Wednesday, February 02, 2005

Letter: Spence to Lendermon re: Tennessee Open Meetings Act

During the question and answer session following a recent presentation to the League of Women Voters, Benny Lendermon told the audience that, while it is subject to the Tennessee Open Records Act, the RDC is not subject to the Tennessee Open Meetings Act. Here is the complete text of the local attorney's opinion letter upon which Mr. Lendermon apparently relied.


Robert L. J. Spence, Jr.
Attorney at Law

Spence Law Firm
119 S. Main Street, Suite 500, Memphis, TN 38103
901-312-9160, fax 901-312-5501

February 2, 2005

VIA HAND DELIVERY

Benny Lendermon
President
Riverfront Development Corporation
22 N. Front, Suite 960
Memphis, TN 38103

Re: Tennessee Open Meetings Act

Dear Benny:

You have asked for our opinion as to whether the Tennessee Open Meetings Act[1] (the “Act”) is applicable to meetings of the board of directors of the Riverfront Development Corporation (“RDC”). For the following reasons we do not believe that it is applicable. RDC, as a private non-profit corporation, has no legal obligation to give public notice of meetings of its board of directors or to allow the public to attend and observe such meetings.

The Act sets out a declaration of state policy that the “formation of public policy and decisions is public business and shall not be conducted in secret.”[2] Toward that end the Act further provides that “[a]ll meetings of any governing body are declared to be public meetings open to the public at all times, except as provided by the Constitution of Tennessee.”[3] “Governing body” is defined in the Act to include the board of directors of several types of non-profit corporations, including those that (1) receive more than 30% of their funding through contracts with the state for community grant funds, [4] (2) provide utility or solid waste disposal systems on behalf of local governments pursuant to state law, [5] (3) provide certain sized cities with heat, steam or incineration services, [6] and (4) act as a municipal bond financing pool for local governments and receive more than 30% of their total annual income through related fees.[7] None of these categories would include the RDC.

    "Government body" is also defined in the Act as:

    (A)The members of any public body which consists of two (2) or more members, with the authority to make decisions for or recommendations to a public body on policy or administration.


The question thus becomes whether the RDC board meets the criteria for a “public body” for purposes of this definition. “Public body” is not defined in the Act. Nevertheless, the Tennessee Supreme Court, taking guidance from the legislative history and the policy declaration of the Act, has determined it to be:

    clear that for purposes of this Act, the Legislature intended to include any board, commission, committee, agency, authority or any other body, by whatever name, whose origin and authority may be traced to State, City or County legislative action and whose members have authority to make decisions or recommendations on policy or administration affecting the conduct of the business of the people in the government sector.[9]


Thus, the two criteria that must be satisfied in order for the RDC to be considered a “public body” and consequently a “governing body” are: (1) whether RDC’s existence and authority arises from a legislative action by the City, and (2) whether RDC has the authority to make decisions or recommendations about City government policy or administration.

RDC did not originate and was not formed by legislative action of the city. It is a private Tennessee non-profit corporation formed by an independent group of citizens. Although the Mayor of the City recommends persons to serve on its board of directors, its actual invitation to do so is made by the RDC board of directors itself. The Mayor has no appointment power and the City Council has no approval authority with regard to the RDC board of directors. The inclusion of City government officials as ex officio members of the RDC board gives the City a representative presence only, and does not provide or allow the City authority and control over the RDC board. RDC does receive grant money from the City. It also receives significant funding from private grants and contributions and contractual income. Consequently, the City’s grant funding is not so pervasive as to be tantamount to control over the actions and decisions of the RDC board. It appears that neither the original existence nor authority of the RDC can properly be traced to the City, and the RDC does not meet the first prong of the definition of “public body” under the Act.

