OF THE STATE OF CONNECTICUT
|In the Matter of a Complaint by||FINAL DECISION|
Dale P. Faulkner, Jr. and
|against||Docket #FIC 2002-089|
Windham Mills Development
|Respondent||July 10, 2002|
The above-captioned matter was heard as a contested case on May 21, 2002, at which time the complainants and the respondent appeared, stipulated to certain facts and presented testimony, exhibits and argument on the complaint.
After consideration of the entire record, the following facts are found and conclusions of law are reached:
1. Section 1-200(1), G.S., defines public agency as:
(A) Any executive, administrative or legislative office of the state or any political subdivision of the state and any state or town agency, any department, institution, bureau, board, commission, authority or official of the state or of any city, town, borough, municipal corporation, school district, regional district or other district or other political subdivision of the state, including any committee of, or created by, any such office, subdivision, agency, department, institution, bureau, board, commission, authority or official, and also includes any judicial office, official, or body or committee thereof but only with respect to its or their administrative functions; (B) Any person to the extent such person is deemed to be the functional equivalent of a public agency pursuant to law; or (C) Any "implementing agency" as defined in section 32-222. [Emphasis added.]
2. Section 32-222(k), G.S., in turn, defines “implementing agency” as
one of the following agencies designated by a municipality under section 32-223: (1) An economic development commission, redevelopment agency; sewer authority or sewer commission; public works commission; water authority or water commission; port authority or port commission or harbor authority or harbor commission; parking authority or parking commission; (2) a nonprofit development corporation; or (3) any other agency designated and authorized by a municipality to undertake a project and approved by the [state Department of Economic and Community Development] commissioner.
3. It is found that the respondent is a nonprofit development corporation, and that the Town of Windham’s Board of Selectmen authorized the respondent, by resolution, in November 2001, to replace an entity known as the Northeast Connecticut Economic Alliance, Inc, as the implementing and developing agency for certain projects, namely Windham Mills and State Heritage Park.
4. It is concluded that the respondent is an “implementing agency” within the meaning of §32-222(k), G.S., and is therefore a public agency within the meaning of §1-200(1)(C), G.S.
5. By letter dated March 4, 2002 and filed March 5, 2002, the complainants appealed to the Commission alleging that during a February 28, 2002 meeting, the respondent’s board of directors convened in executive session to discuss “contract and financing issues,” an improper purpose for an executive session under the Freedom of Information (hereinafter “FOI”) Act. The complainants further contended that they believed based upon statements made by the respondent’s President, that the respondent also considered some “personnel issues” in executive session, which matter was not listed on the respondent’s meeting agenda. Finally, the complainants alleged that the respondent improperly permitted three individuals who were not members of the board of directors to attend the executive session in its entirety.
6. It is found that the respondent’s board of directors held a meeting on February 28, 2002, and that the agenda for such meeting listed as item 4. “Executive Session” for “Contract and Financing Issues.”
7. It is also found that during the February 28, 2002 meeting, the respondent’s board of directors convened in executive session, at which time the respondent’s President stated that the board would need to discuss an employee during the executive session as well.
8. It is further found that the minutes of the respondent’s February 28, 2002 meeting indicate that the respondent convened in executive session for the purpose of discussing “personnel and contract” issues.
9. It is further found that in addition to the members of the respondent’s board of directors, two representatives from the state Department of Economic and Community Development (hereinafter “DECD”), the Town of Windham’s economic development director and the respondent’s President were invited into the executive session and remained for its duration.
10. It is further found that the executive session discussion primarily concerned the possible refinancing of a significant loan that the respondent had received in 1999 from a private Rhode Island based bank, Enterprise Capital. During the course of the executive session, the respondent’s President also apprised the members of the respondent’s board of directors of the sudden illness of one of the respondent’s key employees who would not be able to return to work for a lengthy period of time.
