Opinion ID: 1150068
Heading Depth: 1
Heading Rank: 1

Heading: louthan case

Text: Richard Louthan initiated his action July 10, 1979, shortly after the King County Council adopted ordinance No. 4341. His basic theory was that the County could substantially achieve its purpose through use of its police power without the necessity of expending public funds. He alleged that the vigorous and ongoing programs by King County to preserve farmlands and open space were sufficient without the purchase of development rights. Louthan concluded that the sale of general obligation bonds and use of the proceeds to purchase an intangible (development rights), which the County is by law already entitled to control, is a gift of public funds contrary to Const. art. 8, § 7. Both parties moved for summary judgment. As previously noted, King County prevailed. Louthan's motion was denied and his action dismissed with prejudice. He appealed. Ordinance No. 4341, presenting the program to purchase development rights of certain farm and open space land in King County (PDR program), was authorized under RCW 84.34.200-.220. The plan provides that owners of eligible property may apply to sell to the County the development rights in their land. The price paid for these rights may be no more than the difference between the value of the land, if it were confined to use for agricultural purposes or open space, and current market value of the land. Both values are to be determined by appraisal. In return for payment, the owner must agree to restrict the use of the land to agriculture and open space in perpetuity. As noted above, Louthan opposes this plan as a giveaway of public funds violative of Const. art. 8, § 7. He asserts that no real consideration for the sale exists and thus, the transaction is a gift. Louthan vigorously expounded and urged the efficacy of this theme. He contends the principles to be followed in matters of this kind were early set forth in Johns v. Wadsworth, 80 Wash. 352, 354, 141 P. 892 (1914), as follows: The section of the constitution last quoted, in most express terms, prohibits a county from giving any money, property or credit to, or in aid of, any corporation, except for the necessary support of the poor and infirm. If the framers of the constitution had intended only to prohibit counties from giving money or loaning credit for other than corporate or public purposes, they would doubtless have said so in direct words. That agricultural fairs serve a good purpose is not questioned, but the constitution makes no distinction between purposes, but directly and unequivocally prohibits all gifts of money, property, or credit to, or in aid of, any corporation, subject to the exception noted. It is Louthan's position that a municipality may not provide benefits to private individuals except when they follow from necessary and proper governmental functions of that municipality. For cases demonstrating that principle, he cites Berglund v. Tacoma, 70 Wn.2d 475, 423 P.2d 922 (1967) (extension of city water system beyond municipal boundaries to service private individuals) and Washington Natural Gas Co. v. PUD 1, 77 Wn.2d 94, 459 P.2d 633 (1969) (PUD dispensing electrical power may construct a distribution system within a private development). As a contrary example of a benefit not properly within the governmental function, Louthan cites Port of Longview v. Taxpayers, 85 Wn.2d 216, 533 P.2d 128 (1974) (under an authorizing statute, the port district sold revenue bonds to purchase leaseholds of pollution control equipment to be subleased back to original owners). The net effect of the procedure in Port of Longview was to give the private users the benefit of the port district's ability to obtain lower interest rates through the sale of tax exempt bonds. The risks to the port district were minimal and it incurred no net expense in carrying out the plan. Nonetheless, when the scheme was challenged, this court struck it down as contrary to Const. art. 8, § 7. It is Louthan's contention that the King County plan is as flawed as the scheme to finance the purchase of pollution control equipment at reduced interest rates. Where the port district, in effect, provided a loan of public funds, King County is providing a gift. Here, King County does not get back its money and according to Louthan, it gets nothing in return for its payment that it does not already possess. We are unable to agree. The wisdom of the King County plan is not for the consideration of this court  its constitutionality is. We hold the PDR program to be constitutional. A legislative body of a home rule charter county has wide discretion in the methods that it selects to solve perceived social problems within its jurisdiction. Here, the King County Council has identified loss of farm and open space lands as an ongoing adverse condition with which it must contend. For several years it has attempted to preserve its agricultural and open space lands by the use of zoning, tax benefits, and deferred road and utility assessments. As stated in the finding and declaration of purpose of ordinance No. 4341, it is the conclusion of the county council that these methods have not proved to be completely effective. In an effort to better achieve its desired results, the council devised the PDR program and submitted it to the voters for approval. With the foregoing, Louthan disagrees. In the November 6, 1979, election, the bonds were authorized that would provide the funds to implement the plan. The basic thrust of Louthan's objection to the PDR program is that King County gets nothing for the funds that it expends. [1] Ordinance No. 4341 finds and concludes that zoning and other tools used by King County have not been adequate to preserve the farm and open space lands identified by the county council as necessary to be retained at their present intensity of use. The ordinance is entitled to a presumption of validity and the burden of showing otherwise rests heavily on the challenger. Winkenwerder v. Yakima, 52 Wn.2d 617, 328 P.2d 873 (1958); Homes Unlimited, Inc. v. Seattle, 90 Wn.2d 154, 579 P.2d 1331 (1978). That burden has not been met in this instance. [2, 3] For purposes of Const. art. 8, § 7, a gift is a transfer of property without consideration and with donative intent. Receipt of valuable consideration assures that a transaction is not a gift. Lassila v. Wenatchee, 89 Wn.2d 804, 576 P.2d 54 (1978). Although less than a fee interest, development rights are beyond question a valuable right in property. Penn Cent. Transp. Co. v. New York, 438 U.S. 104, 57 L.Ed.2d 631, 98 S.Ct. 2646, rehearing denied, 439 U.S. 883, 58 L.Ed.2d 198, 99 S.Ct. 226 (1978). Since the County acquires a valuable right for the funds it expends, there is no merit in the contention that the expenditure of the funds for development rights is in reality a gift. The choice of method of acquiring or controlling such rights is within the ambit of legislative power of the county council. The decision of the trial court is affirmed.