2001).
2Virginia Freedom of Information Advisory Opinions 28 (2004), 6 (2004) and 36 (2001).
3Virginia Freedom of Information Advisory Opinions 28 (2004)(regarding procurement transactions) and 6 (2004)(regarding grants).
4Virginia Freedom of Information Advisory Opinion 22 (2004).
5Virginia Freedom of Information Advisory Opinion 28 (2004).
6Virginia Freedom of Information Advisory Opinions 28 (2004) and 6 (2004).
July 19, 2005
Andrew Beaujon
Richmond, Virginia
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 received June 7, 2005 and electronic mail of June 22, 2005.
Dear Mr. Beaujon:
You have asked whether the Virginia Performing Arts Foundation (the Foundation) is a public body subject to the requirements of the Virginia Freedom of Information Act (FOIA). You indicated that you had made a request for certain records from the Foundation, but the Foundation denied your request on the basis that it is not a public body subject to FOIA. Your request was for bank statements and copies of bills and accounts payable in amounts over $500. You further indicated that you believe the Foundation to be a public body as defined in § 2.2-3701 of the Code of Virginia, which includes other organizations, corporations or agencies in the Commonwealth supported wholly or principally by public funds. Additionally, you stated that by City Ordinance No. 2005-136-79 (the Ordinance) two members of the Richmond City Council (the Council) have been added to the Foundation's Board of Directors (the Board) and the Board's Executive Committee.
First addressing the Ordinance, subsection b of § 2 states that the Foundation shall cause [two named Council members] to be named members with vote on the Foundation's Board of Directors and its Executive Committee. The provisions of § 1 of the Ordinance are conditioned upon the Foundation's satisfaction of all of the provisions of § 2, including subsection b of § 2. However, it is clear that the power to name Directors is still a power of the Board, not a power of the Council. The Council has directed the Board to exercise that power in a certain manner in exchange for certain consideration by the Council, but the ultimate decision whether to do so still rests with the Board. Additionally, although two Council members are to be named to the Board, nothing in the facts presented indicates that the Council members so named have also been designated or appointed as a committee, subcommittee, or other entity of the Council that is performing a delegated function of the Council or advising the Council. Even if the two Council members were such a committee of the Council, that would only mean that when together they would be a public body subject to FOIA, not that the Foundation or its Board would become a public body subject to FOIA. That two members of a public body also serve as members of the board of a private entity does not by itself transform that private entity into a public body subject to FOIA.
Turning to the question of whether the Foundation is supported principally by public funds, FOIA does not provide a specific definition for the phrase supported wholly or principally by public funds. It is clear that supported wholly...by public funds indicates that an entity receives all of its funding (100%) from public sources. However, FOIA does not specify what amount of public funding an entity must receive to be considered supported...principally by public funds, nor is public funds itself a defined term. This office has indicated 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.1 Each situation must be addressed on a case-by-case basis depending upon the particular facts involved.2 Prior opinions have indicated that money received from competitive public grants and from procurement transactions should not be considered public funds for the purpose of determining whether the entity is a public body subject to FOIA.3 Whether an entity is considered a public body at any given time depends on the status of the entity (e.g., whether it is wholly or principally supported by public funds) at the time a request for records is made under FOIA.4 Additionally, measures that are variable, such as the proceeds of procurement transactions that may vary monthly, should not be used to determine an entity's level of public funding. The use of such variable measures may lead to the untenable result that the entity may be subject to FOIA one month then exempt from FOIA the next.5 In the case of procurements and grants, a requester can generally obtain financial records from the public body on one side of the transaction without seeking records from the private party on the other side of the transaction.6
As factual background you included a large volume of financial documents and a description of the Foundation's financial status, and indicated that the Foundation's true financial position has been difficult to ascertain. You have provided three alternative measures of the Foundation's finances: (1) the amount raised to date; (2) the amount received to date; and (3) the amount reflected on a tax filing, IRS Form 990, submitted by the Foundation to the Internal Revenue Service (IRS) for the 2003-2004 fiscal year. You indicated that the amount raised includes funds received and spent in previous years as well as pledges and other commitments not yet received. Based upon the information you have provided, it appears that as of May 20, 2005, the Foundation had raised $ 23.1 million in private funds. As of the same date, the Foundation had raised $ 39.9 million in public funds and an additional $ 4.9 million in historic tax credits. Of the total amount raised by the Foundation ($ 67.9 million), $ 44.8 million, or 65.98%, is derived from public funds, if the historic tax credit is counted as a public fund. Private sources account for 34.02% of the amount raised. By contrast, if one considers the amount actually received rather than the amount raised, the amounts from public and private sources are almost identical: $ 11.2 million and $ 11.1 million, or 50.2% and 49.8%, respectively. These amounts include all funds received to date over the several years since the inception of the Foundation. The tax filing you provided indicates that the Foundation reported total support of approximately $ 7.1 million, of which $ 4.5 million (63%) came from a single public source, the City of Richmond, for the 2003-2004 fiscal year. Other public sources also contributed funds to the Foundation, bringing the total public funding as reported on this tax filing to 64.7%. You further indicate that the Foundation has a pending request to draw more than $ 2 million from the money allocated to it by the City of Richmond, and that an $ 8.5 million grant from the Commonwealth became available on July 1, 2005. It appears that there are additional proposals pending which might further increase the percentage of public funding received by the Foundation. Additionally, the Foundation continues to seek and receive increased private funding. Thus it appears that the Foundation's funding levels are changing rather rapidly as new contributions from both private donors and public sources are received.
