The Kansas Supreme Court took a scalpel Wednesday to a dispute arising from a lower court’s application of the Kansas Open Records Act to a not-for-profit corporation hired to administer a public hospital in Greensburg.
The issue before the justices is whether Great Plains of Kiowa County Inc. should be considered an extension of the hospital’s board of trustees under the state’s open records act. The Kiowa County Memorial Hospital’s board has earmarked mill-levy tax revenue to operation of the hospital by GPKC.
GPKC appealed a district court finding that financial information of the hospital should be considered public records. The district court imposed a $500 fine against the corporation for refusing to turn over records sought by the county.
The Kansas Court of Appeals declared GPKC existed solely for the purpose of operating the hospital and concluded the hospital board didn’t possess the financial records. The appeals court didn’t directly decide whether GPKC was a public agency under state law and ordered the case returned to district court for analysis of whether documents sought by the county were “relevant to evaluating GPKC’s performance of its contract terms.”
Increased privatization of what previously were exclusively government-operated programs has led courts in Kansas and other states to dig deeper into laws crafted to promote transparency.
Alan Rupe, a Wichita attorney representing Great Plains of Kiowa County, said during oral argument before the Supreme Court that a fair reading of Kansas statute revealed GPKC shouldn’t be categorized as a public entity. After all, Rupe said, GPKC can’t raise the county mill levy. Only the hospital board possesses that taxing authority, he said.
“The fact is it’s not a governmental function they’re providing,” Rupe said.
Justice Caleb Stegall suggested affirmation of Rupe’s position would essentially gut the state’s open records act, because it would consider operation of a public hospital outside a government’s function. He suggested a state might similarly elude accountability under statutes defining open records by transferring control of a prison to a private company.
Dwight Carswell, assistant solicitor general of Kansas, argued on behalf of Kiowa County that substantial public tax dollars were dedicated to the hospital in Greensburg under a management contract with GPKC. He said state law required the open records act to be liberally construed in favor of openness and that GPKC should be viewed as a instrumentality of a taxing subdivision of the state.
In 2001, GPKC signed a lease agreement with the county hospital’s board of trustees to carry out administration of the facility. The hospital received financial support from county property owners from 2012 to 2014. The amount of tax levied — rising from $500,000 in 2012 to $1.04 million in 2014 — was tied to information provided by GPKC. The bulk of the Greensburg hospital’s budget was allocated from federal grants. The county government sought through a 2014 open records request budget information from GPKC that included salary compensation to hospital employees and the vouchers for payments for professional and management fees. GPKC denied the records request by asserting it wasn’t a public agency.