RELEASE OF PORTION OF REGIONAL LIBRARY BUILDING TO PRIVATE FIRM
A regional library may erect a building large enough for future needs and rent space presently unused to a private firm and may pledge the rental to the payment of indebtedness incurred in erecting the building.
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July 9, 1952
Miss Maryan E. Reynolds
Olympia, Washington Cite as: AGO 51-53 No. 348
Dear Miss Reynolds:
Receipt is acknowledged of your letter of July 2, 1952, in which you request our opinion upon the following proposal:
"1. The Boards of Trustees of the Yakima Public Library and the Yakima County Library are the legal owners of a tract of land 200 x 140 feet within the city of Yakima, which property is the site of the Yakima Valley Regional Library.
"2. The Library proposes to erect a four-story building upon said tract of land for library purposes. At the present time they would not require all of the space and that portion not presently required for their library use would be leased to a business firm.
"3. To finance the cost of construction, they propose to borrow sufficient funds from an insurance company, and to insure repayment of said loan they will pledge the rentals to be received from the leased portion of the building.
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"4. Under their proposal the lease monies would be sufficient to meet all payments due upon the loan over the amortized period of about thirty years.
"5. Due to increases of population, they will require all of the building for library quarters by the end of the lease period, at which time no further payments will be due upon the loan, and they will own the entire building, free of encumbrances.
"6. The lessee would be required, in addition to cash rental paid, to supply certain facilities and services to the library. Also, the lessee would be required to pay taxes upon the leasehold."
It is our conclusion that the regional library may erect a library of such size as shall be necessary for its future requirements and may rent excess space to a private firm provided such renting does not interfere with the use of the property for library purposes and provided the project can be financed within the statutory debt limitations.
The Yakima Public Library is a regional library formed under RCW 27.12.080 (§ 5, chapter 65, Laws of 1941; Rem. 1941 Supp. § 8226-5). A regional library is simply a contract arrangement between two or more governmental units maintaining libraries. In this case the two governmental units, as we understand, are the city of Yakima and the Yakima Rural County Library District.
The proposal as outlined in your letter calls for the erection at this time on property already owned by the regional library of a building which is larger than present needs require but all of the space will be required for library purposes in about thirty-five years. There can be no question that the board of trustees of the library has authority to erect an appropriate building for library purposes. It is specifically given this authority by RCW 27.12.210 (§ 8, chapter 65, Laws of 1941; Rem. 1941 Supp. § 8226-9). Among the powers specifically conferred upon such a board are the following:
"(8) Lease, purchase, or erect an appropriate building for library purposes, and acquire such other property as may be needed therefor;"
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We deem it a matter of business judgment resting with the library board as to whether a building larger than present needs should be erected so long as the building has for its object, library purposes. The regional library is not in itself a municipal corporation, but consists of two cooperating municipal corporations. The question next to be considered is whether the regional library may lease to a private firm space in excess of its immediate needs. In our opinion the component municipalities of a regional library do have that authority. McQuillin on Municipal Corporations, 3rd Edition, § 28.42 states the general rule:
"* * * And, furthermore, if parts of public property, including a public building, are not used for municipal purposes, or are not continuously used, the municipality may permit others to use such part, provided no public use is interfered with thereby. * * * "
One of the authorities cited for this conclusion is Colwell v. City of Great Falls, (Mont.) 157 P. (2d) 1013, where it was held that a part of a municipal building could be leased for a motion picture theater. The court said:
"It is generally conceded that a municipal corporation having erected a building in good faith for municipal or public purposes has the right, when such building is no longer used by the municipality, or when parts of it are not needed for public use, or when at intervals the whole building is not so used, and when it does not interfere with its public use, to permit it to be used either gratuitously or for a compensation for private purposes. Note 31 L.R.A., N.S., 580; Worden v. New Bedford, 131 Mass. 23, 41 Am. Rep. 185; Lowry v. Forest City Borough, 39 Pa. Super. 276; 44 C.J. 1092; 19 R.C.L. 771; 38 Am. Jur. 168, 169; Notes, 133 A.L.R. 1241-1250, 63 A.L.R. p. 614-620; Cline v. City of Hickory, 207 N.C. 125, 176 S.E. 250; Clarey v. City of Philadelphia, 311 Pa. 11, 166 A. 237; Captain Charles v. Gridley Camp v. Board of Sup'rs of Butte County, 98 Cal. App. 585, 277 P. 500 [[277 Pac. 500]]; Harris v. St. Louis, 233 Mo. App. 911, 111 S.W. 2d 995; City of Biddeford v. Yates, 104 Me. 506, 72 A. 335 [[72 Atl. 335]], 15 Ann. Cas. 1091; Gottlieb‑Knabe Co. v. [[Orig. Op. Page 4]] Macklin, 109 Md. 429, 71 A. 949 [[71 Atl. 949]], 31 L.R.A., N.S., 580, 16 Ann. Cas. 1092; French v. Inhabitants of Quincy, 3 Allen, Mass. 9 [[3 Allen 9]]; Bates v. Bassett, 60 Vt. 530, 15 A. 200 [[15 Atl. 200]], 1 L.R.A. 166; Kingman v. Brockton, 153 Mass. 255, 26 N.E. 998, 11 L.R.A. 123; Anderson v. Montvideo, 137 Minn. 179, 162 N.W. 1073; Town of Meredith v. Fullerton, 83 N.H. 124, 139 A. 359 [[139 Atl. 359]]; City of Mission v. Richards, Tex. Civ. App., 274 S. W. 269; Wheelock v. City of Lowell, 196 Mass. 220, 81 N.E. 977, 124 Am. St. Rep. 543, 547, 12 Ann. Cas. 1109; Jones v. Inhabitants of Sanford, 66 Me. 585; Bell v. City of Plattville, 71 Wis. 139, 36 N.W. 831; Stone v. Oconomowoc, 71 Wis. 155, 36 N.W. 829."