Applying the law to the facts you have presented, none of the measures of the Foundation's funding indicates a total amount of 66% or more, the percentage generally used by this office to indicate whether an entity is principally supported by public funds. The tax filing for 2003-2004 and the amounts raised both indicate that public funding is greater than 60% and significantly larger than any other single source of funds, which is at first persuasive that public funds may be the Foundation's principal support. However, the amounts raised include amounts from past years as well as future amounts that may or may not ever be received (as there are conditions upon receipt that may or may not be met). The tax documents provided reveal information for the 2003-2004 fiscal year, which does not necessarily reflect the Foundation's funding at the time the request was made in May of 2005. Therefore neither of these measures accurately reflects the Foundation's funding levels at the time your request was made, and so neither can be used to determine whether the Foundation was a public body subject to FOIA at the time of the request. There is a similar problem when considering the amount actually received because it reflects amounts received in past years as well as current funding. As the Foundation's funding levels fluctuate as new contributions from both public and private sources are received, it is very difficult to state what the precise status of the Foundation's funding is at any given point in time. Despite the voluminous pages of financial records you provided with your letter, this office cannot make an accurate factual determination regarding the Foundation's funding levels at the time of your request. Such a determination presents questions best answered by a trier of fact rather than this office.
However, much as in the cases of procurement transactions or grants, where a requester may be able to get records from a public entity that is party to a transaction, you should be able to inspect and copy records pertaining to the Foundation from the City of Richmond and other public bodies, rather than from the Foundation itself. Observe that the Ordinance imposes certain reporting requirements upon the Foundation. Section 1 of the Ordinance provides that the Director of Finance shall be entitled to request and receive from the Foundation such documentation, including reports of third parties, as the Director of Finance may consider necessary or appropriate to determine to his satisfaction that the conditions have been met. Subsection a of § 2 of the Ordinance states that the Foundation shall furnish the City Council and the Mayor with monthly written reports comparing all of the Foundation's receipts of funds with all binding commitments and approvals for funds required to complete the construction of the Project...based on then current cost estimates. It is clear that records involving the transaction of public business held by the Director of Finance, the Council, and the Mayor are public records subject to FOIA. We would suggest you might wish to request documents from the City of Richmond and other sources of public funds that reflect what funding they have provided, are providing, or will provide to the Foundation. Such public records, along with the available IRS filings, should prove to be the best measures by which to determine what level of support the Foundation receives from public funds.
In conclusion, this office lacks the financial expertise to fully and accurately determine the Foundation's financial status at the time of the request. Additionally, while this office is authorized by statute to provide advisory opinions regarding FOIA, we do not have the authority to make binding factual determinations regarding the funding provided to the Foundation. This office is not a fact-finding body or trier of fact. Unfortunately, the background materials you provided, while informative regarding some aspects of the Foundation's funding, do not provide the information necessary to describe accurately the Foundation's funding levels at the time of your request. Without that information, this office cannot opine whether the Foundation is principally supported by public funds and thus should be treated as a public body subject to FOIA. We would suggest that you seek further information from public bodies involved in providing funding to the Foundation or that might otherwise have information regarding the Foundation's funding levels, such as the City of Richmond. Additionally, you may wish to retain private legal and financial counsel to provide you with further advice regarding the financial status of the Foundation.
Thank you for contacting this office. I hope that I have been of assistance.
Sincerely,
Maria J.K. Everett
Executive Director
1Virginia Freedom of Information Advisory Opinions 28 (2004), 6 (2004), 3 (2004), and 36 (2001).
2Virginia Freedom of Information Advisory Opinions 28 (2004), 6 (2004) and 36 (2001).
3Virginia Freedom of Information Advisory Opinions 28 (2004)(regarding procurement transactions) and 6 (2004)(regarding grants).
4Virginia Freedom of Information Advisory Opinion 22 (2004).
5Virginia Freedom of Information Advisory Opinion 28 (2004).
6Virginia Freedom of Information Advisory Opinions 28 (2004) and 6 (2004).
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