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B-118638, NOV 17, 1972

B-118638 Nov 17, 1972
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ESTIMATES THAT $18.8 MILLION WILL BE REQUIRED TO COMPLETE THE REMOVAL AND THE REPAIRING OF THE TRACKAGE. TRANSIT'S OBLIGATION TO COMPLETE THIS JOB IS IN DISPUTE SINCE THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY HAS NEGOTIATED TO PURCHASE D.C. REQUESTS OUR VIEWS ON WHETHER IT IS IN THE INTEREST OF THE DISTRICT OF COLUMBIA GOVERNMENT TO ACCEPT THE SUM OF $2.3 MILLION (OR ANY LARGER SUM WHICH MAY BE NEGOTIATED) FROM D.C. SINCE TRANSIT'S OFFER WILL EXPIRE ON NOVEMBER 20. THE FACTS AS SET FORTH IN YOUR LETTER ARE ESSENTIALLY THAT NEGOTIATIONS ARE NOW IN PROCESS BETWEEN THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY (WMATA) AND TRANSIT IN CONNECTION WITH WMATA'S PROPOSED PURCHASE OF CERTAIN OF TRANSIT'S ASSETS PURSUANT TO PUBLIC LAW 92-517.

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B-118638, NOV 17, 1972

LIABILITY FOR REMOVING STREETCAR TRACKAGE - PROPOSED TAKEOVER OF D.C. TRANSIT SYSTEM CONCERNING THE D.C. GOVERNMENT'S ACCEPTANCE OF $2.3 MILLION FROM THE D.C. TRANSIT SYSTEM, INC. AS A SETTLEMENT FOR THE COST OF REMOVING AND REPAIRING THE REMAINING STREETCAR TRACKAGE IN THE DISTRICT OF COLUMBIA. PUBLIC LAW 84-757, 70 STAT. 598, WHICH GRANTED A FRANCHISE TO THE CAPITAL TRANSIT COMPANY'S SUCCESSOR, THE D.C. TRANSIT SYSTEM, INC. PROVIDES FOR THE REMOVAL, REGRADING, AND REPAIRING OF TRACK AREAS TO BE COMPLETED WITHIN 7 YEARS FROM THE ENACTMENT OF THE LAW (1956). HOWEVER, UPON A SHOW OF GOOD CAUSE THIS SEVEN YEAR TIME LIMIT MAY BE EXTENDED BY THE COMMISSIONERS. SEC. 402 OF REORGANIZATION PLAN NO. 3 TRANSFERS AUTHORITY FROM THE BOARD OF COMMISSIONERS TO THE DISTRICT OF COLUMBIA CITY COUNCIL. THE COMP. GEN. ESTIMATES THAT $18.8 MILLION WILL BE REQUIRED TO COMPLETE THE REMOVAL AND THE REPAIRING OF THE TRACKAGE. HOWEVER, TRANSIT'S OBLIGATION TO COMPLETE THIS JOB IS IN DISPUTE SINCE THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY HAS NEGOTIATED TO PURCHASE D.C. TRANSIT. IN THE LIKELIHOOD OF WMATA'S TAKE OVER OF TRANSIT'S FRANCHISE THE 5TH AMENDMENT, WHICH REQUIRES JUST COMPENSATION FOR THE TAKING OF PROPERTY BY THE FEDERAL GOVERNMENT, WOULD NECESSITATE WMATA TO COMPENSATE TRANSIT FOR THE LOSS OF ITS RIGHT TO COLLECT FARES TO PAY FOR TRACK REMOVAL AND REPAIRING COSTS. SINCE THE BURDEN OF THIS COST WOULD ULTIMATELY SHIFT BACK TO THE FARE PAYING CUSTOMER THE COMP. GEN. ADVISES THAT A HIGHER SETTLEMENT FIGURE BE NEGOTIATED.

TO MR. JOHN A. NEVIUS:

YOUR LETTER OF NOVEMBER 13, 1972, WITH ENCLOSURES, REQUESTS OUR VIEWS ON WHETHER IT IS IN THE INTEREST OF THE DISTRICT OF COLUMBIA GOVERNMENT TO ACCEPT THE SUM OF $2.3 MILLION (OR ANY LARGER SUM WHICH MAY BE NEGOTIATED) FROM D.C. TRANSIT SYSTEM, INC. (TRANSIT), IN SETTLEMENT OF THAT CORPORATION'S ALLEGED LIABILITY TO PAY THE DISTRICT OF COLUMBIA THE COST OF REMOVING THE REMAINING STREETCAR TRACKAGE IN THE DISTRICT AND FOR ASSOCIATE REPAVING. SINCE TRANSIT'S OFFER WILL EXPIRE ON NOVEMBER 20, 1972, YOU REQUEST OUR VIEWS BY NOVEMBER 17, 1972.

