B-130960, AUG. 22, 1957

B-130960: Aug 22, 1957

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WHICH WAS REPORTED HERE FOR COLLECTION ACTION BY THE HOUSING AND HOME FINANCE AGENCY. 150 THEREUNDER WERE MADE TO THE VILLAGE OF RICHFIELD. SECTION 501 (C) OF TITLE V OF THE ACT OF 1944 PROVIDES: "ADVANCES UNDER THIS SECTION TO ANY PUBLIC AGENCY SHALL BE REPAID BY SUCH AGENCY IF AND WHEN THE CONSTRUCTION OF THE PUBLIC WORKS SO PLANNED IS UNDERTAKEN. * * *" THE RECORD DISCLOSES THAT THE VILLAGE OF RICHFIELD HAS DENIED ANY INDEBTEDNESS TO THE UNITED STATES FOR REPAYMENT OF THE ADVANCES. CONTENDS THAT THE PROJECTS AS BUILT WERE ENTIRELY DIFFERENT FROM THE PROJECTS WHICH WERE PLANNED WITH FEDERAL ADVANCES. THAT THE PLANS AND SPECIFICATIONS PROCURED THEREWITH WERE NOT USED IN THE CONSTRUCTION OF THE INVOLVED SEWER FACILITIES.

B-130960, AUG. 22, 1957

TO VILLAGE OF RICHFIELD:

IN LETTER OF FEBRUARY 14, 1957, TO OUR CLAIMS DIVISION, MR. CLAYTON L. LEFEVERE, ATTORNEY FOR THE VILLAGE OF RICHFIELD, REQUESTED A REVIEW OF THE GOVERNMENT'S CLAIM FOR REPAYMENT BY THE VILLAGE OF $81,150, WHICH WAS REPORTED HERE FOR COLLECTION ACTION BY THE HOUSING AND HOME FINANCE AGENCY. THIS INDEBTEDNESS AROSE OUT OF TWO AGREEMENTS EXECUTED ON APRIL 28, 1947, ON BEHALF OF THE VILLAGE BY ITS PRESIDENT AND ACCEPTED ON BEHALF OF THE GOVERNMENT ON MAY 27, 1947, BY THE ACTING DIVISION ENGINEER. THE AGREEMENTS PROVIDED FOR ADVANCES OF $29,400 (PROJECT NO. MINN. 21-P-166) AND $51,750 (PROJECT NO. MINN. 21-P-165), TO THE VILLAGE OF RICHFIELD PURSUANT TO TITLE V OF THE WAR MOBILIZATION AND RECONVERSION ACT OF 1944, 58 STAT. 791, TO COVER THE COST OF PLAN PREPARATION FOR (1) LATERAL LINES OF NEW MUNICIPAL SANITARY SEWAGE COLLECTION SYSTEM AND (2) MAIN LINES OF NEW MUNICIPAL SANITARY SEWAGE COLLECTION SYSTEM, RESPECTIVELY. PAYMENTS AGGREGATING $81,150 THEREUNDER WERE MADE TO THE VILLAGE OF RICHFIELD.

SECTION 501 (C) OF TITLE V OF THE ACT OF 1944 PROVIDES:

"ADVANCES UNDER THIS SECTION TO ANY PUBLIC AGENCY SHALL BE REPAID BY SUCH AGENCY IF AND WHEN THE CONSTRUCTION OF THE PUBLIC WORKS SO PLANNED IS UNDERTAKEN. * * *"

THE RECORD DISCLOSES THAT THE VILLAGE OF RICHFIELD HAS DENIED ANY INDEBTEDNESS TO THE UNITED STATES FOR REPAYMENT OF THE ADVANCES. CONTENDS THAT THE PROJECTS AS BUILT WERE ENTIRELY DIFFERENT FROM THE PROJECTS WHICH WERE PLANNED WITH FEDERAL ADVANCES; THAT THE PLANS AND SPECIFICATIONS PROCURED THEREWITH WERE NOT USED IN THE CONSTRUCTION OF THE INVOLVED SEWER FACILITIES; AND THAT REPAYMENT, THEREFORE, IS NOT REQUIRED. IN THAT CONNECTION MR. LEFEVERE POINTS OUT IN HIS LETTER OF FEBRUARY 14, 1957, THAT THE ENTIRE PROCEEDS OF THE TWO ADVANCES WERE PAID TO THE ENGINEERING FIRM OF MACGREGOR AND DAVIS; THAT THE G. M. ORR ENGINEERING COMPANY, THE FIRM WHICH PLANNED THE SEWAGE FACILITIES AS CONSTRUCTED, WAS PAID ENTIRELY FROM VILLAGE FUNDS; AND THAT NONE OF THE PLANNING WORK OF MACGREGOR AND DAVIS WAS USED BY THE G. M. ORR ENGINEERING COMPANY.

