Disincorporation

Cities and towns in the State of Washington have the authority to disincorporate. Upon disincorporation, the city or town's powers as a municipality are surrendered to the state and county. The city or town ceases to have further duties and all of the city or town offices cease to exist. Disincorporation does not impair the obligation of any contract and any franchise which was granted but not yet expired remains in effect.

Disincorpation has very rarely been utilized in this state. In fact, the last disincorporation of a municipality in this state was the town of Elberton in Whitman County in 1965.

However, with the passage of Initiative 695 at the November 1999 general election and the resulting financial impact that will have on cities and towns, there is a renewed interest in this process and it may in fact be necessary for some municipalities to consider this as an option. The procedure for disincorporation will be briefly outlined below. The statutory provisions for a code city to disincorporate are outlined in Ch. 35A.15 RCW and for a sEcond class city or town in Ch. 35.07 RCW.

The procedure for disincorporation is primarily the same for code cities as it is for towns and for sEcond class cities. However, there is one significant difference in regard to how a disincorporation may be initiated. In a code city, the disincorporation process may be initiated either by a petition signed by a majority of the registered voters of the city or by a resolution approved by the city council. In a sEcond class city or town, the only authorized method to initiate a disincorporation is by petition signed by a majority of the registered voters of the city or town.

The petition must be sent to the county auditor, who must verify if there are sufficient signatures on the petition. If there are sufficient signatures, then the issue must be voted upon at the next general municipal election, if one is to be held within 180 days, or otherwise at a special election called for that purpose. If a majority of the voters are in favor of the disincorporation, then the city or town ceases to exist at the time the election results are certified.

If the city or town has any indebtedness or outstanding liabilities, then it must provide for election of a receiver at the same election as the disincorporation issue is decided. The receiver becomes qualified by filing a bond with the county auditor. Once qualified, the receiver is required to take possession of all property, money, vouchers, records, and books of the former municipality. The receiver has broad authority to sue and be sued, to sell property, and the power to levy taxes in order to settle the obligations and affairs of the former city or town.

When the final payment of all lawful demands against the former city has been made, the receiver files a final account, together with all vouchers, with the clerk of the superior court. Any funds remaining are to be paid to the county treasurer for the use of the school district.

There also is a procedure set out in the state statutes for the involuntary disincorporation of a city or town. This process has never been utilized in this state, but the statutes do provide that a city or town may be involuntary dissolved if it fails for two consecutive years to hold its regular municipal election or if the officers fail to qualify for two successive years. In either situation, the state auditor may petition the superior court of the county involved for an order dissolving the municipality.

If there are any additional questions concerning disincorporation, you can contact the legal consultants at MRSC at (206) 625-1300.