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Van Hollen Writes That Uncertainty Can Be Minimized if One Consistently Keeps in Mind the Purposes of the Open Meetings and Public Records Laws and the Desirability of Transparency in the Conduct of Governmental Functions
MADISON - Responding to a request for clarification and guidance from the Wisconsin Economic Development Association, Attorney General J.B. Van Hollen today issued an informal opinion addressing when a privately organized local economic development corporation must be considered a "quasi-governmental corporation" that is subject to Wisconsin's open meetings and public records laws.
Van Hollen noted that there is inherent uncertainty in the case-by-case, totality‑of‑the‑circumstances approach to this issue taken by the Wisconsin Supreme Court in its recent decision in State v. Beaver Dam Development Corp., but concluded that a close examination of that decision in light of the basic policy of the open government laws can provide meaningful guidance for privately organized entities that wish to partner with local governments in the field of economic development.
Van Hollen particularly emphasized that, out of the numerous factors discussed in the Beaver Dam decision, great weight should be given to the extent to which the services provided by an economic development corporation play an integral part in any stage of the governmental decision making processes of local officials.
More specifically, Van Hollen found that a privately organized entity is more likely to be deemed quasi‑governmental if it participates in traditional governmental functions such as the use of municipal fiscal, planning, or regulatory powers or the exercise of eminent domain.
Conversely, Van Hollen determined that such an entity is less likely to be considered quasi‑governmental if it instead contracts with a municipality for the sale of professional services-such as marketing, appraising, or expert consulting-that the municipality then uses in performing its own governmental functions.
Van Hollen also stated that the form of public funding received by a local economic development corporation is likely to affect its private or quasi-governmental character. Entities that are directly funded by public capital or credit, or by subsidized use of government property, are more likely to be considered quasi-governmental, whereas entities that bargain for contracts under which they are paid with public funds in exchange for rendering professional services are more likely to be deemed private.
Van Hollen concluded by noting that the uncertainties and potential litigation risks inherent in the Supreme Court's case-by-case approach can also be minimized if one keeps in mind the general legislative purpose of promoting transparency in the conduct of governmental functions.