Letter Opinion 1971 No. 118

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                                                                 October 7, 1971
 
 
 
Honorable Christopher T. Bayley
Prosecuting Attorney
King County Court House
Seattle, Washington
                                                                                          Cite as:  AGLO 1971 No. 118 (not official)
 
 
Dear Sir:
 
            By recent letter you have requested our opinion on two questions pertaining to a proposal by King county to establish and operate a public transit system.  You have described this proposal as follows:
 
            ". . . The county proposes to lease twenty-seven busses from an established transit company in the county.  In addition, the county proposes to contract with that established company to operate the system.  Exclusive control with regard to the rate and fare structure and the scheduling and routing of the bus lines is to be vested in the county.  . . ."
 
            Your questions regarding this proposal are as follows:
 
            "(1) Does King County have the authority to establish a transit system?
 
            "(2) Does King County's proposed operation contract with the transit company conflict with the Washington State Constitution, Article 8, § 7, and the decision in State ex rel. Navigation Company v. Pierce County, 184 Wash. 414 (1935)."
 
                                                                     ANALYSIS
 
            We answer question (1) in the affirmative and question (2) in the negative for the reasons set forth below.
 
            Your request, as we understand it, was precipitated by our recent opinion to State Representative Norwood Cunningham, dated October 4, 1971, in which we advised that  [[Orig. Op. Page 2]] Article VIII, § 7 of our state constitution, as applied in State ex. rel. Navigation Company v. Pierce County, 184 Wash. 414, 51 P.2d 407 (1935), would prohibit the city of Kent from subsidizing the operation of a privately owned transportation company providing bus service in the Auburn-Kent area.  The present proposal of King county represents an attempt to overcome the constitutional problem which was involved in the Pierce County case by means of eliminating the concept of a privately owned transit company and substituting therefor a public transportation system to be owned and managed by the county itself.
 
            Your first question inquires as to whether King county has the authority to establish such a transit system.  In responding to this question we take note of the fact that your county, unlike any other county in this state at the present time, is currently operating under a "home rule" charter as provided for in Article XI, § 4 (Amendment 21) of our state constitution.  The material language of this constitutional provision reads
 
            "Any county may frame a 'Home Rule' charter for its own government subject to the Constitution and laws of this state, . . ."
 
            This constitutional provision is substantially the same as Article XI, § 10, relating to "home rule" charter cities, and, as you know, such cities have long been held to possess the same legislative authority within their territorial jurisdictions as is possessed by our state legislature itself ‑ subject only to subordination to conflicting acts of the legislature or conflicting provisions in our state constitution.  See, Winkenwerder v. Yakima, 52 Wn.2d 617, 328 P.2d 873 (1958), and cases cited therein.  We have no doubt that this rule is equally applicable to a home rule charter county under Article XI, § 4 (Amendment 21), supra, and therefore it is our opinion, in response to question (1) that through the enactment of an appropriate county ordinance, King county may establish a county transit system such as is envisioned by your proposal.
 
            In so far as your second question is concerned, it is manifest from the foregoing that any county operation of this type must be conducted in a manner consistent with our Article VIII, § 7, which provides that:
 
            "No county, city, town or other municipal corporation shall hereafter give any money,  [[Orig. Op. Page 3]] 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."
 
            In State ex rel. Navigation Company v. Pierce County, supra, the court held that this constitutional prohibition against gifts and loans to private individuals or corporations1/ was violated by an agreement between Pierce County and a privately owned and operated transportation company under which the county was to pay a monthly subsidy to the private enterprise while retaining no measure of control over the operation thereof.  As we have noted, this was the court decision upon which we based our advice to Representative Cunningham, as well as the advice contained in a similar opinion written to the Washington Public Service Commission some twenty years ago.  See, AGO 51-53-166, copy enclosed.
 
            However, it is critically important to note that there, the transportation system to be financially assisted by the county was privately owned and operated, and wholly beyond the management or control of the county.  Here on the other hand, your proposal visualizes a public transportation system which would be owned and managed by King county, with only the functions of operation being retained by the private corporation.  This, in our judgment, readily distinguishes your proposal from the plan which was invalidated by the court in the Pierce County case, and we therefore answer your second question in the negative.2/

 
             [[Orig. Op. Page 4]]
            This disposes of the specific questions which you ask; however before concluding this opinion we believe it appropriate to add that it is our understanding, after discussions with you, that before your proposal is implemented you intend to obtain whatever approval is necessary with regard to the operation, including the take over of the existing private transportation system, from the Washington Utilities and Transportation Commission.
 
            We trust the foregoing will be of some assistance to you.
 
Very truly yours,
 
FOR THE ATTORNEY GENERAL
 
 
Philip H. Austin
Deputy Attorney General
 
 
                                                         ***   FOOTNOTES   ***
 
1/A gift or loan to another public agency is not prohibited by the constitution.  See, Rands v. Clarke County, 79 Wash. 152, 139 Pac. 1090 (1914).
 
2/We do not regard the fact that the county would merely lease the buses from the private company, rather than purchasing them outright, as being legally significant in terms of the constitutional validity of the proposal, for there most certainly is no requirement that a public agency own all of its operating equipment outright in order to be regarded as constituting a public transportation system.