B-242821, Sep 6, 1991
B-242821: Sep 6, 1991
Schwarzer is entitled to reimbursement for certain expenses he incurred incident to a change of official station from San Francisco. These expenses are the extra costs he incurred in moving a portion of his household goods into storage. Sec. 302-8.3(a). /2/ The commercial bill of lading issued by the household goods moving company Judge Schwarzer selected shows the household goods weight was 10. 000 pounds and the total cost for transportation and storage was $12. Judge Schwarzer was reimbursed $11. The commuted rate computations were based on 10. He was unable to supply either actual or constructive evidence of the weight of the goods he moved to storage. The Administrative Office denied reimbursement of these expenses since Judge Schwarzer was unable to supply evidence of either the actual or constructive weight of these additional goods.
B-242821, Sep 6, 1991
DIGEST: This decision concerns whether Judge William W. Schwarzer is entitled to reimbursement for certain expenses he incurred incident to a change of official station from San Francisco, California, to Washington, D.C., in March 1990. These expenses are the extra costs he incurred in moving a portion of his household goods into storage, a real estate broker's fee he incurred to lease his residence at the old duty station, and an additional amount for an appraisal fee he incurred in financing the purchase of a residence at this new duty station. /1/ For the reasons explained below, we hold that he may not be reimbursed for these expenses.
Transportation of Household Goods
Incident to his transfer, Judge Schwarzer's travel orders authorized shipment of up to 18,000 pounds of household goods, specifying use of the commuted rate method. See Federal Travel Regulation (FTR), 41 C.F.R. Sec. 302-8.3(a). /2/ The commercial bill of lading issued by the household goods moving company Judge Schwarzer selected shows the household goods weight was 10,000 pounds and the total cost for transportation and storage was $12,385. Judge Schwarzer was reimbursed $11,127 according to a rate per hundred pounds for the distance shipped plus additional allowances for handling,storage and pick-up and delivery, as prescribed in the General Services Administration's commuted Rate Schedules. According to the computation sheet the Administrative Office provided to us, the commuted rate computations were based on 10,000 pounds for pick-up and delivery, warehouse handling, storage and transportation from storage in California to Washington, D.C..
In addition to the amount paid to the commercial mover, Judge Schwarzer incurred expenses in the amount of $311.88 for the drayage of some of his household goods which he elected to move independent of the commercial mover to local storage in preparation for shipment to Washington, D.C., with his other household goods. /3/ The expenses he incurred consisted of $200 for labor, $98.53 for truck rental, and $13.35 for gas. He was unable to supply either actual or constructive evidence of the weight of the goods he moved to storage; however, he estimated their weight at 500 pounds, The Administrative Office denied reimbursement of these expenses since Judge Schwarzer was unable to supply evidence of either the actual or constructive weight of these additional goods. Review of the record, however, indicates that whatever the actual weight of these goods, their weight when combined with the goods moved into storage by the commercial mover, totaled 10,000 pounds.
Although under the FTR an employee's goods may be moved in separate shipments, the total amount which may be paid by the government may not exceed the cost of transporting the property in one lot to the new official station. 41 C.F.R. Sec. 302-8.2(e) (1990). In accordance with this limitation we have held that where temporary storage is authorized the limitation is based on the constructive cost of transporting the household goods in one lot to temporary storage, storage costs, and then delivery in one lot to the permanent residence. Lyndon A. Werner, B-232375, May 31, 1989; Michael L. Piccirilli, B-237640, Feb. 6, 1990; William R. Tuttle, B-204285, Dec. 15, 1981. The record indicates that Judge Schwarzer has already been reimbursed the maximum allowed under this limitation as his reimbursement was based on the total 10,000 pounds transported into temporary storage, even though the commercial mover apparently actually moved less than 10,000 pounds into storage, the difference being the weight of the household goods Judge Schwarzer elected to move to storage independent of the commercial mover. Therefore, since the reimbursement made to Judge Schwarzer was based upon the combined total weight of the household goods shipped, Judge Schwarzer has been reimbursed the maximum permissible under the regulations and no additional reimbursement may be allowed.
