The Kansas Court of Appeals has affirmed a district court ruling that the entity which operates Kiowa County Memorial Hospital is legally required to make its records public.
In February of 2016, the 16th Judicial District Court of Kiowa County ruled in favor of Kiowa County, which had sued the hospital for release of the records. The district court ruled that Great Plains of Kiowa County, which operates the hospital, had 30 days to release records requested by the Kiowa County Commission.
GPKC appealed the decision.
The appellate court's decision in favor of the county was handed down late last week.
"We're pleased with the ruling," Kiowa County Attorney Scott James said. "We were confident in our stance that the records should be available to the public. We're glad the court agreed with us on that. I think that it's a victory for open records and transparency across the board."
James said 20 percent of the hospital's budget is attributed to taxpayers through the mill levy.
"If they take that much in taxpayer money, they need to understand they're accountable to taxpayers," he said.
Jessica Skladzien, attorney for GPKC, said the case has never been about GPKC withholding records and that it has been cooperative with the KCMH Hospital Board of Directors and the county.
"However, GPKC's willingness to provide records does not mean that it concedes that it is subject to the Kansas Open Records Act (KORA) or that all of its records – especially records of its employees – are public records," Skladzien said in an email.
The case originated in October of 2014 when the county commission requested from GPKC information about the hospital's budget, professional/management fees, salaries and titles of administrative or executive employees, the registration of all vehicles operated by the hospital, whether owned or leased and income tax returns.
"We wanted to know what the hundreds of thousands of dollars being spent on administrative fees were for," James said.
GPKC responded to the request, saying it was not a public agency. Instead, it was merely a lessee of the hospital. (A lease agreement between GPKC and the KCMH Board of Trustees was signed in 2001. GPKC, a non-profit corporation, was organized solely for the purpose of administering the hospital.)
GPKC suggested the county seek the information it wanted from the hospital board. The county advised GPKC that it had already contacted the board and was told the board did not possess that information.
On October 20, 2014, Kiowa County filed a petition in district court seeking to enforce KORA and named GPKC as a defendant. GPKC filed an answer, denying it was a "public agency" subject to KORA and its records were not public records, the court record states.
GPKC argued since it was largely funded by federal monies, it was not a "public entity" under KORA. In its February 2016 ruling, the district court found that because the county provided public funds to GPKC through mill tax levy funds, GPKC was a public agency.
GPKC's attorneys had cited a statute defining a public agency, saying it does not apply to "any entity solely by reason of payments from public funds for property, goods or services of such entity." The attorneys argued that even though the hospital received funds from the county, it provided property, goods or services to the county, making it exempt from the statutory definition of a public agency.
However, the court ruled that when the services were provided directly to the public rather than the county, the records related to those services were subject to KORA.
The county relied on a 1985 article in the University of Kansas Law Review, saying the exception to the "public agency" definition "is designed to exempt vendors who merely sell goods or services to government, for example the company that sells gravel to the city street department or the bottling company that maintains soft drink machines in the courthouse."
What is public?
The appellate court ruling stated that arguing about the definition of "public agency" in the applicability of a KORA case "may be misguided." The focus on KORA is public records "regardless of who has custody of the public records," the court stated.
"In other words, the focus of KORA seems to be on the nature of the records, i.e., are they 'public records,' rather than on the nature of the entity with the custody of those records," the court stated. "KORA's focus is not on who serves as the actual custodian of the public records; it is simply to ensure that records relating to the use of governmental funds are open."
Skladzien said for records to be public, they must be "made, maintained or kept by" or "in the possession of" a public agency.
"By sidestepping the question of whether GPKC is a public agency, the court deviated from the statutory language defining the duties of an entity under the KORA," she said.
The court quoted the 1984 statute on KORA, which said KORA should be "liberally construed and applied" to promote the policy that "public records be opened for public review."
According to the court ruling, GPKC has one function – to operate on behalf of the hospital board.
"The board cannot hide its records by delegating the operations to GPKC and violate its statutory duty to maintain adequate financial records pertaining to the operations of the county-created hospital. By assuming the role as the sole operator of the hospital on behalf of the board, GPKC's operating records are deemed to be public records," the court record stated.
"You can't just contract your way out of a government obligation," James said.
Skladzien said after the original district court ruling that "the biggest misconception about Great Plains' position is the notion that it is somehow seeking permission to be less than transparent in its operation of the hospital. That is false. However, Great Plains does think there is an important distinction between being transparent and being statutorily required to be transparent."
James said there is little case law on the issue the two sides are wrangling over. If the hospital appeals the appellate court's ruling to the Kansas Supreme Court, James believes the court is likely to accept the case for a hearing.
"The Supreme Court will be likely to weigh in," he said.
It is still unclear whether the hospital will accept the latest court decision or appeal it.
"GPKC is still reviewing the opinion and making decisions about what to do going forward," Skladzein said.