11. The complainants maintain that discussion concerning the refinancing of a private loan is not a proper purpose for an executive session under the FOI Act and that although personnel matters may be an appropriate purpose, the respondent’s board of directors failed to take the proper steps under the FOI Act to amend the agenda to include such matter during the executive session discussion.
12. With respect to the complainants’ claim that personnel issues were not properly listed on the agenda for the February 28, 2002 meeting, it is found that at the time the agenda for such meeting was prepared, the respondent was not yet aware of the medical issue that had arisen with regard to one of its employees. It is further found that the first time the respondent’s board of directors learned of such matter was just prior to the meeting, when the respondent’s President informed the board of directors that he felt he should apprise the board of directors concerning such issue in the executive session.
13. Section 1-225(c), G.S., provides in relevant part:
The agenda of the regular meetings of every public agency… shall be available to the public and shall be filed, not less than twenty-four hours before the meetings to which they refer, in such agency's regular office or place of business….Upon the affirmative vote of two-thirds of the members of a public agency present and voting, any subsequent business not included in such filed agendas may be considered and acted upon at such meetings.
14. It is found that the respondent’s board of directors did not conduct any vote with regard to adding the personnel issue, described in paragraph 10, above, to the agenda for the February 28, 2002 meeting.
15. It is concluded therefore that the respondent violated the provisions of §1-225(c), G.S., by failing to obtain the requisite two-thirds vote of the members of the respondent’s board of directors to add discussion of the personnel issue described in paragraph 10, above, to the February 28, 2002 meeting agenda.
16. With respect to the complainants’ claim that the executive session was not convened for a proper purpose, the respondent contends that discussion concerning both the possible refinancing of the Enterprise Capital loan and the discussion of the medical condition of a respondent employee, as described in paragraph 10, above, was permissible under the FOI Act pursuant to §§1-200(6)(E), 1-210(b)(5) and 32-244(a), G.S.
17. Section 1-225(a), G.S., provides in relevant part that “the meetings of all public agencies, except executive sessions as defined in subdivision (6) of section 1-200, shall be open to the public.”
18. Section 1-200(6)(E), G.S., permits a public agency to convene in executive session for the purpose of: “discussion of any matter which would result in the disclosure of public records or the information contained therein described in subsection (b) of section 1-210.”
19. Section 1-210(b)(5), G.S., permits a public agency to withhold from disclosure:
“(A) Trade secrets, which for purposes of the Freedom of Information Act, are defined as information, including formulas, patterns, compilations, programs, devices, methods, techniques, processes, drawings, cost data, or customer lists that (i) derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) are the subject of efforts that are reasonable under the circumstances to maintain secrecy; and
(B) commercial or financial information given in confidence, not required by statute.”
20. In addition, §32-244, G.S., provides that:
“(a) All data and other information received by the Department of Economic and Community Development, the Connecticut Development Authority or any implementing agency, as defined in section 32-222, or any advisory board or committee of the department, authority or agency, from any person in connection with an application for, or the provision of, financial assistance, which consists of the following, shall be deemed, for purposes of a public records request pursuant to the Freedom of Information Act…made to the Department of Economic and Community Development, the Connecticut Development Authority or any such implementing agency, advisory board or committee, to be information described in subdivision (5) of subsection (b) of section 1-210; (1) Actual trade secrets or information that a person intends to become a trade secret, (2) material that a person intends to patent, (3) patented material, (4) marketing or business plans, (5) plans for new products or services, (6) reports of customer order or sales or other documents that would disclose names and addresses of customers or potential customers, (7) information concerning the financial condition or personal affairs of any individual, (8) financial statements or projections, (9) sales or earnings forecasts, (10) Enterprise Capital or strategic plans, (11) information regarding research and development, (12) tax returns, or (13) other commercial, credit or financial information with respect to the financial condition or business operations of an applicant for or recipient of financial assistance which is of a type not customarily made available to the public.” [Emphasis added.]
