FIRE PROTECTION DISTRICTS USE OF 'CONTRACT FUND'

FIRE PROTECTION DISTRICTS USE OF "CONTRACT FUND"

Under Chapter 134, Laws of 1955, the Contract Fund of a Fire Protection District may be used only for capital purposes.

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                                                              September 15, 1955

Honorable Cliff Yelle
State Auditor
Legislative Building
Olympia, Washington                                                                                                                                      Cite as: AGO 55-57 No. 137

Attention:  Mr. A. E. Hankins, Chief Examiner

Dear Sir:

            By your letter of August 19, 1955, previously acknowledged, you have asked for our opinion in regard to a question which we paraphrase as follows:

            Under chapter 134, Laws of 1955, for what purposes may disbursements be made by a fire protection district from its contract fund.

            The contract fund, under chapter 134, Laws of 1955, and under provisions of chapter 56.16 RCW, may be used only for capital purposes.

                                                                     ANALYSIS

            Section 1, chapter 134, Laws of 1955, amended § 2, chapter 176, Laws of 1953 (codified as RCW 52.16.020) removed "all taxes levied for the purchase of fire‑fighting equipment, apparatus, and for the housing thereof, proceeds from the sale of coupon warrants heretofore authorized" from the contract fund and directed the county treasurer to place them in the expense  [[Orig. Op. Page 2]] fund.  This change converted the expense fund into a dual purpose fund for general expenses and capital outlay.

            The 1955 act makes no express provision for disbursement from the contract fund.  The following language is used: "Proceeds from the sale of general obligation bonds, and the transfer of any surplus in the expense fund, shall be placed by the county treasurer in the contract fund."  Because of the identification of the contract fund with the bond proceeds, it is our opinion that the legislature exhibited an intention to identify the contract fund with the purpose for which general obligation bonds can be issued.

            RCW 52.16.080 states in part:

            "Fire protection districts are hereby authorized to incur general indebtedness for capital purposes * * * and to issue general obligation bonds evidencing such indebtedness * * *"

            The limitation of capital purposes placed upon the general bonding powers of the districts must also be applied to any funds directed to be deposited therewith.  The commingling of other funds with bond proceeds without taking on the nature of bond proceeds would create a serious question of proper application and restriction upon funds therein deposited.

            The 1955 act in providing for the placing of transferred surplus from the expense fund in the contract fund evidenced the intention of limiting future expenditures of such transferred surplus to capital purposes only.

Very truly yours,

DON EASTVOLD
Attorney General

DON MILES
Assistant Attorney General