Allen v. Public Utility Dist. No. 1 of Thurston County

• Court: Washington Supreme Court
• Writing for the Court: HILL; WEAVER; MALLERY; FINLEY
• Citation: Allen v. Public Utility Dist. No. 1 of Thurston County, 347 P.2d 539, 55 Wn.2d 226 (Wash. 1959)
• Decision Date: 14 December 1959
• Docket Number: No. 35387
• Parties: Thomas P. ALLEN, Kenneth McClarty, A. D. Campbell, Maxine Patrick, and D. A. Hastings, Plaintiffs, v. PUBLIC UTILITY DISTRICT NO. 1 OF THURSTON COUNTY, a municipal corporation, et al., Defendants and Relators, The Superior Court of the State of Washington for Thurston County, Honorable Charles T. Wright, Judge, Respondent.

Page 226

55 Wn.2d 226

347 P.2d 539

Thomas P. ALLEN, Kenneth McClarty, A. D. Campbell, Maxine Patrick, and D. A. Hastings, Plaintiffs, v. PUBLIC UTILITY DISTRICT NO. 1 OF THURSTON COUNTY, a municipal corporation, et al., Defendants and Relators The Superior Court of the State of Washington for Thurston County, Honorable Charles T. Wright, Judge, Respondent.

No. 35387.

Supreme Court of Washington, En Banc.

Dec. 14, 1959.

Rehearing Denied Jan. 13, 1960.

O'Leary, Meyer & O'Leary, Olympia, for plaintiffs.

Houghton, Cluck, Coughlin & Henry, Paul Coughlin, Seattle, Lynch & Lynch, Olympia, for relators.

HILL, Judge.

We are here reviewing a permanent injunction issued November 2, 1959, by the superior court of Thurston county against (a) Public Utility District No. 1 of Thurston County; (b) the commissioners of that district; and (c) certain elected officials of Thurston county. The injunction brings to a halt all proceedings that would result in the levy and spreading of a tax of 1.97 mills for 1960 on all taxable property in the district. The purpose of the proposed tax levy by the public utility district is to raise one hundred thousand dollars for

'* * * all expenses related to the acquisition by purchase or condemnation of electrical properties operated by the Puget Sound Power & Light Company, including engineering, legal, accounting, and other costs.'

The injunction was secured by the plaintiff taxpayers who attacked the validity of the purported levy on the grounds that the public utility district's proposed budget, as filed, and the published notices of the hearing thereon were insufficient and deceptive in character.

The policy question of whether the public utility district should acquire, by purchase or condemnation, the properties of the Puget Sound Power & Light Company is no concern of the courts. The only question is: was there a substantial compliance with RCW 54.16.080 which, so far as here material, reads as follows:

'* * * A district may raise revenue by the levy of an annual tax on all taxable property within the district, not exceeding two mills in any one year, exclusive of interest and redemption for general obligation bonds. The commission shall prepare a proposed budget of the contemplated financial transactions for the ensuing year and file it in its records, on or before the first Monday in September. Notice of the filing of the proposed budget and the date and place of hearing thereon shall be published for at least two consecutive weeks in a newspaper printed and of general circulation in the county. On the first Monday in October, the commission shall hold a public hearing on the proposed budget at which any taxpayer may appear and be heard against the whole or any part thereof. Upon the conclusion of the hearing, the commission shall, by resolution, adopt the budget as finally determined, and fix the final amount of expenditures for the ensuing year. Taxes levied by the commission shall be certified to and collected by the proper officer of the county in which the district is located in the same manner as provided for the certification and collection of port district taxes. * * *'

The facts are not in dispute. We shall set them out, so far as material, in connection with each of the statutory steps.

The statute provides that the commission shall file

'* * * a proposed budget of the contemplated financial transactions for the ensuing year and file it in its records, on or before the first Monday in September. * * *'

The first Monday in September, 1959, was the 7th. At its meeting on September the 2nd the commission presented and filed a proposed budget of 'contemplated financial transactions for the ensuing year,' showing general fund expenditures of $24,800. To balance this amount, the proposed budget showed:

" Estimated cash on hand $24,000.00

Estimated revenues

(interest) 800.00

To be raised by taxation ....None

----------

$24,800.00 "

(Italics ours.)

By resolution, adopted the same day, the commission fixed 8:00 o'clock a. m., October 7, 1959 (that being the date of its regular monthly meeting, i. e., the first Wednesday in the month), at 208 Thurston Savings and Loan Building, Olympia, Washington as the time and place at which

'* * * any taxpayer may appear and be heard against the whole or any part of the proposed budget. * * *'

It also directed that notice of such hearing be given by publication in the Olympia News 'for at least two (2) consecutive weeks prior to the said October 7, 1959,' and directed that the proposed budget be published in full as part of the notice. (Italics ours.)

