B-138834, AUGUST 17, 1959, 39 COMP. GEN. 98

B-138834, AUGUST 17, 1959, 39 COMP. GEN. 98

DISTRICT OF COLUMBIA - STADIUM CONSTRUCTION - BONDS - PROCEEDS DISPOSITION PROCEEDS FROM THE SALE OF NEGOTIABLE BONDS WHICH ARE GUARANTEED AS TO BOTH PRINCIPAL AND INTEREST BY THE UNITED STATES SHOULD BE REGARDED AS PUBLIC MONEYS REQUIRED TO BE DEPOSITED IN THE TREASURY OF THE UNITED STATES PURSUANT TO 31 U.S.C. 482, AND 31 U.S.C. 521, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY WHICH WOULD PERMIT THE DEPOSIT OF SUCH FUNDS IN COMMERCIAL BANKS OR OTHER PRIVATE DEPOSITORIES. NOTWITHSTANDING THAT THE DISTRICT OF COLUMBIA STADIUM ACT OF 1957 IS SILENT AS TO THE MANNER IN WHICH PROCEEDS FROM THE SALE OF BONDS ISSUED BY THE ARMORY BOARD ARE TO BE EXPENDED, IN VIEW OF THE INTENT THAT THE STADIUM IS FOR THE PEOPLE OF THE DISTRICT OF COLUMBIA AND SECTIONS 9 AND 10 OF THE ACT PROVIDE THAT THE DISTRICT COMMISSIONERS ARE TO CERTIFY THE YEARLY FINANCIAL STATEMENTS OF THE ARMORY BOARD AND THAT THE DISTRICT OF COLUMBIA IS TO ADVANCE, ON A REIMBURSABLE BASIS, NECESSARY FUNDS TO MEET AMOUNTS PAYABLE ON ACCOUNT OF THE BONDS, THE PROCEEDS FROM THE SALE OF THE BONDS SHOULD BE EXPENDED IN THE SAME MANNER AS OTHER PUBLIC FUNDS OF THE DISTRICT OF COLUMBIA. ALTHOUGH DISTRICT OF COLUMBIA ARMORY BOARD IS OBLIGED TO REPAY PRINCIPAL, PLUS INTEREST, ON BONDS SOLD PURSUANT TO THE DISTRICT OF COLUMBIA STADIUM ACT OF 1957, THE OPERATING FUND FOR THE STADIUM IS INTENDED TO INCLUDE BOTH RECEIPTS FROM THE ISSUANCE OF BONDS AS WELL AS REVENUE FROM STADIUM OPERATIONS AND, CONSEQUENTLY, MONEYS DERIVED FROM SALES OF BONDS ARE CONSIDERED "RECEIPTS" WITHIN THE SCOPE OF THE TERM AS USED IN SECTION 6 (A) OF THE ACT AND ARE FOR DEPOSIT INTO THE OPERATING FUND ESTABLISHED BY THE ACT AND HELD IN THE UNITED STATES TREASURY.

TO THE BOARD OF COMMISSIONERS OF THE DISTRICT OF COLUMBIA, AUGUST 17, 1959:

YOUR LETTER OF JUNE 8, 1959, CONCERNS THE DEPOSIT OF FUNDS DERIVED FROM THE SALE OF BONDS BY THE DISTRICT OF COLUMBIA ARMORY BOARD ( ARMORY BOARD) PURSUANT TO THE AUTHORITY IN THE DISTRICT OF COLUMBIA STADIUM ACT OF 1957 ( PUBLIC LAW 85-300), 71 STAT. 619, AS AMENDED, BY THE ACT OF JULY 28, 1958 ( PUBLIC LAW 85-561), 72 STAT. 421, AND PRESENTS CERTAIN QUESTIONS IN CONNECTION THEREWITH FOR OUR CONSIDERATION.

