VALIDITY OF GENERAL OBLIGATION BOND ISSUE OF CLALLAM COUNTY FIRE PROTECTION DISTRICT NO. 2 IN EXCESS OF FORTY MILL TAX LIMIT

VALIDITY OF GENERAL OBLIGATION BOND ISSUE OF CLALLAM COUNTY FIRE PROTECTION DISTRICT NO. 2 IN EXCESS OF FORTY MILL TAX LIMIT.

Proposition for issuance by Fire Protection District of bonds in excess of forty mill tax limit not required to state amount exceeds tax limit.

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                                                                  January 7, 1953 

Honorable Howard V. Doherty
Prosecuting Attorney
Clallam County
Port Angeles, Washington                                                                                                              Cite as:  AGO 51-53 No. 454

 Dear Mr. Doherty:

             In your letter of December 31, 1952, your recitation of facts is, substantially as follows:

             Clallam County Fire Protection District No. 2 is a municipal corporation under RCW 52.08.010.  At a regular meeting in August 1952 the board of fire commissioners adopted a resolution to submit to the electors of the district a proposition to issue general obligation bonds in excess of the forty mill tax limitation for the purchase of fire protection equipment.  The proposition was stated as follows:

             "Shall Clallam County Fire District No. 2 issue ten-year six-percent-maximum general obligation bonds for $27,500.00 for purchase of two fire engines?

             Yes     [     ]             No     [     ]"

             The resolution was duly certified to the county auditor and notice properly given of the election to be held in the various precincts within the district and stating the proposition as above quoted.

              [[Orig. Op. Page 2]]

            The proposition appeared on the November 4th ballot and was favorably received by more than seventy per cent of the electors who voted on the proposition, with a total vote of two-thirds of those eligible to vote.  A total number of 2,177 voted at the election of which number 1,886 voted on the bond issue.  There were 1,410 votes in favor of, and 476 votes opposed to, issuance of the bonds.

             During the course of the bond issue campaign various residents of the fire protection district placed advertisements in the local newspaper which has a circulation of above 8000 and blankets the town of Port Angeles and its immediately surrounding territory, within which the fire protection district lies, thereby informing the public of the proposed bond issue and that it was a special levy to acquire more funds than the tax limitation provided.  The volunteer firemen and others interested in the proposition made personal solicitations throughout the area advising the voters of the bond issue and that it would be paid by an additional levy.

             You inquire whether the bond issue is invalid because the proposition failed to state in so many words that the bonds were in excess of the forty mill tax limitation.

             It is the opinion of this office that the bonds are valid.

                                                                      ANALYSIS

             The bond issue proposition quoted above clearly satisfies the requirement of the statute (RCW 29.27.070) that the governing board of the municipal corporation, desiring to submit to the voters of such political subdivision any proposition at any election shall duly certify to the county auditor before the date of the election for voting thereon the proposition in the form of a ballot title of not exceeding twenty-five words framed in such manner as to clearly identify the proposition to be voted upon and to enable voters favoring the proposition to vote "yes" and those opposed thereto to vote "no."  The proposition meets the constitutional requirement that

             "No tax shall be levied except in pursuance of law; and every law imposing a tax shall state distinctly the object of the same * * *" Washington Constitution, Art. VII, § 5.

             The proposition conforms to the statutory and constitutional rules cites; it expressly states that the bonds are to be general obligation bonds.

              [[Orig. Op. Page 3]]

            The Fire Protection District bond statute (RCW 52.16.020, 52.16.070 to 52.16.150, inclusive) was enacted by the Second Extra-ordinary Session of the Thirty-second Legislature, September 10, 1951, and without particular reference to other financing methods.

             RCW 52.16.020 was amended to include "(6) General obligation bond fund," which is a separate fund from the "(1) Expense fund" which is derived from the annual regular tax levies.  Manifestly, the general obligation bond fund is in addition thereto.

             RCW 52.16.080 reads as follows:

             "Fire protection districts are hereby authorized to incur general indebtedness for capital purposes and for the purpose of refunding outstanding coupon warrants issued for capital purposes only, not to exceed an amount, together with any outstanding general obligation indebtedness, equal to three percent of the assessed valuation of the taxable property within such district and to issue general obligation bonds evidencing such indebtedness on the terms and provisions hereinafter set forth, the principal and interest thereof to be payable from annual tax levies to be made in excess of the forty-mill tax limitation."

             That is to say, general obligation bonds are payable from annual tax levies to be made in excess of the forty mill limitation.

