      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

JOHN R. FERLIN and MARY E. FERLIN,
trustees of the FERLIN FAMILY LIVING         No. 75561-7-1
TRUST; J & M'S, LLC, a Washington
limited liability company; BROOKS            DIVISION ONE
MANUFACTURING CO., a Washington
corporation, and ROOSEVELT LAND
COMPANY, LLC, a Washington limited
liability company,
                                        )
                         Appellants,    )
                                        )
              v.                        )
                                        )
CHUCKANUT COMMUNITY FOREST              ) PUBLISHED OPINION
PARK DISTRICT, a metropolitan park      )
district; THE CITY OF BELLINGHAM, a     ) FILED: October 30, 2017
Washington State municipal corporation, )
                                        )
                          Respondents, )
                                        )
              and                       )
                                        )
WHATCOM COUNTY, a Washington State)
municipal corporation; STEVEN OLIVER in)
his capacity as the Whatcom County      )
Treasurer,                              )
                                        )
                          Defendants.   )
                                         )


      BECKER, J. —The appellants own real property subject to a tax imposed

by the new Chuckanut Community Forest Park District in south Bellingham.
No. 75561-7-1/2

Appellants claim the tax is illegal because the revenue is passed on to the city of

Bellingham to pay off a loan needed by the city to buy the park property. The

district retained an interest in the property through a conservation easement

granted by the city, and its taxing authority exists independent of the city. We

conclude the district's arrangement with the city does not exceed the district's

statutory authority and it does not violate the constitutional requirement for

uniformity in taxation. The trial court properly dismissed the taxpayers' suit on

summary judgment.

                                      FACTS

       The material facts are not disputed. In 2011, the city of Bellingham

purchased 82 acres of forested land located in south Bellingham. The property,

locally known as the "Hundred Acre Wood," is adjacent to the north end of

Chuckanut Drive and the Fairhaven neighborhood. It includes trails and

wetlands and valuable habitat for a variety of plant and animal species.

       The city purchased the forest for $8.2 million after the previous owner, a

developer, went through foreclosure. To finance part of the purchase, the city

used tax revenue and park impact fees. The remainder was made up by an

interfund loan of $3.2 million from the Greenways Endowment Fund, which is

earmarked for the payment of park maintenance costs. The city was obligated to

find a source of funds to pay back the $3.2 million loan on a timely basis. One

possibility was to carve off 25 acres to sell for development.

       The idea of selling any part of the property was unpopular with a group of

citizens who wanted the forest to remain intact. As an alternative, the citizens


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proposed to create a park district as permitted by chapter 35.61 RCW. They

proposed that the park district could use its power of taxation to raise $3.2

million. The district would then transfer the revenue to the city to enable the city

to pay back the interfund loan.

       A park district may be created either by local government resolution or by

citizen petition. Either way, a ballot proposition must be submitted to the voters

of the area to be included and the creation of the district must be approved by

majority vote. RCW 35.61.020(1). In this case, the district was created by citizen

petition. The proposal for the creation of a park district was submitted to voters

in south Bellingham in a special election on February 12, 2013.

       The ballot measure asked,"Shall the Chuckanut Community Park District

with boundaries encompassing [13 named precincts within the City of

Bellingham] be created?" According to the explanatory statement, the district

would have all powers provided in chapter 35.61 RCW,including the power to

levy a property tax. The intended property tax levy rate was 28 cents per $1,000

in assessed value. This rate would provide a dedicated funding source for

repayment of the interfund loan in 10 years. The proposition passed by a

majority vote of 51.73 percent of the electorate. The Chuckanut Community

Forest Park District was "created as a municipal corporation effective

immediately upon certification of the election results." RCW 35.61.040.

       In November 2013, the park district board, made up of commissioners

elected during the special election, passed a resolution authorizing collection of a

property tax. The total assessed value of property in the district was


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No. 75561-7-1/4

$1,510,071,867. Based on a tax rate of 28 cents per $1,000 in assessed value,

the total amount to be collected under the levy was $422,820.12. This amount

was included in the county's ordinance authorizing the levy of taxes for 2014.

       By this time, the city had already agreed to consider rezoning the 82 acres

along with 29 acres of adjacent city-owned property from multi-family residential

to public open space. To provide additional protection for the forest in its natural

state, the park district commissioners negotiated an interlocal agreement with the

city under which the city granted a conservation easement to the district. The

city granted the easement "in consideration for:(1)the Park District paying off the

Loan, accrued interest on the Loan and future interest; and (2) the Park District

formally dissolving in accordance with RCW 35.61.310 after the Loan, accrued

interest and future interest are paid off by the Park District." The city retained

control and ownership of the property, "subject to" the conservation easement.

