LOCAL IMPROVEMENT GUARANTY FUND
A city may exceed the 15 mill limitation provided in RCW 84.52.050 for a local improvement guaranty fund within RCW 35.54.060, without a vote providing the 40 mill constitutional limitation upon counties is not exceeded. Recomputation shall be made by county assessor within RCW 84.52.010.
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November 2, 1953
Honorable R. DeWitt Jones
Vancouver, Washington Cite as: AGO 53-55 No. 162
Attention: Mr. William Church, Deputy
Your letter of October 16, 1953, states as follows:
"In its current budget the City of Vancouver has levied .25 mills over and above the 15 mill limit, the excess millage being for the purposes of a local improvement guaranty fund for a fire alarm bond. The City purports to act under authority of RCW 35.54.060.
"Can the City exceed the 15 mill limit as established by RCW 84.52.050, Chapter 175, Laws of 1953, for the above purpose?
"Is a County Assessor obligated to extend such excess levy on to the Tax Assessment Role when the total County Assessment is 39 mills?"
[[Orig. Op. Page 2]]
In our opinion the City of Vancouver may, under authority of RCW 35.54.060 exceed the 15 mill limit for the maintenance of a local improvement guaranty fund, however it may not exceed the 40 mill aggregate levy of all taxes as limited by chapter 175, Laws of 1953, unless by special election as authorized within RCW 84.52.052, 84.52.056 and 84.52.060.
In answer to the second interrogatory, it is our opinion that the county assessor is obligated to recompute and establish a consolidated levy, under authority of RCW 84.52.010 providing the recomputation is within the authorized 40 mill levy.
The foregoing conclusions are based upon the statutes quoted and the interpretation given to the local improvement guaranty fund by the courts.
In the case ofComfort v. Tacoma, 142 Wash. 249, at page 256, the court said:
"The distinction between a debt and a contingent liability is nowhere more concisely stated than inWalla Walla v. Walla Walla Water Co., 172 U.S. 1, 43 L.Ed. 341:
"'There is a distinction between a debt and a contract for future indebtedness to be incurred, provided the contracting party perform the agreement out of which the debt may arise. There is also a distinction between the latter case and one where an absolute debt is created at once, as, by the issue of railway bonds or for the erection of a public improvement,‑-though such debt be payable in the future by installments. In the one case the indebtedness is not created until the consideration has been furnished; in the other the debt is created at once, the time of payment being only postponed.'"
Again, in the case ofKelly v. The City of Sunnyside, 168 Wash. 95, an action was brought by the bondholder for recovery upon his bonds and to require the city to levy a tax for the benefit of the guaranty fund. The city had already exceeded the debt limitation as provided in Sec. 6, Art. VIII of the Constitution and there had been no vote authorizing any increase of indebtedness. Relying uponComfort v. Tacoma, supra, the court required the city to make an additional assessment for the guaranty fund on the basis that "under the guarantee fund law there is not a debt, but a contingent liability."
[[Orig. Op. Page 3]]
Following the foregoing cases section 1, chapter 109, Laws of 1933, was passed by the legislature giving cities and towns direct authority to levy additional taxes for the maintenance of the local improvement guaranty fund "in excess of all statutory and charter limitations applicable to tax levies." However, no authority exists for a county in combining all levies to exceed the 40 mill constitutional limitation.
Consequently, where the total county assessment for all purposes is 39 mills for Clark County, the assessor shall proceed in accordance with RCW 84.52.010 and recompute and establish a consolidated levy as provided in subsections 1 and 2 of said statute.
We hope that the foregoing will be of assistance to you.
Very truly yours,
DONALD E. WATSON
Assistant Attorney General