By Michael Swanger

The next time you ignore those dull-looking public notices in your newspaper, remember you are passing up the opportunity to see your tax dollars at work. They not only inform you of government spending of your tax monies, but your tax dollars are paying for their publication thanks to centuries-old laws designed to preserve an open and transparent government, therefore subsidizing newspapers that run them.

No one, from newspaper to government officials, disputes the value of public notices — though most people don’t buy a newspaper to read them. In the fine print of public notices, you can learn a lot about your community. They are unadulterated news that include announcements from all levels of the government, businesses and individuals, informing readers about a variety of topics ranging from neighbors who have applied for permits to enlarge their houses, to sales of commercial and residential properties, to a proposed tax increase on the school board agenda. Newspapers publish thousands of them every day, often burying them in their classified advertising sections.

But despite the fact that newspapers like to champion themselves as government watchdogs, when was the last time you read a column from a publisher or an editor telling readers that their tax dollars are being used to place notices in their newspaper? It is an industry secret [and a state law most people overlook] and, for many newspapers, a financial boon, as tax dollars spent on notices help keep their businesses in the black. Though it is unlikely to happen in the near future, that could change if lawmakers decided to overturn the law and save taxpayers money by posting notices online for free.

In the meantime, government bodies are required by state law to publish public notices (also known as legal notices) in “official newspapers” located in their county as a way of preserving democracy. But newspaper lobbyists like the Iowa Newspaper Association (INA) — whose membership includes 314 paid circulation daily and weekly newspapers in Iowa — see to it that the taxpayer-funded fees that city, county and state governments pay to publish legal notices increases each fiscal year to account for the cost of inflation.

As circulation numbers decline at large metro daily newspapers, and more readers turn to alternative news sources for free information, some see public notices printed in paid circulation newspapers as an expensive, old-fashioned form of enlightenment. One that, ironically, is an ineffective use of tax dollars, though they were created to protect wasteful government spending.

“There should be some evaluation as to whether or not this is the best use of tax money,” says Peggy Huppert, a former reporter for The Des Moines Register and Associated Press who now works as the executive director of Iowans For Sensible Priorities, a Des Moines-based non-profit taxpayer watchdog group. “I’m a pretty voracious newspaper reader, and I don’t read them [public notices]. They’re so tiny and dense, that I imagine most people don’t look at them, which makes me wonder if others do, and if it’s worth spending taxpayers’ money on them.”

Huppert says when she served as Polk County’s co-chair for the 2000 Iowa Caucuses, she saw first-hand how ineffective and costly public notices published in The Register were. State law required election officials to publish voting information that she says most people found online or by calling her office.

“It was a huge expense, and nobody seemed to read them,” she says. “It didn’t seem to work.”

For hundreds of years, the public has relied on newspapers to monitor the government. So it is no surprise that laws were passed a long time ago to require governments to place legal notices in newspapers to publicize a decision or debate that would affect the general populace. Transparency in government — as proposed by our country’s founding fathers — requires that citizens be informed of the actions of their government.

State laws vary regarding public notices, but all of them, including Iowa’s, regulate the manner in which public notices are published — from type size and font, to frequency of publication — as well as the price. They were originally designed to ensure that the greatest amount of people receive important information about the actions of their government. When those laws were written, paid circulation newspapers were the preferred news outlet — before the advent of free newspapers, television, radio and the Internet.

“Paid newspapers have a fairly lucrative business with legal notices, as there is no competition in the pricing structures,” says Brian Gay, executive director of Midwest Free Community Papers. “Small municipalities are paying more than they would have to if there were competition for these ads.”

Free newspapers began circulating heavily in the state during the ’70s and competed with paid newspapers for advertising revenue. Ownership was clearly separated between paid newspapers and free newspapers or shoppers which are known for broader distribution. Today, according to Gay, approximately 60 percent of MFCP’s member publications also own paid circulation newspapers, which lessens the interest in changing the law.

To fulfill the law, newspapers that wish to run public notices are required to meet a number of criteria. In Iowa, only paid newspapers of “general circulation” are allowed to publish public notices, written in English. They are required to have been published for at least two years, and they must average at least 25 percent news and editorial content per issue. The requirements were established to ensure that a newspaper is already a trusted source of information, and that a majority of the population will read the notices, though some newspapers also publish public notices on their Web sites. [In Minnesota, state law dictates that newspapers that have Web sites are required to post them online in addition to print.]

