DISTRICTS ‑- PORTS ‑- INVESTMENT OF SURPLUS FUNDS
In authorizing its county treasurer to invest surplus port district funds in qualified investments under RCW 36.29.020, the board of commissioners of a port district has the authority to designate the specific qualified financial institution or institutions in which such funds are to be invested.
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September 14, 1972
Honorable R. Ted Bottiger
State Representative, 29th District
8849 Pacific Avenue
Tacoma, Washington 98444
Cite as: AGO 1972 No. 21
By letter previously acknowledged you requested the opinion of this office on a question which we paraphrase as follows:1/
In authorizing its county treasurer to invest surplus port district funds in qualified investments under RCW 36.29.020, does the board of commissioners of a port district have the authority to designate the specific qualified financial institution or institutions in which such funds are to be invested?
We answer this question in the affirmative for the reasons set forth in our analysis.
RCW 53.36.010 designates the treasurer of the county in which a port district is located as the treasurer of the district and states that "All district funds shall be paid to him as such treasurer . . ." In this manner, these funds become [[Orig. Op. Page 2]] subject to certain of the provisions of another statute, RCW 36.29.020, in so far as their investment is concerned.
The first portion of this statute relates only to state and county funds and thus is outside of the scope of this opinion. However, the next part of the statute concerns the funds of other municipal corporations (including port districts) which are in the legal custody of the county treasurer, and provides for the investment of certain surpluses of such funds by the treasurer pursuant to authorization from the particular municipal corporation. As to this class of funds, the statute provides in pertinent part as follows:
". . . Any municipal corporation may by action of its governing body authorize any of its funds which are not required for immediate expenditure, and which are in the custody of the county treasurer or other municipal corporation treasurer, to be invested by such treasurer in savings or time accounts in banks, trust companies and mutual savings banks which are doing business in this state, up to the amount of insurance afforded such accounts by the Federal Deposit Insurance Corporation, or in accounts in savings and loan associations which are doing business in this state, up to the amount of insurance afforded such accounts by the Federal Savings and Loan Insurance Corporation, or in any short term United States government securities, or deposit such funds or any portion thereof in investment deposits as defined in RCW 39.58.010 secured by collateral in accordance with the provisions of this 1969 act: . . ."
A third part of this same statute deals with municipal funds as to which the owning municipal corporation has given no such authorization. As to this class of funds, the last paragraph of RCW 36.29.020, which was added by a 1967 amendment to the statute,2/ provides in pertinent part as follows:
[[Orig. Op. Page 3]]
"Whenever the funds of any municipal corporation which are not required for immediate expenditure are in the custody or control of the county treasurer, and the governing body of such municipal corporation has not taken any action pertaining to the investment of any such funds, the county finance committee shall direct the county treasurer to invest, to the maximum prudent extent, such funds or any portion thereof in securities . . ."
Your question deals solely with the second of these three separate parts of the statute; you ask whether or not the governing body of a port district, in authorizing its county treasurer to invest the district's surplus funds thereunder, possesses the legal power to designate the specific qualified financial institution or institutions in which such funds are to be invested.
The question to be determined is the meaning of RCW 36.29.020 and our object is, of course, to ascertain the legislature's intention. Cory v. Nethery, 19 Wn.2d 326, 142 P.2d 488 (1943). In the process of statutory construction, the first resort must be made to the context and subject matter of the legislation. Graffell v. Honeysuckle, 30 Wn.2d 390, 191 P.2d 858 (1948). Legislative intent is to be determined from reading the act itself, construing its terms and conditions according to their ordinary meaning, and giving consideration to the purposes and objects sought to be accomplished by the legislative enactment. State ex rel. State Ret. Bd. v. Yelle, 31 Wn.2d 87, 195 P.2d 646, 201 P.2d 172 (1948).
In AGO 1967 No. 23 [[to State Auditor on June 20, 1967]], we considered an analogous question relating to the continuing discretion of a municipal corporation to expend or invest its surplus funds according to the desires of its governing body even where residual surplus investments have been made by the treasurer under the final paragraph of RCW 36.29.020, supra. We concluded, among other things, that when the governing body of a municipal corporation has
". . . directed the investment of less than all of its surplus funds which are in the custody of the county treasurer, and thereafter the treasurer, pursuant to § 1, [[Orig. Op. Page 4]] chapter 173, Laws of 1967, invests all such surplus as part of the county's residual treasury cash balance . . . each municipal corporation retains the power to expend or invest its funds according to the respective fund balances shown in its accounts."
