Untitled Texas Attorney General Opinion ( 1987 )

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Novaber 17, 1987
Honorable Mike Toomev Opinion No. JM-821
Chairman
Judiciary Committee Re: Whether a volunteer
Texas House of Representatives fire department is subject
P. 0. Box 2910 to the Open Records Act,
Austin, Texas 78769 article 6252-17a, V.T.C.S.
(RQ-1225)
Dear Representative Toomey:
You ask whether a volunteer fire department that
receives public funds through a contract with a rural fire
prevention district constitutes a "governmental body"
under the Texas Open Records Act, article 6252-17a,
V.T.C.S. your concern focuses on the Cy-Fair Volunteer
Fire Department, which you state is organized as a
nonprofit corporation under Texas law. you indicate that
the department receives public funds through a contract
with the Harris County Rural Fire Prevention District No.
9 to perform fire fighting services in the district. At
various times, members of the public have requested
records from the district.
The Open Records Act applies to governmental bodies
as defined in section 2 of the act. Section 2(l)(A)
describes the state agencies covered by the act. Sections
Z(~)(B)-(E) list specific types of local governing bodies
or their subdivisions that are covered by the act. A
volunteer fire department does not fall within any of
these specific descriptions. Section 2(l)(F) provides
that a "governmental body" also includes
the part, section, or portion of every
organization, corporation, commission,
committee, institution, or agency which is
suvvorted in whole or in nart bv nublic
funds, or which exnends DUbliC funds.
Public funds as used herein shall mean funds
of the State of Texas or any governmental
subdivision thereof. (Emphasis added.)
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Honorable Mike Toomey - Page 2 (JM-821)
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Private nonprofit corporations can fall within this
provision. See, e.s., Open Records Decision Nos. 302
(1982); 228 (1979). .---.
The primary issue in determining whether certain
private entities are "governmental bodies" under the act
is whether they are supported in whole or in part by
public funds or whether they expend public funds. See
A.H. Belo Cornoration v. Southern Methodist University,
734 S.W.2d 720. 723 (Tex. App. - Dallas 1987, writ
pending); Attorney General Opinions JM-154 (1984): JM-116
(1983): Open Records Decision Nos. 343, 302 (1982); 228
(1979); see also Kneeland v. National Colleoiate Athletic
Association, 650 F. Supp. 1047, 1056 (W.D. Tex. 1986); cf.
Attorney General Opinions JM-596 (1986); JM-120 (1983).
In A. - H. Belo -Corvoration v. Southern Methodist
Universitv, sunra, the court held that certain private
schools' athletic deoartments are not llsovernmental
bodies" under the Open Records Act because they did not
receive public funds. The member schools, state and
private, retained a predetermined amount of funds from
gate receipts and from broadcasting fees. The remaining
funds were forwarded to the Southwest Athletic Conference
(SWC) and other schools. The SWC retained a predetermined ?
amount and distributed the rest to member schools. The
court reasoned that the departments did not receive
"public funds" within the meaning of section 2(l)(F)
because the money distributed by the SWC did not consti-
tute the "funds of the State of Texas or any governmental
subdivision thereof." The court concluded that, because
the funds never "vested" in any school, including a public
school, the funds did not constitute "public funds." See
734 S.W.2d at 723.
The contract between the Cy-Fair Volunteer Fire
Department and the Harris County Fire Prevention District
No. 9, however, expressly involves a transfer to the
department of the bulk of funds received by the district
from its tax collections, less the district's adminis-
trative costs. In the A.H. Belo case, the court dis-
tinguished Open Records Decision No. 228 on the basis that
it clearly involved public funds; funds transferred
directly from a governmental body to the private entity in
question. The case at hand is similar. Thus, this case
is not one in which the governmental body acts only as a
conduit for funds.
The receipt of public funds for the general support
of the activities .of a private organization brings that
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Honorable Mike Toomey - Page 3 (JM-821)
organization within the definition of a "governmental
body." Open Records Decision No. 228. For example, in
Open Records Decision No. 228, this office determined that
a private, nonprofit corporation chartered to promote the
interests of the Dallas-Fort Worth metropolitan area was a
governmental body under the Open Records Act because of
its contract with the city of Fort Worth. The contract
did not impose 'Iaspecific and definite obligation on the
commission to provide a measurable amount of service in
exchange for a certain amount of money as would be
expected in a typical arms-length contract for services
between a vendor and purchaser." Open Records Decision
No. 228. The corporation was not simply a vendor or
independent contractor who provided goods or services to a
governmental body in an arms-length transaction. For
these reasons, the decision determined that the contract
funds were for the general support of the corporation
rather than for specific measurable services. Con-
sequently, the corporation was supported in part by public
funds within the meaning of section 2(l)(F) of the Open
Records Act. Id.; see also Attorney General Opinion
JM-116 (1983): Open Records Decision No. 302 (1982).
In contrast, Open Records Decision No. 343 (1982)
determined that a private, nonprofit corporation under
contract with a hospital district to provide emergency
medical service is not a "governmental body" because the
applicable contract provided that the corporation should
receive "each month a sum equal to the differences between
cash receipts and approved operating expenditures of the
ambulance service ." The decision stated that this
language imposed a definite obligation to make a "specific
payment for specific measurable services" rather than to
provide for general support. The decision did not
indicate how the payment of monthly operating expenses
through this formula constitutes payment for "specific
measurable services" or how that payment can be distin-
guished from general monthly support. The Vest*' applied
in Decision 343 is part of the test adopted and applied in
Open Records Decision No. 228. The VUtestVV was formulated
in Decision No. 228, however, to help distinguish the
"private" nonprofit corporation from a private vendor who
sells goods or services to a governmental body. The
"test" cannot be applied mechanically. The precise manner
of funding is not the sole dispositive issue in
determining whether an entity falls under the Open Records
Act.
