B-158832, MAY 2, 1966

B-158832: May 2, 1966

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WE ADVISED THE CITY COLLECTOR'S OFFICE THAT PAYMENT OF THE BILLS COULD NOT BE MADE BECAUSE THE VALIDITY OF THE ORDINANCE UNDER WHICH THE SEWER USE CHARGES WERE ASSESSED WAS THEN BEING CONSIDERED IN A CASE PENDING BEFORE THE COURTS OF MASSACHUSETTS. SUPPORT YOUR ADVICE THAT THE VALIDITY OF THE ORDINANCE WAS NOT PRESSED BUT THAT THE BASIS FOR COMPLAINT LAY IN THE FACT THAT THE AMOUNT BILLED BY THE CITY WAS DEEMED EXCESSIVE. THE CASE WAS SETTLED ON A RECOMPUTATION OF THE CHARGES ASSESSED. THE ONLY BILLS WHICH HAVE BEEN REFERRED FOR OUR CONSIDERATION ARE THOSE RELATING TO THE YEAR 1961. WE HAVE ON A NUMBER OF OCCASIONS CONSIDERED THE QUESTION WHETHER CHARGES OF THIS KIND ARE IN THE NATURE OF ASSESSMENTS CONSTITUTING INVOLUNTARY TAX EXACTIONS FOR WHICH THE UNITED STATES MAY NOT BE HELD LIABLE OR ON THE NATURE OF SERVICE CHARGES FOR WHICH THE UNITED STATES IS LIABLE.

B-158832, MAY 2, 1966

TO CORPORATION COUNSEL, CITY OF BOSTON:

BY LETTER OF MARCH 22, 1966, YOU STATE THAT THIS OFFICE HAS DECLINED TO PROCESS FOR PAYMENT SEWER USE CHARGES AGAINST FEDERAL BUILDINGS AND INSTALLATIONS IN BOSTON FOR THE YEARS 1961, 1962, 1963, 1964 AND 1965.

THE GENERAL SERVICES ADMINISTRATION OF THE UNITED STATES GOVERNMENT IN 1963 REFERRED TO THE CLAIMS DIVISION OF THIS OFFICE EIGHT BILLS TOTALING $5,657, WHICH IT HAD RECEIVED FROM THE CITY OF BOSTON REPRESENTING SEWER USE CHARGES FOR CALENDAR YEAR 1961 AGAINST CERTAIN BUILDINGS LEASED OR OWNED BY THE FEDERAL GOVERNMENT. BY LETTER OF JULY 10, 1963, WE ADVISED THE CITY COLLECTOR'S OFFICE THAT PAYMENT OF THE BILLS COULD NOT BE MADE BECAUSE THE VALIDITY OF THE ORDINANCE UNDER WHICH THE SEWER USE CHARGES WERE ASSESSED WAS THEN BEING CONSIDERED IN A CASE PENDING BEFORE THE COURTS OF MASSACHUSETTS, GENERAL FOODS CORPORATION V. CITY OF BOSTON, ET AL., SUPERIOR COURT OF MASSACHUSETTS, SULFOLK COUNTY NO. 574,523. AGREEMENT FOR JUDGMENT FILED FEBRUARY 15, 1963, AND THE PLAINTIFF'S PETITION IN THE CASE, COPIES OF WHICH YOU FURNISHED, SUPPORT YOUR ADVICE THAT THE VALIDITY OF THE ORDINANCE WAS NOT PRESSED BUT THAT THE BASIS FOR COMPLAINT LAY IN THE FACT THAT THE AMOUNT BILLED BY THE CITY WAS DEEMED EXCESSIVE. THE CASE WAS SETTLED ON A RECOMPUTATION OF THE CHARGES ASSESSED. YOU, THEREFORE, REQUEST THAT WE PROCESS FOR IMMEDIATE PAYMENT THE SEWER USE CHARGE BILLS FOR THE YEARS MENTIONED ABOVE.