As more people turn to the Internet, some have wondered whether newspapers are the best way to publicize city, county, state and school public notices, or whether they should be posted for free by governments to save tax dollars. Bill Monroe, executive director of the INA, argues otherwise.

“It would be like the fox guarding the henhouse,” Monroe says. “Do you want local governing bodies to determine what gets posted, when it gets posted, and how easy it is to access information? Newspapers have a stake in this as an objective, third-party.”

They also have a financial stake in it. Most of the newspapers that responded to a National Newspaper Association (NNA) survey estimated their annual revenue from public notices at 5 percent. Just over 19 percent said the figure was 10 percent, and another 10 percent said their public notice revenue was 50 percent or more.

Public notices are the lifeblood to several Iowa daily and weekly newspapers, though Monroe says the state-approved rates fall short of open rates larger newspapers charge advertisers. “If those papers relied on public notices, they would lose their shirts,” he says. “But they obviously help smaller papers, though we don’t talk about that. It’s not in our credo.”

But to Maureen Miller, publisher of the Pella Chronicle (circulation 2,249), public notices account for 10 to 12 percent of her paper’s gross revenues. “For us they are important,” she says. “We’re a weekly newspaper without a Web site, and we only have one shot of getting the information out there. I would like to see them stay in the newspapers.”

Becky Maxwell, publisher of the Centerville Daily Iowegian (circulation 2,561), agrees. She says her paper took in $29,000 in public notice revenue last year. “The loss of revenue would hurt us and is especially important to a small daily like [ours],” she says. “I’ve noticed in a depressed area, like around here, where everyone doesn’t have access to the Internet, that a lot of people read legal publications.”

In Central Iowa, governing bodies spend thousands of dollars publishing public notices in paid circulation newspapers. The City of West Des Moines spent $21,128.23 from fiscal year July 1, 2006 to June 30, 2007, to publish legal notices in The Des Moines Register (circulation 152,035) and The Dallas County News (circulation 2,282). For the most recent quarter, from July 1 to Oct. 10, Polk County paid The Register $15,762.92 and the Des Moines Business Record (circulation 3,431) $26,226.22 to publish all of its notices. Des Moines Public Schools says they spend an average of $1,500 to $2,000 per month on notices in The Register. The City of Des Moines spent $62,491 during its previous fiscal year on notices published by The Register and Business Record. Factor in monies collected for notices from schools, cities and counties in the coverage area of a newspaper the size of The Register, and it can add up to hundreds of thousands of dollars in revenue.

Monroe, however, says publishing public notices in paid newspapers remains a great value to taxpayers. A 2006 statewide readership survey conducted by Newton Marketing and Research in Norman, Okla., concluded that 89 percent of Iowans read their local newspaper, and that 77 percent believe that public notices should be published by newspapers. Even more, the study shows, 83 percent believe that 28E agencies like CIETC should be required to publish notices in newspapers, and more than half of all Iowans read public notices.

As for posting notices online, the study shows that only 8 percent of Iowans say “they would be very likely” to read public notices on the Internet, and more than 60 percent say they were “not at all likely” to read the notices on the Internet. It also shows that more than half of Iowans say they don’t visit local government Web sites.

“It’s a battle for eyeballs, and eyeballs are still in newspapers,” Monroe says.

Nonetheless, the INA has one eye on the future, and like other newspaper associations, Monroe says it is investing more time and resources into developing more Web-based content. It has also developed a database on its own Web site [www.inanews.com] specifically for posting public notices, where it has uploaded about 350,000 paid notices published by participating Iowa newspapers as a way to dissuade governments from moving into the venue. To stay ahead of the Web-based publishing trend, Monroe says the INA board will vote early next month whether to contract with a vendor that could capture for free all of the notices published in Iowa newspapers — notices still paid for by taxpayers.

“It’s an expensive proposition and could mean a hefty dues increase to our members,” he says, “but it would add value to what we do and drive traffic to our Web site. Right now, the only people looking at our notices online are those interested in bids, not casual readers.”

