B-226473, APR 1, 1987

B-226473: Apr 1, 1987

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THAT INSTEAD INDIVIDUAL AGENCIES PAY THE DISTRICT DIRECTLY FOR THESE SERVICES IS CONTRARY TO EXISTING STATUTORY LAW. IS THE EXCLUSIVE METHOD BY WHICH THE UNITED STATES MAY PAY. ADJUSTMENTS ARE NEEDED FOR THE PAYMENTS TO CORRESPOND TO THE ACTUAL SERVICES PROVIDED. YOU ASKED WHETHER (1) THE PRESIDENT'S PROPOSAL IS IN ACCORD WITH EXISTING LAW. (3) THE PRESIDENT'S BUDGET SHOULD HAVE INCLUDED ADJUSTMENTS FOR WATER AND SEWER SERVICES PROVIDED TO THE FEDERAL GOVERNMENT IN PRIOR YEARS. FOR THE REASONS INDICATED BELOW WE CONCLUDE THAT: (1) THE PRESIDENT'S PROPOSAL IS CONTRARY TO EXISTING LAW. ADJUSTMENTS ARE NEEDED FOR THE PAYMENTS TO CORRESPOND TO THE ACTUAL WATER AND SEWER SERVICES PROVIDED. THE PRESIDENT'S BUDGET ANNOUNCES A SIGNIFICANT CHANGE IN THE MANNER IN WHICH THE FEDERAL GOVERNMENT WILL PAY THE DISTRICT OF COLUMBIA FOR WATER AND SEWER SERVICES.

B-226473, APR 1, 1987

APPROPRIATIONS/FINANCIAL MANAGEMENT - BUDGET PROCESS - LUMP-SUM APPROPRIATION - GOVERNMENT PROPERTY - UTILITY SERVICES - PAYMENT PROCEDURES DIGEST: 1. THE PROPOSAL, CONTAINED IN THE FISCAL YEAR 1988 FEDERAL BUDGET, THAT THE CONGRESS NO LONGER APPROPRIATE A LUMP-SUM PAYMENT TO THE DISTRICT OF COLUMBIA FOR WATER AND SEWER SERVICES, AND THAT INSTEAD INDIVIDUAL AGENCIES PAY THE DISTRICT DIRECTLY FOR THESE SERVICES IS CONTRARY TO EXISTING STATUTORY LAW. THE PAYMENT MECHANISM SPECIFIED IN THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, AS AMENDED, CONTEMPLATES A SINGLE APPROPRIATION TO THE DISTRICT OF COLUMBIA FOR ALL WATER AND SEWER SERVICES USED BY THE FEDERAL GOVERNMENT. APPROPRIATIONS/FINANCIAL MANAGEMENT - BUDGET PROCESS - LUMP-SUM APPROPRIATION - GOVERNMENT PROPERTY - UTILITY SERVICES - PAYMENT PROCEDURES 2. THE DISTRICT OF COLUMBIA HAS NO STATUTORY AUTHORITY TO BILL, OR TO ACCEPT PAYMENTS DIRECTLY FROM, INDIVIDUAL FEDERAL AGENCIES FOR WATER AND SEWER SERVICES. THE PAYMENT MECHANISM SPECIFIED IN THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, AS AMENDED, IS THE EXCLUSIVE METHOD BY WHICH THE UNITED STATES MAY PAY, AND THE DISTRICT OF COLUMBIA MAY ACCEPT, REMUNERATION FOR WATER AND SEWER SERVICES PROVIDED TO FEDERAL AGENCIES. THAT STATUTE REQUIRES A SINGLE ANNUAL APPROPRIATION TO THE DISTRICT FOR ALL WATER AND SEWER SERVICES PROVIDED TO THE FEDERAL GOVERNMENT. APPROPRIATIONS/FINANCIAL MANAGEMENT - BUDGET PROCESS - GOVERNMENT PROPERTY - UTILITY SERVICES - PAYMENT PROCEDURES 3. THE PRESIDENT'S ANNUAL BUDGET SHOULD CONTAIN ADJUSTMENTS TO FEDERAL WATER AND SEWER PAYMENTS MADE TO THE FEDERAL GOVERNMENT DURING THE TWO PREVIOUS YEARS IF, IN HIS OPINION, ADJUSTMENTS ARE NEEDED FOR THE PAYMENTS TO CORRESPOND TO THE ACTUAL SERVICES PROVIDED. THE PAYMENT MECHANISM CONTAINED IN THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, AS AMENDED, DIRECTS THAT PAYMENT BE MADE BASED ON ESTIMATED USAGE, "SUBJECT TO SUBSEQUENT ADJUSTMENT WITHIN 2 FISCAL YEARS."