Nor does the RDC have the authority to make decisions or recommendations about City government policy or administration – the second prong of the analysis of whether it is a “public body” and thus a “government body” subject to the Act. This criteria has been considered by the Tennessee Court of Appeals. In Fain vs. Faculty of the College of Law of the University of Tennessee, 552 S.W.2nd 752 (Tenn. App. 1988) the Court considered whether a faculty committee appointed and presided over by the Dean of the University of Tennessee College of Law was a “governing body” subject to the Act. The Court found that although the Dean had the responsibility and power to administer the College of Law, neither he nor the faculty committee had authority to formulate policies governing it. That authority resided solely in the Board of Trustees of the University of Tennessee. Therefore, the faculty committee was not a “governing body” and was not subject to the Act. Also, in the recent case of Allen v. City of Memphis, 2004 Tenn. App. LEXIS 403 (June 22, 2004), the Court was unable to determine that a committee of the Memphis City Council, formed to review an annexation matter, was a “governing body” due to the fact that the committee had no authority to delete, change or amend the relevant annexation ordinance and that the committee did not act in the capacity of making a “recommendation” regarding the annexation ordinance.

Consistent with its corporate purpose, the RDC is involved with public property located in the Memphis riverfront area. It has no absolute authority over same, however. RDC contracts with the City for capital improvement projects effecting city infrastructure in the riverfront area as well as comprehensive planning projects. The terms and conditions of these contracts are approved and administered by the Mayor and his staff, and funding is approved by the City Council. Pursuant to these contracts RDC implements the policies of the City, as would any similarly situated, independent construction or project management contractor or planning consultant. Similarly RDC manages certain of the City’s park properties located in the riverfront area pursuant to contract with the City. Any operaying policies and procedures that it formulates with regard to these properties are subject to review by the City, and the City retains ultimate authority and control over the use and disposition of such properties. Any proposals or recommendations by the RDC for development of these properties are presented to the City Council, for discussion and approval, in public meetings held pursuant to the Act. RDC does not obtain or exercise independent and absolute authority to make or implement its own policies with regard to its performance of its contracts with the City, including the management of City park properties. As a result the RDC does not meet the second promng of the definition of “public Body.”

Accordingly, we do not believe the RDC falls within any of the definitions of “governing body” in the Act, and is therefore, not subject to the Act.

I hope this responds adequately to your request, and that you will not hesitate to call if you have any questions.

Very truly yours,

THE SPENCE LAW FIRM

(signed)
Robert L.J. Spence, Jr.



Notes

[1] Tenn. Code Ann. 8-44-101 et seq.
[2] Tenn. Code Ann. 8-44-101 (a).
[3] Tenn. Code Ann. 8-44-102 (a).
[4] Tenn. Code Ann. 8-44-102(b)1)(B). “(b)(1) ‘Governing body’ means: (B) The board of directors of any nonprofit corporation which contracts with a state agency to receive community grant funds in consideration for rendering specified services to the public; provided, that community grant funds comprise at least thirty percent (30%) of the total annual income of such corporation….”
[5] Tenn. Code Ann. 8-44-102(b)(1)(C). “(b)(1) ‘Governing body’ means: (C) The board of directors of any not-for-profit corporation authorized by the laws of Tennessee to act for the benefit or on behalf of any one (1) or more counties, cities, towns and local governments pursuant to the provisions of title 7, chapter 54 or 58.
[6] Tenn. Code Ann. 8-44-102(b)(1)(D). “(b)(1) ‘Governing body’ means (D) The board of directors of any nonprofit corporation which through contract or otherwise provides a metropolitan form of government having a population in excess of five hundred thousand (500,000) according to the 1990 federal census or any subsequent federal census with heat, steam or incineration of refuse.”
[7] Tenn. Code Ann. 8-44-102(b)(1)(E). “(b)(1) ‘Governing body’ means (E)(i) The board of directors of any association or nonprofit corporation authorized by the laws of Tennessee that: (a) was established for the benefit of local government officials or counties, cities, towns or other local governments or as a municipal bond financing pool; (b) receives dues, service fees or any other income from local government officials or such local governments that constitute at least thirty percent (30%) of its total annual income; and (c) was authorized as of January 1, 1998, under state law to obtain coverage for its employees in the Tennessee consolidated retirement system.”
[8] Tenn. Code Ann. 8-44-102(b)(1)(A).
[9] Dorrier v. Dark, 537 S.W.2nd 888, 892 (Tenn. 1976).

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