A COPY OF THE LETTER, TOGETHER WITH A BRIEF AND OVERLAY MAPS FURNISHED US BY REPRESENTATIVES OF THE VILLAGE DURING THEIR VISIT HERE ON FEBRUARY 8, 1957, WERE FORWARDED TO THE HOUSING AND HOME FINANCE AGENCY FOR A TECHNICAL EVALUATION AND REPORT. ON JUNE 28, 1957, THE COMMISSIONER OF THE COMMUNITY FACILITIES ADMINISTRATION OF THAT AGENCY REPORTED AS FOLLOWS:

"* * * THE "AS-BUILT" PLANS PREPARED BY A DIFFERENT ENGINEERING FIRM IS ESSENTIALLY THE SAME AS THE SCHEME CONTEMPLATED BY THE APPLICATION, AND THE FIRST SET OF PLANS PREPARED BY MACGREGOR-DAVIS COMPANY. SOME MODIFICATIONS WERE NECESSARY AS A RESULT OF GROWTH AND EXPANSION OF THE CITY OF RICHFIELD. HOWEVER, THE PROJECT, AS CONSTRUCTED, IS SUBSTANTIALLY THE SAME AS THE PROJECT CONTEMPLATED BY THE APPLICATION.'

REPAYMENT IS REQUIRED UNDER THE APPLICABLE STATUTE "WHEN THE CONSTRUCTION OF THE PUBLIC WORKS SO PLANNED IS UNDERTAKEN.' THE WORDS "PUBLIC WORKS SO PLANNED" HAVE BEEN HELD BY THE COURTS TO RELATE TO THE GENERAL OVERALL PLAN CONTEMPLATED BY THE APPLICANT AT THE TIME THE ADVANCE IS MADE, AND RECOVERY IS NOT PRECLUDED BY THE FACT THAT THE PLANS PAID FOR BY THE ADVANCE WERE NOT USED. UNITED STATES V. BOARD OF EDUCATION OF CITY OF BISMARCK (NORTH DAKOTA), 126 F.SUPP. 338; UNITED STATES V. CITY OF WENDELL, IDAHO, 237 F.2D 51. THE FEDERAL AGENCY CHARGEABLE WITH DETERMINATIONS OF FACT HAS DETERMINED THAT THE PROJECTS, AS CONSTRUCTED, ARE SUBSTANTIALLY THE SAME AS THOSE CONTEMPLATED BY THE APPLICATIONS AND IT HAS LONG BEEN THE RULE OF OUR OFFICE, IN THE ABSENCE OF AFFIRMATIVE EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF, TO ACCEPT THE REPORT OF THE AGENCY CONCERNED ON DISPUTED QUESTIONS OF FACT. 3 COMP. GEN. 51; 16 ID. 1105, 1106. IN VIEW OF THE ADMINISTRATIVE DETERMINATION AND OF THE REFERRED-TO RULE, AND SINCE IT SEEMS CLEAR FROM THE RECORD THAT THE SEWER FACILITIES AS CONSTRUCTED WERE WITHIN THE GENERAL OVERALL PLAN FOR WHICH THE ADVANCE WAS MADE, RECOVERY IS REQUIRED PURSUANT TO THE ABOVE-CITED STATUTE AND COURT DECISIONS.

THEREFORE, REPAYMENT TO THE UNITED STATES OF THE INVOLVED ADVANCES IS REQUIRED AND WE REQUEST THAT THE VILLAGE OF RICHFIELD REMIT PROMPTLY TO OUR OFFICE BY CHECK OR DRAFT PAYABLE TO THE ,TREASURER OF THE UNITED STATES," THE AMOUNTS OF $51,750 PLUS INTEREST AT SIX PERCENTUM PER ANNUM FROM MARCH 2, 1955, AND $29,400 PLUS INTEREST AT SIX PERCENTUM PER ANNUM FROM AUGUST 10, 1955, THE DATES ON WHICH IT APPEARS THAT CONSTRUCTION OF THE PROJECTS WERE FIRST UNDERTAKEN INCLUDING AUTHORIZED EXTENSIONS FOR REPAYMENT, TO THE DATE OF PAYMENT FOR THE DELAY IN SUCH PAYMENT. SEE BROOKLYN SAVINGS BANK V. O-NEILL, 324 U.S. 697; UNITED STATES V. UNITED DRILL AND TOOL CORPORATION, 81 F.SUPP. 171. ..END :