THE HONORABLE JULIAN C. DIXON:

IN YOUR LETTER OF MARCH 5, 1987, YOU REQUESTED OUR OPINION ON THE PROPRIETY OF THE PRESIDENT'S PROPOSAL IN THE FISCAL YEAR 1988 FEDERAL BUDGET, THAT THE CONGRESS NO LONGER APPROPRIATE A LUMP-SUM ANNUAL PAYMENT TO THE DISTRICT OF COLUMBIA IN LIEU OF WATER AND SEWER CHARGES. INSTEAD THE PRESIDENT PROPOSES THAT THE DISTRICT BILL INDIVIDUAL FEDERAL AGENCIES DIRECTLY FOR THE WATER AND SEWER SERVICES PROVIDED TO THOSE AGENCIES. SPECIFICALLY, YOU ASKED WHETHER (1) THE PRESIDENT'S PROPOSAL IS IN ACCORD WITH EXISTING LAW; (2) THE DISTRICT GOVERNMENT HAS THE AUTHORITY TO BILL FEDERAL AGENCIES DIRECTLY; AND (3) THE PRESIDENT'S BUDGET SHOULD HAVE INCLUDED ADJUSTMENTS FOR WATER AND SEWER SERVICES PROVIDED TO THE FEDERAL GOVERNMENT IN PRIOR YEARS.

FOR THE REASONS INDICATED BELOW WE CONCLUDE THAT:

(1) THE PRESIDENT'S PROPOSAL IS CONTRARY TO EXISTING LAW, SPECIFICALLY SECTIONS 106 AND 212 OF THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, AS AMENDED, D.C. CODE SECS. 43-1552, 43-1612 (1981);

(2) THE DISTRICT OF COLUMBIA HAS NO STATUTORY AUTHORITY TO BILL, OR TO ACCEPT PAYMENTS DIRECTLY FROM, INDIVIDUAL FEDERAL AGENCIES FOR WATER AND SEWER SERVICES THEY RECEIVE; AND

(3) THE PRESIDENT'S BUDGET SHOULD CONTAIN ADJUSTMENTS TO THE FEDERAL WATER AND SEWER PAYMENTS MADE TO THE DISTRICT DURING THE 2 PREVIOUS YEARS IF, IN HIS OPINION, ADJUSTMENTS ARE NEEDED FOR THE PAYMENTS TO CORRESPOND TO THE ACTUAL WATER AND SEWER SERVICES PROVIDED.

BACKGROUND

FOR MANY YEARS, UNDER THE PROCEDURE SET FORTH IN STATUTE, THE PRESIDENT'S ANNUAL BUDGET HAS REQUESTED A SINGLE LUMP-SUM APPROPRIATION FOR PAYMENT TO THE DISTRICT OF COLUMBIA IN LIEU OF REIMBURSEMENTS FOR WATER, WATER SERVICES AND SANITARY SEWER SERVICES PROVIDED TO FEDERAL FACILITIES. SEE, E.G., BUDGET OF THE UNITED STATES GOVERNMENT, FISCAL YEAR 1987- APPENDIX AT I-Z15, 16 (1986). EACH YEAR THE CONGRESS APPROPRIATED A SINGLE, LUMP- SUM PAYMENT TO THE DISTRICT FOR WATER, WATER SERVICES, AND SANITARY SEWER SERVICES. SEE, E.G., DISTRICT OF COLUMBIA APPROPRIATIONS ACT, 1987, AS ENACTED BY PUB.L. NO. 99-591, 100 STAT. 1341, 1341-180 (1986).

FOR FISCAL YEAR 1988, HOWEVER, THE PRESIDENT'S BUDGET ANNOUNCES A SIGNIFICANT CHANGE IN THE MANNER IN WHICH THE FEDERAL GOVERNMENT WILL PAY THE DISTRICT OF COLUMBIA FOR WATER AND SEWER SERVICES. AS EXPLAINED IN THE BUDGET APPENDIX:

"BEGINNING IN 1988, IN ORDER TO PROMOTE EFFICIENCY AND ACCOUNTABILITY, THE DISTRICT OF COLUMBIA WILL TREAT FEDERAL ESTABLISHMENTS OF THE JUDICIAL, LEGISLATIVE, AND EXECUTIVE BRANCHES OF GOVERNMENT LIKE PRIVATE CUSTOMERS FOR THE WATER AND SEWER SERVICES THAT THEY RECEIVE FROM THE DISTRICT OF COLUMBIA GOVERNMENT. THUS, IN LIEU OF A LUMP-SUM APPROPRIATION TO THE DISTRICT FOR THESE SERVICES, THE FEDERAL ESTABLISHMENTS WILL MAKE PAYMENTS DIRECTLY." BUDGET OF THE UNITED STATES GOVERNMENT, FISCAL YEAR 1988 - APPENDIX AT I-Z13 (1987).

