Letter Opinion 1972 No. 042

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                                                                   May 25, 1972

Honorable Eric O. Anderson
State Representative, 19th District
627 Grand Avenue
Hoquiam, Washington 98550                                                                                            Cite as:  AGLO 1972 No. 42 (not official)

Dear Sir:
 
            By letter dated May 17, 1972, you requested an opinion of this office on the following question:
 
            "Is it legal for a public utility to give, or sell for a token fee, PUD property to a city for a public park?"
 
                                                                     ANALYSIS
 
            Because the transaction contemplated by your question would be between two public agencies, it raises no constitutional issue as to the adequacy of the contemplated "price" to be paid by the grantee city under Article VIII, § 7 of the Washington Constitution.  This constitutional provision, which prohibits gifts of municipal funds or property, has been held by the Washington court to be inapplicable to gifts made by one municipality to another.  See, Rands v. Clarke County, 79 Wash. 152, 139 Pac. 1090 (1914).
 
            However, this absence of a constitutional objection to the proposed transfer covers only one side of the coin.  It is fundamental that in addition to its compliance with any limitations contained in the Constitution, the legality of any action taken by municipal corporations is to be judged, as well, upon the existence of statutory authority in support of the action.  Accord, Pacific First Federal Savings & Loan Association v. Pierce County, 27 Wn.2d 347, 353, 178 P.2d 351 (1947), to the effect that
 
            "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.  . . ."
 
             [[Orig. Op. Page 2]]
            The general powers of a public utility district to dispose of any of its properties are set forth in RCW 54.16.180, as follows:
 
            "A district may sell and convey, lease, or otherwise dispose of all or any part of its works, plants, systems, utilities and properties, after proceedings and approval by the voters of the district, as provided for the lease or disposition of like properties and facilities owned by cities and towns:  Provided, That the affirmative vote of three‑fifths of the voters voting at an election on the question of approval of a proposed sale, shall be necessary to authorize such sale:  Provided further, That a district may sell, convey, lease or otherwise dispose of all or any part of the property owned by it, located outside its boundaries, to another public utility district, city, town or other municipal corporation without the approval of the voters; or may sell, convey, lease, or otherwise dispose of to any person or public body, any part, either within or without its boundaries, which has become unserviceable, inadequate, obsolete, worn out or unfit to be used in the operations of the system and which is no longer necessary, material to, and useful in such operations, without the approval of the voters:  Provided further, That a public utility district located within a county of the first class may sell and convey to a city of the first class, which owns its own water system, all or any part of a water system owned by said public utility district where a portion of it is located within the boundaries of such city, without approval of the voters upon such terms and conditions as the district shall determine:  Provided further, That a public utility district located in a fifth class county and bordered by the Columbia river may, in connection with the operation of a water system, or as part of a plan for acquiring or constructing and operating a water system, or in connection with the creation of another or subsidiary local utility district, may provide for the acquisition or construction, additions or improvements to, or extensions of, and operation of a sewage system within the same service area as in the judgment of the district commission is necessary or advisable in order to eliminate or avoid any existing or potential danger to the public  [[Orig. Op. Page 3]] health by reason of the lack of sewerage facilities or by reason of the inadequacy of existing facilities:  And provided further, That a public utility district located within a county of the first class bordering on Puget Sound may sell and convey to any city of the third class or town all or any part of a water system owned by said public utility district without approval of the voters upon such terms and conditions as the district shall determine.  Public utility districts are municipal corporations for the purposes of this section and the commission shall be held to be the legislative body and the president and secretary shall have the same powers and perform the same duties as the mayor and city clerk and the resolutions of the districts shall be held to be ordinances within the meaning of the statutes governing the sale, lease, or other disposal of public utilities owned by cities and towns."
 
            Alternatively, because the transaction described in your question involves two governmental agencies, the parties thereto may, instead, proceed under the following provisions of RCW 39.33.010 (1), as amended by § 1, chapter 95, Laws of 1972, Ex. Sess.:
 
            "((Notwithstanding any provision of law to the contrary,)) (1)  The state or any municipality or any political subdivision thereof, may sell, transfer, exchange, lease or otherwise dispose of any property, real or personal, or property rights, including but not limited to the title to real property, to the state or any municipality or any political subdivision thereof on such terms and conditions as may be mutually agreed upon by the proper authorities of the state and/or the subdivisions concerned:  PROVIDED, That such property is determined by decree of the superior court in the county where such property is located, after publication of notice of hearing is given as fixed and directed by such court, to be either necessary, or surplus or excess to the future foreseeable needs of the state or of such municipality or any political subdivision thereof  [[Orig. Op. Page 4]] concerned, which requests authority to transfer such property."1/
 
             The important distinction to be noted between these two statutes, insofar as your question is concerned, relates to the procedures to be followed in each case.  If the transaction is to be consummated pursuant to RCW 39.33.010, supra, a determination must first be made by the superior court of the county in which the property is located that such property is either necessary, on the one hand, or is surplus or excess to the future foreseeable needs of the municipality which requests authority to transfer the particular property.  However, under RCW 54.16.180, supra, this approach is not required.  Nor, it will be noted, is the requirement of voter approval which is set forth in the first sentence of RCW 54.16.180 applicable where the transaction is (as here) intergovernmental in nature and provided that the property to be transferred
 
            ". . . has become unserviceable, inadequate, obsolete, worn out or unfit to be used in the operations of the system and . . . is no longer necessary, material to, and useful in such operations, . . ."
 
            Our direct answer to your question, then, is basically in the affirmative ‑ subject only to the qualification that the requirements of either RCW 54.16.180, supra, or RCW 39.33.010, supra, must be met in order to legalize the proposed transaction.  We would assume that legal counsel for both the district and the city would be consulted before the transfer is consummated in order to insure that the requisite procedures are followed.
 
             [[Orig. Op. Page 5]]
            We trust that the foregoing will be of assistance to you.
 
Very truly yours,
 
FOR THE ATTORNEY GENERAL
 
Philip H. Austin
Deputy Attorney General
 
                                                         ***   FOOTNOTES   ***
 
1/That this statute is to be read as an alternative to any other statute (such as RCW 54.16.180) authorizing a particular municipality to dispose of its property is now clear from subsection (2), added by the 1972 amendment, which reads as follows:
 
            "(2) This section shall be deemed to provide an alternative method for the doing of the things authorized herein, and shall not be construed as imposing any additional condition upon the exercise of any other powers vested in the state, municipalities or political subdivisions."