The interlocal agreement requires that if the property is rezoned, the city will

initiate the requisite public process for establishment of a park on the property

consistent with the intent of the conservation easement and, within 10 years,

adopt a park master plan for the property. A separate document laid out the

terms of the conservation easement. These agreements were finalized in

January 2014.

       The appellants are taxpayers who own property within the park district and

were taxed in accordance with the 2014 levy. They paid the tax under protest,

then filed this suit in July 2014. Their complaint asked the court to enjoin




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No. 75561-7-1/5

collection of the tax. An injunction may be issued to prevent collection of a tax if

the law under which the tax is imposed is void. RCW 84.68.010.

       The case came before the trial court in May 2016 on cross motions for

summary judgment. The park district and the city defended the validity of the

park district and the levy. The trial court granted summary judgment in favor of

the defendant municipalities. The taxpayers appeal from that order.

       We review summary judgment orders de novo, engaging in the same

inquiry as the trial court. Mahoney v. Shinpoch, 107 Wn.2d 679, 683, 732 P.2d

510 (1987). Summary judgment is proper when, viewing the evidence and

available inferences in favor of the nonmoving party, there are no genuine issues

of material fact and the moving party is entitled to judgment as a matter of law.

CR 56(c).

                      VALIDITY OF DISTRICT FORMATION

       "A metropolitan park district may be created for the management, control,

improvement, maintenance, and acquisition of parks, parkways, boulevards, and

recreational facilities." RCW 35.61.010. The taxpayers contend the Chuckanut

Community Forest Park District is not a legitimate park district and was void at its

inception because it was not created for any of the itemized statutory purposes.

In their view, the documented history of events and communications leading up

to the vote is decisive evidence that the district was created for the sole purpose

of raising revenue for the city. For example, the "Statement For" in the ballot

measure said,"The singular purpose of this Park District is to repay the loan that

enabled the City's purchase of the Chuckanut Community Forest(aka Chuckanut


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No. 75561-7-1/6

Ridge), thereby assuring its preservation as a park, forever. The alternative is

that an unknown portion of the land may be sold."

       RCW 35.61.010 lists permissible purposes of actions a park district may

take once it is created. An action taken by a municipal corporation may be

subject to challenge on the basis that it exceeds powers expressly or implicitly

granted by statute. See e.g., City of Tacoma v. Taxpayers of City of Tacoma,

108 Wn.2d 679, 695, 743 P.2d 793(1987)(challenge to city's energy

conservation program); Okeson v. City of Seattle, 150 Wn.2d 540, 78 P.3d 1279

(2003)(challenge to city ordinance that shifted responsibility for costs of

providing streetlights to ratepayers of the city-owned electrical utility). The

taxpayers offer no authority for declaring a municipal corporation void ab initio on

a theory that the individuals who voted to create it had improper purposes. We

reject their argument that the park district was void at inception and turn to their

argument that the tax levy—an action taken by the park district—is void because

it does not serve any of the purposes of park districts identified in

RCW 35.61.010.

                             VALIDITY OF THE LEVY

       If a municipal corporation acts in excess of its statutory authority, its action

may be challenged as ultra vires. "Ultra vires acts are those performed with no

legal authority and are characterized as void on the basis that no power to act

existed, even where proper procedural requirements are followed." S. Tacoma

Way, LLC v. State, 169 Wn.2d 118, 123, 233 P.3d 871 (2010). If the park district

levy is ultra vires, the levy—not the park district—will be ruled invalid.


                                          6
No. 75561-7-1/7

       The taxpayers contend the levy is invalid because the park district did not

"acquire" a park and it does not "manage," "control," "improve" or "maintain" a

park, the functions authorized by RCW 35.61.010. They say all these functions

are performed by the city as the owner of the property and the district's only

function is to collect revenue and pass it through to the city. Paying off the city's

debt, they argue, is not a legitimate park purpose.

       In exchange for agreeing to pass its tax revenues on to the city, the park

district did not acquire a park, but it did acquire a conservation easement that

runs with the property in perpetuity. When the park district dissolves, its interest

in the conservation easement is to be assigned to a qualified third party

organization. Through the terms of the conservation easement, the park district

exerted substantial control over the way the forest will be used and managed in

years to come. For instance, the easement virtually eliminates the city's ability to

make residential, commercial, or industrial use of the property. With limited

exceptions, the city may not build or place roads or buildings of any type on the

property; may not operate motor vehicles on it; may not remove trees, excavate,

or grade; and may not provide athletic facilities or ball fields of any kind. The

park district retains the right to enter the property, to observe and monitor

compliance with the terms of the easement, and to enjoin and abate any activity

that violates the easement.