THE ONLY BILLS WHICH HAVE BEEN REFERRED FOR OUR CONSIDERATION ARE THOSE RELATING TO THE YEAR 1961. DISREGARDING FOR THE MOMENT THOSE BILLS RELATING TO SUBSEQUENT YEARS, WE MUST ADVISE THAT THE CHARGES BILLED FOR 1961 MAY NOT BE PAID FOR THE FOLLOWING REASONS:

SECTION 8 OF CHAPTER 30 OF THE REVISED ORDINANCES OF 1961 AS ADDED BY ORDINANCES OF 1961, CHAPTER 11, PROVIDES FOR ASSESSMENT BY THE CITY OF BOSTON OF THE ANNUAL SEWER USE CHARGES IN QUESTION. WITHOUT RECITING THE PROVISIONS OF SECTION 8, IT MAY BE SAID GENERALLY THAT THEY ESTABLISH A SYSTEM OF CHARGING FOR USE OF THE COMMON SEWERS OF BOSTON ON THE BASIS OF THE AMOUNT OF WATER DISCHARGED INTO THOSE SEWERS. WE HAVE ON A NUMBER OF OCCASIONS CONSIDERED THE QUESTION WHETHER CHARGES OF THIS KIND ARE IN THE NATURE OF ASSESSMENTS CONSTITUTING INVOLUNTARY TAX EXACTIONS FOR WHICH THE UNITED STATES MAY NOT BE HELD LIABLE OR ON THE NATURE OF SERVICE CHARGES FOR WHICH THE UNITED STATES IS LIABLE. WHERE A CHARGE OF THE KIND HERE INVOLVED IS APPLIED ON AN INDISCRIMINATE BASIS AGAINST VARIOUS CLASSES OF USERS AND IS REASONABLE, IT IS SETTLED THAT THE CHARGE IS TO BE REGARDED AS A SERVICE CHARGE FOR THE RIGHT TO USE A CITY'S SEWAGE DISPOSAL SYSTEM AND THAT THE UNITED STATES IS NOT EXEMPT THEREFROM. SEE 42 COMP. GEN. 246 AND CASES CITED THEREIN. THUS, WE DO NOT QUESTION THE GENERAL APPLICABILITY OF SECTION 8 TO THE UNITED STATES.

HOWEVER, WITH RESPECT TO THE SEWER USE CHARGES IMPOSED FOR 1961, IT IS SIGNIFICANT TO NOTE THAT THE ORDINANCE IN QUESTION WAS APPROVED ON DECEMBER 13, 1961, AND, IN EFFECT, REACHES THAT PORTION OF THE YEAR 1961 PRIOR TO SUCH APPROVAL BY RETROACTIVELY INCLUDING SEWER USE COMMENCING JANUARY 1, 1961. UNITED STATES LIABILITY UNDER THE ORDINANCE RESTS UPON PRINCIPLES OF CONTRACT RATHER THAN UPON SUBJUGATION TO THE MUNICIPAL TAXING POWER. OBVIOUSLY, THE UNITED STATES IS UNDER NO LEGAL COMPULSION TO AVAIL ITSELF OF THE MUNICIPAL SERVICE, BUT WHEN IT DOES SO, WITH KNOWLEDGE OF THE RATES CHARGED, THE GOVERNMENT BY IMPLICATION AGREES TO COMPENSATE THE MUNICIPALITY FOR SUCH SERVICE. 9 COMP. GEN. 41, 29 ID. 120. THIS, ESSENTIALLY, IS WHAT DISTINGUISHES BETWEEN A SERVICE CHARGE AND A TAX. AS STATED BY THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF CARSON V. BROCKTON SEWERAGE COMMISSION (1901) 182 U.S. 398, 403, IN CONNECTION WITH AN ORDINANCE SIMILAR TO THE ONE HERE INVOLVED:

"* * * THE MUNICIPAL ORDINANCE FIXES THE ANNUAL RENTALS, DETERMINABLE UPON A CERTAIN BASIS OF WATER SERVICE, WITH A PROVISION THAT THE COMMISSIONERS MAY MAKE AN EQUITABLE DISCOUNT FROM SUCH RATES AT THEIR DISCRETION. THIS WAS ALL THERE WAS TO IT. THE LOT OWNER COULD USE THE SEWER OR NOT, AS HE CHOSE. IF HE USED IT, HE PAID THE RENTAL FIXED BY THE ORDINANCE. IF HE MADE NO USE OF IT, HE PAID NOTHING. THERE IS NO ELEMENT OF DEPRIVATION HERE OR EVEN OF TAXATION, BUT ONE OF CONTRACT, INTO WHICH THE LOT OWNER MIGHT OR MIGHT NOT ENTER. * * *"

IT IS CLEAR THAT UNITED STATES USE OF THE COMMON SEWERS OF BOSTON BETWEEN JANUARY 1 AND DECEMBER 13, 1961, WAS ON THE BASIS THAT A SERVICE CHARGE WOULD NOT BE MADE. UNDER THE CIRCUMSTANCES, IT CANNOT BE REASONABLY CONTENDED THAT THE UNITED STATES HAS IMPLIEDLY OR OTHERWISE CONTRACTED TO PAY FOR SEWER USE SERVICES FURNISHED BY THE CITY PRIOR TO DECEMBER 13, 1961. NOR WAS THERE ANY BASIS UPON WHICH THE CITY COULD EXACT A CHARGE FOR SUCH SERVICE AT THE TIME IT WAS RENDERED. TO CONCLUDE THAT THE CITY MAY NOW PROPERLY ASSESS A CHARGE AGAINST THE UNITED STATES FOR SEWER USE DURING A PERIOD IN WHICH BOTH THE UNITED STATES AND THE CITY RECOGNIZED THAT SUCH USE AT THE TIME WAS FREE OF ANY CHARGE WOULD REQUIRE ABANDONMENT OF THE VERY PREMISES UNDERLYING THE DISTINCTION BETWEEN SERVICE CHARGES AND TAXES. ONCE THE UNITED STATES HAS BEEN RENDERED A SERVICE WHICH WAS MADE AVAILABLE ON A FREE BASIS, ANY LATER ATTEMPT TO CHARGE FOR THAT SERVICE MUST BE CONSTRUED AS AN INVOLUNTARY EXACTION IN THE NATURE OF A TAX SINCE THE ELEMENT OF CHOICE WHICH DISTINGUISHES THE SERVICE CHARGE FROM A TAX IS THEN ABSENT.

CONCERNING CHARGES FOR THE YEARS 1962 THROUGH 1965 REFERRED TO IN YOUR LETTER, WE HAVE NO KNOWLEDGE AS TO THE STATUS OF THESE ITEMS, THEY NEVER HAVING BEEN REFERRED TO THIS OFFICE. WE, THEREFORE, SUGGEST THAT YOUR PURSUE THEM THROUGH THE PARTICULAR UNITED STATES GOVERNMENT AGENCIES INVOLVED. WHILE THE RATIONALE FOR EXCLUDING THE CLAIMS FOR 1961 DOES NOT, OF COURSE, APPLY TO THE SUBSEQUENT YEARS, WE WOULD CAUTION THAT THIS LETTER IS NOT TO BE CONSTRUED AS DETERMINING THAT THE LATER CLAIMS ARE PAYABLE. WITH RESPECT TO THESE CLAIMS, CERTAIN OTHER FACTORS WOULD REQUIRE CONSIDERATION, SUCH AS THE REASONABLENESS OF THE CHARGES AND WHETHER THE UNITED STATES IS THE PROPER PARTY TO THE CHARGE WHERE THE PREMISES INVOLVED ARE LEASED.