YOUR LETTER IS, IN PERTINENT PART, AS FOLLOWS:

ON MAY 28, 1959, THERE WAS DEPOSITED IN THE UNITED STATES TREASURY- - ACCOUNT 99X9430 STADIUM FUND, ARMORY BOARD, D.C.--- THROUGH THE D.C. TREASURER, $80,000 RECEIVED FROM THE RIGGS NATIONAL BANK BY THE ARMORY BOARD. THIS CHECK REPRESENTED PART OF THE PROCEEDS OF A BOND SOLD TO THE RIGGS NATIONAL BANK FOR $96,000. SAID BOND IS MATURE ON MAY 25, 1962, AND PROVIDES FOR INTEREST AT THE RATE OF 3 1/2 PERCENT PER ANNUM, PAYABLE SEMI -ANNUALLY TO THE RIGGS NATIONAL BANK.

THE BANK RETAINED $16,000 IN A SAVINGS ACCOUNT IN THE NAME OF THE D.C. ARMORY BOARD TO MEET THE EXPENSES OF THE ARMORY BOARD IN CONNECTION WITH STADIUM OBLIGATIONS, PART OF WHICH WAS EARMARKED AND RETAINED IN THE SAVINGS ACCOUNT TO PAY INTEREST ON THE BORROWED FUNDS. THE RIGGS NATIONAL BANK HAS EXPRESSED A WILLINGNESS TO PAY INTEREST ON THIS SAVINGS ACCOUNT (OF $16,000) AT THE RATE OF 3 PERCENT PER ANNUM.

YOUR SPECIFIC QUESTIONS ARE AS FOLLOWS:

(1) WHETHER THE PROCEEDS RECEIVED FROM THE SALE OF BONDS UNDER THE PROVISIONS OF THE 1957 ACT, AS AMENDED, ARE REQUIRED BY LAW TO BE DEPOSITED IN THE TREASURY OF THE UNITED STATES AND EXPENDED IN THE SAME MANNER AS OTHER PUBLIC FUNDS OF THE DISTRICT OF COLUMBIA ARE RECEIVED AND EXPENDED;

(2) IN VIEW OF THE 3 PERCENT INTEREST WHICH THE ARMORY BOARD WILL RECEIVE ON THE $16,000 (NOW IN A SAVINGS ACCOUNT AT THE RIGGS NATIONAL BANK) PLUS THE FACT THAT THE MAJOR PORTION OF THIS ($10,080) WILL BE USED TO PAY THE RIGGS NATIONAL BANK ITS 3 1/2 PERCENT INTEREST ON THE $96,000, CAN THIS SUM BE LEFT ON DEPOSIT AT THE BANK EITHER IN WHOLE OR TO SUCH EXTENT AS TO MEET THE ARMORY BOARD'S OBLIGATION TO PAY TO THE RIGGS NATIONAL BANK THE 3 1/2 PERCENT INTEREST ON THE $96,000;

(3) WHEN THE ARMORY BOARD SELLS A BOND OR BONDS IN THE FUTURE, EITHER FOR THE COST OF FINAL DRAWINGS AND SPECIFICATIONS, THE CONSTRUCTION OF THE STADIUM AND/OR OTHER PURPOSES AS STATED IN THE 1957 STADIUM ACT AND, AT THE SAME TIME, INCURS AN OBLIGATION TO REPAY SUCH BOND OR BONDS, PLUS INTEREST, IS THE MONEY DERIVED FROM SUCH SALE A "RECEIPT" (DERIVED FROM THE EXERCISE BY THE BOARD OF THE POWERS GRANTED BY THE 1957 STADIUM ACT, AMENDED), AND AS SUCH, MUST BE DEPOSITED IN THE TREASURY OF THE UNITED STATES IN VIEW OF THE FACT THAT THE ARMORY BOARD IS PRIMARILY REQUIRED TO PAY OFF THE PRINCIPAL AND INTEREST ON SUCH BONDS UNDER THE 1957 STADIUM ACT?