21. The respondent maintains that the executive session discussion included discussion of the respondent’s financial projections, including earnings forecasts, spending projections, and commercial, credit and financial information concerning the condition of, and business operations of the respondent. The respondent further maintains that the discussion included a conversation about what effect the Enterprise Capital loan refinancing would have on the respondent’s debts to the DECD and the Town of Windham (hereinafter “Town”).
22. In addition, the respondent further claims that refinancing of the Enterprise Capital loan could not be accomplished without the approval of both the DECD and the Town, and that was why the representatives from the DECD and the Town were invited to remain during the executive session.
23. It is concluded that the respondent failed to prove that discussion of the matters described in paragraph 10, above, in open session, would have resulted in the disclosure of records of “trade secrets” or “commercial information,” or the information contained therein, as set forth in §1-210(b)(5), G.S.
24. The respondent claims that its board of directors discussed matters of the nature set forth in §32-244(a), G.S., which pursuant to the terms of that provision, are deemed to be trade secrets for purposes of §1-210(b)(5), G.S. Specifically, the respondent claims that the financial and planning information discussed in the executive session falls within §32-244(a), G.S, subsections (8) financial statements or projections, (9) sales or earnings forecasts, (10) Enterprise Capital or strategic plans and (13) other commercial, credit or financial information with respect to the financial condition or business operations of an applicant for or recipient of financial assistance; and that the discussion of the illness of the respondent’s employee constitutes “the personal affairs of any individual” within the meaning of §32-244(a)(7), G.S.
25. It is found that the language of §32-244(a), G.S., by its express terms, refers to information received by the DECD, Connecticut Development Authority (hereinafter “CDA”) or an implementing agency from any person in connection with an application for, or the provision of, financial assistance. Further, the enumerated items set forth in §32-244(a)(1) through (13), G.S., are examples of the kinds of information that might be received by the DECD, CDA or an implementing agency, from a person in connection with an application for, or the provision of, financial assistance. Section 32-244(a), G.S., does not refer, in any way, to information pertaining to the implementing agency itself.
26. The Commission takes administrative notice of the legislative history of House Bill 5684 (hereinafter “HB 5684”) of the 2000 Regular Session of the Connecticut General Assembly, which ultimately included the language contained in §32-244(a), G.S.
27. It is found that there is nothing in the legislative history of HB 5684 indicating that §32-244(a), G.S., was intended to keep information concerning an implementing agency’s financial condition or status confidential. On the contrary, the testimony before the Government Administration and Elections Committee on HB 5684 indicates two things: first, a desire to ensure that implementing agencies, like the respondent, would be deemed to be public agencies under the FOI Act, subject to the open records and open meetings provisions contained therein; and second, a desire to protect the proprietary information of private entities doing business with, or applying for assistance from, public agencies. See, Connecticut General Assembly Joint Standing Committee on Government Administration and Elections, Public Hearing, February 28, 2000, pages 28-36 and 50-63.
28. It is therefore also concluded that the respondent’s board of directors' discussion in executive session did not constitute a discussion of trade secrets within the meaning of §1-210(b)(5), G.S., by operation of §32-244(a), G.S.
29. The respondent further contends that pursuant to §32-244a, G.S., the Enterprise Capital loan documentation is exempt from disclosure under the FOI Act, and that the respondent’s board of directors should therefore have been able to discuss such documentation during the February 28, 2002 executive session.
30. Section 32-244a, G.S., provides that:
“All information contained in any application for financial assistance submitted to the [DECD] or the [CDA] prior to October 1, 2000, and all information with respect to any person or project, including all financial, credit and proprietary information, obtained by the [DECD] or [CDA] prior to October 1, 2000, or on or after October 1, 2000, pursuant to the requirements of an agreement entered into prior to October 1, 2000, shall be exempt from the provisions of subsection (a) of section 1-210.
31. It is found that §32-244a, G.S., again, by its express terms, applies only to information submitted to, or obtained by the DECD or CDA, in connection with, an application for financial assistance.