THIS ANNOUNCED CHANGE IS THE SUBJECT OF YOUR INQUIRY. /1/

IN ACCORDANCE WITH OUR NORMAL PROCEDURES, WE REQUESTED THE VIEWS OF THE DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET (OMB) AND THE MAYOR OF THE DISTRICT OF COLUMBIA. THE GENERAL COUNSEL OF OMB REPLIED TO OUR INQUIRY IN LETTER DATED MARCH 18, 1987, ARGUING THAT THE PRESIDENT'S PROPOSAL WAS FULLY IN ACCORD WITH EXISTING LAWS. ALTHOUGH WE RECEIVED NO FORMAL REPLY FROM THE DISTRICT, WE WERE INFORMALLY SUPPLIED WITH A COPY OF A LETTER FROM THE DISTRICT'S ACTING CORPORATION COUNSEL TO THE GENERAL COUNSEL OF OMB EXPRESSING THE DISTRICT'S POSITION THAT THE STATUTORY SCHEME REQUIRES A SINGLE, LUMP-SUM APPROPRIATION TO THE DISTRICT RATHER THAN SEPARATE PAYMENTS FROM EACH FEDERAL AGENCY AS CONTEMPLATED BY THE PRESIDENT'S PROPOSAL.

DISCUSSION

1. AUTHORITY FOR THE DISTRICT OF COLUMBIA TO CHARGE FOR WATER AND WATER SERVICES SUPPLIED TO THE FEDERAL GOVERNMENT AND FOR THE FEDERAL GOVERNMENT TO PAY FOR THEM IS CONTAINED IN SECTION 106 OF THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, AS AMENDED, D.C. CODE SEC. 43 1552 (1981). /2/

THIS SECTION PROVIDES:

"(A) ALL WATER AND WATER SERVICES FURNISHED FROM THE DISTRICT WATER SUPPLY SYSTEM THROUGH ANY CONNECTION THERETO FOR DIRECT USE BY THE GOVERNMENT OF THE UNITED STATES OR ANY DEPARTMENT, INDEPENDENT ESTABLISHMENT, OR AGENCY THEREOF, SITUATED IN THE DISTRICT *** SHALL BE PAID FOR AT THE RATES FOR THE FURNISHING AND READINESS TO FURNISH WATER APPLICABLE TO OTHER WATER CUSTOMERS IN THE DISTRICT. *** PAYMENT SHALL BE MADE AS PROVIDED IN SUBSECTION (B) OF THIS SECTION. ***

"(B) FOR THE PURPOSE OF EFFECTUATING THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION, THERE SHALL BE INCLUDED ANNUALLY IN THE BUDGET ESTIMATES OF THE MAYOR *** THE ESTIMATED VALUE, AS DETERMINED BY THE MAYOR, OF THE WATER AND WATER SERVICES TO BE FURNISHED TO THE UNITED STATES DURING THE FISCAL YEAR FOR WHICH THE BUDGET ESTIMATES ARE PREPARED ***. THERE SHALL BE APPROPRIATED ANNUALLY TO THE DISTRICT, SUBJECT TO SUBSEQUENT ADJUSTMENT WITHIN 2 FISCAL YEARS, OUT OF ANY MONEY IN THE TREASURY NOT OTHERWISE APPROPRIATED, A SUM CORRESPONDING TO THE ESTIMATED VALUE OF WATER AND WATER SERVICES TO BE FURNISHED TO THE UNITED STATES ***."

ON ITS FACE, THIS STATUTORY LANGUAGE SUPPORTS THE METHOD OF PAYMENT THAT THE DISTRICT, THE PRESIDENT, AND THE CONGRESS HAVE FOLLOWED OVER THE YEARS. SUBSECTION (A), IN AUTHORIZING THE FEDERAL GOVERNMENT TO PAY FOR WATER AT THE SAME RATES APPLICABLE TO OTHER CUSTOMERS, DIRECTS THAT "PAYMENT SHALL BE MADE AS PROVIDED IN SUBSECTION (B)." SUBSECTION (B), ALSO WRITTEN IN MANDATORY TERMS, DIRECTS THAT "THERE SHALL BE INCLUDED" IN THE MAYOR'S ANNUAL BUDGET AN ESTIMATE OF THE WATER AND WATER SERVICES TO BE FURNISHED TO THE UNITED STATES THAT YEAR AND THAT "THERE SHALL BE APPROPRIATED ANNUALLY TO THE DISTRICT *** A SUM" EQUIVALENT TO THE ESTIMATED VALUE OF THE WATER AND WATER SERVICES TO BE RENDERED.

IN OUR OPINION THIS STATUTE CONTEMPLATES AN ANNUAL APPROPRIATION TO THE DISTRICT OF COLUMBIA OF ONE SUM WHICH REPRESENTS ESTIMATED WATER USAGE OF ALL FEDERAL ENTITIES USING DISTRICT WATER. APPARENTLY, BOTH THE CONGRESS AND THE PRESIDENT AGREE WITH THIS INTERPRETATION BECAUSE EACH YEAR THE CONGRESS HAS ENACTED AND THE PRESIDENT HAS SIGNED INTO LAW AN APPROPRIATION "FOR PAYMENT TO THE DISTRICT OF COLUMBIA *** IN LIEU OF REIMBURSEMENT" FOR WATER AND SEWER CHARGES. E.G., DISTRICT OF COLUMBIA APPROPRIATIONS ACT, 1987, AS ENACTED BY PUB.L. NO. 99-591, 100 STAT. 3341- 180 (1986).

