Bob Ferguson
Other LanguagesAGLO 1970 No. 85 -
Attorney General Slade Gorton
- - - - - - - - - - - - -
June 2, 1970
Honorable James P. Thompson
Prosecuting Attorney
Whatcom County Courthouse
Bellingham, Washington 98225
Cite as: AGLO 1970 No. 85
Dear Sir:
By letter previously acknowledged, you have requested the opinion of this office upon a question which we paraphrase as follows:
Upon the dissolution of the township form of government in a county (following an election held pursuant to RCW 45.82.010 (2)) what disposition is to be made of those properties of the dissolved townships which pertained to their cemetery operations?
We answer this question in the manner set forth below.
ANALYSIS
RCW 45.82.010 codifies § 1, chapter 243, Laws of 1969, Ex. Sess. As we indicated in our opinion to your office dated September 23, 1969, subsection (1) of this statute states that after its effective date1/ ". . . no township shall assess or levy ad valorem taxes upon property"; and subsection (2) provides for a mandatory county-wide election on the question of the disorganization of ". . . all township organizations within the county."2/ This latter subsection then goes on to provide that
". . . If a majority of votes cast upon the question favor disorganization of the township system of the county, the ensuing disorganization shall be conducted pursuant to RCW 45.80.040, 45.80.050, 45.80.060, 45.80.070 and 45.80.080: . . ."
These several code sections, in turn, constitute the codifications of a preexisting, 1961, law3/ establishing the procedural details of township disorganization and dissolution [[Orig. Op. Page 2]] following an election (then permissive rather than, as now, mandatory) on the question of disorganization" . . . of the township organizations of a county . . ."4/ These procedures may be briefly summarized as follows:
(1) RCW 45.80.040: Election returns certified to the judge of the superior court, who shall enter an order of disorganization effective December 31st of the year of the election and shall appoint the chairman of the board of county commissioners as receiver to wind up the affairs of the townships;
(2) RCW 45.80.050: Empowers receiver to take possession of all township property, etc., and to wind up their affairs; includes right to sue and be sued, and power to sell property at public auction;
(3) RCW 45.80.060: Prohibits township tax levies after effective date of order of disorganization;5/
(4) RCW 45.80.070: Directs the chairman of the board of county commissioners, as receiver, to
". . . take the following actions, in the order indicated:
"First, he shall pay all lawful demands against the townships, and then file a final account together with all vouchers, with the clerk of the superior court;
"Second, if prior to the election a tax levy has been made by one or more of the townships, for collection the year following the election, and if a pro rata reduction has been caused in the levy of any junior taxing district in the county which would not have been required had the township made no levy, the chairman shall order the county treasurer to collect the township levy and to disburse to the junior taxing district whose levy was reduced by proration the sum of money by which its levy was so [[Orig. Op. Page 3]] reduced; if the township levy is not sufficient for such payments, any available funds to the credit of the township shall be so paid;
"Third, the chairman shall pay any remaining township funds to the county treasurer to be deposited to the credit of the several taxing districts of the county (except the state and county) in the following allocations: Each such taxing district of the county shall receive a share that bears the same proportion to the total amount as its assessed valuation within the township times its authorized levy last in process of collection (excepting excess levies) bears to the total assessed valuation of such taxing districts within the township times the total authorized levy (excepting excess levies) of such districts. . . ." (Emphasis supplied.)6/
(5) Lastly, RCW 45.80.080: Provides for the disposition of the various physical properties of the township as follows:
"All real property, buildings, and the furnishings and equipment used in connection with buildings owned by the township shall pass to the county in fee upon the effective date of the order of disorganization. Such property, as all other county property, shall be managed and controlled by the board of county commissioners: Provided, That the board shall for at least five years maintain and operate township meeting halls for community and public use."
Your question assumes that voter approval for the disorganization of townships in your county has been obtained,7/ [[Orig. Op. Page 4]] and inquires as to the proper disposition of those township properties which pertained to their cemetery operations, as provided for in RCW 45.12.100 (10). These properties, evidently, fall into the following three categories: (1) real property (including buildings, fixtures and equipment) used in connection with cemeteries; (2) monetary assets accumulated for cemetery purposes but not committed to any particular use; and (3) certain other monetary assets accumulated by the townships in such a manner as to be committed to endowment care funds similar or identical to those provided for in chapter 68.44 RCW (and see, chapter 68.40 RCW).
The manner of disposing of those properties falling within categories (1) and (2) seems obvious. The first, comprised of physical properties, is governed by RCW 45.80.080, supra, and the second, consisting of uncommitted monetary assets, is clearly to be handled in the manner provided for in RCW 45.80.070, supra. The more difficult question concerns the disposition of funds committed to an endowment care fund.
In considering this question, we are met at the outset with the proposition that, at least insofar as this office is concerned, the accumulation and maintenance of such committed funds as these by a township is of most doubtful validity. See, AGO 57-58 No. 165 [[to Prosecuting Attorney, Whatcom County on February 26, 1958]], copy enclosed, in which we said:
"RCW 45.12.100 (10) (1953 Supp.) authorizes the electors of a township at their annual town meeting:
"'(10) To instruct by vote the board to purchase grounds for a town cemetery; to limit the price to be paid therefor, to raise a tax for payment thereon and to establish rules for the care and management thereof.'
"However, the chapter makes no provisions for the establishment of a perpetual care fund.
