PAYMENT OF OPERATING EXPENSES OF LOCAL UTILITY DISTRICT FORMED PURSUANT TO CHAPTER 209, LAWS OF 1951

PAYMENT OF OPERATING EXPENSES OF LOCAL UTILITY DISTRICT FORMED PURSUANT TO CHAPTER 209, LAWS OF 1951.

Local utility district bonds may not be issued to pay the operating expenses of such local utility district.

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                                                                  March 24, 1952 

Honorable Cliff Yelle
State Auditor
Olympia, Washington                                                                                                              Cite as:  AGO 51-53 No. 265

 Attention:  !ttMr. A. E. Hankins,Chief Examiner

 Dear Sir:

           We wish to acknowledge receipt of your letter of January 22, 1952, and your supplemental letter which was received March 17, 1952.  In your supplemental letter you ask our opinion on the following:

             "Remington's Revised Statutes 11610, as amended by chapter 209 of the Laws of 1951, provide for the establishment within a public utility district of a local utility district for the purpose of providing among other things of street lighting within the local utility district.  The procedure for establishing the local utility district and the issuance of bonds or warrants to pay for the improvements is understandingly set forth.  The act, however, seems to fail to set forth any method of providing for operating revenue following the completion of the improvements.  The question, therefore, is: Can local utility district bonds be issued to pay the operating expenses of such district or is there some other method provided for within the act by which the operating revenues may be produced?"

              [[Orig. Op. Page 2]]

            We may summarize our conclusions by stating that local utility district bonds may not be issued to pay the operating expenses of such local utility district.

                                                                      ANALYSIS

             The statute to which you refer, chapter 209, Laws of 1951, as codified in RCW 54.16.120 and 54.16.130, provides in part:

             "A district * * * may levy and collect in accordance with the special benefits conferred thereon, special assessments and reassessments on property specially benefited thereby, for paying the cost and expense thereof, or any portions thereof, as herein provided, and issue local improvement bonds or warrants or both to be repaid wholly or in part by collection of local improvement assessments."

             It is our opinion that "cost and expense," as used in this statute, refers to the cost and expense of installing a local improvement, and not to the operating expense of such improvement after installation.  A study of this statute convinces us that payment by a local utility district of its operating expenses is not expressly provided for by the legislature.

             We do not, however, presume that the legislature did a vain act; it is quite possible that a public utility district might consider it advantageous to enter into an arrangement, by contract or otherwise, for the payment of the operating expenses of a local utility district, with such local district, or individuals, or a municipality, on behalf of such local district.  Were such an arrangement proposed and submitted to the Division of Municipal Corporations of the State Auditor's Office, we shall be glad to give an opinion on its legality.

 Very truly yours,
SMITH TROY
Attorney General 

C. R. NELSON
Assistant Attorney General