THE DISTRICT OF COLUMBIA ARMORY BOARD WAS CREATED BY PUBLIC LAW 605, APPROVED JUNE 4, 1948 (62 STAT. 341). THE PURPOSE OF THIS ACT WAS TO STATE A POLICY FOR MAINTENANCE AND OPERATION OF THE DISTRICT OF COLUMBIA NATIONAL GUARD ARMORY WITH THE USE TO BE, PRIMARILY, FOR THE QUARTERING AND TRAINING OF THE MILITIA OF THE DISTRICT OF COLUMBIA, AND, SECONDARILY, TO PROVIDE SUITABLE FACILITIES FOR MAJOR ATHLETIC EVENTS, CONVENTIONS, CONCERTS AND SUCH OTHER ACTIVITIES AS MAY BE IN THE INTEREST OF THE DISTRICT OF COLUMBIA. SECTION 8 OF THE 1948 ACT PROVIDES THAT EXPENDITURES FROM THE ARMORY BOARD WORKING CAPITAL FUND (CREATED BY SECTION 8) MAY BE MADE ONLY UPON VOUCHERS WHICH HAVE BEEN CERTIFIED BY THE ARMORY BOARD AND APPROVED BY THE AUDITOR OF THE DISTRICT OF COLUMBIA BEFORE PAYMENT, AND THAT SUCH EXPENDITURES SHALL BE DISBURSED IN THE SAME MANNER AS OTHER DISTRICT OF COLUMBIA FUNDS ARE DISBURSED.

THE DISTRICT OF COLUMBIA STADIUM ACT OF 1957, AS AMENDED ( STADIUM ACT), AUTHORIZES THE ARMORY BOARD TO CONSTRUCT AND OPERATED A STADIUM HAVING A SEATING CAPACITY OF NOT MORE THAN 50,000. THE STADIUM ACT ALSO AUTHORIZES THE ARMORY BOARD TO ISSUE NEGOTIABLE BONDS BEARING INTEREST TO FINANCE STADIUM CONSTRUCTION COSTS, BUT PROVIDES THAT THE INTEREST (ON THE BONDS) SHALL NOT BE AT A RATE IN EXCESS OF THAT APPROVED BY THE SECRETARY OF THE TREASURY. THE ACT FURTHER PROVIDES (SECTION 6 (A) (, 62 STAT. 340, THAT THE ARMORY BOARD "SHALL PLACE INTO AN OPERATING FUND ALL RECEIPTS DERIVED FROM THE EXERCISE BY THE BOARD OF THE POWERS GRANTED BY THIS ACT.' (I.E. THE STADIUM ACT, AS AMENDED) TO BE USED FOR CONSTRUCTING, OPERATING AND MAINTAINING THE STADIUM. ALSO, SECTION 9 OF THE STADIUM ACT, 62 STAT. 34, AS AMENDED, PROVIDES IN PERTINENT PART AS FOLLOWS:

* * * ALL BONDS AND OTHER SECURITIES ISSUED BY THE BOARD UNDER AUTHORITY OF THIS ACT ARE HEREBY GUARANTEED AS TO BOTH PRINCIPAL AND INTEREST BY THE UNITED STATES. (ITALICS SUPPLIED.)

INASMUCH AS THE BONDS ISSUED BY THE ARMORY BOARD UNDER THE STADIUM ACT, AS AMENDED, ARE GUARANTEED AS TO BOTH PRINCIPAL AND INTEREST BY THE UNITED STATES, WE ARE OF THE VIEW THAT THE FUNDS RECEIVED FROM THE SALE OF SUCH BONDS SHOULD BE REGARDED AS PUBLIC MONEYS REQUIRED TO BE DEPOSITED IN THE TREASURY OF THE UNITED STATES PURSUANT TO 31 U.S.C. 482 AND 31 U.S.C. 521, IN THE ABSENCE OF SPECIFIC STATUTORY AUTHORITY PERMITTING SUCH FUNDS TO BE DEPOSITED IN COMMERCIAL BANKS OR OTHER PRIVATE DEPOSITORIES.