"Provisions for endowment care, formerly called 'perpetual care,' are found in chapter 68.44 RCW. RCW 68.44.010 (1953 Supp.) authorizes the establishment of endowment care funds by 'any cemetery authority.' However, the legislature has made it clear that these provisions do not apply to municipal cemeteries. See RCW 68.04.190; also § 246, chapter 247, Laws of 1943 (cf. RCW 68.48.070). The only exception appears to be [[Orig. Op. Page 5]] in the case of a cemetery district, which is expressly made a 'cemetery authority' as previously defined in the chapter.
"While certain special provisions in this regard are made for cities and towns (chapter 68.12 RCW (1955 Supp.)), there appears to be no such express power given to townships."8/
It is perhaps for this reason that RCW 45.12.070, supra, makes no provision for the disposition of such funds, the use of which (where authorized) is governed by a statute, RCW 68.44.020, which provides as follows:
"Endowment care funds shall not be used for any purpose other than to provide, through income only, for the endowment care stipulated in the instrument by which the fund was established, and shall be kept separate and distinct from all other funds. The principal shall forever remain irreducible and inviolable." (Emphasis supplied.)
Clearly, any township funds which are thus restricted as to use ‑ irrespective of the townships' authority or lack of same for their accumulation in the first place ‑ cannot simply be distributed to the various taxing districts in the county as provided for in RCW 45.12.070 without violating the terms of the trust under which they are held. See, Bogert, Trusts and Trustees, § 377 (pp. 163-166) (2nd ed. 1964) with respect to the status of such funds, as follows:
". . . In many states there are provisions for the organization of cemetery corporations or associations, and such organizations are granted power to hold maintenance funds in perpetual trust, and frequently are required to set up such a perpetual maintenance fund out of the proceeds of the sale of lots. In other jurisdictions one or more municipal corporations is empowered to accept a trust of this type. The agency may be a city, town or village. . . ."
[[Orig. Op. Page 6]]
Although it is unlawful, under RCW 68.40.085, for an endowment care fund to be represented as being "perpetual," we take the language of RCW 68.44.020, supra, that ". . . The principal [of the endowment fund] shall forever remain irreducible and inviolable. . . ." to mean that the purposes of the fund will never be fully performed. Hence, these funds must in fact be perpetuated for as long as there is any trustee capable of administering them.
With this in mind, our task becomes one of finding some procedure whereby a competent trustee can be obtained to replace the about-to-be dissolved townships in your county in the performance of this function. Because there are no statutory provisions specifically governing this matter, our suggestion is that of placing the matter before the superior court which has jurisdiction over the dissolution proceedings as provided for in RCW 45.80.040 ‑ 45.80.080, supra. This could be done pursuant to a petition by the chairman of your board of county commissioners, as receiver, to have the county (which will be receiving the physical cemetery properties) appointed as a temporary trustee until such time as one or more cemetery districts (which are the only class of municipal corporation which can qualify as a "cemetery authority" for the purpose of administering an endowment care fund) can be organized to take over both the properties and the committed care funds. The court could then be asked to retain jurisdiction until such cemetery districts have been formed, to the end that it could thereupon supervise the ultimate transfer of the property and funds to these districts for their maintenance and operation.
If this procedure is followed, we would recommend that the state cemetery board be joined as a party to the proceedings and given an opportunity either to join in urging this approach or to present some counterproposal. Under RCW 68.05.170, the legislature has vested this board with certain powers to go into court in order to protect endowment care funds, as follows:
". . .
"(2) The board may bring actions for the preservation and protection of endowment care funds in the superior court of the county in which the cemetery is located and the court shall appoint [[Orig. Op. Page 7]] substitute trustees and make any other order which may be necessary for the preservation, protection and recovery of endowment care funds, whenever a cemetery authority or the trustees of its fund have:
". . .
"(f) is [sic] in danger of becoming insolvent or has gone into bankruptcy or receivership; . . ." (Emphasis supplied.)
The appropriateness of including the cemetery board in the action under this statute will be readily seen when it is recalled that the procedure for township dissolution which the legislature (in RCW 45.80.040 ‑ 45.80.080, supra,) has prescribed includes the use of a statutory receivership device.
It is hoped that the foregoing analysis and suggestion will be of some assistance to you.
Very truly yours,
SLADE GORTON
Attorney General
DONALD FOSS, JR.
Assistant Attorney General
PHILIP H. AUSTIN
Assistant Attorney General
*** FOOTNOTES ***
1/August 11, 1969.
2/See, opinion dated September 17, 1969, to State Representative James P. Kuehnle, copy enclosed, with regard to the time for conducting this election.
3/Chapter 53, Laws of 1961.
4/See, RCW 45.80.010.
5/Obsolete with the enactment of RCW 45.82.010 (1) supra.
6/This statute then, concludes by providing that:
". . . Upon approval by the court of said final account the court shall sign proper orders dissolving said township."
7/As of the enactment of chapter 243, Laws of 1969, Ex. Sess., township governments were operating in only two counties in this state ‑ Whatcom and Spokane.
8/We do not regard this conclusion as having been altered by the subsequent enactment of § 1, chapter 119, Laws of 1965 (RCW 45.12.021), pertaining to joint acquisition and operation of public cemeteries by two or more townships, inasmuch as that statute does not contain any grant of power to establish endowment funds and, in any case, relates to powers which may be exercised by a township only in concert with another.