AGREEMENTS CONCERNING OWNERSHIP OF REAL AND PERSONAL PROPERTY JOINTLY ACQUIRED

CITIES AND TOWNS - MUNICIPAL AIRPORTS - AGREEMENTS CONCERNING OWNERSHIP OF REAL AND PERSONAL PROPERTY JOINTLY ACQUIRED.

The city of Centralia is legally authorized to enter into an agreement with the city of Chehalis and Lewis county concerning their joint airport whereby Centralia agrees to share in the costs of operation and of acquisition of additional property with the proviso that any new improvements are to be jointly owned by all three parties and any increase in the value of the property, real and personal, owned by the city of Chehalis and Lewis county is to be owned by all three parties in equal shares.

                                                                   - - - - - - - - - - - - -

                                                               November 22, 1960

Honorable John Panesko
Prosecuting Attorney
Lewis County
County Court House
Chehalis, Washington                                                                                        Cite as:  AGO 59-60 No. 160

Dear Sir:

            By letter previously acknowledged, you have indicated that the city of Chehalis and Lewis county, as joint owners and operators of a municipal airport, propose to enter into an agreement with the city of Centralia whereby the city of Centralia will henceforth share the costs of operation and the costs of acquisition of any additional airport property.  You have further indicated that it is proposed that the agreement provide in part that:

            "In the event of any improvements placed upon the said real estate or the personal property presently owned, such improvement shall be jointly owned by all of the three parties hereto, and in the event of any increases in the value of the property, real  [[Orig. Op. Page 2]] and personal, owned by the First and Second parties (City of Chehalis and Lewis County) such increases in value shall be owned by all three parties in equal shares."

            Relative to this proposed agreement, you have requested an opinion of this office on the question of whether the above quoted provision will, in effect, amount to a giving away of property or rights to property in violation of Article VIII, section 7 of the Washington State Constitution.

            We answer your question in the negative for the reasons set forth in our analysis.

                                                                     ANALYSIS

            Article VIII, section 7 of the Washington State Constitution, reads as follows:

            "No county, city, town or other municipal corporation, shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation."  (Emphasis supplied.)

            Inasmuch as such increases in value of the airport property as are to inure to the city of Centralia under the agreement apparently will be acquired in exchange for a performance of value by the city of Centralia (i.e., a sharing of future costs of operation and of acquisition of additional property), we have, at the outset, some doubt as to whether performance of the agreement by the city of Chehalis and by Lewis county, would amount to a gift of their respective properties at all.  We do not presently decide that question.  However, even if we were to assume that performance of the agreement by the city of Chehalis and by Lewis county would amount to a gift of their respective properties, in our opinion it would not amount to such a gift as is prohibited by the above quoted constitutional provision.

             [[Orig. Op. Page 3]]

            We base this conclusion upon the fact that the prospective donee of the proposed "gift" in this case is itself a municipal corporation; namely, the city of Centralia.  In an opinion of this office dated January 22, 1942, to the Honorable Cliff Yelle, State Auditor, we advised that in our opinion Article VIII, section 7 of the State Constitution does not prohibit a municipal corporation or county from making a gift of its property to some other municipal corporation.  We based this conclusion upon the decisions of the Washington supreme court in Foster v. Commissioners of Cowlitz County, 100 Wash. 502, 171 Pac. 539 (1918), and Rands v. Clark County, 79 Wash. 152, 139 Pac. 1090 (1914).  The main point of the court's decisions in the two cited cases is that Article VIII, section 7 of the State Constitution only prohibits municipal corporations and counties from aiding by means of gift:

            ". . . individuals, associations, companies and corporations engaged in purely private enterprises, or enterprises only quasi public, not enterprises carried on by the corporations whose functions are wholly public, such as the Federal or state government, or some branch thereof."  Rands v. Clark County, supra, at page 157.

            Of course the absence of a constitutional bar to the legality of the agreement which the cities of Chehalis and Centralia, and Lewis county propose to enter into does not by itself mean that the governmental units in question may properly enter into the agreement.  A municipal corporation has only such authority as has been expressly granted by the legislature, or as is to be necessarily implied from the authority which has been expressly granted.  Pacific First Federal Savings and Loan Association v. Pierce County, 27 Wn. (2d) 347, 178 P. (2d) 351 (1947).  However, with regard to the instant matter (though the issue is somewhat outside the scope of the specific question which you have asked), we are of the opinion that the requisite authority has been granted.  See section 14, chapter 182, Laws of 1945 (cf. RCW 14.08.310), a part of the 1945 Municipal Airports Act, which provides that:

            "Whenever the governing body of any municipality determines that the public interest and the interests of the municipality will be served by assisting any  [[Orig. Op. Page 4]] other municipality in exercising the powers and authority granted by this act, such first-mentioned municipality is expressly authorized and empowered to furnish such assistance by gift, or lease with or without rental, of real property, by the donation, lease with or without rental, or loan, of personal property, and by the appropriation of monies, which may be provided for by taxation or the issuance of bonds in the same manner as funds might be provided for the same purposes if the municipality were exercising the powers heretofore granted in its own behalf."

            A letter in accord with this last conclusion was written by this office July 21, 1960, to the city attorney of Chehalis.

            We trust that the foregoing information will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

PHILIP H. AUSTIN
Assistant Attorney General