B-150236, DEC. 28, 1962

B-150236: Dec 28, 1962

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ENCLOSED WITH WHICH WAS AN OPINION DATED OCTOBER 8. PARAGRAPH (D) OF ARTICLE 1 OF THE AGREEMENT FORM PROVIDES: "THE GOVERNMENT WILL PAY TO THE CONTRACTOR THE CONTRACTOR'S PUBLISHED WATER RATE AND SEWER USAGE CHARGE (CURRENTLY 25 CENTS PER THOUSAND GALLONS OF WATER FOR WATER AND 19 CENTS PER THOUSAND GALLONS OF WATER FOR SEWER USAGE). " WHICH ADDITIONAL SUM IS. FOR THE FIRST TERM OF THIS CONTRACT THE ADDITIONAL SUM IS ESTIMATED TO BE 6.7 CENTS PER THOUSAND GALLONS. THE GOVERNMENT WILL PAY THIS ADDITIONAL SUM DURING SAID TERM SUBJECT TO ADJUSTMENT AS HEREINAFTER PROVIDED.'. THE ADDITIONAL SUM FOR SERVICE TO BE CHARGED THE GOVERNMENT IS NOT TO BE REQUIRED OF NON-GOVERNMENT USERS. ADDITIONAL REVENUES FROM SUCH USERS ARE OBTAINED BY MEANS OF FRONT FOOT BENEFIT CHARGES AND AD VALOREM (OR SANITARY) TAXES.

B-150236, DEC. 28, 1962

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

A CONTRACT FORM PROPOSED BY THE WASHINGTON SUBURBAN SANITARY COMMISSION FOR THE FURNISHING OF WATER AND SEWER SERVICES TO FEDERAL AGENCIES WITHIN ITS SERVICE AREA HAS GIVEN RISE TO TWO QUESTIONS SUBMITTED BY YOUR LETTER OF NOVEMBER 1, 1962, ENCLOSED WITH WHICH WAS AN OPINION DATED OCTOBER 8, 1962, OF YOUR GENERAL COUNSEL. THE QUESTIONS SUBMITTED RELATE TO THE ADDITIONAL SUM TO BE CHARGED GOVERNMENT AGENCIES FOR WATER AND SEWER SERVICES.

PARAGRAPH (D) OF ARTICLE 1 OF THE AGREEMENT FORM PROVIDES:

"THE GOVERNMENT WILL PAY TO THE CONTRACTOR THE CONTRACTOR'S PUBLISHED WATER RATE AND SEWER USAGE CHARGE (CURRENTLY 25 CENTS PER THOUSAND GALLONS OF WATER FOR WATER AND 19 CENTS PER THOUSAND GALLONS OF WATER FOR SEWER USAGE), TOGETHER WITH AN ADDITIONAL AMOUNT, PER THOUSAND GALLONS OF WATER, HEREINAFTER CALLED "THE ADDITIONAL SUM," WHICH ADDITIONAL SUM IS, WITHIN THE HEREINAFTER EXPRESSED LIMITS, FOR ACTUAL COSTS AND EXPENSES OF THE CONTRACTOR, PER THOUSAND GALLONS OF WATER, FOR PROVIDING WATER AND SEWER SERVICES NOT INCLUDED IN THE CONTRACTOR'S PUBLISHED RATES. FOR THE FIRST TERM OF THIS CONTRACT THE ADDITIONAL SUM IS ESTIMATED TO BE 6.7 CENTS PER THOUSAND GALLONS, AND THE GOVERNMENT WILL PAY THIS ADDITIONAL SUM DURING SAID TERM SUBJECT TO ADJUSTMENT AS HEREINAFTER PROVIDED.'

THE ADDITIONAL SUM FOR SERVICE TO BE CHARGED THE GOVERNMENT IS NOT TO BE REQUIRED OF NON-GOVERNMENT USERS. ADDITIONAL REVENUES FROM SUCH USERS ARE OBTAINED BY MEANS OF FRONT FOOT BENEFIT CHARGES AND AD VALOREM (OR SANITARY) TAXES, ASSESSMENTS AND TAXES FROM WHICH THE GOVERNMENT IS IMMUNE. IN VIEW OF THE ADDITIONAL SUM TO BE CHARGED THE GOVERNMENT, PLUS THE FACT THAT ANALYSIS OF THE COSTS AND EXPENSES USED BY THE COMMISSION IN DETERMINING THE ADDITIONAL SUM SHOWS THE INCLUSION OF COSTS ATTRIBUTABLE TO STORM DRAIN SERVICE, AS WELL AS THOSE FOR WATER AND SEWER SERVICES, THE FOLLOWING QUESTIONS ARE SUBMITTED:

1. MAY THE GOVERNMENT PROPERLY PAY THE PUBLISHED RATES FOR WATER AND SEWER SERVICES FURNISHED BY THE WASHINGTON SUBURBAN SANITARY COMMISSION TOGETHER WITH THAT PORTION OF THE COMMISSION'S ,ADDITIONAL SUM" PROPERLY ATTRIBUTABLE AND RELATED TO THE FURNISHING OF WATER AND SEWER SERVICES?

2. MAY THE GOVERNMENT PROPERLY PAY AS A PART OF THE WASHINGTON SUBURBAN SANITARY COMMISSION'S CHARGE FOR WATER AND SEWER SERVICE THAT PORTION OF THE "ADDITIONAL SUM" WHICH APPEARS TO BE RELATED TO STORM DRAIN SERVICE?

THE WASHINGTON SUBURBAN SANITARY COMMISSION IS A PUBLIC CORPORATION CREATED BY CHAPTER 122 OF THE ACTS OF THE GENERAL ASSEMBLY OF MARYLAND OF 1918 TO ADMINISTRATE THE WASHINGTON SUBURBAN SANITARY DISTRICT. THE LAWS RELATING TO THE COMMISSION AND THE SANITARY DISTRICT ARE CODIFIED IN THE PRINCE GEORGE'S COUNTY AND THE MONTGOMERY COUNTY CODES.

OF SIGNIFICANCE HEREIN ARE THE STATUTORY PROVISIONS REGARDING RATES AND CHARGES FOR THE FURNISHING OF WATER AND SEWER SERVICES TO GOVERNMENT AGENCIES:

"* * * WHENEVER THE COMMISSION SHALL FURNISH WATER TO FEDERAL, STATE OR OTHER AGENCIES WHICH ARE EXEMPT FROM FRONT FOOT BENEFIT CHARGES AND/OR AD VALOREM TAXES IMPOSED UNDER THE PROVISIONS OF CHAPTER 122 OF THE ACTS OF THE GENERAL ASSEMBLY OF MARYLAND OF 1918, AND AMENDMENTS THERETO, THE COMMISSION SHALL MAKE SUCH CHARGE, WITH FULL AUTHORITY TO CHANGE THE SAME FROM TIME TO TIME, FOR WATER SERVICE AS IT SHALL DEEM NECESSARY AND REASONABLE, WHICH CHARGE SHALL TAKE INTO CONSIDERATION THE GENERAL TAX, AND FRONT FOOT BENEFIT CHARGE LEVIED WITHIN THE SANITARY DISTRICT IN ADDITION TO THE REGULAR RATE FOR SERVICE AS PROVIDED IN SUB-SECTION (B) HEREOF * * *.'

CODE OF PUBLIC LOCAL LAWS OF PRINCE GEORGE'S COUNTY, SECTION 1578; MONTGOMERY CODE, SECTION 74-43.

"WHEREVER THE PROPERTY OF ANY FEDERAL, STATE OR OTHER AGENCY IS EXEMPT FROM FRONT FOOT BENEFIT CHARGES AND AD VALOREM TAXES IMPOSED UNDER THE PROVISIONS OF CHAPTER 122 OF THE ACTS OF THE GENERAL ASSEMBLY OF MARYLAND OF 1918, AND AMENDMENTS THERETO, AND SAID PROPERTY IS CONNECTED TO THE COMMISSION'S SEWERAGE SYSTEM, THE COMMISSION SHALL MAKE A SEWER USAGE CHARGE AGAINST SAID PROPERTY SO CONNECTED, WITH FULL AUTHORITY TO CHANGE THE SAME FROM TIME TO TIME, WHICH CHARGE SHALL TAKE INTO CONSIDERATION THE GENERAL TAX, AND FRONT FOOT BENEFIT CHARGE LEVIED WITHIN THE SANITARY DISTRICT IN ADDITION TO THE REGULAR SEWER USAGE CHARGE PROVIDED HEREIN.'

CODE OF PUBLIC LOCAL LAWS OF PRINCE GEORGE'S COUNTY, SECTION 1579; MONTGOMERY COUNTY CODE, SECTION 74-44.

