Request By:
Mr. Ralph Ed Graves
Commissioner
Department for Local Government
Capitol Annex
Frankfort, Kentucky 40601
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your question reads:
"Are engineering and architectural design costs for a capital project, as a condition for consideration of a construction grant by another agency (here federal EPA), eligible for payment from the Economic Aid Fund or the Area Development Fund?"
Many federal projects require design preparation as a condition to final determination of awarding a construction grant. You cite the present case of an application from Letcher County Economic Aid Board for $85,000 to be used as local match for $253,600 from the Environmental Protection Agency to complete plans for a "201" water treatment system. As soon as the engineering plans are complete, the wastewater district will be eligible for funds from EPA for construction of the facilities. It may be six months to three years before the results on the construction grant are known.
The Coal Severance Economic Aid Fund [KRS 42.330] and the Area Development Fund [KRS 42.350] can only be spent for capital projects. Realizing that, in connection with federal construction grants, even with the expenditure of money for engineering and architectural design costs relating to a capital project, such federal construction may or may not be granted, the sharp question here is whether or not engineering and architectural design costs, standing alone, could be legitimately paid for out of either of the two funds mentioned above as being an expenditure for a capital project.
KRS 42.330(2) reads in part:
"Money in the fund shall be used only for capital projects in 'coal producing counties' as defined in subsection (3) of this section, consisting of general construction, renovation, maintenance, improvements, property acquisition, major items of equipment, and the costs relating to architectural design, construction and supervision of such capital projects, . . . ." (Emphasis added).
It is our opinion that the phrase "and the costs relating to architectural design" was intended to authorize the expenditure of such funds [and the same applies to the Area Development Fund as treated in KRS 42.350(2)] for that item alone. (Emphasis added).
We must assume that such costs for engineering and architectural design would not be proposed, approved, and provided for out of the subject funds unless it were anticipated that the proposed capital project, as provided for in KRS 42.330(2) and 42.350(2) would be actually completed.
Although a literal reading of the statute might suggest a syntactical and contextual affinity between these juxtaposed words, "and the costs relating to architecural design, construction and supervision of such capital projects," we are of the opinion that such literalism must surrender to the general purpose and intent of the statute as gathered from its four corners.
Department of Revenue v. Miller, 303 Ky. 822, 199 S.W.2d 622 (1947). Here, when we consider the realities of the programming and management of a capital construction project and the inevitable necessity for engineering and architectural design work, the overall intent of KRS 42.330(2) and 42.350(2) and their general purpose become evident. This matter of engineering and architectural design is a precendential link in the chain of capital construction.
In summary, we are of the opinion that engineering and architectural design costs for a capital project, as a condition for consideration of a construction grant by another agency (here the E.P.A.) are eligible for payment from the Economic Aid Fund or the Area Development Fund, regardless of whether the capital project is completed or not. In reaching this conclusion we make two assumptions: (1) That the procuring of the engineering and architectural design work is done in good faith and in anticipation of a completed capital project (constructed, or renovated etc.); (2) That the project must meet the general guidelines set forth in KRS 42.330 and 42.350 as relates to a qualifying capital project.