THE FACTS AS SET FORTH IN YOUR LETTER ARE ESSENTIALLY THAT NEGOTIATIONS ARE NOW IN PROCESS BETWEEN THE WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY (WMATA) AND TRANSIT IN CONNECTION WITH WMATA'S PROPOSED PURCHASE OF CERTAIN OF TRANSIT'S ASSETS PURSUANT TO PUBLIC LAW 92-517, OCTOBER 21, 1972. THE COMPANY HAS OFFERED TO PAY WMATA $2.3 MILLION TO ASSUME UNCONDITIONALLY AND FULLY ANY OBLIGATION THE COMPANY MAY HAVE TO REMOVE TRACKAGE AND REPAVE ROADWAYS UNDER D.C. CODE 7-604A AND SECTION 7 OF ITS FRANCHISE ACT, 70 STAT. 598, WHICH SURVIVES CANCELLATION OF THE COMPANY'S FRANCHISE TO OPERATE A SYSTEM OF MASS TRANSIT UNDER SECTION 102(B) OF PUBLIC LAW 92-517. YOU STATE THAT WMATA HAS INFORMALLY REQUESTED THE D.C. GOVERNMENT TO ACCEPT THE SAID SUM FROM IT IN FULL SATISFACTION OF THE OBLIGATION WMATA WOULD THUS ASSUME.

SINCE SECTION 501 OF PUBLIC LAW 92-517 VESTS AUDIT AND REVIEW AUTHORITY IN THE COMPTROLLER GENERAL OVER THE ACQUISITIONS OF PRIVATELY OWNED TRANSIT ASSETS AS CONTEMPLATED BY THAT ACT AND SINCE THE LEGISLATIVE HISTORY - IN PARTICULAR, HOUSE REPORT 92-1502, DATED OCTOBER 3, 1972 - STATES THAT THE AUDIT AND REVIEW FUNCTION WAS PROVIDED, AT LEAST IN PART, TO ASSURE THAT THE PUBLIC RECEIVES THE BENEFIT OF ANY CREDITS OR CONSIDERATIONS LEGALLY DUE IT, YOU HAVE REQUESTED OUR VIEWS ON WHETHER TRANSIT'S SETTLEMENT OFFER SHOULD BE ACCEPTED.

THE QUESTION OF LIABILITY FOR TRACK REMOVAL IN THE DISTRICT IS QUITE COMPLEX. THOSE TERMS OF TRANSIT'S FRANCHISE WHICH ARE HERE APPLICABLE WERE INITIALLY ESTABLISHED BY PUBLIC LAW 77-148, JULY 1, 1941, 55 STAT. 533, D.C. CODE 7-604A, WITH RESPECT TO ITS PREDECESSOR, THE CAPITAL TRANSIT COMPANY. THAT PROVISION PROVIDES:

