In re Bond Issuance of Greater Wenatchee Reg'l Events Ctr.
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The Washington constitution limits municipal indebtedness to protect taxpayers from legislative and voter improvidence. The issue before the Supreme Court centered on whether the city of Wenatchee (City) would exceed its debt limit by entering into a "contingent loan agreement" (CLA) with appellant Greater Wenatchee Regional Events Center Public Facilities District (District) to help the District finance a regional events center. The District argued that the CLA was not subject to the City's debt limit because it created a "contingent" liability, triggered only if the District is unable to make payments on the District's bonds. Upon review, the Supreme Court rejected this argument because the City was unconditionally obligated to service the District's debt if the District could not and because the risk of loss fell upon the City and its taxpayers: "[o]ur decision accordingly places the approval of the CLA in the hands of the voters."
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