City of Spokane v. Taxpayers of City of Spokane

758 P.2d 480, 111 Wash. 2d 91
CourtWashington Supreme Court
DecidedJuly 14, 1988
Docket54765-3
StatusPublished
Cited by75 cases

This text of 758 P.2d 480 (City of Spokane v. Taxpayers of City of Spokane) is published on Counsel Stack Legal Research, covering Washington Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Spokane v. Taxpayers of City of Spokane, 758 P.2d 480, 111 Wash. 2d 91 (Wash. 1988).

Opinions

Dolliver, J. —

The City of Spokane filed a class action against the City's taxpayers, ratepayers and electors, seeking a declaratory judgment that it had authority to proceed with the construction of a solid waste disposal facility. The trial court issued a partial summary judgment upholding Spokane's authority to proceed with the project without obtaining voter approval. We granted direct review.

[93]*93The facts are largely undisputed. The City and County of Spokane recognized their four landfills were becoming insufficient to process their solid waste. In 1981, they began investigating the feasibility of a so-called "waste-to-energy facility", that is, a facility which would incinerate the county's garbage while simultaneously producing energy as a by-product.

In 1983 and 1984, an "Update" to Spokane's solid waste management plan was prepared. Public hearings were held on the merits of the Update in December 1983 and October 1984. The Update called for construction of a "mass burn" waste-to-energy facility and transfer stations. The process of using landfills would be continued to a limited extent.

On December 17, 1984, the Spokane City Council adopted an ordinance establishing a plan for construction of the Spokane Regional Solid Waste Disposal Facility. Spokane Ordinance C-27797 (the Note Ordinance). Although the Note Ordinance did not specify the plan being adopted was that presented in the Update, the Update was officially adopted the next day by resolution. The Note Ordinance also authorized the issuance and sale of $50 million in Project Notes to Rainier National Bank. By the Note Ordinance, the City pledged to issue revenue bonds in order to generate some of the funds for repayment of the notes. The notes were intended only as a temporary financing tool until the revenue bonds were issued. By virtue of this arrangement with Rainier, the City was able to gain certain temporary tax advantages. The Note Ordinance estimated the cost of building the facility at $100 million.

Numerous committees worked on implementing these plans for the next few years. Public meetings were held which included input from the area's citizens. The City and County of Spokane entered into a series of "Interlocal Agreements" in order to establish the project's organizational structure and funding participation among the various local governments involved in the regional plan. An environmental impact statement was drawn up and [94]*94approved. Contracts were negotiated with Puget Sound Power and Light for the sale and transmission of the project's electrical output. In November 1986, the City Council approved acceptance of a $60 million grant from the Department of Ecology to help fund the project's design and construction. Under the grant, DOE would provide 50 percent matching funds for the project. The remainder of the funds was to come initially from the note proceeds and later from the revenue bond proceeds.

The process for selecting a vendor to construct and operate the facility began in March 1986. Ultimately, four companies submitted proposals for the design, construction, and operation of the facility in March 1987. The City and County determined in May that Signal Environmental Systems (later known as Wheelabrator Environmental Systems) was best qualified for the project.

The project met with some opposition in the community. As part of the opposition, the Citizens for Clean Air, a nonprofit corporation, sponsored an initiative calling for an amendment to the city charter which would require voter approval "for capital expenditures . . . requiring indebtedness of the taxpayers and property owners for capital projects . . . including the proposed mass burn plant for refuse disposal (Waste to Energy Plant)." The initiative was filed on September 3 and was placed on the November 3 ballot.

In response to the filing of this initiative, the City began this declaratory action on October 6. Named as defendants were Spokane's taxpayers, the ratepayers of the City's refuse utility, and the City's qualified and registered electors. In its suit, the City sought a declaratory judgment that the initiative did not apply to the waste-to-energy project and that the City Council could proceed with the issuance and sale of the revenue bonds.

Public hearings on the Wheelabrator contracts were held on October 26 and November 2. At the conclusion of the last meeting, at 1:45 a.m. on November 3, the City and County authorized execution of the Wheelabrator contracts. The contracts were signed at 2 a.m.

[95]*95Later that day, Spokane's voters passed the initiative with a majority vote of approximately 70 percent. On November 23, the City Council adopted an ordinance authorizing the issuance of $100 million in revenue bonds for the project. Despite this authorization, the bonds have not yet been issued because the current dispute prevented the City's bond attorney from being able to render an opinion as to the bonds' validity.

In the declaratory action, the trial court certified the class of taxpayers, ratepayers, and electors of the City of Spokane. In the interest of simplicity, we will refer to the defendant class as "the taxpayers". The trial court granted leave to intervene to the group which sponsored the initiative, Citizens for Clean Air. Spokane moved for partial summary judgment. The trial court granted the motion, concluding that since the charter amendment did not apply to the project, the City Council did not need to obtain voter approval before proceeding with the project. The trial court also concluded application of the ordinance to the project would unconstitutionally impair the City's contract with DOE. The defendants sought direct review in this court, which was granted.

Before reaching the merits of the case, we must determine two preliminary matters. First, whether the City's action against the ratepayers and electors constituted a "justiciable controversy". The appellants argue no justiciable controversy exists with respect to the ratepayers and electors and seek to have these classes decertified and the relief against them dismissed. They assert it would be wrong to bind the ratepayers and electors to the decision reached in this case.

The appellants concede a justiciable controversy exists with respect to the taxpayers. Under RCW 7.25, a city may initiate a declaratory judgment action against its taxpayers in order to determine the validity of a bond issue. RCW 7.25.010, .020. This would appear to be a determination such actions would constitute a justiciable controversy. The parties have all treated the statute in this manner.

[96]*96Assuming a justiciable controversy exists as to the taxpayers, there is no reason to hold differently as to the ratepayers and electors. A justiciable controversy is one involving: (1) an "actual, present and existing dispute"; (2) parties with "genuine and opposing interests"; (3) interests that are "direct and substantial”; and (4) a "final and conclusive" judicial determination. Diversified Indus. Dev. Corp. v. Ripley, 82 Wn.2d 811, 815, 514 P.2d 137 (1973). Indeed, these requirements are more clearly met with regard to the ratepayers and electors than with regard to the taxpayers.

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Cite This Page — Counsel Stack

Bluebook (online)
758 P.2d 480, 111 Wash. 2d 91, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-spokane-v-taxpayers-of-city-of-spokane-wash-1988.