"SEC 7-604A. REMOVAL OF STREET RAILWAY TRACKS - PROVISION FOR PAVING

"ON AND AFTER JULY 1, 1941, WHEN ANY CAPITAL TRANSIT COMPANY STREET RAILWAY OPERATION SHALL HAVE BEEN ORDERED ABANDONED BY THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA AND THE COMMISSIONERS OF THE DISTRICT OF COLUMBIA SHALL HAVE ORDERED THE REMOVAL OF ABANDONED TRACKS, THE CAPITAL TRANSIT COMPANY SHALL PAY THE ENTIRE COST OF REMOVING SUCH ABANDONED TRACKS AND REGRADING THE TRACK AREA, AND, IF THE STREET OR BRIDGE IN WHICH THE SAID TRACKS HAVE BEEN ORDERED ABANDONED IS NOT BEING PAVED, THE CAPITAL TRANSIT COMPANY SHALL PAY THE ENTIRE COST OF PAVING THE ABANDONED TRACK AREAS, WHICH COST, HOWEVER, SHALL NOT EXCEED THE COST OF REPAVING SUCH ABANDONED TRACK AREAS WITH THE TYPE, CHARACTER, AND THICKNESS OF THE PAVING OF THE ADJACENT ROADWAY LEFT IN PLACE, AND, IF THE ROADWAY OF THE STREET OR BRIDGE IS BEING PAVED AT THE TIME OF REMOVAL OF SAID ABANDONED TRACKS, THE CAPITAL TRANSIT COMPANY SHALL PAY ONE-HALF OF THE ACTUAL COST OF PAVING THE ABANDONED TRACK AREAS, IRRESPECTIVE OF WHETHER THE PAVING IS OF THE TYPE, CHARACTER, AND THICKNESS AS THAT EXISTING AT THE TIME OF SAID REMOVAL. THE COMMISSIONERS OF THE DISTRICT ARE AUTHORIZED TO SETTLE IN CONFORMITY WITH THE PRINCIPLES HEREIN SET FORTH, ANY CLAIMS IT NOW HAS, OR IN THE FUTURE MAY HAVE, FOR THE PAVING OF ABANDONED TRACK AREAS, UPON SUCH TERMS AND CONDITIONS AS TO TIME OF PAYMENT OR PAYMENTS AS THE COMMISSIONERS MAY DETERMINE. JULY 1, 1941, CH. 271, 55 STAT. 533."

THAT PROVISION WAS AMENDED BY SECTION 7 OF PUBLIC LAW 84-757, JULY 24, 1956, 70 STAT. 598, WHICH GRANTED A FRANCHISE TO CAPITAL TRANSIT'S SUCCESSOR, D.C. TRANSIT SYSTEM, INC. (REFERRED TO IN THAT LAW AS THE CORPORATION) AND WHICH PROVIDED:

"SEC. 7. THE CORPORATION SHALL BE OBLIGATED TO INITIATE AND CARRY OUT A PLAN OF GRADUAL CONVERSION OF ITS STREET RAILWAY OPERATIONS TO BUS OPERATIONS WITHIN SEVEN YEARS FROM THE DATE OF THE ENACTMENT OF THIS ACT UPON TERMS AND CONDITIONS PRESCRIBED BY THE COMMISSION, WITH SUCH REGARD AS IS REASONABLY POSSIBLE WHEN APPROPRIATE TO THE HIGHWAY DEVELOPMENT PLANS OF THE DISTRICT OF COLUMBIA AND THE ECONOMIES IMPLICIT IN COORDINATING THE CORPORATION'S TRACK REMOVAL PROGRAM WITH SUCH PLANS: EXCEPT THAT UPON GOOD AND SUFFICIENT CAUSE SHOWN THE COMMISSION MAY IN ITS DISCRETION EXTEND BEYOND SEVEN YEARS THE PERIOD FOR CARRYING OUT SUCH CONVERSION. ALL OF THE PROVISIONS OF THE FULL PARAGRAPH OF THE DISTRICT OF COLUMBIA APPROPRIATION ACT, 1942 (55 STAT. 499, 533), UNDER THE TITLE 'HIGHWAY FUND, GASOLINE TAX AND MOTOR VEHICLE FEES', SUBTITLE 'STREET IMPROVEMENTS', RELATING TO THE REMOVAL OF ABANDONED TRACKS, REGRADING OF TRACK AREAS, AND PAVING ABANDONED TRACK AREAS, SHALL BE APPLICABLE TO THE CORPORATION."

PARAGRAPH 170 OF SECTION 402 OF REORGANIZATION PLAN NO. 3 OF 1967, PROVIDES:

"SEC. 402. TRANSFER OF FUNCTIONS TO COUNCIL. THE FOLLOWING REGULATORY AND OTHER FUNCTIONS NOW VESTED IN THE BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA ARE HEREBY TRANSFERRED TO THE COUNCIL (SUBJECT TO THE PROVISIONS OF SECTION 406 OF THIS REORGANIZATION PLAN):

"(170) ORDERING THE REMOVAL OF ABANDONED STREET RAILWAY TRACKS, SETTLING CLAIMS AGAINST D.C. TRANSIT SYSTEM, INC., FOR THE PAVING OF ABANDONING TRACK AREAS, AND DETERMINING TERMS AND CONDITIONS AS TO TIME OF PAYMENT OR PAYMENTS UNDER D.C. CODE, SEC. 7-604A."