AS POINTED OUT IN YOUR LETTER, THE PAYMENT OF CHARGES PROPERLY ATTRIBUTABLE AND RELATED TO WATER AND SEWER SERVICES RENDERED THE GOVERNMENT WOULD NOT BE OBJECTIONABLE. SEE 31 COMP. GEN. 405; B 122714, APRIL 18, 1955. CF. B-129637, DECEMBER 4, 1956. AND WHEN BY STATUTE, AS HEREIN, A LOCAL PUBLIC AGENCY IS NOT REQUIRED TO FURNISH WATER AND SEWER SERVICES TO FEDERAL AGENCIES AT THE PUBLISHED RATES, THE SERVICES BEING OTHERWISE SUPPORTED BY LOCAL TAXATION, THERE WOULD BE NO OBJECTION TO THE INCLUSION OF AN ADDITIONAL SUM "FOR ACTUAL COSTS AND EXPENSES * * * FOR PROVIDING WATER AND SEWER SERVICES NOT INCLUDED IN THE CONTRACTOR'S PUBLISHED RATES.' ACCORDINGLY, THE FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE.

WITH REFERENCE TO THE SECOND QUESTION THE OPINION OF YOUR GENERAL COUNSEL STATES:

"AN AD VALOREM TAX, COMMONLY REFERRED TO AS THE SANITARY TAX, IS LEVIED ANNUALLY ON ALL ASSESSABLE PROPERTY IN THE SANITARY DISTRICT. THE REVENUES DERIVED FROM THIS TAX ARE USED PRIMARILY FOR FLOOD CONTROL PROJECTS, THE MAINTENANCE OF STORM SEWERS, AND THE PAYMENT OF PRINCIPAL AND INTEREST OF STORM DRAINAGE BONDS ISSUED BY THE COMMISSION. THERE ARE NO INDICATIONS THAT THE FEDERAL PROPERTIES WITHIN THE SANITARY DISTRICT RECEIVE DIRECT BENEFITS FROM THE PROGRAMS CARRIED ON THROUGH THE ASSESSMENT OF THE AD VALOREM TAX.

"ON THE BASIS OF THE ATTACHED STATEMENT, IT WOULD APPEAR THAT APPROXIMATELY 3 1/2 CENTS OF THE 6.707 CENTS "ADDITIONAL SUM" IS ATTRIBUTABLE TO THE COST OF PROVIDING STORM DRAIN SERVICE, INCLUDING MAINTENANCE AND OPERATION OF STORM DRAINS AND A PAYMENT OF INTEREST AND PRINCIPAL ON STORM DRAIN BONDS. * * * WE ARE INFORMED THAT THE GOVERNMENT HAS NOT REQUESTED STORM DRAIN SERVICE OR PERMISSION TO CONNECT TO THE WSSC STORM DRAIN OPERATION. ANY BENEFIT RECEIVED FROM THIS OPERATION WOULD BE OF AN INDIRECT NATURE, ANALOGOUS TO THE BENEFIT RECEIVED FROM FIRE PROTECTION AND POLICE PROTECTION. SUCH BENEFITS, ALTHOUGH OF CERTAIN GENERAL BENEFIT TO A FEDERAL INSTALLATION LOCATED IN THE JURISDICTION PROVIDING THE SERVICES, ARE SUPPORTED BY TAX FUNDS, WHICH ARE NOT PROPERLY PAYABLE BY THE FEDERAL GOVERNMENT.

"* * * STORM DRAIN SERVICE IS A SEPARATE AND DISTINCT SERVICE, AND, AS INDICATED ABOVE, ITS COST IS NOT PROPERLY ATTRIBUTABLE TO THE COST OF WATER AND SEWER SERVICE. ABSENT A REQUEST BY THE GOVERNMENT FOR STORM DRAIN SERVICE, ANY PAYMENT BY THE GOVERNMENT BASED ON THE COST OF SUCH SERVICE WOULD APPEAR TO BE IN THE NATURE OF AN UNAUTHORIZED PAYMENT IN LIEU OF TAXES * * *"

ON THE BASIS OF THE INFORMATION THUS FURNISHED, AND AS THE LOCAL STATUTORY PROVISIONS PREVIOUSLY QUOTED CANNOT BE VIEWED AS WARRANTING A DIFFERENT CONCLUSION, WE CONCUR IN THE POSITION OF YOUR GENERAL COUNSEL. CONSEQUENTLY, THE SECOND QUESTION IS ANSWERED IN THE NEGATIVE.