B-145640, OCTOBER 18, 1961, 41 COMP. GEN. 255

B-145640: Oct 18, 1961

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HIGHWAYS - CONSTRUCTION - RELOCATION ROADS BUILT BY CORPS OF ENGINEERS - BETTERMENTS ROAD BETTERMENTS WHICH ARE REQUESTED BY A STATE TO BE INCORPORATED IN RELOCATED HIGHWAYS CONSTRUCTED BY THE CORPS OF ENGINEERS UNDER SECTION 207 (B) OF THE FLOOD CONTROL ACT OF 1960. - IS PROVIDED BY THE STATE IN ADVANCE OF CONSTRUCTION. THE ASSISTANT SECRETARY OF THE ARMY ( FM) SUBMITTED FOR OUR CONSIDERATION AN ADMINISTRATIVE REPORT PREPARED BY THE OKLAHOMA STATE HIGHWAY DEPARTMENT FOR RELIEF FROM THE SCHEDULE OF ADVANCE PAYMENTS THE STATE IS OBLIGATED TO MAKE TO THE FEDERAL GOVERNMENT ON ACCOUNT OF SO-CALLED "BETTERMENTS" TO BE INCORPORATED AT THE STATE'S REQUEST IN HIGHWAYS BEING RELOCATED AT CORPS OF ENGINEERS WATER RESOURCE PROJECTS.

B-145640, OCTOBER 18, 1961, 41 COMP. GEN. 255

HIGHWAYS - CONSTRUCTION - RELOCATION ROADS BUILT BY CORPS OF ENGINEERS - BETTERMENTS ROAD BETTERMENTS WHICH ARE REQUESTED BY A STATE TO BE INCORPORATED IN RELOCATED HIGHWAYS CONSTRUCTED BY THE CORPS OF ENGINEERS UNDER SECTION 207 (B) OF THE FLOOD CONTROL ACT OF 1960, 33 U.S.C. 701R-1 (B), WHICH MERELY REQUIRES THE CORPS TO REPLACE THE HIGHWAYS TO EXISTING STANDARDS RATHER THAN TO SUPERIOR STANDARDS TO MEET FUTURE NEEDS MUST BE REGARDED AS THE SOLE FINANCIAL RESPONSIBILITY OF THE STATE AND UNLESS THE COST OF THE ADDITIONAL WORK--- WHICH COST MAY NOT BE REGARDED AS A COST INCIDENT TO THE FLOOD CONTROL PROJECT--- IS PROVIDED BY THE STATE IN ADVANCE OF CONSTRUCTION, ANY ATTEMPT BY THE CORPS OF ENGINEERS TO UNDERTAKE THE WORK WITH FEDERAL FUNDS WOULD BE CONTRARY TO THE PROHIBITORY STATUTES SUCH AS SECTIONS 3733, 3678 AND 3679, REVISED STATUTES, 41 U.S.C. 12; 31 ID. 628; ID. 665, WHICH PRECLUDE CONTRACTS FOR PUBLIC IMPROVEMENTS IN AMOUNTS LARGER THAN THE AMOUNT APPROPRIATED, REQUIRE APPROPRIATIONS TO BE APPLIED SOLELY TO OBJECTS FOR WHICH MADE, AND PROHIBIT EXPENDITURE OR CONTRACT OBLIGATIONS IN EXCESS OF APPROPRIATED FUNDS.

TO THE SECRETARY OF THE ARMY, OCTOBER 18, 1961:

BY LETTER OF JULY 29, 1961, THE ASSISTANT SECRETARY OF THE ARMY ( FM) SUBMITTED FOR OUR CONSIDERATION AN ADMINISTRATIVE REPORT PREPARED BY THE OKLAHOMA STATE HIGHWAY DEPARTMENT FOR RELIEF FROM THE SCHEDULE OF ADVANCE PAYMENTS THE STATE IS OBLIGATED TO MAKE TO THE FEDERAL GOVERNMENT ON ACCOUNT OF SO-CALLED "BETTERMENTS" TO BE INCORPORATED AT THE STATE'S REQUEST IN HIGHWAYS BEING RELOCATED AT CORPS OF ENGINEERS WATER RESOURCE PROJECTS. FROM INFORMATION CONTAINED IN THE ADMINISTRATIVE REPORT AND AN ATTACHED BROCHURE PREPARED BY THE OKLAHOMA STATE HIGHWAY DEPARTMENT AND ENTITLED " ECONOMIC IMPACT OF BETTERMENT COSTS ON OKLAHOMA HIGHWAYS," THE FACTS IN THE MATTER MAY BE SUMMARIZED AS FOLLOWS:

THE CORPS OF ENGINEERS, ACTING FOR THE GOVERNMENT UNDER AUTHORITY OF VARIOUS PUBLIC LAWS, HAS UNDERTAKEN THE DEVELOPMENT OF FLOOD CONTROL PROJECTS KNOWN AS EUFAULA DAM AND RESERVOIR, KEYSTONE DAM AND RESERVOIR, AND OOLOGAH DAM AND RESERVOIR IN OKLAHOMA. IT IS NECESSARY IN THE CONSTRUCTION OF THESE PROJECTS THAT THE GOVERNMENT RELOCATE OR OTHERWISE ALTER APPROXIMATELY 130 MILES OF OKLAHOMA HIGHWAYS WHICH ARE SITUATED IN AREAS TO BE INUNDATED BY THE RESERVOIRS. THESE RELOCATIONS OR ALTERATIONS ARE ACCOMPLISHED UNDER RELOCATION CONTRACTS BETWEEN THE CORPS OF ENGINEERS, REPRESENTING THE GOVERNMENT, AND THE OKLAHOMA STATE HIGHWAY DEPARTMENT. EXISTING RELOCATION CONTRACTS AT THESE PROJECTS, PURSUANT TO REQUESTS OF THE STATE, PROVIDE--- AND NEGOTIATIONS FOR OTHER HIGHWAY RELOCATIONS PENDING AT THESE PROJECTS ALSO CONTEMPLATE--- THAT THE ROADS BE CONSTRUCTED TO INCLUDE BETTERMENTS DESIGNED TO MEET STANDARDS FOR ANTICIPATED TRAFFIC ON THE RESPECTIVE HIGHWAYS. THIS ELECTION BY THE STATE REQUIRES SUBSTANTIAL CONTRIBUTION OF STATE FUNDS TO COVER THE COST OF SUCH BETTERMENTS INASMUCH AS THE LEGAL OBLIGATION OF THE CORPS OF ENGINEERS IS TO PROVIDE RELOCATED HIGHWAYS DESIGNED ONLY TO EXISTING STATE STANDARDS FOR TRAFFIC VOLUME AT THE TIME OF TAKING.

THE OKLAHOMA STATE HIGHWAY DEPARTMENT REPORTED ON THE ECONOMIC IMPACT OF BETTERMENT COSTS ON OKLAHOMA HIGHWAYS SHOWS THE TOTAL BETTERMENT COST TO BE BORNE BY THE STATE AT ABOUT $15,000,000 WHICH MUST BE PAID TO THE CORPS OF ENGINEERS WITHIN THE NEXT 3 YEARS UNDER RELOCATION CONTRACTS PRIOR TO CONSTRUCTION SCHEDULED THEREUNDER. THE REPORT DEMONSTRATES THAT ABOUT $7,500,000 OF STATE FUNDS WILL BE INCLUDED IN THE ABOVE SUM ON THE ASSUMPTION THAT MATCHING FEDERAL AIR PRIMARY HIGHWAY FUNDS WILL BE OBTAINED FROM THE FEDERAL BUREAU OF PUBLIC ROADS ON ALL RELOCATION CONTRACTS. THE STATE HIGHWAY DIRECTOR POINTS OUT THAT SINCE THE BUREAU OF PUBLIC ROADS WILL PARTICIPATE UNDER ITS PRIMARY ROAD PROGRAM, FOR WHICH THE ROADS IN QUESTION QUALIFY, ONLY WHEN THE ROADS INVOLVED ARE DESIGNED TO ACCOMMODATE EXPECTED FUTURE TRAFFIC--- SEE THE PROVISIONS OF 23 U.S.C. 103 (B), 109 (A) AND 120 (A/ -- THE STATE IS CAUGHT IN THE DILEMMA OF EITHER REDUCING STANDARDS AND PAYING THE ENTIRE COST OF THE BETTERMENTS IT DESIRES OR KEEPING STANDARDS AT PROPER LEVELS IN ORDER TO SHARE THE COST UNDER THE BUREAU OF ROADS PROGRAM. THE DIRECTOR ADDS THAT WHILE A THIRD POSSIBILITY IS TO NOT BUILD THE ROADS NOW BUT TO EXPEND PUBLIC FUNDS, BOTH FEDERAL AND STATE, TO BUILD THEM AT A FUTURE DATE, IT WOULD COST THE PUBLIC MORE MONEY OVERALL TO BUILD IN THE FUTURE EVEN THOUGH THE CORPS OF ENGINEERS MONIES EXPENDED WOULD ULTIMATELY BE THE SAME. FINALLY, IT IS NOTED THAT THE RAPID SPENDING IN CONCENTRATED AREAS OF TOO GREAT A PORTION OF THE PRIMARY FUNDS ALLOCATED BY THE BUREAU OF PUBLIC ROADS WILL STARVE THE PRIMARY SYSTEM OF ROADS IN OTHER PARTS OF THE STATE.

