EXPENDITURES IN EXCESS OF BUDGET BY COMMISSIONERS OF PUBLIC HOSPITAL DISTRICT

EXPENDITURES IN EXCESS OF BUDGET BY COMMISSIONERS OF PUBLIC HOSPITAL DISTRICT

The commissioners of a public hospital district, in the event of need or emergency, may not make expenditures in excess of the budget as adopted by the commission for the fiscal year.

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                                                                   June 16, 1952

Honorable Lowell B. Vail
Prosecuting Attorney
Garfield County
Pomeroy, Washington                                                                                                              Cite as:  AGO 51-53 No. 326

Dear Sir:

            Receipt is hereby acknowledged of your letter of May 2, 1952, in which you request an opinion as to whether the commissioners of a public hospital district may make expenditures in the event of need, or emergency, in excess of the detailed budget as adopted by the commission.  If such an expenditure is legally cognizable, how is it to be accomplished?

            Our conclusion may be summarized as follows:

            The commissioners of a public hospital district may not make expenditures in the event of need or emergency, in excess of the budget as finally adopted by the commission in accordance with RCW 70.44.060, subdivision 6.

                                                                     ANALYSIS

            In arriving at our conclusion it is necessary to set out the sections of chapter 70.44 RCW (chapter 264, Laws of 1945 as amended by chapter 197, Laws of 1949) as are pertinent to the questions which you have submitted.

            RCW 70.44.060 subsection (6) (§ 18 (f) chapter 197, Laws of 1949) provides:

             [[Orig. Op. Page 2]]

            "* * * The commissioners shall prepare a proposed budget of the contemplated financial transactions for the ensuing year and file the same in the records of the commission on or before the first Monday in September.  Notice of the filing of the proposed budget and the date and place of hearing thereon shall be published for at least two consecutive weeks in a newspaper printed and of general circulation in the county.  On the first Monday in October the commission shall hold a public hearing on the proposed budget at which any taxpayer may appear and be heard against the whole or any part thereof.  Upon the conclusion of the hearing, the commission shall, by resolution, adopt the budget as finally determined and fix the final amount of expenditures for the ensuing year.  * * * The commission may, prior to the receipt of taxes raised by levy, borrow money or issue warrants of the district in anticipation of the revenue to be derived from the levy of taxes for the district, and the warrants shall be redeemed from the first money available from such taxes when collected, and the warrants shall not exceed the anticipated revenues of one year, and shall bear interest at a rate of not to exceed six percent per year."  (Emphasis supplied)

            RCW 70.44.090 (§ 11, chapter 264, Laws of 1945) provides:

            "The superintendent shall:

            "* * *

            "(2) Keep the commission advised as to the financial condition and needs of the district; prepare each year an estimate for the ensuing fiscal year of the probable expenses of his department, and recommend to the commission what development work should be undertaken, and what extensions and additions, if any, should be made during the ensuing fiscal year, with an estimate  [[Orig. Op. Page 3]] of the costs of the development work, extensions, and additions; certify to the commission all the bills, allowances, and payrolls, including claims due contractors of public works, and recommend to the commission salaries of th employees of his office and a scale of salaries or wages to be paid for the different classes of service required by the district."

            It is to be noted that chapter 70.44 RCW (chapter 264, Laws of 1945, as amended by chapter 197, Laws of 1949) does not contain a provision for the making of emergency expenditures in excess of the budget as finally adopted by the commissioners of the public hospital district.  However, section 1, chapter 264, Laws of 1945, annotation following RCW 70.44.010 states:

            "* * * The rule of strict construction shall have no application to this act, but the same shall be liberally construed, in order to carry out the purposes and objects for which this act is intended.  * * * "

            The purposes for which a public hospital district are to be formed are stated in RCW 70.44.010 (§ 1, chapter 264, Laws of 1945), which provides:

            "Municipal corporations, to be known as public hospital districts, are hereby authorized and may be established within the several counties of the state to own and operate hospitals and to furnish hospital service for the residents of the district and other persons."

            Municipal corporations possess and can exercise only such powers as are granted in express words, or those necessarily or fairly implied in or incident to the powers expressly conferred, or those essential to the accomplishment of the declared objects and purposes of the corporation.  McGilvra v. Seattle School District, 113 Wash. 619, 194 Pac. 817, 12 A.L.R. 913;State ex rel. Seattle v. Superior Court, 93 Wash. 267, 160 Pac. 755, L.R.A. 1917-B 354;Winsor v. Mayor and Council, 10 Wash. 4; Dillon on Municipal Corporations section 84, 4th Ed.

            InFedi v. Ryan, 193 Atl. 801, 118 N.J. Law 516, the court states:

             [[Orig. Op. Page 4]]

            "The legislative direction for a liberal construction does not warrant the extension of the scope and sweep of the statute beyond that expressly provided, or reasonably to be implied.  * * * It calls for a broad interpretation to advance the declared policy of statute within the prescribed limits."

            In the case ofIn re Bazelle, 282 N.Y. Supp. 983, 245 App. Div. 395, the court stated:

            "Provision in law that it should receive liberal construction does not authorize the court to disregard any of its provisions."

            In looking at the public hospital district act, chapter 70.44 RCW, (chapter 264, Laws of 1945, as amended by chapter 197, Laws of 1949) as a whole, and in view of the legislative mandate for a liberal construction, it cannot be said that expenditures can be made in excess of the budget without doing violence, and nullifying the effect of the provision in RCW 70.44.060, subsection (6), which states:

            "* * * the commission shall, by resolution, adopt the budget as finally determined and fix the final amount of expenditures for the ensuing year.  * * *"

            And, further, the incurring of obligations in excess of the budget would make the holding of public hearings, prior to the fixing and final determination of the budget, useless and of no effect.  McQuillin on Municipal Corporations, 3rd Ed., volume 15, section 39.39, p. 125, states:

            "* * * Laws of this nature receive much publicity to be given to the items in the budget, and provide for a hearing and final action upon the budget.  The purpose of these laws is 'not only to secure greater uniformity in municipal financing, but to give the members of the public a better understanding of the financial condition and affairs of municipalities in which they are interested and to place at the disposal of the governing bodies the data necessary for intelligent action on financial matters, and thereby safeguard the public interests.'"

             [[Orig. Op. Page 5]]

            Therefore, we conclude that expenditures may not be made in excess of the budget as finally adopted by the commissioners of the hospital district.

Very truly yours,

SMITH TROY
Attorney General

STEPHEN C. WAY
Assistant Attorney General