Real Estate Broker's Fee
Judge Schwarzer incurred a real estate broker's commission in the amount of $4,320 for obtaining a lease of his residence at his old station for which he requests reimbursement. The agency disallowed this item on the basis that the regulations do not authorize reimbursement of such expenses in connection with lease of the residence, but only in connection with a sale of the residence. In support of this position the agency cited two of our prior decisions, 46 Comp.Gen. 705 (1967), and B-179079, Nov. 13, 1978.
Reimbursement of broker's fees and real estate commissions is governed by FTR, Sec. 302-6.2(a), which provides that "a broker's fee or real estate commission paid by the employee for services in selling his/her residence is reimbursable... ." Judge Schwarzer contends that while the text of the regulation refers only to the sale of the residence, the generality of the caption of the section does not reflect an intention to limit reimbursement to sales. He believes the critical element of the regulation is not whether the commission was paid for a permanent disposition of real estate, but rather that it was necessarily incurred by reason of the transfer.
The authority for reimbursing an employee for expenses incurred indisposing of or relinquishing a former residence following a transfer of official station is contained in 5 U.S.C. Sec. 5724(a) (4) (A) which provides for reimbursement of expenses of "the sale of the residence(or the settlement of an unexpired lease)." Pursuant to this authority the implementing regulations cited above authorize reimbursement of the expenses of a sale or the termination of a lease of real estate, but do not authorize reimbursement of expenses of entering into a lease of an employee's former residence. We have held, therefore, that such expenses are not reimbursable. 46. Comp.Gen. 705, supra.; B-179079, supra; see also 54 Comp.Gen. 87, at 89 (1974). Accordingly, the Administrative Office's disallowance of this item was correct.
Property Appraisal Fee
A property appraisal is usually required by a lender to establish the value of the residence for permanent financing purposes, in this case a cooperative apartment in Washington, D.C.. The agency indicates that the lender in this case, located in Boston, Massachusetts, required a much more detailed and sophisticated appraisal than the standard appraisal, for which it charged an appraisal fee of $1,000.
The FTR provides for the reimbursement of the "customary cost" of an appraisal (FTR Sex 302-6.2 (b)), and it requires disallowance of amounts higher than costs "normally imposed for similar services in the locality" (FTR Sec 302-6.3(b)).
The Administrative Office contacted the U.S. Department of Housing and Urban Development and several independent appraisers in the area, and from information they provided it was determined that the customary range for an appraisal of a cooperative apartment in Washington, D.C., is $250- $500. Based upon this information the Administrative Office reimbursed $500 and disallowed the remaining $500 of the $1,000 claimed. Judge Schwarzer objects to this disallowance on the basis that "customary" must necessarily mean with respect to residences of similar value, and he questions whether the information obtained by the Administrative Office concerned fees paid in connection with the financing of cooperative apartments in the same price bracket as the one he purchased. Judge Schwarzer suggests that it would seem reasonable to treat the fee charged in the normal course of a routine transaction as presumptively reasonable in the absence of clear evidence to the contrary.
As noted previously, the agency has the responsibility under the regulations to review the amount claimed in relation to what is the "customary cost" in the locality, and to allow payment of no more than that amount. We believe that the agency has properly exercised its responsibility in obtaining and reviewing objective cost information specifically related to the costs of appraisals of cooperative apartments inn Washington to make its determination, and has allowed the maximum reimbursement based upon that information. See Erwin E. Drossel, B-203009, May 17, 1982; Glen A. Ballenger, B-187437, Feb. 7, 1977. the record before us, therefore, we find no basis to authorize payment of more than that amount.
/1/ This decision was requested by A.L. Lloyd, Chief, Accounting Branch, Administrative Office of the United States courts.
/2/ Under the commuted rate system the employee makes his own arrangements for moving his household goods and is reimbursed based on the weight moved in accordance with GSA schedules of commuted rates established pursuant to 5 U.S.C. Sec. 5724(c) (1988). This is a system of approximation which, depending on the variables in each shipment, i;s sometimes favorable to the employee and sometimes operates to his disadvantage. Where it operates to the employee's disadvantage, there is no basis upon which the difference may be reimbursed. See 54 Comp.Gen. 638 (1975), and B-168088, Nov. 5, 1969.
/3/ We have been informally advised by a representative of the Administrative Office of the Courts that the household goods moved by Judge Schwarzer to local temporary storage were included as part of the 10,000 pounds moved to his new official duty station under the commercial bill of lading.