FURTHER, THE HISTORY OF THE PROVISION AUTHORIZING PAYMENT FOR WATER PROVIDED TO THE FEDERAL GOVERNMENT BY THE DISTRICT SUPPORTS THIS CONSTRUCTION. ORIGINALLY, THE LAW PROVIDED FOR THE PAYMENT OF A SINGLE SUM, UNRELATED TO ACTUAL USAGE. ARTICLE VI OF THE DISTRICT OF COLUMBIA REVENUE ACT OF 1947, CH. 258, 61 STAT. 328, 361 (1947), AUTHORIZED TO BE APPROPRIATED, FOR FISCAL YEAR 1948 AND THEREAFTER, "AS THE ANNUAL PAYMENT BY THE UNITED STATES TOWARD DEFRAYING THE EXPENSES OF THE DISTRICT OF COLUMBIA, THE SUM OF $12,000,000, OF WHICH *** $1,000,000 SHALL BE CREDITED TO THE WATER FUND OF THE DISTRICT OF COLUMBIA ***." UNDER THIS AUTHORIZATION THE CONGRESS ANNUALLY APPROPRIATED $1,000,000 TO THE DISTRICT'S WATER FUND. SEE, E.G., DISTRICT OF COLUMBIA APPROPRIATIONS ACT, 1948, CH. 324, 61 STAT. 425 (1947).

THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, CH. 218, 68 STAT. 101 (1954), ALTERED THE METHOD OF PAYMENT. RATHER THAN A FLAT RATE, UNRELATED TO USAGE, SUBSECTION 106(B) OF THE STATUTE DIRECTED THE DISTRICT COMMISSIONERS TO INCLUDE IN THEIR ANNUAL BUDGET ESTIMATE THE VALUE OF WATER AND WATER SERVICES FURNISHED TO THE UNITED STATES "DURING THE MOST RECENT PRECEDING FISCAL YEAR FOR WHICH SUCH VALUE CAN BE DETERMINED, BASED ON THE WATER RATES PREVAILING DURING THE PERIOD OF CONSUMPTION ***." STAT. AT 103. THE STATUTE FURTHER DIRECTED THE APPROPRIATION OF "A SUM CORRESPONDING TO THE VALUE OF THE WATER AND WATER SERVICES FURNISHED TO THE UNITED STATES." ID. /3/ ALTHOUGH THIS LEGISLATION CHANGED THE MEASURE OF THE FEDERAL PAYMENT FOR WATER SERVICES FROM A FLAT RATE TO AN AMOUNT BASED ON ACTUAL USAGE, IT DID NOT CHANGE THE MECHANISM OF PAYMENT, WHICH WAS A SINGLE ANNUAL APPROPRIATION TO THE D.C. WATER FUND.

IN 1977, PUBLIC LAW 95-122 FURTHER AMENDED THE STATUTORY PAYMENT MECHANISM FOR WATER AND WATER SERVICES TO ITS PRESENT FORM. THE MAJOR CHANGE EFFECTED WAS THAT THE AMOUNT OF THE PAYMENT IS TO BE BASED ON THE MAYOR'S ESTIMATE OF FEDERAL GOVERNMENT USAGE IN THE FISCAL YEAR FOR WHICH APPROPRIATIONS ARE REQUESTED RATHER THAN ON ACTUAL USAGE IN THE MOST RECENT YEAR FOR WHICH USAGE CAN BE DETERMINED. HOWEVER, THE ACTUAL METHOD OF PAYMENT, A SINGLE DIRECT LUMP-SUM PAYMENT TO THE DISTRICT OF COLUMBIA, /4/ WAS NOT CHANGED.

THAT THIS 1977 AMENDMENT ENVISIONED NO CHANGE IN THE METHOD OF PAYMENT IS MADE CLEAR BY ITS LEGISLATIVE HISTORY. IN EXPLAINING THE BILL THAT BECAME PUBLIC LAW 95-122, THE HOUSE COMMITTEE ON THE DISTRICT OF COLUMBIA STATED:

"SECTION 1 OF THE BILL AMENDS SECTION 106(B) OF THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954 *** TO REQUIRE THE MAYOR OF THE DISTRICT OF COLUMBIA TO INCLUDE IN HIS ANNUAL BUDGET ESTIMATE *** AN AMOUNT BASED ON THE WATER SERVICES EXPECTED TO BE PROVIDED TO THE FEDERAL GOVERNMENT IN THE COMING FISCAL YEAR. THIS AMOUNT SHALL BE BASED ON THE RATES TO BE IN EFFECT TO ALL CUSTOMERS FOR THAT FISCAL YEAR.