THE CITY COUNCIL UNDER THE FOREGOING PROVISION OF LAW HAS THE FUNCTION OF ORDERING THE REMOVAL OF ABANDONED STREET RAILWAY TRACKS, SETTLING CLAIMS AGAINST D.C. TRANSIT SYSTEM, INC., FOR THE PAVING OF ABANDONED TRACK AREAS, AND DETERMINING TERMS AND CONDITIONS AS TO TIME OF PAYMENT OR PAYMENTS UNDER D.C. CODE, SEC. 7-604A.

WHILE REMOVAL AND REPAVING HAVE BEEN GOING ON FOR YEARS, THE JOB IS FAR FROM COMPLETE. ACCORDING TO THE FIGURES FURNISHED US, IT IS ESTIMATED THAT ABOUT $18.8 MILLION WOULD BE REQUIRED TO REMOVE ALL OF THE TRACK AND REPAVE THE STREETS. UNDER SECTION 102(B) OF THE RECENTLY PASSED BUS ACQUISITION LAW, PUBLIC LAW 92-517, TRANSIT'S AUTHORITY TO OPERATE A SYSTEM OF MASS TRANSPORTATION OF PASSENGERS FOR HIRE WILL BE CANCELED EFFECTIVE UPON THE DATE IMMEDIATELY PRECEDING THE DATE ON WHICH WMATA ACQUIRES ITS TRANSIT FACILITIES.

THE ISSUE OF WHETHER TRANSIT'S OBLIGATION TO REMOVE THE REMAINING TRACKAGE WILL CONTINUE AFTER TERMINATION OF ITS FRANCHISE TO OPERATE A MASS TRANSIT OPERATION IS A COMPLEX PROBLEM INVOLVING THE INTERRELATIONSHIPS AMONG LEGAL QUESTIONS, FINANCIAL ISSUES AND A LONG ADMINISTRATIVE HISTORY. ONE OF THE ARGUMENTS AGAINST CONTINUATION OF THE OBLIGATION IS THAT THE OBLIGATION RUNS WITH AND IS CONTINGENT UPON THE CONTINUATION OF THE FRANCHISE AND THAT WHEN THE FRANCHISE IS CANCELED, THE OBLIGATION TO REMOVE STREETCAR TRACKAGE IS CANCELED THEREWITH.

IN THIS REGARD WE SHOULD POINT OUT THAT TRANSIT'S OBLIGATION TO REMOVE TRACKAGE IS LIMITED TO THOSE PORTIONS OF THE TRACKS DECLARED ABANDONED AND ORDERED REMOVED BY THE CITY COUNCIL. PRESUMABLY THE REASON THE CITY COUNCIL HAS NOT ORDERED MORE TRACKS REMOVED IS THAT THE COMMISSIONERS HAD TAKEN THE POSITION THAT SINCE SUCH REMOVAL BENEFITS EVERYONE WHO USES THE STREETS, THE FARE PAYERS SHOULD NOT HAVE TO PAY FOR TRACK REMOVAL BUT RATHER THE EXPENSE SHOULD BE BORNE BY ALL THE DISTRICT'S TAXPAYERS AND THAT ORDERING TRANSIT TO REMOVE THE TRACKS WOULD HAVE RESULTED IN THE COSTS BEING BORNE SOLELY BY THE FARE PAYERS THROUGH RATE INCREASES. THE ISSUE OVER WHICH THERE IS SERIOUS DISPUTE IS WHETHER THE CITY COUNCIL COULD ISSUE SUCH AN ORDER TO TRANSIT EITHER NOW (I.E., IMMEDIATELY BEFORE) OR AFTER ITS FRANCHISE IS TERMINATED. WE MIGHT POINT OUT THAT THE REASON IT IS QUESTIONABLE WHETHER THE CITY COUNCIL COULD ORDER TRANSIT TO PAY FOR TRACK REMOVAL PRIOR TO THE CANCELLATION OF ITS FRANCHISE (DUE APPROXIMATELY JANUARY 1, 1973) LIES IN THE PROVISIONS OF SECTION 7 OF PUBLIC LAW 84-757, QUOTED ABOVE IN FULL, THAT ANY ORDER FOR TRACK REMOVAL WOULD HAVE TO GIVE "SUCH REGARD AS IS REASONABLY POSSIBLE WHEN APPROPRIATE TO THE HIGHWAY DEVELOPMENT PLANS OF THE DISTRICT OF COLUMBIA AND THE ECONOMIES IMPLICIT IN COORDINATING THE CORPORATION'S TRACK REMOVAL PROGRAM WITH SUCH PLANS."