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Other aspects of a contract or relationship involving
the transfer of public funds between a private and public
entity must be considered in determining whether a private
entity is a l@governmental body" under the Open Records
Act. For example, a contract or relationship that
involves public funds and that indicates a common purpose
or objective or that creates an agency-type relationship1
between a private entity and a public entity will bring
the private entity within the section 2(l)(F) definition
of a "governmental body." See Open Records Decision Nos.
302, 228; see also Kneeland v. National Colleaiate
Athletic Association, m (following Open Records
Decision No. 228). For example, Open Records Decision No.
228 cited a provision of the contract which directed the
private entity to continue to carry out the common
objectives it held with the city. Structuring a contract
that involves public funds to provide a formula to compute
a fixed amount of money.for a fixed period of time will
not automatically prevent a private entity from
constituting a VVgovernmental body" under section 2(l)(F)
of the Open Records Act. The overall nature of the
relationship created by the contract is relevant in
determining whether the private entity is so closely
associated with the governmental body that the private
entity falls within the Open Records Act. As indicated,
the precise manner of funding is not the sole dispositive
issue in determining whether an entity falls under the
Open Records Act. For this reason, the determination in
Open Records Decision No. ,343 with regard to a
"governmental body" under the act should not be relied
upon.2
1. It should .be noted that the common purpose or
agency-type relationship that will subject .a "private"
entity to the Open Records Act is not the equivalent of an
agency relationship for purposes of tort liability. gg
cenerallv Attorney General Opinion JM-748 (1987).
2. Review of the contract at issue in Open Records
Decision No. 343 reveals that the contract did not involve
'Iaspecific and definite obligation on the [entity] to
provide a measurable amount of service in exchange for a
certain amount of money as would be expected in a typical
arms-length contract for services between a vendor and
purchaser." &g Open Records Decision No. 228 (1979).
(Footnote Continued)
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Honorable Mike Toomey - Page 5 (JM-821)
c
h
Additionally, when volunteer fire departments
contract with a political subdivision, considerations
apply to them that ordinarily set them apart from private
vendors of goods and services who typically deal with
governmental bodies in arms-length transactions. Fire
protection is one of the services traditionally provided
by governmental bodies. Snn. Citv of Coleman v. Rhone, 222
S.W.2d 646 (Tex. Civ. App. - Eastland 1949, writ ref'd).
Although no statute expressly makes nonprofit volunteer
fire departments subject to the Open Records Act or labels
them governmental bodies for other purposes, several
statutes recognize that they may have strong affiliations
with public agencies. See. e.a., V.T.C.S. art. 8309h,
§1(2) (political subdivisions may bring volunteer
firefighters within workers compensation coverage): art.
6243e.3 (political subdivision may opt to provide relief
and retirement benefits to volunteer firefighters): see
~&g Tex. Const. art. III, 551-d (legislature may provide
benefits for survivors of members of volunteer fire
departments killed in the performance of "official
duties"). These considerations make it more likely that a
nonprofit volunteer fire department that enters into a
contract with a public entity will fall within the Open
Records Act. Whether or not a particular nonprofit
volunteer fire department falls within the Open Records
Act depends on the circumstances in each case, including
the terms of the contract between the department and the
public entity. See Schwartzman v. Merritt Island Volun-
teer Fire Denartment, 352 So. 2d 1230 (Fla. APP. - 4th
Dist. 1977), c r denied 358 So. 2d 132 (Fla. 1978)
(cited in Open Ee&rds DeciLion No. 228 (1979)).
The contract between the Cy-Fair Volunteer Fire
Department and the Harris County Rural Fire Prevention
District No. 9 involves the general support of the
activities of the department with public funds. The
contract provides:
The Department will provide the emergency
ambulance services, the fire prevention
(Footnote Continued)
For example, the hospital district provided ambulances for
the ambulance service and provided for the general monthly
operating expenses of the service. The service could not
make expenditures, including hiring personnel, without
district approval.
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Honorable Mike Toomey - Page 6 UM-821)
services, the fire fighting services in the
geographic District and will not look to the
District to arovide anv services whatsoever
excevt for the wrovidina of funds to enable
the Denartment to carrv on its duties and
resnonsibilities. (Emphasis added.)
Thus, the department receives public funds to provide all
of the district's needed services. Additionally, the
contract involves the submission by the department to the
district of one-year operating budgets and'a three-year
capital expenditure budget for planning purposes. The
contract also provides for a form of continuing annual
renewals. Consequently, the contract provides for the
general support of the department for purposes of section
2(l)(F) of the Open Records Act.
As indicated, section 2(l)(F) covers only "the part,
section, or portion" of corporations supported by public
funds. See Open Records Decision No. 228. Accordingly,
the department must comply with the Open Records Act
to the extent that it receives public funds from the
district. Because the contract requires the department to
maintain a separate accounting of the expenditure of funds
received from the district, this **partial" coverage should
not require undue delay in responding to requests for
information under the Open Records Act.
SUMMARY
The Cy-Fair Volunteer Fire Department, a
nonprofit corporation, is a "governmental
body" within the meaning of section 2 (1) (F)
of the Texas Open Records Act, article
6252-17a, V.T.C.S., to the extent that it is
supported by public funds received pursuant
to its contract with the Harris County Rural
Fire Prevention District No. 9.
Very truly yo s
J k;, lldJ%
JIM MATTOX
Attorney General of Texas
MARY KELLER
Executive Assistant Attorney General
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JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jennifer Riggs
Assistant Attorney General
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