IN ADDITION TO THE ABOVE BETTERMENT COSTS, THE STATE ASSERTS THAT AS OF JULY 1, 1961, IT HAS PAID THE SUM OF APPROXIMATELY $9,069,000 IN BETTERMENTS AT THE 3 RESERVOIRS AND THAT THE IMPACT OF THE REQUIRED EXPENDITURES OF SUCH LARGE SUMS DUE TO RESERVOIR CONSTRUCTION WITHIN THE NEXT 3 YEARS MEANS THAT THE STATE MUST VIRTUALLY ABANDON ITS PRIMARY HIGHWAY PROGRAM AND SERIOUSLY CURTAIL MAINTENANCE ACTIVITIES.

IN AN EFFORT TO ALLEVIATE THE ADVERSE ECONOMIC IMPACT THE STATE ADVANCES ALTERNATE SOLUTIONS. UNDER ALTERNATE A, THE STATE'S PAYMENTS OF APPROXIMATELY $7,500,000 WOULD BE PRORATED OVER A PERIOD OF SIX YEARS COMMENCING WITH FISCAL YEAR 1962, AND MATCHING FEDERAL-AID HIGHWAY FUNDS WOULD BE APPLIED TO THE RELOCATIONS AS RECEIVED. IN ALTERNATE B, THE TOTAL PAYMENT OF APPROXIMATELY $15,000,000 WOULD BE PRORATED AND PAID BY THE STATE OVER A PERIOD OF 12 YEARS, AND THE FEDERAL-AID MATCHING FUNDS PAID TO THE STATE AS DUE WOULD BE RELEASED AND EXPENDED BY THE STATE ON OTHER PROGRAMMING. UNDER BOTH PLANS AS PROPOSED, IT IS CONTEMPLATED THE " FEDERAL GOVERNMENT ACT AS BANKER FOR THE STATE OF OKLAHOMA.' WATER RESOURCE PROJECT FUNDS WOULD THUS BE INITIALLY CHARGED WITH THE COST OF ROAD BETTERMENTS DESIRED SOLELY BY THE STATE AND NOT OTHERWISE A PROJECT COST. SINCE CERTAIN RELOCATION CONTRACTS ARE IN EXISTENCE AND UNDER THESE CONTRACTS THE TERMS OF THE CONTRIBUTION TO BE MADE BY THE STATE FOR BETTERMENT COSTS ARE FIXED, EITHER ALTERNATE A OR B WOULD REQUIRE AN AMENDMENT TO THESE CONTRACTS IN ORDER TO INCREASE THE OBLIGATION AGAINST PROJECT FUNDS AND TO SCHEDULE PAYMENT OF BETTERMENT COSTS. THE STATE HIGHWAY DIRECTOR HAS ADVISED THAT HE SEES NO REASON WHY SUCH CONTRACTS SHOULD NOT BE AMENDED IF THE STATE IS UNABLE TO MAKE THE PAYMENT, AND HE STATES FURTHER THAT THE RULE AGAINST MODIFICATION OF A FEDERAL CONTRACT TO THE DETRIMENT OF THE FEDERAL GOVERNMENT IS NOT APPLICABLE.