MOREOVER, EVEN IF THE OBLIGATION TO PAY FOR TRACK REMOVAL IS DETERMINED TO SURVIVE THE CANCELLATION OF THE FRANCHISE TO OPERATE A MASS TRANSPORTATION SYSTEM, WE UNDERSTAND THAT SOME DISTRICT OFFICIALS FEEL THAT THE COMPANY COULD NOT BE FORCED TO PAY FOR IT. BOTH THE PUBLIC UTILITIES COMMISSION (NOW THE WASHINGTON METROPOLITAN AREA TRANSIT COMMISSION) AND THE U.S. COURT OF APPEALS IN BEBCHICK V. PUBLIC UTILITIES COMMISSION, 318 F2D 187 (1963), CERT. DENIED 373 U.S. 913 (1963), HAVE RULED THAT TRANSIT IS ENTITLED TO COLLECT VIA THE FARE BOX THE COSTS IT INCURS FOR TRACK REMOVAL AND REPAVING. THE PRINCIPLE OF RIDER PAYMENT OF THESE COSTS WAS LATER REAFFIRMED IN D.C. TRANSIT V. WASHINGTON METROPOLITAN AREA TRANSIT COMMISSION, 350 F2D 753 (1965). TRANSIT WILL, OF COURSE, LOSE ITS FARE INCOME UPON THE CANCELLATION OF ITS FRANCHISE AND BASED ON THE BEBCHICK CASE, SUPRA, THERE IS SOME DOUBT THAT IT CAN BE FORCED TO PAY FOR TRACK REMOVAL AND STREET REPAVING FROM OTHER INCOME OR FROM ITS CAPITAL.

WE MIGHT POINT OUT THAT TRANSIT HAD ORIGINALLY ESTABLISHED A RESERVE FOR PAYMENT OF THESE EXPENSES. HOWEVER, THE RESERVE WAS MOUNTING FASTER THAN EXPENDITURES AND CONTAINED OVER $6 MILLION. THE PUC AND THE COURT IN THE BEBCHICK CASE, SUPRA, TERMINATED FUTURE ACCUMULATION OF THE RESERVE AND DETERMINED THAT TRANSIT COULD NOT CHARGE MORE THAN ACTUAL EXPENDITURES AS AN EXPENSE TO ITS FARE PAYING CUSTOMERS. SINCE TRANSIT WAS PROHIBITED FROM RESERVING THE NECESSARY MONIES, IT IS HIGHLY QUESTIONABLE WHETHER A COURT WOULD NOW FORCE TRANSIT TO PAY OFF THE ENTIRE ESTIMATED COST.

ALSO, EVEN IF IT IS HELD THAT TRANSIT WOULD HAVE TO PAY EVEN THOUGH ITS FRANCHISE WAS CANCELED, WE UNDERSTAND THAT SOME DISTRICT OFFICIALS FEEL THAT THE FIFTH AMENDMENT OF THE UNITED STATES CONSTITUTION, WHICH PROHIBITS THE TAKING OF PROPERTY BY THE FEDERAL GOVERNMENT WITHOUT JUST COMPENSATION, WOULD REQUIRE WMATA TO PAY TRANSIT, AS PART OF THE OVERALL PURCHASE PRICE, AN ADDITIONAL AMOUNT TO COMPENSATE IT FOR THE LOSS OF ITS RIGHT TO COLLECT FARES TO PAY FOR TRACK REMOVAL AND REPAVING COSTS. FURTHER, IF THE AFOREMENTIONED VIEW IS CORRECT, THE BURDEN OF PAYMENT FOR TRACK REMOVAL WOULD SHIFT FROM TRANSIT TO WMATA AND, ULTIMATELY, BACK TO THE FARE PAYING CUSTOMERS. IN THIS REGARD, SECTION 2(B) OF PUBLIC LAW 84- 757 PROVIDES THAT IN THE EVENT OF THE CANCELLATION OF TRANSIT'S FRANCHISE BY THE CONGRESS AFTER SEVEN YEARS FROM THE EFFECTIVE DATE OF THE FRANCHISE FOR ANY REASON OTHER THAN NON USE, TRANSIT WAIVES ITS CLAIM FOR DAMAGES FOR LOSS OF FRANCHISE.