In thus answering the question there posed, we emphasized that a county treasurer may deposit or invest municipal funds in his custody only pursuant to express statutory authority. We pointed out that prior to the 1967 amendment which added the final paragraph to RCW 36.29.020,supra,
". . . county treasurers, as agents of the municipal corporations whose funds were in their custody, were empowered to invest those fundsonly to the extent specifically authorized by order of the governing body of each municipal corporation. . . ." (Emphasis supplied.)3/
We then analyzed the history of the 1967 amendment and said:
"In our opinion, the foregoing legislative history, considered with the content of the statute itself, negates any thought that the legislature intended to take away from individual municipal corporations any control over their funds. All that the legislature evidently intended was that such funds, at times when they are not invested by order of the governing body or needed for immediate expenditure, should be invested in the manner prescribed in the amendment. It should be noted that there is nothing in the amendment which indicates that investments made under its terms must continue in effect for any particular length of time; nor does the new statute direct the county treasurer regarding reinvestment after the maturity or liquidation of initial investments. The legislature must have realized that there would be a continuing turnover of [[Orig. Op. Page 5]] investments maturing or being liquidated at various times. Thus, the mechanics of investing prescribed by the legislature, and the absence of any such details, are further indications of a legislative intent to require the investment of surplus municipal funds simply as residual county treasury funds pending demand upon the treasury by the individual municipal corporation owners forany lawful reasons." (p. 8.)
Shortly thereafter, in AGO 1967 No. 25 [[to Avery Garrett, State Representative on July 6, 1967]](to which your letter made reference), we construed an almost identical statutory provision relating to the investment of water district funds; i.e., RCW 57.20.160, providing as follows:
"Whenever there shall have accumulated in any general or special fund of a water district moneys, the disbursement of which is not yet due, the board of water commissioners may, by resolution, authorize and direct the county treasurer to deposit or invest such moneys in banks, mutual savings banks, or savings and loan associations. . . ."
We were asked in this opinion whether the board of commissioners of a water district had the authority under this statute to designate the specific bank or banks in which its surplus funds were to be invested by the county treasurer. In concluding that it did we reasoned as follows:
"It is apparent that when a county treasurer invests water district funds in response to the authorization and direction of a board of water district commissioners, he does so as an agent for the water district. . . . Accordingly, the county treasurer has only such authority as has been granted to him by his principal, the water district, acting through its board of commissioners.
"From this it follows that where a board of water district commissioners, in its resolution authorizing the investment of surplus [[Orig. Op. Page 6]] funds in a bank or savings and loan association, directs which specific bank or association the funds are to be invested in, the county treasurer is without authority to place the funds in any other institution. He can only place the funds in the institution specified in the commissioners' resolution." (Emphasis supplied.)
It is true that we then went on to note that the provisions of RCW 57.20.160 permitted a board of water commissioners ". . . not merely to authorize but, as well, to direct the county treasurer to deposit surplus funds of the district in banks, mutual savings banks, or savings and loan associations. . . ." However we did not mean to suggest thereby that the word "direct" was the actual basis of our opinion. We merely said that this word in the statute
". . . would seem to emphasize the legislature's intent that the county treasurer, in investing water district funds pursuant to a resolution, as agent of the water district, can only exercise the granted authority in the manner directed by the commissioners . . ."4/
Accordingly, the absence of the word "direct" in RCW 36.29.020, supra, does not, in our opinion, affect the ultimate conclusion here to be drawn with respect to investments of port district funds thereunder. Because of its absence it may well be that a county treasurer investing such funds could decline to make a particular investment designated by the commissioners. However, it will next be seen that once having done so the treasurer would then be without any authority to invest the funds in any other statutorily eligible financial institution.
The powers of a county treasurer, as a public officer, are, of course, limited to those which are given him by statute, expressly or by necessary implication. See,Pacific Etc. Ass'n v. Pierce County, 27 Wn.2d 347, 178 P.2d 351 (1947);State ex rel. Eastvold v. Maybury, 49 Wn.2d 533, 304 P.2d 663 [[Orig. Op. Page 7]] (1956). Thus, the authority of the treasurer to invest port district or other municipal funds under RCW 36.29.020 must be limited to that given to him under this statute, either by the municipal governing body itself under the portion of the statute here under consideration or by the county finance committee under the amendatory final paragraph of the statute ‑ and it seems readily apparent in the case at hand that this latter source of authority is not available because this paragraph only applies where there has been no authorization granted by the municipal governing body itself.
This leaves us, then, only with the possibility that in searching for the authority to invest a port district's surplus funds in some other financial institution than that designated by the commissioners, the treasurer might find this authority in some other statute. However, our search discloses only two statues to which he might look in this respect, and in our opinion neither of these would do the job.
First to be noted is RCW 53.36.050, a special statute dealing with port district funds, which provides as follows:
"The county treasurer acting as port treasurer shall create a fund to be known as the 'Port of Fund,' into which shall be paid all money received by him from the collection of taxes in behalf of such port district, . . . All such port funds shall be deposited with the county depositories under the same restrictions, contracts and security as is provided by statute for county depositories and all interest collected on such port funds shall belong to such port district and shall be deposited to its credit in the proper port funds:Provided, That any portion of such port moneys determined by the port commission to be in excess of the current needs of the port district may be invested in certificates, notes, bonds, or other obligations of the United States of America, or any agency or instrumentality thereof, and all interest collected thereon shall likewise belong to such port district and shall be deposited to its credit in the proper port funds." (Emphasis supplied.)