THE CHIEF OF ENGINEERS HAS TAKEN THE POSITION THAT COSTS ASSOCIATED SOLELY WITH BETTERMENTS OR ADDITIONAL WORK DESIRED BY THE STATE TO PROVIDE NEW TRAFFIC ARTERIES OF HIGHER STANDARDS THAN THOSE FOR WHICH THE CORPS OF ENGINEERS IS ACCOUNTABLE ARE FOR ASSUMPTION BY THE STATE, AND THE FINANCING OF SUCH COSTS IS A STATE MATTER FOR WHICH THE FEDERAL GOVERNMENT HAS NO RESPONSIBILITY. FURTHER, THE STATE MUST CONTINUE ADVANCING MONIES TO COVER BETTERMENT COSTS AS FEDERAL APPROPRIATIONS CANNOT INITIALLY BE CHARTED FOR SUCH NON-FEDERAL PURPOSES IN VIEW OF VARIOUS PROHIBITORY STATUTES SUCH AS SECTIONS 3733, 3678, AND 3679, AS AMENDED, REVISED STATUTES (41 U.S.C. 12; 31 ID. 628; ID. 665), EVEN THOUGH EVENTUAL REFUNDS ARE CONTEMPLATED. THESE STATUTES PROVIDE AS FOLLOWS:

41 U.S.C. 12---

NO CONTRACT SHALL BE ENTERED INTO FOR THE ERECTION, REPAIR, OR FURNISHING OF ANY PUBLIC BUILDING, OR FOR ANY PUBLIC IMPROVEMENT WHICH SHALL BIND THE GOVERNMENT TO PAY A LARGER SUM OF MONEY THAN THE AMOUNT IN THE TREASURY APPROPRIATED FOR THE SPECIFIC PURPOSE. ( R.S. SECTION 3733.)

31 U.S.C. 628---

EXCEPT AS OTHERWISE PROVIDED BY LAW, SUMS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS. R.S. SECTION 3678.)

31 U.S.C. 665---

(A) EXPENDITURES OR CONTRACT OBLIGATIONS IN EXCESS OF FUNDS PROHIBITED.

NO OFFICER OR EMPLOYEE OF THE UNITED STATES SHALL MAKE OR AUTHORIZE AN EXPENDITURE FROM OR CREATE OR AUTHORIZE AN OBLIGATION UNDER ANY APPROPRIATION OR FUND IN EXCESS OF THE AMOUNT AVAILABLE THEREIN; NOR SHALL ANY SUCH OFFICER OR EMPLOYEE INVOLVE THE GOVERNMENT IN ANY CONTRACT OR OTHER OBLIGATION, FOR THE PAYMENT OF MONEY FOR ANY PURPOSE, IN ADVANCE OF APPROPRIATIONS MADE FOR SUCH PURPOSE, UNLESS SUCH CONTRACT OR OBLIGATION IS AUTHORIZED BY LAW.

THE STATE HIGHWAY DIRECTOR HAS COMMENTED ON THE CORPS POSITION AS FOLLOWS, QUOTING FROM THE ADMINISTRATIVE REPORT FURNISHED:

"* * * WE FAIL TO UNDERSTAND WHY THE " FEDERAL GOVERNMENT HAS NO RESPONSIBILITY" SINCE ON THE ONE HAND THE FEDERAL BUREAU OF THE PUBLIC ROADS SAYS (AND RIGHTLY SO) WE MUST BUILD FOR FUTURE TRAFFIC TO QUALIFY FOR THEIR FUNDS AND ON THE OTHER HAND, THE CORPS OF ENGINEERS SAYS WE MUST MEET THEIR DAM CLOSING SCHEDULE IN FUNDING REQUIREMENTS FOR THE SAME ROADS.'

THE MATTER HAS BEEN REFERRED TO THIS OFFICE AT THE REQUEST OF OKLAHOMA STATE OFFICIALS FOR RESOLUTION OF THE QUESTION WHETHER FEDERAL APPROPRIATIONS MAY PROPERLY BE CHARTED UNDER EITHER OF THE ALTERNATIVES SUGGESTED BY THE STATE. THE STATE HIGHWAY DIRECTOR HAS ASSERTED THAT HE IS INTERESTED IN SECURING A REVISED PAYMENT SCHEDULE FOR ROAD BETTERMENT WORK AT THE EUFAULA AND KEYSTONE RESERVOIRS, THE "PLAIN FACT BEING THAT THE STATE CANNOT MAKE PAYMENTS IF IT DOES NOT HAVE THE FUNDS.'

