LEGALITY OF EXPENDING PUBLIC FUNDS FOR PRIVATE INSURANCE PLAN

MUNICIPAL HOUSING AUTHORITY ‑- PENSION PLAN ‑- LEGALITY OF EXPENDING PUBLIC FUNDS FOR PRIVATE INSURANCE PLAN

A municipal housing authority lacks authority to expend public moneys for the purpose of making contributions to a private insurer for a pension plan.

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                                                                   June 30, 1955

Honorable Charles O. Carroll
Prosecuting Attorney
King County
County City Building
Seattle 4, Washington                                                                                                              Cite as:  AGO 55-57 No. 111

Attention:  !ttMr. K. G. Smiles, Deputy

Dear Sir:

            We have your letter requesting the opinion of this office on the following question:

            Does the housing authority of the City of Seattle have authority to contribute to a pension plan for its employees through a private insurer?

            It is our opinion that this question must be answered in the negative.

                                                                     ANALYSIS

            RCW 74.24.070 provides in part as follows:

            "An authority shall constitute a public body corporate and politic, exercising public and essential governmental functions, and having  [[Orig. Op. Page 2]] all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this chapter, including the following powers in addition to others herein granted:

            "* * *

            "(3) To arrange or contract for the furnishing by any person or agency, public or private, of services, privileges, works, or facilities for, or in connection with, a housing project or the occupants thereof; * * *"

            We understand that employees of the Seattle Housing Authority are presently covered by the Federal Social Security program.  It appears that they are not eligible for combined coverage under social security and the state employees retirement system because the total contribution would exceed that permitted by regulation of the Public Housing Administration.  The only method available to these employees for increased pension coverage is to cease making contributions under the social security program in order to become eligible under state retirement, which they would prefer not to do, or to supplement their coverage through a private insurer.

            A municipal housing authority is a municipal corporation.  Clark v. Housing Authority of Port Orchard, 25 Wn. (2d) 579.  InPacific First Federal Savings and Loan Association v. Pierce County, 27 Wn. (2d) 347, the court stated at page 353:

            "Municipal authorities cannot exercise powers except those expressly granted, or those necessarily implied from granted powers.  And, if there is a doubt as to whether the power is granted, it must be denied.  * * *"

            See alsoState ex rel. Hill v. Port of Seattle, 104 Wash. 634;Griggs v. Port of Tacoma, 150 Wash. 402; andBatcheller v. Westport, 39 Wn. (2d) 338.

             [[Orig. Op. Page 3]]

            The housing authority statute is silent as to express power of the authority to employ or to compensate its employees.  Manifestly, such power must necessarily be implied in order for a housing authority to function.  That a housing authority may at its option arrange for its employees to become members of the state employees retirement system seems evident under RCW 41.40.410 (1953 Supp.).  However, there is serious doubt as to the legality of a housing authority expending public funds for the purpose of making contributions to a private insurer for a pension fund for its employees.

            On the basis of the authorities above cited, we conclude that the Seattle Housing Authority lacks power to expend housing authority money for this purpose in the absence of express statutory authority to do so.

            We hope the foregoing analysis will prove helpful to you.

Very truly yours,

DON EASTVOLD
Attorney General

ANDY G. ENGEBRETSEN
Assistant Attorney General