"THE SECTION ALSO AUTHORIZES AN ANNUAL APPROPRIATION OF THE ESTIMATED AMOUNT, SUBJECT TO ADJUSTMENT OVER THE FOLLOWING 2 FISCAL YEARS, FOR ACTUAL USE AS DETERMINED BY THE DISTRICT OF COLUMBIA." H. R. REP. NO. 247, 95TH CONG., 1ST SESS. 2-3 (1977).

IN HIS LETTER, THE GENERAL COUNSEL OF OMB ASSERTS THAT THE PRESIDENT'S BUDGET PROPOSAL IS FULLY IN ACCORD WITH EXISTING LAW. SPECIFICALLY HE SAYS:

"THE FY 88 BUDGET REQUESTS FOR THE VARIOUS FEDERAL AGENCIES THAT OPERATE FACILITIES IN THE DISTRICT INCLUDE AMOUNTS EQUAL TO THE ESTIMATED CHARGES FOR WATER AND SEWER SERVICES PROVIDED THEM BY THE DISTRICT. IF CONGRESS WERE TO APPROPRIATE FUNDS IN THE MANNER REQUESTED BY THE PRESIDENT, THE UNITED STATES WOULD HAVE FULLY AND PROPERLY DISCHARGED ITS OBLIGATIONS TO THE DISTRICT FOR THESE SERVICES."

FURTHER, IN A MARCH 18 LETTER TO THE DISTRICT'S ACTING CORPORATION COUNSEL THE GENERAL COUNSEL STATED:

"THE LANGUAGE OF THE STATUTE DOES NOT DEFINE THE MECHANICS OF HOW THE MONEY WILL BE APPROPRIATED. THE LANGUAGE DOES NOT ANTICIPATE DIRECT BILLING, BUT NEITHER DOES IT PREVENT THE GOVERNMENT FROM ADJUSTING TO CHANGED CIRCUMSTANCES TO TAKE ADVANTAGE OF MORE ACCURATE INFORMATION ABOUT WATER AND SEWER USAGE. THE PROVISIONS ESTABLISH A FUNCTIONAL GOAL, THAT MONEY WILL BE APPROPRIATED TO THE DISTRICT ANNUALLY IN AN AMOUNT EQUAL TO ESTIMATED USAGE OF THESE SERVICES. NOTHING IN THESE PROVISIONS REQUIRES APPROPRIATION OF A 'LUMP-SUM.' THE FY 88 BUDGET ACCOMPLISHES THE RESULT INTENDED BY THE STATUTE BY APPROPRIATING A 'SUM,' AMOUNTS PROVIDED FOR DIFFERENT AGENCIES, WHICH WHEN ADDED TOGETHER, EQUAL THE ESTIMATED TOTAL FEDERAL USAGE OF SUCH SERVICES."

IF THE ONLY ISSUES HERE WERE WHETHER THE UNITED STATES WAS DISCHARGING ITS OBLIGATIONS TO THE DISTRICT OF COLUMBIA FOR WATER AND SEWER SERVICES, OR WHETHER SOME "FUNCTIONAL GOAL" OF THE STATUTORY PROVISIONS WERE BEING FULFILLED, WE COULD ACCEPT OMB'S ARGUMENTS. BUT THE ISSUE WE FACE IS WHETHER THE BUDGET PROPOSAL CONFORMS TO THE STATUTE AS THE CONGRESS ENACTED IT AND THE PRESIDENT APPROVED IT.

CONTRARY TO THE GENERAL COUNSEL'S ASSERTION, THE STATUTE DOES DEFINE THE MECHANICS OF HOW MONEY IS TO BE APPROPRIATED TO PAY FOR WATER AND SEWER SERVICES FURNISHED BY THE DISTRICT. SUBSECTIONS 106(B) (FOR WATER) AND 212(B) (FOR SEWERS) OF THE PUBLIC WORKS ACT, AS AMENDED, PROVIDE THAT THE MAYOR OF THE DISTRICT OF COLUMBIA, IN HIS ANNUAL BUDGET, IS TO ESTIMATE THE VALUE OF WATER AND SEWER SERVICES PROVIDED TO THE UNITED STATES. THE CONGRESS IS THEN TO APPROPRIATE TO THE DISTRICT A SUM CORRESPONDING TO THE MAYOR'S ESTIMATE. THE FISCAL YEAR 1988 BUDGET DOES NOT SUBMIT TO THE CONGRESS THE MAYOR'S REQUEST FOR AN APPROPRIATION TO THE DISTRICT OF COLUMBIA TO PAY FOR WATER AND SEWER CHARGES. RATHER, AS INDICATED BY OMB, IT PROPOSES THAT A PORTION OF THE FUNDS APPROPRIATED TO THE VARIOUS FEDERAL ESTABLISHMENTS LOCATED IN THE DISTRICT OF COLUMBIA BE USED TO PAY THE DISTRICT FOR THE SERVICES. THIS PROPOSAL, IN OUR OPINION, IS CONTRARY TO EXISTING LAW.