THE OBLIGATION OF THE CORPS OF ENGINEERS FOR ROAD REPLACEMENTS NECESSITATED BY THE CONSTRUCTION OF WATER RESOURCE PROJECTS IS CONTAINED IN SECTION 207 (B) OF THE FLOOD CONTROL ACT OF 1960, 74 STAT. 501, 33 U.S.C. 701R-1 (B), WHICH PROVIDES:

(B) THAT, FOR SUCH WATER RESOURCES PROJECTS, UNDER CONSTRUCTION OR TO BE CONSTRUCTED, WHEN THE TAKING BY THE FEDERAL GOVERNMENT OF AN EXISTING PUBLIC ROAD NECESSITATES REPLACEMENT, THE SUBSTITUTE PROVIDED WILL AS NEARLY AS PRACTICABLE SERVE IN THE SAME MANNER AND REASONABLY AS WELL AS THE EXISTING ROAD. THE CHIEF OF ENGINEERS IS AUTHORIZED TO CONSTRUCT SUCH SUBSTITUTE ROADS TO DESIGN STANDARDS COMPARABLE TO THOSE OF THE STATE IN WHICH THE ROAD IS LOCATED, FOR ROADS OF THE SAME CLASSIFICATION AS THE ROAD BEING REPLACED. THE TRAFFIC EXISTING AT THE TIME OF THE TAKING SHALL BE USED IN THE DETERMINATION OF THE CLASSIFICATION.

AND WHERE EXISTING ROADS ARE TAKEN AND REQUIRE REPLACEMENT IT IS CLEAR BEYOND QUESTION THAT THE STATE IS NOT ENTITLED TO ANY GREATER CONSIDERATION THAN IS PROVIDED FOR IN SECTION 207 (B). THE STATE WOULD NOT SUFFER ANY DAMAGES IF INSTEAD OF REQUESTING THE CORPS OF ENGINEERS TO INCLUDE DESIRED BETTERMENTS IN RELOCATED ROADS IT ALLOWED THE CORPS TO PROCEED UNDER THE CORPS RESPONSIBILITY FOR RELOCATING ROADS TAKEN IN CONNECTION WITH THE VARIOUS WATER RESOURCES PROJECTS. WITHOUT PROVIDING FOR BETTERMENTS, THE STATE WOULD, AT NO COST TO IT, ACQUIRE ROADS AT LEAST COMPARABLE, IF NOT SUPERIOR, TO THOSE LOST ON ACCOUNT OF CORPS PROJECTS. UNDER THESE CIRCUMSTANCES, WE CANNOT BUT AGREE WITH THE CHIEF OF ENGINEERS' POSITION THAT ANY BETTERMENTS REQUESTED BY THE STATE ARE THE SOLE FINANCIAL RESPONSIBILITY OF THE STATE, SUBJECT, OF COURSE, TO ANY REIMBURSEMENT TO WHICH THE STATE IS ENTITLED FROM THE BUREAU OF PUBLIC ROADS. NOR CAN WE RATIONALIZE ANY AUTHORITY FOR CHARGING THE COST OF SUCH BETTERMENTS TO WATER RESOURCE PROJECT FUNDS. IN NO SENSE CAN THE COST OF THESE BETTERMENTS BE PROPERLY CONSIDERED AS ATTRIBUTABLE TO PROJECT PURPOSES. UNDOUBTEDLY, IT WILL BE MORE ECONOMICAL IN THE LONG RUN FOR THE STATE OF OKLAHOMA TO PROVIDE FOR EXPANDED DESIGN OF THE ROADS BEING RELOCATED DURING THEIR INITIAL CONSTRUCTION RATHER THAN AT SOME FUTURE DATE. BUT WE ARE NOT AWARE OF ANY FEDERAL APPROPRIATION WHICH IS AVAILABLE TO FINANCE THE STATE'S SHARE OF THE BETTERMENT COSTS INVOLVED. THEREFORE, IN VIEW OF THE PROHIBITORY STATUTES QUOTED ABOVE, WE MUST CONCLUDE THAT UNLESS THE STATE OF OKLAHOMA PROVIDES FUNDS IN ADVANCE OF CONSTRUCTION TO COVER THE COST OF ANY WORK IT REQUESTS OVER AND ABOVE THAT FOR WHICH THE CORPS OF ENGINEERS IS OTHERWISE RESPONSIBLE, SUCH ADDITIONAL WORK MAY NOT BE UNDERTAKEN IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY.

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