STATUTORY DEBT LIMITATION UNDER RCW 39.36.020 AS AMENDED BY § 1, CHAPTER 38, LAWS OF 1971

CITIES AND TOWNS ‑- STATUTORY DEBT LIMITATION UNDER RCW 39.36.020 AS AMENDED BY § 1, CHAPTER 38, LAWS OF 1971

A city or town may incur debt to the extent of an additional two and one‑half percent, with voter approval, for the acquisition or development of open space or park facilities.

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                                                                December 2, 1976

Honorable Robert V. Graham
State Auditor
Legislative Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1976 No. 73

Dear Sir:

            By recent letter you have directed our attention to the provisions of RCW 39.36.020 and have requested our opinion on a question pertaining to the limitation upon indebtedness imposed by that statute upon cities and towns.  We will set forth the essence of your question, together with our answer thereto, within the following analysis.

                                                                     ANALYSIS

            RCW 39.36.020 reads, in material part, as follows:

            "(1) Except as otherwise expressly provided by law or in subsections (2), (3) and (4) of this section, no taxing district shall for any purpose become indebted in any manner to an amount exceeding three‑eighths of one percent of the value of the taxable property in such taxing district without the assent of three‑fifths of the voters therein voting at an election to be held for that purpose, nor in cases requiring such assent shall the total indebtedness incurred at any time exceed one and one‑fourth percent on the value of the taxable property therein.

            "(2) Counties, cities, towns, and public hospital districts are limited to an indebtedness amount not exceeding three‑fourths of one percent of the value of the taxable property in such counties, cities, towns, or public hospital districts without the assent of three‑fifths of the voters therein voting at an election held for that purpose.  In cases requiring such assent counties, cities,  [[Orig. Op. Page 2]] towns, and public hospital districts are limited to a total indebtedness of two and one‑half percent of the value of the taxable property therein.

            ". . .

            "(4) No part of the indebtedness allowed in this chapter shall be incurred for any purpose other than strictly county, city, town, school district, township, port district, metropolitan park district, or other municipal purposes:  Provided, That a city or town, with such assent, may become indebted to a larger amount, but not exceeding two and one‑half percent additional, determined as herein provided, for supplying such city or town with water, artificial light, and sewers, when the works for supplying such water, light, and sewers shall be owned and controlled by the city or town; and a city or town, with such assent, may become indebted to a larger amount, but not exceeding two and one‑half percent additional for acquiring or developing open space and park facilities:  Provided further, That any school district may become indebted to a larger amount but not exceeding two and one‑half percent additional for capital outlays.

            ". . ."  (Emphasis supplied.)

            The portion of RCW 39.36.020 which we have above underscored was added to the statute by an amendment contained in § 1, chapter 38, Laws of 1971.  As you have described the problem, however,

            "This amendment has been interpreted by some to authorize a city or town to become indebted an additional two and one‑half percent for open space and park purposes thereby raising the maximum debt limit to seven and one‑half percent for all purposes.  Others have interpreted this amendment to merely add another purpose whereby a city or town could become indebted up to a maximum limit of five percent."

             [[Orig. Op. Page 3]]

            Your question of us, basically, is which of the foregoing two interpretations is correct, in our opinion.

            Although obviously inartfully drafted, it nevertheless appears to us that the intent of the legislature, in enacting § 1, chapter 38, Laws of 1971,supra, was to further increase the indebtedness limitation for cities and towns beyond that which existed prior to its enactment.  Had the legislature, instead, merely meant (in your words) ". . . to . . . add another purpose whereby a city or town could become indebted up to a maximum limit of five percent" it could easily have accomplished that goal by adding to the purposes listed in the first clause of the proviso in question rather than (as it did) adding an entirely new clause to that proviso.  Therefore, it is our opinion that a city or town may now incur debt to the extent of an additional two and one‑half percent, with voter approval, for the acquisition or development of open space or park facilities.  In short, the over-allstatutory debt limitation for cities and towns, by reason of chapter 38,supra, is now at the level of seven and one‑half percent of its taxable property ‑ still well within the ten percent limit which is prescribed by Article VIII, § 6 of our state constitution, we might add.

            We trust that the foregoing will be of some assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

PHILIP H. AUSTIN
Deputy Attorney General