       The fact that the levy is being used to pay off the city's loan does not

mean the levy monies are not being raised and spent for a legitimate park

purpose. Enabling the city to pay off the loan is a means of preserving the entire


                                          7
 No. 75561-7-1/8

 property as a park, including acreage that most likely would not be otherwise

 protected from development. To act under the authority of RCW 35.61.010, a

 metropolitan park district need not own title to real property in fee simple. A

 metropolitan park district is specifically authorized to acquire any lesser interest,

• including an easement or other contractual right "necessary to protect, preserve,

 maintain, improve, restore, limit the future use of, or otherwise conserve,

selected open space land" for public use or enjoyment. RCW 84.34.210.

        We conclude the district did not exceed its statutory authority by adopting

the levy.

                            UNIFORMITY OF TAXATION

        Appellants contend the levy violates the uniformity requirement of article

 VII, section 1 of the Washington Constitution: "All taxes shall be uniform upon

the same class of property within the territorial limits of the authority levying the

tax." Because of this provision, the city of Bellingham cannot impose a tax on

 only a portion of its residents. The taxpayers claim the park district is a "shell" or

"strawman" created to collect a tax for the city so the city can do indirectly what it

 may not do directly. According to their brief, "The Levy is a de facto ad valorem

tax by the City of Bellingham, and as such it is unconstitutional because it is

 imposed on only a portion of the residents within the City's corporate

 boundaries."

        To illustrate their theory, the taxpayers cite Rider v. County of San Diego,

 1 Cal. 4th 1, 820 P.2d 1000, 2 Cal. Rptr. 2d 490(1991). The case centered on

 California's constitutional requirement for two-thirds voter approval of special


                                           8
No. 75561-7-1/9

taxes imposed by cities, counties, and "special districts." CAL. CONST. art. XIII A,

§4; Rider, 1 Cal. 4th at 5.

       The supermajority provision was adopted into the state constitution by a

tax-cutting initiative in 1978. In 1982, the California Supreme Court held that an

agency was a "special district" subject to the requirement of two-thirds voter

approval only if it had the power to impose a tax on real property. Los Angeles

County Transp. Comm'n v. Richmond, 31 Cal. 3d 197, 201,643 P.2d 941, 182

Cal. Rptr. 324(1982). In a dissent that would become a majority opinion in

Rider, Justice Richardson observed that the majority's analysis could be readily

used to circumvent the supermajority vote requirement of section 4 "by the

simple creation of a district which is geographically precisely coterminous with a

county, but which lacks its real property taxing power." Richmond, 31 Cal. 3d at

213(Richardson, J., dissenting).

               The majority has cut a hole in the financial fence which the
       people in their Constitution have erected around their government.
       Governmental entities may be expected, instinctively, to pour
       through the opening seeking the creation of similar revenue-
       generating entities in myriad forms which will be limited only by
       their ingenuity.

Richmond, 31 Cal. 3d at 213(Richardson, J., dissenting); see Rider, 1 Cal. 4th at

8.

       In 1985, San Diego County tried and failed to gain a two-thirds vote for a

county sales tax increase for criminal justice facilities. Rider, 1 Cal. 4th at 9. In

1987, the Richmond decision inspired enactment of a statute allowing creation of

the San Diego County Regional Justice Facility Financing Agency as a "limited

purpose special district" with no power to impose a property tax. Rider, 1 Cal.

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No. 75561-7-1/10

4th at 9. The new agency's territorial boundaries were the same as those of San

Diego County. The agency directors proposed a special sales tax for the limited

purpose of constructing and operating the county's justice facilities, obtained 50.8

percent voter approval, and began collecting the tax. Taxpayers challenged the

tax in court.

       The trial court found that the new facility financing agency was created

solely for the purpose of avoiding the supermajority requirement and was a

deliberate attempt to circumvent it. Rider, 1 Cal. 4th at 8. That finding was

amply supported by the record on appeal, but the California Supreme Court was

less concerned with the purpose for which the agency was formed and more

concerned with the intent of the framers of the supermajority requirement and the

voters who adopted it. Rider, 1 Cal. 4th at 11. The court saw that Justice

Richardson's prediction had come to pass and concluded that the facility

financing agency had to be deemed a "special district" despite its lack of power to

levy a property tax. Richmond's limitation of the term "special district" to those

districts possessing property tax power frustrated the voters' intent to restrict the

ability of local governments to impose new taxes to replace property tax

revenues lost under other provisions of the initiative. Rider, 1 Cal. 4th at 11.

Under Rider, a "special district" includes "any local taxing agency created to raise

funds for city or county purposes to replace revenues lost by reason of the

restrictions of Proposition 13." Rider, 1 Cal. 4th at 11. The court devised a six-

factor test to analyze whether a new taxing agency "is essentially controlled by




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No. 75561-7-1/11

one or more cities or counties that otherwise would have had to comply with the

supermajority provision of section 4." Rider, 1 Cal. 4th at 11-12.

