Letter Opinion 1974 No. 107

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                                                                    April 5, 1974

Honorable Ronald L. Hendry
Prosecuting Attorney
Pierce County
946 County-City Building
Tacoma, Washington 98402                                                                                                                                                 Cite as:  AGLO 1974 No. 107

Attention:  !ttMr. Robert J. Backstein
            Chief Civil Deputy

Dear Sir:
 
            Thank you for your letter of April 2, 1974, responding to ours of March 22, and providing us with the additional information that we requested with respect to a certain proposed expenditure of public funds by Pierce county for mental health facilities.
 
                                                                     ANALYSIS
 
            Based upon the additional information you have provided to us, supplemented by an ensuing telephone conversation, it is our opinion that the proposed expenditure of $113,788.00 by Pierce county would be unconstitutional under Article VIII, § 7 of our state constitution which provides as follows:
 
            "No county, city, town or other municipal corporation shall hereafter give any money, 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."
 
            The reason that we believe that this would be so is that the facilities which would be paid for with these moneys would not thereby be acquired by Pierce county in exchange for its payment, but, instead, would remain at all times in the ownership of the private nonprofit corporation with which the county would be contracting.
 
             [[Orig. Op. Page 2]] 

            If, in the exercise of its authority under chapter 71.24 RCW, Pierce county desires to purchase or construct a mental health facility of its own ‑ and then contract with a nonprofit corporation to operate that facility ‑ it unquestionably may do so.  Or, instead, it simply may contract for the performance of community health services by a private nonprofit corporation that owns its own physical facilities ‑ thereby only contracting for the services of the corporation and not for a purchase of any of its physical facilities.  But for the county, in addition to contracting for the services of a nonprofit corporation, also to pay for its physical facilities without acquiring title to them would, in our judgment, amount to an unconstitutional gift of public funds in violation of Article VIII, § 7, supra.1/
 
             We trust that the foregoing informal opinion with respect to this matter will be of some assistance to you.  As indicated in our telephone conversation, we are utilizing this approach rather than that of a preparation of a complete, formal attorney general's opinion in view of the time factors described in your letter.
 
Very truly yours,
 
FOR THE ATTORNEY GENERAL

PHILIP H. AUSTIN
Deputy Attorney General

                                                         ***   FOOTNOTES   ***
 
1/As an alternative to purchasing the facilities in question for a lump sum payment of the agreed purchase price ‑ based upon a determination by the county commissioners that these particular facilities represent the best ones available for a given price in which to have county community health services performed ‑ the county could, constitutionally, merely lease those facilities.  But it could not, in so doing, pay the entire consideration for the leasehold interest in a single lump sum at the outset ‑ for to do so would, likewise, represent an unconstitutional loan of the county's credit to the private lessor, in our judgment.