STATE EMPLOYEES RETIREMENT SYSTEM ‑- PARTICIPATION BY HOUSING AUTHORITIES

STATE EMPLOYEES RETIREMENT SYSTEM ‑- PARTICIPATION BY HOUSING AUTHORITIES.

Housing authorities may participate in retirement system provided approval secured from federal agencies providing funds.

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                                                                    July 12, 1950

Mr. Samuel P. Totten
Executive Secretary
State Employees Retirement System
Olympia, Washington                                                                                              Cite as:  AGO 49-51 No. 300

Dear Sir:

            This is in answer to your letter of June 1, 1950, in which you request the opinion of this office on the following question:

            "May a housing authority, established pursuant to section 23, Laws of 1939, as amended, bring its employees into the State Employment Retirement System?"

            Our conclusion is as follows:

            A housing authority may participate in the State Employees Retirement System providing approval is obtained from the proper federal authority.

                                                                     ANALYSIS

            Your question is whether housing authorities can qualify as employers under section 43, chapter 274, Laws of 1947, as amended by section 27, chapter 240, Laws of 1949 (11072-42 Rem. Supp. 1949).  The pertinent portion of this section of the Retirement Act reads as follows:

             [[Orig. Op. Page 2]]

            "The employees and appointive and elective officials of any political subdivision of the state with five (5) or more employees may become members of the Retirement System by the approval of the local legislative authority.  * * *"

            Section 11072-42 was construed at length in a former opinion dated August 20, 1947, to the Honorable William A. Sullivan, Chairman, Washington State Employees Retirement System.  We held that participation in the system required two attributes of the employer:  (1) that the employer be a public body, exercising governmental power, and (2) that it have authority to assume the financial obligations imposed by the act.

            Our problem, then, is to determine whether a housing authority complies with these requirements.

            The first requirement is clearly met by the language of the Housing Act.  Section 8, chapter 23, Laws of 1939, as amended by section 1, chapter 43, Laws of 1945 (6889-8 Rem. Supp. 1945), which reads in part as follows, states that,

            "An authority shall constitute a public body corporate and politic exercising public and essential governmental functions, and having all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this act.  * * *"

            The second requirement raises the question of whether a housing authority is authorized to assume the financial obligations required by the Retirement Act.  Subsection (c) of section 6889-8 provides that a housing authority may contract for services as follows:

            "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; * * *"

             [[Orig. Op. Page 3]]

            Our Supreme Court has held that contributions to a retirement system for municipal employees is a public purpose; that such contributions are compensations, not gratuities.  InAyers v. Tacoma, 6 Wn. (2d) 545, 108 P. (2d) 348, the court approved the following language from Bower v. Nagle, 228 Mich. 434, 200 N.W. 258:

            "That the money which will be expended under this amendment is for a 'public purpose' we have no doubt.  The annuities, or pensions if you please, to be paid under it are not gratuities but in the nature of additional compensation for valuable services rendered to the city."

            We conclude that a housing authority may properly meet the financial obligations required of an employer under the Retirement Act.  Section 6889-8 also provides that contracts of housing authorities must "comply with conditions which the federal government may have attached to financial aid to the project."  In order to become an employer under the Retirement Act a housing authority must secure approval of the necessary expenditures from the proper federal agencies.

Very truly yours,

SMITH TROY
Attorney General

JAMES M. MORRIS
Assistant Attorney General