A private utility company in Pike County that gets all of its revenue from local governments must obey the Kentucky Open Records Act and publicly disclose its finances, the state Court of Appeals has ruled.
Utility Management Group, based in Pikeville, has been fighting the records request, filed by Pike County officials, for more than four years.
"Exceptions to the public's right to know are rightfully few and narrowly read," Court of Appeals Judge Irv Maze wrote in a decision that was released Friday.
"The people of Pike County, and their representatives, were entitled under the Open Records Act to seek answers regarding the conduct of UMG and its expenditure of public funds," the ruling said. "That these answers might contain 'the most dreaded ... of knowledge' concerning UMG or others is of no consequence. On the contrary, it is all the more reason they must be given."
UMG is paid millions of dollars annually to operate water and sewer services for Pike County's publicly owned Mountain Water District. Pike County officials filed the records request in early 2011 to determine how UMG spends local ratepayers' money, following critical state audits of the water district. Recently the water district asked for large rate increases.
Attorney General Jack Conway sided with Pike County in 2011, ruling that the Open Records Act applied to UMG because it received at least 25 percent of its revenue from public sources, the threshold provided in the law. But in 2012, the General Assembly rewrote the law to protect UMG, exempting any entity from the Open Records Act if it gets public funds through a competitive bidding process, as UMG does.
In 2013, Pike Circuit Special Judge John David Caudill cited the newly rewritten law and ruled that UMG didn't have to open its books.
A three-judge panel of the Court of Appeals unanimously overturned Caudill's decision last week. The request to see UMG's financial records was filed and then denied in 2011, before the legislature rewrote the Open Records Act, so the previous version of the law should apply, the court said.
State Rep. Chris Harris, D-Pikeville, praised the court's decision. Harris led the fight to get UMG's financial records when he served on Pike County Fiscal Court.
"The Court of Appeals clearly understood the battle we've been fighting here for years and recognized the importance of the public's right to know how government is spending its money," Harris said Friday. "The decision is a monumental victory for Pike County, its people and for everyone around the commonwealth who believes government should operate openly and transparently."
Harris said he planned to file "legislation in the 2016 session that will bring more transparency to public utilities across the state."
UMG's attorney could not be reached for comment.