Discussion of General Budgetary Matters in Closed Session Violates the Open Meetings Act

August 20, 2012

By: Adam Dauksas

This is the second eBlackboard in a three-part series discussing recent developments relating to the Open Meetings Act. 

Recently, the Attorney General issued a binding opinion declaring that a downstate village board’s personnel and finance committees had violated the Open Meetings Act (the “Act”) by discussing budgetary matters in meetings closed to the public pursuant to Section 2(c)(1) of the Act.

Section 2(c)(1) of the Act permits a public body to meet in closed session to discuss “[t]he appointment, employment, compensation, discipline, performance or dismissal of specific employees of the public body . . . .”  The village committees relied on this exception in going into closed session where they discussed not only the employment of specific employees, but also general budgetary issues, including staffing needs, the effect of certain staff reductions, which services were most valuable to its residents, and strategies for balancing its budget.

In concluding that such broad-based financial discussions fell outside the scope of Section 2(c)(1), the Attorney General stated that “[t]he exception is not intended to allow private discussions of fiscal matters, notwithstanding that they may directly or indirectly impact the employees of the public body.”  Section 2(c)(1) is meant, instead, to allow public bodies, including school boards, “to candidly discuss the relative merits of individual employees, or the conduct of individual employees.”

Of course, certain fiscal choices may ultimately lead to discussions and decisions as to which specific employees to retain and which to let go, especially in light of the fact that a public entity’s budget is devoted largely to employee salaries.  But, according to the Attorney General, these issues are separate.  “To the extent that a public body is required to discuss the relative merits of individual employees as a result of its fiscal decisions, such discussions may properly be closed to the public under section 2(c)(1) of OMA.  The underlying budgetary discussions leading to those decisions, however, may not be closed to the public.”

Thus, in following the Attorney General’s opinion, it is imperative that boards of education distinguish between conversations regarding general budgetary matters (which must be held in open session), and discussions concerning the employment of specific individuals (which may be held in closed session) in order to avoid violating the Act.  And, in doing so, remember that simply because a budgetary decision may affect specific employees, it does not mean that the fiscal discussions leading up to that decision may be held in private.

Should you have any questions regarding this issue or any other aspect of the Open Meetings Act, please do not hesitate to contact Scariano, Himes and Petrarca, Chtd.