       The Washington case that most resembles Rider is Granite Falls Library

Capital Facility Area v. Taxpayers of Granite Falls Library Capital Facility Area,

134 Wn.2d 825, 836, 953 P.2d 1150(1998). There, a statute authorized the

creation of special districts to finance the construction of libraries. Taxpayers

invoked article VII, section 1 of the Washington Constitution to challenge the

validity of a tax imposed in a portion of Snohomish County to pay for and retire

bonds for local library facilities. They claimed that the Snohomish County

Council was "the true taxing authority" and the tax violated the constitution

because it would not be imposed uniformly throughout Snohomish

County. Granite Falls, 134 Wn.2d at 833. The court rejected this argument and

concluded the special district was "sufficiently independent to levy taxes."

Granite Falls, 134 Wn.2d at 835. The court's analysis shows that Washington's

constitutional requirement for uniformity in taxation reflects a concern, somewhat

similar to the concern in Rider, to ensure that a special localized taxing district is

not controlled by the city or county of which it is a part. But the court concluded

that the plain language of the statute declared a library facility district to be an

independent taxing authority and vested it with sufficient express and implied

powers to carry out all of its essential functions without reliance upon other

governmental entities. Granite Falls, 134 Wn.2d at 835.

       The same is true here. A metropolitan park district may include territory

located in portions or all of one or more cities or counties, or one or more cities


                                          11
No. 75561-7-1/12

and counties. RCW 35.61.010. A metropolitan park district has specific statutory

authority to levy property taxes. RCW 35.61.210. It is vested with sufficient

express and implied powers to carry out all of its essential functions without

reliance upon other governmental entities.

       The Chuckanut Community Forest Park District came into being in

compliance with a statute that has been in place for 100 years without any

argument that it frustrates the intent of our constitution's uniformity requirement.

The appellants concede that the district has authority to tax real property within

its boundaries and the tax at issue here is uniformly imposed within the district.

The park district's achievement of obtaining a conservation easement from the

city shows that it is not a shell for the city. The district is statutorily and

organizationally distinct from the city. We conclude the district can impose a tax

within its boundaries without running afoul of the uniformity requirement.

                               OBJECT OF TAXATION

       The taxpayers also claim the tax levy violates article VII, section 5 of the

Washington Constitution: "No tax shall be levied except in pursuance of law; and

every law imposing a tax shall state distinctly the object of the same to which

only it shall be applied." The taxpayers argue the levy is unconstitutional

because the park district's resolution establishing the levy, passed in November

2013, does not mention any object of the tax.

       This argument lacks merit as it is virtually identical to an argument

rejected in Hogue v. Port of Seattle, 54 Wn.2d 799, 809, 341 P.2d 171 (1959).

The taxpayers in that case sought to enjoin, on numerous grounds, the collection


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No. 75561-7-1/13

of a two-mill tax levied by the Port of Seattle under the authority of statutes

enacted to facilitate harbor improvements and promote industrial development.

One ground of argument was that the object of the tax was not definitely stated in

the statute as allegedly required by the second clause of article VII, section 5 of

the Washington Constitution. The court's analysis is contained in a single

paragraph:

              There is no merit in this contention. It is questionable
       whether the constitutional provision even applies to a statute of this
       type. Rather than directly imposing a tax, the 1957 act merely
       authorizes a tax levy. In any event, the object or purposes of the
       tax are set forth in the 1955 act, and by reference are as much a
       part of the 1957 act as if they had been explicitly written therein.
       Pacific First Fed. Say. & Loan Ass'n v. Pierce County, 27 Wn.(2d)
       347, 178 P.(2d) 351 (1947), and cases cited.

Hogue, 54 Wn.2d at 809.

       The park district had authority to levy a property tax under

RCW 35.61.210(1). Thus, the levy was "in pursuance of law." WASH. CONST. art.

VII, § 5. It is questionable whether the levy resolution is a "law imposing a tax"

any more than the statute in Hogue was. "The law by which counties are

authorized to levy a tax is not, strictly speaking, a law imposing a tax." Mason v.

Purdy, 11 Wash. 591, 594, 40 P. 130(1895). But in any event, under Hogue, the

constitutional requirement is satisfied because the object or purposes of a park

district levy are set forth in RCW 35.61.010. Should greater specificity be

required, we observe that on the same date they passed the levy resolution for

2014, the park district commissioners adopted a budget detailing the expenses

they anticipated for 2014, primarily the repayment of the city's loan from the




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No. 75561-7-1/14

Greenways Endowment Fund. We find no violation of article VII, section 5 of the

Washington Constitution.

      Affirmed.




                                                                    OM




WE CONCUR:




                                      14