WHILE THE STADIUM ACT IS SILENT AS TO WHETHER FUNDS RECEIVED FROM SALE OF THE BONDS SHOULD BE EXPENDED IN THE SAME MANNER AS PUBLIC FUNDS OF THE DISTRICT OF COLUMBIA, IT EXPRESSLY STATES THAT THE CONSTRUCTION OF THE STADIUM IS "TO PROVIDE THE PEOPLE OF THE DISTRICT OF COLUMBIA WITH A STADIUM" (SEE SECTION 2 OF THE ACT), 62 STAT. 339. ALSO, SECTION 10 OF THE ACT, 62 STAT. 342, PROVIDES THAT THE COMMISSIONERS OF THE DISTRICT OF COLUMBIA SHALL CERTIFY AS TO ACCURACY THE FINANCIAL STATEMENT THE ARMORY BOARD IS REQUIRED BY THE SECTION TO FILE WITH THE CONGRESS EACH YEAR. MOREOVER, PROVISIONS ARE INCLUDED IN THE ACT (SECTION 9) UNDER WHICH THE DISTRICT OF COLUMBIA WILL, IF NECESSARY, OBTAIN AND FURNISH FUNDS TO THE ARMORY BOARD IN ORDER TO INSURE PROMPT PAYMENT OF AMOUNTS PAYABLE ON ACCOUNT OF THE BONDS, ALTHOUGH SUCH AMOUNTS ARE REIMBURSABLE TO THE DISTRICT OF COLUMBIA OUT OF AVAILABLE MONEYS IN THE "SINKING FUND," ESTABLISHED BY THE ACT. ALSO, IT WOULD APPEAR TO BE IN THE INTEREST OF ECONOMY THAT THE BOND PROCEEDS SHOULD BE EXPENDED IN THE SAME MANNER AS PUBLIC FUNDS OF THE DISTRICT OF COLUMBIA, SINCE THE DISTRICT GOVERNMENT HAS THE NECESSARY PERSONNEL AND FACILITIES FOR APPROVING, PROCESSING AND PAYING VOUCHERS OF THE ARMORY BOARD. (SEE SECTION 8 OF THE ACT OF JUNE 4, 1948, REFERRED TO ABOVE.) IN LIGHT OF THE FOREGOING IT IS OUR VIEW THAT THE BOND PROCEEDS SHOULD BE EXPENDED IN THE SAME MANNER AS ARE PUBLIC FUNDS OF THE DISTRICT OF COLUMBIA.

YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY.

IN VIEW OF THE ANSWER TO QUESTION NO. 1, YOUR SECOND QUESTION IS ANSWERED IN THE NEGATIVE.

AS TO QUESTION NO. 3, HOUSE REPORT NO. 2146 (85TH CONGRESS, 2D SESSION), ON THE BILL WHICH BECAME PUBLIC LAW 85-561 AND AMENDED THE DISTRICT OF COLUMBIA STADIUM ACT OF 1957, CONTAINS THE FOLLOWING (P. 8):

(E) THE STADIUM'S OPERATING FUND SHALL BE USED FOR CONSTRUCTING, OPERATING, AND REPAIRING THE STADIUM. THIS FUND WILL INCLUDE RECEIPTS FROM THE ISSUANCE OF BONDS AS WELL AS REVENUES DERIVED FROM THE OPERATION OF THE STADIUM.

IT IS CLEAR FROM THE QUOTED STATEMENT THAT MONEYS DERIVED FROM THE SALE OF BONDS ARE TO BE CONSIDERED "RECEIPTS," WITHIN THE SCOPE OF THAT TERM AS USED IN SECTION 6 (A) OF THE ACT, AS AMENDED, AND AS SUCH, ARE FOR DEPOSIT INTO THE OPERATING FUND ESTABLISHED BY THE SECTION. HENCE, AND IN VIEW OF THE ANSWER TO QUESTION NO. 1, YOUR THIRD QUESTION IS ANSWERED IN THE AFFIRMATIVE.