Monroe says when a newspaper publishes notices, it is acting as a third-party auditor, assuring that they include important information in a timely manner. He also says that surveys conducted by the INA show that the total that any Iowa city, school or county spent on all public notices in recent years averages less than one-fifth of 1 percent of the local government’s annual budget, and that most, if not all of those costs, would remain if they were properly distributed on the Internet or in city newsletters. “That’s a pretty low cost to assure integrity,” he says.

One Texas town, however, has proved that you can preserve integrity and save the taxpayers thousands of dollars at once. The Public Notice Resource Center (PNRC), based in Arlington, Va., and founded in 2003 by the American Court and Commercial Newspapers Inc., reported that last year the City of Bryan, Texas, used an obscure law to reduce public notice for procurement and saved Bryan taxpayers thousands of dollars by posting them on a government Web site. “According to the law, the charters of home-rule municipalities supersede state requirements when it comes to procurement notices. Texas state statutes require local governments must publish these notices in newspapers of general circulation once a week for two weeks before evaluating bids, but the city used its home rule-charter to override that law.”

The city’s purchasing manager, Roger Dempsey, pushed for a charter amendment to change the city’s procurement process “to allow only one publication in a newspaper in addition to posting the procurement notice on a government Web site.” The city attorney endorsed the bill, saying it would “save the taxpayers a little money,” and the proposition passed with 75 percent of the vote.

“We were able to save some money, though that was not the motivation for the change,” Dempsey tells Cityview. “It saves us from $16,000 to $25,000 a year, though in the scheme of things the city spent $65 million for goods and services, so it’s not a lot of money compared to that.

“Our goal was to find the best way to reach our vendors, and that was online. If the newspapers were the best way, we would use them. We didn’t do this to hurt their business. But we surveyed our residents, and they said they rarely if ever checked the newspaper. It was a black-and-white case.”

Dempsey says the city expected a backlash from the public and press, but it never got one.

“When the charter changed, we expected a lot of comments because of the perception we were not maintaining an open government, but we didn’t get any inquiries,” Dempsey says. “The newspaper visited us about posting notices, but they didn’t take exception with it.”

In a 2000 report titled “Public Notice in Peril: A Report on the Status of Public Notice & Accountability,” the NNA detailed the impact of the Internet on what it termed an important component of public information. Samuel Spencer, chairman of the NNA’s Public Notice Task Force said a fundamental service provided by community newspapers is in jeopardy as state and local officials move to control notices themselves exclusively online. “These public notice advertisements give citizens the information they need to make informed decisions and allows for an informed electorate,” he says in the report.

Monroe says government agencies and lawmakers in some states are a threat to newspapers that fight to secure the right to publish notices. In Pennsylvania, for example, public-notice legislation has been used by politicians as a weapon against newspapers for publishing stories that portray them in an unfavorable light.

“That’s happened in other states in the past, but not in Iowa in all the years I’ve been working in the industry here,” Monroe says. “When lawmakers in powerful positions are made to look like fools, they lash back. When you look at anti-newspaper bills and drill down far enough, you’ll find someone who is angry at a newspaper for something they said about them.”

Still, for others who have sought change in state laws regarding public notices for less political reasons, they say it is an uphill battle.

“The free paper association in Wisconsin has spent thousands of dollars to try to change the law there to no avail,” Gay says. “Our board discussed it several years ago but has not pursued it.” CV

Defining public notices

Public notice is a tradition dating back to town criers and postings on the steps of government buildings. There are three general types of public notices:

Citizen participation — Examples include the publication of public budgets, notices of public hearings, and notices of intentions to create new taxation or benefit zones. They are intended to afford the public the time and opportunity to react to proposed government action and are intended to satisfy the requirement of “due process of law,” found in both our federal and state constitutions.

Business and commerce — Includes government contracts and purchases and other business-related notices to assure that the government is operating in accordance with principles of equal opportunity, getting the best price for a service, and allowing the public to make sure it is not spending tax money unwisely. Other examples include notices whereby corporations and other businesses are required to publish their intention to do business in an area and to give notice when the entity dissolves to protect creditors and consumers; or notices of sales of unclaimed property given to the state.