2. FOR SIMILAR REASONS, WE ALSO CONCLUDE THAT THE DISTRICT OF COLUMBIA DOES NOT HAVE AUTHORITY TO COLLECT WATER AND SEWER CHARGES DIRECTLY FROM INDIVIDUAL FEDERAL ENTITIES. SUBSECTION 106(A) OF THE D.C. PUBLIC WORKS ACT, AS AMENDED, D.C. CODE SEC. 43-1552(A), AUTHORIZES THE DISTRICT OF COLUMBIA TO BE PAID FOR THE WATER AND WATER SERVICES /5/ IT PROVIDES TO THE UNITED STATES GOVERNMENT AT THE SAME RATES CHARGED TO OTHER CUSTOMERS. THE PROVISION THEN SPECIFIES, "PAYMENT SHALL BE MADE AS PROVIDED IN SUBSECTION (B) OF THIS SECTION." SUBSECTION (B) SETS FORTH THE BUDGET ESTIMATE-DIRECT APPROPRIATION METHOD OF PAYMENT WE HAVE DESCRIBED ABOVE. IN THE CONTEXT OF THIS STATUTE, WE MUST CONSTRUE THE WORDS "PAYMENT SHALL BE MADE" AS MANDATING AN EXCLUSIVE METHOD BY WHICH THE UNITED STATES MAY PAY, AND THE DISTRICT OF COLUMBIA MAY ACCEPT, REMUNERATION FOR WATER AND SEWER SERVICES. THE LANGUAGE OF THE SECTION READ AS A WHOLE, AS WELL AS THE HISTORY OF THE SECTION'S EVOLUTION, WHICH WE DESCRIBED ABOVE, MAKE IT CLEAR THAT THE PAYMENT MECHANISM IS THE ONLY METHOD THE CONGRESS INTENDED TO BE USED TO EFFECT PAYMENT FROM THE UNITED STATES TO THE DISTRICT OF COLUMBIA.

IN HIS LETTER, THE OMB GENERAL COUNSEL STATES THAT "THE QUESTION OF BILLING SEEMS BESIDE THE POINT. NOTHING IN THE LAW PROHIBITS THE DISTRICT FROM INFORMING FEDERAL AGENCIES OF THE AMOUNT OF SERVICES USED."

AGAIN, WE THINK THAT OMB HAS MISUNDERSTOOD THE ISSUE YOU HAVE ASKED US TO RESOLVE. WE CERTAINLY WOULD AGREE THAT THE DISTRICT MAY, SHOULD IT SO CHOOSE, INFORM INDIVIDUAL FEDERAL AGENCIES OF THE AMOUNT OF WATER AND SEWER SERVICES THEY ARE USING. THE ISSUE, HOWEVER, IS WHETHER INDIVIDUAL FEDERAL AGENCIES MAY MAKE, AND THE DISTRICT OF COLUMBIA MAY ACCEPT, DIRECT PAYMENT FOR WATER AND SEWER SERVICES. UNDER THE PROVISIONS OF THE D.C. PUBLIC WORKS ACT, IT IS CLEAR THAT THEY MAY NOT.

3. YOUR THIRD QUESTION INVOLVES ADJUSTMENTS OF WATER AND SEWER PAYMENTS MADE IN PREVIOUS YEARS. THE PAYMENT PROVISIONS OF THE D.C. PUBLIC WORKS ACT SPECIFY THAT THERE SHOULD BE APPROPRIATED TO THE DISTRICT ANNUALLY, "SUBJECT TO SUBSEQUENT ADJUSTMENT WITHIN 2 FISCAL YEARS," THE AMOUNT ESTIMATED IN THE MAYOR'S BUDGET. IN OUR OPINION, THIS QUOTED LANGUAGE CONTEMPLATES THAT THE PRESIDENT'S BUDGET WILL CONTAIN ADJUSTMENTS TO THE AMOUNTS INITIALLY APPROPRIATED FOR A FISCAL YEAR IF, IN HIS OPINION, THESE ADJUSTMENTS ARE NEEDED FOR THE PAYMENTS TO CORRESPOND TO ACTUAL USAGE.