32. The respondent offered no evidence to demonstrate how the provisions of §32-244a, G.S., relate in any way to the respondent’s loan documentation with Enterprise Capital.
33. It is therefore concluded that the provisions of §32-244a, G.S., do not apply to the executive session in question.
34. It is further concluded therefore that the respondent’s board of directors did not convene in executive session on February 28, 2002 for a purpose permitted under the FOI Act, and that the respondent violated the open meeting provisions of §1-225(a), G.S.
35. With respect to the complainants’ claim that the respondent violated the FOI Act by permitting persons other than members of the board of directors to remain in the executive session, §1-231(a), G.S., provides in relevant part that:
“[a]t an executive session of a public agency, attendance shall be limited to members of said body and persons invited by said body to present testimony or opinion pertinent to matters before said body provided that such persons' attendance shall be limited to the period for which their presence is necessary to present such testimony or opinion….”
36. The respondent claims, as referenced in paragraph 22, above, that the presence of the officials from the DECD and the Town during the executive session was necessary because the respondent would need to get both the DECD and the Town to agree to any changes to the terms of the respondent’s loan with Enterprise Capital. The only thing the respondent offered to support such claim was that the respondent is a recipient of funding from both the DECD and the Town.
37. It is found however, that the respondent failed to prove its claim described in paragraph 36, above, and further failed to prove that the persons who remained during the executive session were present to offer opinion or testimony and that their presence was limited to the time they were offering such opinion or testimony.
38. It is therefore concluded that the respondent also violated the provisions of §1-231(a), G.S., by permitting persons other than the members of the respondent’s board of directors to be present and remain in attendance during the February 28, 2002 executive session.
39. Finally, the respondent maintains that the complaint in this matter should be dismissed because the complainants engaged in negative coverage, which the respondent characterizes as false and misleading, in their news publications. The respondent contends that such coverage is part of a continuing pattern of harassment.
40. The only provision in the FOI Act concerning harassment by a complainant is contained in §1-206(b)(2), G.S. That provision provides in relevant part that:
If the commission finds that a person has taken an appeal under this subsection frivolously, without reasonable grounds and solely for the purpose of harassing the agency from which the appeal has been taken, after such person has been given an opportunity to be heard at a hearing conducted in accordance with sections 4-176e to 4-184, inclusive, the commission may, in its discretion, impose against that person a civil penalty of not less than twenty dollars nor more than one thousand dollars.
41. It is found that the respondent failed to prove that the appeal in this matter was taken frivolously, without reasonable grounds and solely for the purpose of harassing the respondent within the meaning of §1-206(b)(2), G.S. Therefore, there are no grounds upon which to consider the respondent’s request for dismissal described in paragraph 39, above, or the imposition of civil penalties on the complainants in this case.
The following order by the Commission is hereby recommended on the basis of the record concerning the above-captioned complaint:
1. Henceforth the respondent shall strictly comply with the provisions of §§1-225(a) and 1-206, G.S., with respect to agendas of meetings and the convening of executive sessions, and §1-231(a), G.S, with respect to permitting persons, other than agency members, to attend executive sessions.
Approved by Order of the Freedom of Information Commission at its regular meeting of July 10, 2002.
Petrea A. Jones
Acting Clerk of the Commission
PURSUANT TO SECTION 4-180(c), G.S., THE FOLLOWING ARE THE NAMES OF EACH PARTY AND THE MOST RECENT MAILING ADDRESS, PROVIDED TO THE FREEDOM OF INFORMATION COMMISSION, OF THE PARTIES OR THEIR AUTHORIZED REPRESENTATIVE.
THE PARTIES TO THIS CONTESTED CASE ARE:
Dale P. Faulkner, Jr.
1 Chronicle Road
Willimantic, CT 06226
Windham Mills Development Corporation
c/o Lisa Silvestri, Esq.
56 Arbor Street
Hartford, CT 06106
Petrea A. Jones
Acting Clerk of the Commission