The notice was published, as directed, in the Olympia News on September the 10th and 17th, 1959. The notice went beyond the requirements of the statute; it contained the entire proposed budget, showing the expenditures and the sources from which the funds were to come to meet those expenditures, and included the significant statement: 'To be raised by taxation . . . None.' The notice failed to follow the statute, in that the date fixed by the statute for the 'public hearing on the proposed budget' was 'the first Monday in October,' which would have been October 5, 1959.

This failure to follow the statute explicitly, with reference to the date, did not invalidate the hearing on October 7, 1959, pursuant to the notice given. Such a deviation (to October the 7th) from the date fixed by the statute (October the 5th), when accompanied by proper notice of the date on which the hearing was actually held (October the 7th), clearly comes within the doctrine of substantial compliance, which we have so clearly stated and consistently followed. Davis v. Gibbs, 1951, 39 Wash.2d 481, 236 P.2d 545; School District No. 81 of Spokane County v. Taxpayers of School District No. 81 of Spokane County, 1950, 37 Wash.2d 669, 225 P.2d 1063; Davies v. Krueger, 1950, 36 Wash.2d 649, 219 P.2d 969; Hillier v. Public Utility District No. 3, 1936, 188 Wash. 602, 63 P.2d 392; New Seattle Chamber of Commerce v. City of Seattle, 1915, 88 Wash. 620, 153 P. 351; Rands v. Clarke County, 1914, 79 Wash. 152, 139 P. 1090; Wingate v. Ketner, 1894, 8 Wash. 94, 35 P. 591.

(There was a change in the time of the meeting on October the 7th from 8:00 a. m. to 8:30 a. m., and in the place--from 208 Thurston Savings & Loan Building to the conference room of the general administration building on the state capital campus. However, adequate steps were taken to advise those who came to attend the hearing, at the time and place indicated in the notice, as to the change. We do not regard the change in time and place, under such circumstances, as material.)

October 5, 1959, being the first Monday and the day fixed by statute for the budget hearing, the commission met--with three persons present, other than attorneys. It adopted the proposed budget and added thereto an item of one hundred thousand dollars

'For all expenses related to the acquisition by purchase or condemnation of electrical properties operated by the Puget Sound Power & Light Company, including engineering, legal, accounting, and other costs.'

(It is our view that there was no notice of this meeting; an abortive attempt to give notice will be hereinafter discussed.)

Then the commission met for its regular monthly meeting on October 7, 1959; this was the meeting concerning which notice had been published, with the change in time and place to which we have heretofore referred. At this meeting there was an estimated attendance of one hundred and fifty, it having been widely publicized following the action taken by the commission at its October 5, 1959, meeting.

The minutes of the meeting state:

'Chairman Meyer stated that he understood that many of the persons present today wanted to express their opinions one way or the other on the adoption of the operating budget for the Public Utility District for the calendar year 1960, and that the floor would be thrown open for discussion of the matter. He stated that the Commission had adopted a budget for the year 1960 on Monday, October 5, 1959, as the minutes which had just been read disclosed, but that there had been some question as to whether or not the proceedings were proper as the original notice of the budget hearing had called for a hearing on the budget for the 7th of October.'

The discussion at this meeting was full and free. The commission then adopted resolution No. 146, which recited that it had adopted the budget at the meeting on Monday, October the 5th, but that there had been some question as to the validity of the adoption of the budget on that date because of the notices specifying October 7th as the date of the hearing; and that, in consequence thereof, the commission

'* * * in all respects confirmed and approved * * * the operating budget for the Thurston County Public Utility District No. 1 for the calendar year 1960,'

which had been adopted at the October 5th meeting.

Again, we would hold in accord with the spirit of our decisions on substantial compliance, heretofore cited, that the action of October 7th constituted an adoption of the budget despite any irregularities with reference to notice of the October 5th meeting.

We come now to the real crux of this controversy: whether there has been a substantial and good faith compliance with the quoted statute where the commission has (1) prepared and filed in its records 'a proposed budget of the contemplated financial transactions for the ensuing year,' which contains the statement: 'To be raised by taxation . . . None'; (2) published two notices of hearing (setting out that proposed budget with that statement in it); and (3) then adopted a budget containing an additional item of one hundred thousand dollars (more than four times its total general fund budget as proposed) to be raised by taxation. It is important, too, that the first notice of any such contemplated increase or tax levy was the purported adoption of the budget ...