THE ADJUSTMENT LANGUAGE WAS ADDED TO THE STATUTE IN 1977 BY PUBLIC LAW 95 -122. THAT LAW CHANGED THE MEASURE OF PAYMENTS FOR WATER AND SEWER SERVICES FROM ONE BASED ON ACTUAL USAGE IN THE MOST RECENT YEAR FOR WHICH USAGE COULD BE DETERMINED TO ONE BASED ON THE MAYOR'S ESTIMATE OF USAGE IN THE YEAR FOR WHICH PAYMENT IS MADE. THE ADJUSTMENT PROVISION WAS INCLUDED TO ALLOW A CHANGE IF THE MAYOR'S ESTIMATE PROVED INACCURATE. AS EXPLAINED BY THE SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS:

"UNDER THE PROPOSAL, ANNUAL BUDGET ESTIMATES FOR THE FEDERAL REIMBURSEMENT WILL BE BASED ON THE AMOUNT OF SERVICES EXPECTED TO BE PROVIDED DURING THE FISCAL YEAR FOR WHICH THE PAYMENTS ARE APPROPRIATED. ACTUAL USAGE OF FEDERAL FACILITIES WILL BE DETERMINED ANNUALLY. ANY NECESSARY ADJUSTMENTS BETWEEN THE ESTIMATES AND ACTUAL CONSUMPTION WILL BE MADE WITHIN THE FOLLOWING 2 YEARS." S.REP.NO. 229, 95TH CONG., 1ST SESS. 2-3 (1977).

IN HIS LETTER, THE GENERAL COUNSEL OF OMB STATED THAT THE FISCAL YEAR 1988 BUDGET CONTAINED NO RECOMMENDATIONS FOR ADJUSTING PAYMENTS MADE IN PREVIOUS YEARS "BECAUSE THE PRECISE AMOUNT OF WATER AND SEWER SERVICES THAT WERE PROVIDED TO PARTICULAR ACCOUNTS DURING THE 1985-87 PERIOD HAS NOT YET BEEN AUDITED AND VERIFIED BY BOTH THE DISTRICT GOVERNMENT AND THE AFFECTED FEDERAL ESTABLISHMENTS." WE HAVE NOT ATTEMPTED TO VERIFY THE ACCURACY OF THIS STATEMENT. WE MUST POINT OUT, HOWEVER, THAT UNDER THE STATUTE, NECESSARY ADJUSTMENTS FOR FISCAL YEAR 1985 MUST BE PROPOSED TO THE CONGRESS EARLY ENOUGH TO ALLOW THE CONGRESS TO ENACT THEM WITHIN 2 YEARS OF THE INITIAL APPROPRIATION, THAT IS, DURING FISCAL YEAR 1987. LIKEWISE, ADJUSTMENTS FOR FISCAL YEAR 1986 SHOULD BE PROPOSED FOR CONGRESSIONAL ACTION NO LATER THAN FISCAL YEAR 1988.

4. IN HIS LETTER TO THE ACTING CORPORATION COUNSEL OF THE DISTRICT, THE OMB GENERAL COUNSEL STATED WITH RESPECT TO THE PRESIDENT'S FISCAL YEAR 1988 BUDGET PROPOSAL:

"*** REGARDLESS OF THE LANGUAGE OF SECTIONS 1552(B) AND 1612(B) OF THE DISTRICT OF COLUMBIA CODE, CONGRESS IS FREE TO APPROPRIATE MONEY TO THE DISTRICT FOR THESE SERVICES IN ANY MANNER IT DEEMS APPROPRIATE."

WE CERTAINLY AGREE WITH THIS STATEMENT AS FAR AS IT GOES. THE ACTIONS OF AN EARLIER CONGRESS IN ENACTING THE WATER AND SEWER PAYMENT PROVISIONS OF THE D.C. PUBLIC WORKS ACT ARE NOT BINDING ON THE PRESENT CONGRESS. THE CONGRESS IS FREE TO ENACT APPROPRIATIONS WHICH OVERCOME THE EFFECTS OF THE PAYMENT PROCEDURES OR TO AMEND THE PROCEDURES BY ENACTING SUBSTANTIVE LEGISLATION. HOWEVER, THE CONGRESS MAY CHANGE THE EFFECT OF THOSE PAYMENT PROCEDURES ONLY BY FULL LEGISLATIVE ACTION; THAT IS, BY BICAMERAL PASSAGE AND PRESENTMENT TO THE PRESIDENT. MERE STATEMENTS IN COMMITTEE REPORTS INDICATING THE INTENDED USES OF PORTIONS OF LUMP-SUM APPROPRIATIONS WOULD NOT BE SUFFICIENT TO OVERCOME A PROCEDURE ESTABLISHED BY STATUTE. SEE 64 COMP.GEN. 282, 285 (1984).

MOREOVER, IF, AS THE OMB GENERAL COUNSEL ARGUES, THE EXISTING STATUTORY PAYMENT PROVISIONS ARE OBSOLETE, OR DO NOT PROVIDE FOR EFFECTIVE GOVERNMENT, THEN THE PROPER COURSE FOR THE ADMINISTRATION IS TO PROPOSE LEGISLATIVE CHANGES TO THE CONGRESS. THE PROPOSED LEGISLATION SHOULD BE IN THE FORM OF AMENDMENTS TO THE D.C. PUBLIC WORKS ACT, OR SPECIFIC LANGUAGE IN APPROPRIATIONS ACTS MAKING AGENCY APPROPRIATIONS AVAILABLE TO PAY THE DISTRICT FOR WATER AND SEWER SERVICES NOTWITHSTANDING THE PROVISIONS OF THE PUBLIC WORKS ACT.

