Any organization whose employees are covered by the state retirement system would be subject to the state's open records law under proposed legislation that will be considered in January.
Top lawmakers say they generally support the bill, prefiled by Rep. Arnold Simpson, D-Covington, that would define such a group as a "public agency," which would require it to turn over its documents for public perusal.
Simpson said he wrote the bill after a series of stories in the Herald-Leader about the Kentucky League of Cities and the Kentucky Association of Counties, which detailed big salaries and lavish spending. Both groups receive more than 25 percent of their budgets from public funds and both are part of the County Employees Retirement System. The two groups turned over records to the newspaper, but officials at both groups said they did not consider themselves subject to the Kentucky Open Records Act.
Simpson said it was "ridiculous" that employees of the two groups received retirement benefits from the state, but the organizations weren't identified as public agencies.
"I would hope that your board would understand that if you take 1 percent of government funding — an iota of government funding — you as elected officials should be forthright and cooperate in every matter with the press," Simpson told officials from both groups at a public hearing last month.
At that meeting, legislators also criticized the fact that the top three executives at the League received $272,000 in loans from the group to buy more time in CERS. The loans were called an incentive. As part of that incentive, the League forgave nearly $100,000 of those loans.
Because the executives were already making high salaries and bought even more time, their retirement payouts will be high. For example, the League's executive director, Sylvia Lovely, will step down in January having made $330,000 in 2009. With 22 years of service at KLC and five years that she purchased with the help of a $125,000 loan from the League, she currently is eligible for a pension of between $9,500 and $11,000 a month when she retires, according to estimates by a state retirement system benefit calculator.
That would make her annual benefit as much as $132,000 a year.
The bill could affect other quasi-governmental groups in addition to KACo and KLC if they participate in the state retirement system.
Rep. Mike Cherry, D-Princeton, who chairs the State Government Committee, said he would call the bill for discussion, and he expected that it would get a favorable hearing.
"I support the bill because it's good government public service," Cherry said. "I was a little bit surprised that organizations like KLC and KACo weren't covered by open-records law. I think this bill clarifies what most of us thought was an obvious thing to start with."
A 1991 opinion from the Attorney General's office about KACo said that any agency that receives more than 25 percent of its funding from public funds should be subject to the state's Open Records Act.
Cherry said he thought the groups also should be subject to the state Open Meetings Act. However, Simpson's bill does not address the meetings law.
House Speaker Greg Stumbo, D-Prestonsburg, said he also would support the measure as it moved through the House.
"I support Rep. Simpson's legislation and believe that these organizations should also have their own code of ethics, much like the cities and counties they serve," he said in a statement.
Cherry's counterpart in the Senate, Sen. Damon Thayer, R-Georgetown, has spoken in favor of the bill.
Senate President David Williams said through a spokesman that he had not had time to review the proposed bill but he agrees with the concept.
KLC's incoming president, Mike Miller, the mayor of Jackson, issued a statement on Wednesday: "We welcome the opportunity to work with Rep. Simpson on this legislation and we hope that any proposed clarification of the state's open records law will continue to protect the proprietary information of our financing and city-owned insurance programs."
KACo officials were not immediately available for comment.
Ryan Alessi contributed to this report.