The court there went on to say:
"A city has no right, as a primary purpose, to erect buildings to rent; but if on erection of a building for its proper municipal uses, it believes that it will lighten the burden of its taxpayers to rent a part of its building, whereby an income is gained, in such manner as not to interfere with the uses for which it primarily was designed, there is no sound reason suggested why it may not do so. Clarey v. Philadelphia, supra; Bates v. Bassett, supra. * * *"
We find nothing in the statutes relative to the powers of either type of municipal corporation involved in the regional library which would be inimical to the rule which we have cited. The Yakima City Library has the powers derived from being a part of a first class city. That a first class city can lease its excess property is at least inferentially recognized by our supreme court in Nagewitz v. City of Seattle, 21 Wn. (2d) 656, 152 P. (2d) 722. A rural county library district has the general powers of a public corporation and has all such powers as shall be necessary to carry out its functions. In our opinion the general rule is applicable in this case and the regional library may, if it erects a building primarily for library purposes, lease excess space to a private corporation.
The statute relative to regional libraries contains no express authority for the borrowing of money by a regional library. In fact, the whole operation of a regional library is largely a matter of contract between the municipalities [[Orig. Op. Page 5]] involved. Yakima City Library as a component of a first class city, is authorized to borrow money upon the credit of the municipality. RCW 35.22.280. However, the Yakima Rural County Library District has definite limitations as to its borrowing power. Under RCW 27.12.060 (§ 11, chapter 75, Laws of 1947; RRS 8226-4a) it can become indebted only by issuing and selling coupon warrants, and under RCW 26.12.070 its total indebtedness may not exceed the amount that could be raised by a two mill levy on the existing property in the district. Thus, if any general indebtedness of the rural county library district is to be involved, the amount that can be raised is extremely limited. If the regional library is not to become generally obligated, but only to pledge the revenues from the lease, these limitations probably do not apply.
By RCW 27.12.210 (§ 8, chapter 65, Laws of 1941; Rem. 1941 Supp. § 8226-9) the trustees of a library "have exclusive control of the finances of the library." Under this authority we see no reason why they could not pledge the revenues of the rentals for the retirement of an indebtedness. Our supreme court has on numerous occasions held that a municipality is not indebted in cases where it does not pledge its general credit, but pledges specific revenues only for the payment of an obligation. Winston v. Spokane, 12 Wash. 524; Potter v. Whatcom, 25 Wash. 207; Baker v. Seattle, 2 Wash. 576; 27 Pac. 462; Soule v. Seattle, 6 Wash. 315, 33 Pac. 384; Faulkner v. Seattle, 19 Wash. 320; Fogg v. Town of Hoquiam, 23 Wash. 340, 63 Pac. 234;Jones v. Hammer, 143 Wash. 525, 255 Pac. 955;Comfort v. Tacoma, 142 Wash. 249, 252 Pac. 929. To the same effect seeGruen v. State Tax Commission, 35 Wn. (2d) 1. Thus, if the general credit of neither of the municipalities composing the regional library is involved, but only a pledge of revenues is given, we believe that statutory and constitutional limitations upon indebtedness will have no application.
While we believe that the conclusions above expressed are correct, we suggest that in view of the novelty of the proposal, and the fact that there are persons ready to challenge it, a court test of the procedure be arranged before the library becomes too far committed to it.
Very truly yours,
LYLE L. IVERSEN
Assistant Attorney General