[[Orig. Op. Page 8]]
The proviso which we have underscored in this statute was added by § 2, chapter 52, Laws of 1959. Our research discloses no interpretative case, prior attorney general's opinions, or legislative history upon which we can rely in order to ascertain its meaning. However it seems to be a reasonable conclusion to draw from its provisions that once a port commission has determined the existence of an available surplus of its funds in the hands of the county treasurer, those funds are investable by the treasurer in the manner specified by the statute; i.e., in certain obligations of the United States of America or any agency or instrumentality thereof. Such a conclusion, however, would not give the treasurer a basis for investing these funds in a bank or other financial institution other than that designated by the commissioners because such institutions simply are not within the scope of this authority.5/
The other possible source of independent investment authority to be considered is chapter 193, Laws of 1969, Ex. Sess., ‑ the "public depositary protection act" now codified as a part of chapter 39.58 RCW. Section 13 of that act (RCW 39.58.130) provides as follows:
"A treasurer as defined in RCW 39.58.010 is authorized to deposit in investment deposits in a qualified public depositary any public funds available for investment and secured by collateral in accordance with the provisions of this chapter, and receive interest thereon. The authority provided by this section is additional to any authority now or hereafter provided by law for the investment or deposit of public funds by any such treasurer:Provided, That in no case shall the deposit or deposits of public funds by any such treasurer in any one bank or trust company exceed at any one time in the [[Orig. Op. Page 9]] aggregate the total of the capital, surplus, and undivided profits of such bank or trust company."
The term "treasurer" is defined in § 1 of the act (RCW 39.58.010 (9)) as follows:
"'Treasurer' shall mean the state treasurer, a county treasurer, a city treasurer, a treasurer of any other municipal corporation, and the custodian of any other public funds."
However, it is to be noted that the present wording of RCW 36.29.020,supra, is derived from § 26 of that same act and thus must be read together with these other sections. See,Hansen v. Harris, 123 Wash. 109, 212 Pac. 171 (1923). Unlike RCW 53.36.050,supra, relating solely to port district funds, §§ 1 and 13, chapter 193, Laws of 1969, Ex. Sess., are general in nature, while § 26 of this act relates specifically to the funds of municipal corporations in the custody of a county treasurer. Section 13 purports to grant general investment authority to treasurers, while § 26 grants to the governing body of a municipal corporation the power todelegate such authority and further provides that if no such delegation is made the county finance committee shall direct the treasurer to invest either in certain United States securities or in "investment deposits." In other words, such discretion as is granted to any officer or agency under the provisions of RCW 36.29.020, as amended by § 26, is vested either in the governing body of the municipal corporation which owns the funds or in the county finance committee; it is not vested in the county treasurer.
Where a statute first expresses a general intent (as in §§ 1 and 13, chapter 193,supra) and afterwards an inconsistent particular intent (as in § 26,supra) the particular intent is to be construed as an exception to the general intent. See, In re North River Logging Co., 15 Wn.2d 204, 130 P.2d 64 (1942). Thus it follows that as to any surplus funds for which investment authorization has been given by a port commission or other municipal governing body under § 26 (RCW 36.29.020), the provisions of that statute prevail over those of § 13 of the same 1969 act.
With this in mind we may summarize our conclusions with respect [[Orig. Op. Page 10]] to your question as follows: When the board of commissioners of a port district authorizes the investment of its surplus funds by the county treasurer in qualified investments under RCW 36.29.020, the commission may designate the specific qualified financial institution or institutions in which such funds may be invested. It would be legally permissible for the county treasurer, for some good reason, to refuse to act pursuant to such authority and, instead, to invest the funds in United States government securities under RCW 53.36.050. However, the county treasurer would have no authority under existing statutes to place the funds in some other banks or similar financial institutions than those which were designated by the port commissioners in granting their authorization to invest.6/
We trust the foregoing will be of assistance to you.
Very truly yours,
ROBERT F. HAUTH
Assistant Attorney General
*** FOOTNOTES ***
1/A second and unrelated question contained in this request, regarding the ability of savings and loan associations or mutual savings banks to qualify as public depositories under chapter 193, Laws of 1969, has earlier been answered by our letter to you of June 13, 1972.
2/See, § 1, chapter 173, Laws of 1967.
3/AGO 1967 No. 23, supra, p. 4.
4/We also pointed out that the legislature in this particular statute had given the county treasurer limited authority to refuse to invest in certain situations.
5/Beyond this, it might be argued that because this statute preceded the enactment of the current version of RCW 36.29.020, supra, this later statute operated to supersede it. However, RCW 53.36.050,supra, is a special statute and we find no reason to conclude that the legislature in enacting the 1967 amendment to RCW 36.29.020 intended to repeal or amend it by implication. Accord, AGO 1967 No. 25, supra.
6/Of course, this form of authority could be statutorily granted to county treasurers if the legislature desires to do so. Compare RCW 28A.58.440 which covers the investment of school funds and provides that:
". . . The county treasurer shall have the power to select the particular investment in which said funds may be invested. . . ."
Addressing ourselves to this statute in AGO 1967 No. 25, supra, we observed that:
". . . where the legislature has been of a mind to permit the county treasurer, in investing municipal funds, to select the particular investment, it has shown itself fully capable of expressing this intent . . ."