## Facts

- Virginia, Maryland, and the District of Columbia formed the Washington Metropolitan Area Transit Authority (WMATA) by interstate compact to provide regional mass transit.
- The compact authorized WMATA to finance a transit system by issuing revenue bonds.
- Fairfax County and the City of Falls Church negotiated a Transit Service Agreement with WMATA under which each locality would pay monthly amounts in advance to cover its proportionate share of WMATA operating-expense deficits.
- The service payments were calculated to cover projected operating shortfalls after accounting for system revenues and after providing for revenue-bond debt service and reserves.
- County and City officials declined to execute the agreement, citing constitutional, charter, and statutory limitations on incurring local debt.
- The Board of Supervisors and the City sought writs of mandamus to compel the County Executive and City Manager to sign the agreement.

## Issues

1. Whether the localities’ obligation to cover operating deficits under the Transit Service Agreement constituted “debt” or “indebtedness” subject to Virginia constitutional and municipal charter debt limitations.
2. Whether the agreement amounted to an unconstitutional lending or extension of the localities’ credit in violation of the Virginia Constitution’s credit-lending prohibition.
3. Whether the compact and implementing legislation authorized WMATA to issue revenue bonds and enter arrangements supported by local service payments.

## Decision

- The Supreme Court of Virginia denied the petitions for mandamus.
- The court held that the Transit Service Agreement created “debt” or “indebtedness” of Fairfax County and Falls Church for purposes of constitutional and charter debt limits.
- The court held that aiding WMATA served a public purpose and, because WMATA performed a governmental function as a public authority, the arrangement did not violate the constitutional prohibition on lending credit.
- Because execution of the agreement would commit the localities to unauthorized debt without satisfying applicable debt-limit requirements and procedures, mandamus relief was unavailable.

## Legal Principles

- Courts determine whether an obligation is “debt” by examining its substance and enforceable financial commitment, not the labels used by the parties.
- A multi-year, binding promise by a locality to make up an authority’s operating deficits—potentially requiring future taxation—constitutes “debt” within constitutional and charter debt-limit provisions, even if framed as contingent on revenue shortfalls.
- A locality’s agreement to underwrite an authority’s deficits differs from an ordinary service contract; deficit-underwriting functions as a pledge of public credit that can trigger debt-limit constraints.
- Financial support to a public authority performing a governmental function for a public purpose does not violate a constitutional credit-lending prohibition merely because private parties may incidentally benefit.
- Mandamus will not issue to compel public officials to perform an act that would be unlawful or beyond the locality’s authorized power.

## Conclusion

The court refused to compel execution of a transit service agreement because the localities’ commitment to cover WMATA operating deficits created debt prohibited by applicable debt limitations, while also recognizing that support of WMATA’s governmental transit function served a public purpose and did not, by itself, violate the constitutional ban on lending credit.


Bd. of Supervisors of Fairfax Cnty. v. Massey, 210 Va. 253, 169 S.E.2d 556 (Va. 1969)