             RCW 52.16.090, 52.16.120, 52.16.130 and 52.16.140 read as follows:

             "52.16.090.  Election as to proposed bond issue.  After adoption by the board of fire commissioners of any district of a resolution fixing the purpose or purposes for the incurring of such indebtedness and the issuance of said bonds, the question of whether or not such indebtedness shall be incurred and such bonds issued shall be submitted to the qualified  [[Orig. Op. Page 4]] electors of the district for their ratification or rejection at a general or special election which may be held at any time.  Such proposition shall state the purpose or purposes for which such bonds shall be issued, and the amount thereof, the length of time the same shall run, the maximum interest which the same may bear, and must receive an affirmative vote of three‑fifths of those voting on such proposition at such election, at which such election the total number of persons voting shall constitute not less than forty percent of the voters in said fire protection district who voted at the last preceding general state election."

             "52.16.120.  Annual levy to meet bond payments.  An annual levy in excess of the forty-mill tax limitation shall be made upon all the taxable property within such district, except those lands within the district which are now or will hereafter be required to pay forest protection assessment, by the officers or governing body thereof now or hereafter charged by law with the duty of levying taxes for such district sufficient to meet the annual and semiannual payments of principal and interest due on said bonds."

             "52.16.130.  General levy authorized‑-Limit.  To carry out the purposes for which fire protection districts are created, the board of fire commissioners of any such district is hereby authorized to levy each year, in addition to the levy or levies provided for the payment of the principal and interest of any outstanding general obligation bonds and the levies necessary to pay the principal and interest of any coupon warrants heretofore issued and outstanding, and ad valorem tax on all taxable property located in such district not to exceed two mills:  Provided, That such tax shall not be levied upon those lands within the district which are now or will hereafter be required to pay forest protection assessment: And provided further, That in no case may the total  [[Orig. Op. Page 5]] general levy for all purposes, except retirement of general obligation bonds, exceed four mills.  Any such tax when so levied shall be certified to the proper county officials for the collection of the same as for other general taxes.  Such taxes when collected shall be placed in the appropriate district fund or funds as provided by law, and shall be paid out on warrants of the auditor of the county in which the district is situated, upon authorization of the board of fire commissioners of such district."

             "52.16.140.  General levy may exceed limit‑-When.  Notwithstanding the limitation of millage contained in RCW 52.16.130, the board of fire commissioners of any such district is hereby authorized to levy, in addition to any levy for the payment of the principal and interest of any outstanding general obligation bonds and levies necessary to pay the principal and interest of any coupon warrants heretofore issued and outstanding, an ad valorem tax on all property located in such district of not to exceed two mills when such levy will not take millage which other taxing districts may lawfully claim and which will not cause the combined levies to exceed the forty-mill limitation, and such additional levy, or any portion thereof, may also be made when millage of other taxing units is released therefor by agreement with the other taxing units from their authorized levies."

            The resolution of the commissioners of the district is in conformity to the foregoing.  It states the purpose of the resolution, the necessity for the indebtedness and clearly recites "That in the event of ratification of said proposition, an annual levy, in excess of the forty mill tax limitation, shall thereafter be made upon all taxable property within such district except those lands within the district which are now or will hereafter be required to pay forest protection assessment, sufficient to pay said bonds in full with interest thereon within the period of running of said bonds."

              [[Orig. Op. Page 6]]

            This resolution was a matter of public record more than forty-five days prior to the election.  There was compliance with all of the statutory requirements for approval or disapproval by the district's electors of the bond issue.

             Neither the Seventeenth Amendment (forty mill tax limit) to the state constitution nor any other constitutional or statutory provision requires that, in the submission to the electors of a fire protection district the question whether bonds shall be issued, the bond issue proposition shall state that the indebtedness thereby incurred would exceed the forty mill tax limitation.

             The framing of the proposition within a limit of twenty-five words in such manner as to state the purpose for which such bonds should be issued, and the amount thereof, the length of time the bonds should run and the maximum interest which the same would bear conformed to all constitutional and statutory requirements.  The proposition for issuance of the general obligation bonds received an affirmative vote in excess of sixty per cent of those voting on the proposition (1,886 voted on the proposition, of which number 1,410 cast affirmative votes), at which election the total number of persons voting constituted more than forty per cent of the voters in the fire protection district who voted in the last preceding general state election.  The bonds are well within the assessed valuation of the district and the number of votes within the district.

             Conceding, merely for the sake of argument, that the proposition was faulty in that it contained no recital in addition to the twenty-five word statement required by RCW 29.27.070 and 52.16.090, et seq. such recital was in a measure directory in the sense that there need only be substantial compliance therewith.  This was accomplished, as stated above, by the great amount of general widespread unofficial information concerning the approaching election on the proposed bond issue in excess of the forty mill tax limit.  It should be observed, also, that the resolution of the commissioners contained such information and that resolution was a matter of public record more than six weeks prior to the election.

             See School District No. 81 v. Taxpayers, 37 Wn. (2d) 669, 225 P. (2d) 1063 and cases cited therein, respecting requisites and sufficiency of election notices.

 Very truly yours,
SMITH TROY
Attorney General