Court — Used by non-governmental entities. Attorneys, for example, when probating a will must publish a notice informing the public of the appointment of an administrator of the estate, which allows the public to object to any appointment based on conflicts of interest. The attorney must also publish a notice to unknown creditors, notifying anyone with a claim against the estate to assert their claim within a certain time period or risk losing their claim.

The price of public information

Iowa Newspaper Association works each year with the Iowa Department of Management and other state agencies to determine the maximum cost that may be charged for public notices prepared on a form. The notices comply with the newspaper industry’s Standard Advertising Unit (SAU) column measure and may include explanatory information at the right of the form at an additional cost. The following is a look at this year’s fees.

Form | Cost | Notice of Size | Per line cost for explanatory matter
F66 (IA-2) $188.46 City annual financial report 4 columns (SAU)x107 lines, 8-pt. type $1.76
630 $177.51 County public hearing – budget estimate 3 columns (SAU)x109 lines, 6.5 pt. type $1.63
F638-R $154.99 County annual financial report 4 columns (SAU)x88 lines, 8-pt. type $1.76
633 $131.67 Community college public hearing - budget estimate 3 columns (SAU)x75 lines, 6-pt. type $1.76
S-PB-8 $127.72 School district public hearing - proposed budget 3 columns (SAU)x97 lines, 8-pt. type $1.32
S-PB-6 $116.28 School district public hearing - proposed budget 2 columns (SAU)x100 lines, 6-pt. type $116.28
653AR $115.12 County public hearing - amendment of budget 2 columns (SAU)x99 lines, 6-pt. type $1.16
631.1 $102.33 City public hearing - budget estimate 2 columns (SAU)x88 lines, 6-pt. type $1.16
653.C1 $102.33 City public hearing - amendment of budget 2 columns (SAU)x88 lines, 6-pt. type $1.16
MH-1 $79.26 County hospital public hearing - proposed budget 4 columns (SAU)x45 lines, 8-pt. type $1.76
672 $75.49 County hospital public hearing - proposed budget 3 column (SAU)x43 lines, 6-pt. type $1.76
673 $66.71 Assessing jurisdiction public hearing – proposed budget 3 columns (SAU)x35 lines, 8-pt. type $1.76
JDS1 $53.49 Emergency management commission public hearing – proposed budget 2 columns (SAU)x46 lines, 6-pt. type $1.16
No form # $52.67 City utility hearing 3 columns (SAU)x97 lines, 8-pt. type $1.32
653A $49.16 Community college public hearing – amendment of budget 3 columns (SAU)x28 lines, 6-pt. type $1.76
E911-1 $49.16 Joint E911 service board public hearing – proposed budget 3 columns (SAU)x28 lines, 6-pt. type $1.76
674 $46.08 Extension district public hearing – proposed budget 3 columns (SAU)x35 lines, 8-pt. type $1.32
644 $40.82 County public hearing – proposed budget (sanitary sewer, fire, water, lighting) 3 columns (SAU)x31 lines, 8-pt. type $1.32
S-A $33.72 School district public hearing – budget amendment 2 columns (SAU)x29 lines, 6-pt. type $1.16
653A Misc. $16.57 Public hearing – budget amendment (used by others than cities, schools, counties) 2 columns (SAU)x19 lines, 8-pt. type 87 cents

Iowa’s law for public notices

618.1. Publications in English
All notices, proceedings, and other matter whatsoever, required by law or ordinance to be published in a newspaper, shall be published only in the English language and in newspapers published wholly in the English language.

618.3 Requirements for newspaper
for official publication.
For the purpose of establishing and giving assured circulation to all notices and reports of proceedings required by statute to be published within the state, if newspapers are required to be used, only a newspaper which meets all of the following requirements shall be designated for official publication purposes:
1. Is a newspaper of general circulation issued at a regular frequency that has been published within the area and regularly mailed through the post office of entry for at least two years.
2. Has a list of subscribers who have paid, or promised to pay, at more than a nominal rate, for copies to be received during a stated period.
3. Devotes at least twenty-five percent of its total column space in more than one-half of its issues during any twelve-month period to information of a public character other than advertising.
4. Is paid for by at least fifty percent of the persons or subscribers to whom it is distributed.

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