THE ISSUES HERE INVOLVED ARE TOO COMPLEX WITHIN THE SHORT TIME IN WHICH YOU HAVE REQUESTED OUR VIEWS FOR US TO RENDER AN AUTHORITATIVE OPINION. FURTHER, EVEN IF WE WERE TO EXPRESS AN OPINION, NEITHER TRANSIT NOR THE DISTRICT WOULD BE BOUND THEREBY AND IT APPEARS TO US THAT IF AN AGREEMENT IS NOT REACHED BETWEEN TRANSIT AND THE DISTRICT, THE COURTS WILL BE THE FINAL ARBITERS OF TRANSIT'S OBLIGATIONS, IF ANY. HOWEVER, IT IS CLEAR TO US FROM THE LEGAL ISSUES DISCUSSED ABOVE AS WELL AS OTHER LEGAL, POLICY AND FINANCIAL CONSIDERATIONS NOT DISCUSSED HEREIN, THAT THE QUESTION OF TRANSIT'S OBLIGATION TO REMOVE TRACKAGE AND REPAVE STREETS AFTER ITS FRANCHISE IS TERMINATED IS NOT SUBJECT TO EASY RESOLUTION AND INVOLVES MANY LITIGATIVE PROBABILITIES.

WITH RESPECT TO THE SPECIFIC OFFER IN COMPROMISE NOW BEFORE THE COUNCIL, IT IS NOT CLEAR TO US EXACTLY HOW THE FIGURE OFFERED BY TRANSIT ($2.3 MILLION) WAS DETERMINED. WE NOTE, THOUGH, THAT THIS FIGURE DOES APPROXIMATE THE $2.1 MILLION COSTS OF TRACK REMOVAL AND STREET REPAVING WHICH THE D.C. HIGHWAY DEPARTMENT HAD PROJECTED THROUGH 1980. AFTER 1980, THERE WILL BE BETWEEN 75 AND 80 MILES OF TRACK, SOME OR ALL OF WHICH MAY HAVE TO BE REMOVED. IN ADDITION THERETO, WE UNDERSTAND THAT THERE IS AN ENGINEERING ESTIMATE OF POSSIBLE REPAIR COSTS TO PREVIOUSLY COVERED TRACK THROUGH 1930 IN THE AMOUNT OF $2.07 MILLION BASED UPON 1968 COSTS.

IT IS CLEAR TO US THAT THE $2.3 MILLION OFFER WILL NOT COMPLETELY COMPENSATE THE DISTRICT FOR ITS CLAIM AGAINST TRANSIT FOR ALL POSSIBLE FUTURE COSTS WHICH MAY BE INCURRED IN TRACK REMOVAL AND STREET REPAVING. ACCORDINGLY, IT SEEMS TO US THAT THE CITY COUNCIL SHOULD ATTEMPT TO NEGOTIATE A HIGHER SETTLEMENT CONTAINING MORE ADEQUATE COMPENSATION FOR COSTS WHICH THE CITY ANTICIPATES WILL BE INCURRED.

IN VIEW OF THE SPECULATIVE NATURE OF THE RECOVERY, IF ANY, WHICH THE DISTRICT MIGHT RECEIVE FROM ADJUDICATION OF THIS ISSUE, WE COULD NOT DISAGREE WITH THE CITY COUNCIL IF IT WERE TO DETERMINE THAT IT WOULD BE IN THE BEST INTEREST OF THE DISTRICT TO COMPROMISE ITS CLAIM AGAINST TRANSIT FOR STREETCAR TRACK REMOVAL AND STREET REPAVING FOR THE HIGHEST AMOUNT IN EXCESS OF $2.3 MILLION WHICH CAN BE OBTAINED THROUGH NEGOTIATION. COURSE, THE FINAL AMOUNT, IF ANY, WHICH SHOULD BE ACCEPTED IN COMPROMISE OF THE DISTRICT'S CLAIM IS, IN THE FINAL ANALYSIS, FOR DETERMINATION BY THE CITY COUNCIL UNDER THE PROVISIONS OF SECTION 402(170) OF REORGANIZATION PLAN NO. 3 OF 1967. WE TRUST THE ABOVE WILL BE HELPFUL TO THE COUNCIL IN ITS CONSIDERATION OF TRANSIT'S OFFER.

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