RATHER THAN PROPOSING LEGISLATIVE CHANGES, HOWEVER, THE ADMINISTRATION HAS ATTEMPTED TO UNILATERALLY CHANGE THE PAYMENT PROCEDURES BY ISSUING AN OMB BULLETIN THAT DIRECTS AGENCIES TO PAY THE DISTRICT DIRECTLY FOR WATER AND SEWER SERVICES. SEE OMB BULLETIN 87-9, FEB. 24, 1987. IN OUR OPINION, UNLESS THE CONGRESS, BY STATUTE, CHANGES THE PAYMENT PROCEDURES ESTABLISHED BY LAW, THE OMB BULLETIN HAS NO EFFECT.

UNDER THE CONSTITUTION, THE CONGRESS HAS EXCLUSIVE LEGISLATIVE AUTHORITY OVER THE DISTRICT OF COLUMBIA. U.S. CONST., ART. I, SEC. 8, CL. 17. DELEGATION OF THAT AUTHORITY, EITHER TO THE DISTRICT OF COLUMBIA GOVERNMENT OR TO AN AGENCY OF THE UNITED STATES GOVERNMENT, CANNOT BE INFERRED. IT MUST BE BASED ON STATUTE. WE ARE AWARE OF NO STATUTE THAT HAS DELEGATED GENERAL LEGISLATIVE AUTHORITY OVER THE DISTRICT TO THE OFFICE OF MANAGEMENT AND BUDGET. IT FOLLOWS THAT OMB'S ATTEMPT TO ALTER THE STATUTORY PAYMENT PROCEDURES FOR WATER AND SEWER SERVICES BY ISSUING AN OMB BULLETIN IS INVALID.

WE TRUST THAT THIS OPINION IS RESPONSIVE TO YOUR REQUEST. AS AGREED BY AMERIGO MICONI OF THE SUBCOMMITTEE STAFF, THIS OPINION WILL BE AVAILABLE TO THE PUBLIC 5 DAYS FROM TODAY.

/1/ TO IMPLEMENT THIS CHANGE, ON FEBRUARY 24, 1987, THE OFFICE OF MANAGEMENT AND BUDGET ISSUED BULLETIN NO. 87-9, WHICH DIRECTS FEDERAL ESTABLISHMENTS THAT OWN PROPERTY IN THE DISTRICT OF COLUMBIA TO MAKE WATER AND SEWER PAYMENTS DIRECTLY TO THE DISTRICT STARTING OCTOBER 1, 1987.

/2/ AUTHORITY FOR THE DISTRICT TO CHARGE AND FOR THE FEDERAL GOVERNMENT TO PAY FOR SANITARY SEWER SERVICES PROVIDED TO THE FEDERAL GOVERNMENT IS CONTAINED IN SECTION 212 OF THE DISTRICT OF COLUMBIA PUBLIC WORKS ACT OF 1954, AS AMENDED, D.C. CODE SEC. 43-1612 (1981). THE LANGUAGE OF THESE AUTHORITIES IS NEARLY IDENTICAL TO THOSE FOR WATER. TO SIMPLIFY THIS OPINION WE WILL DISCUSS ONLY THE AUTHORITIES FOR WATER. THE DISCUSSION, HOWEVER, WILL BE EQUALLY APPLICABLE TO THE AUTHORITIES FOR SEWER SERVICES.

/3/ THE STATUTE ALSO AUTHORIZED THE UNITED STATES PAYMENT FOR SEWER SERVICES, AND ESTABLISHED A SIMILAR METHOD OF ESTIMATE AND APPROPRIATION BASED ON THE MOST RECENT YEAR FOR WHICH VALUE COULD BE DETERMINED. STAT. AT 108.

/4/ THE AMENDMENT REMOVED THE SPECIFICATIONS THAT THE ANNUAL APPROPRIATION WAS TO BE CREDITED TO THE D.C. WATER FUND (AND, IN THE CASE OF SEWERS, THE D.C. SANITARY SEWER WORKS FUND). THOSE FUNDS WERE MERGED INTO THE D.C. GENERAL FUND BY LOCAL LEGISLATION IN 1975. SEE H.R. REP. NO. 247, 95TH CONG., 1ST SESS. 5 (1977).

/5/ AS ABOVE, OUR DISCUSSION APPLIES EQUALLY TO THE AUTHORITY IN SUBSECTION 212(A) OF THE ACT, D.C. CODE 43-1612(A), FOR THE DISTRICT TO BE PAID FOR SANITARY SEWER SERVICES.