concurring in part and dissenting in part.
I agree that the Department’s finding that the actual cost of the facility, as defined in the Department’s regulations, was $530,800 and must be sustained under our standard of review. Because I agree with that finding, however, I must dissent from that portion of .the opinion which reverses the conclusion of the Department that interest costs are allowable “only to the extent those costs represent borrowing which was necessary and proper for the acquisition of the facility, ...” It is inconsistent to hold on the one hand that the Department’s finding as to actual cost, as defined in the Department’s regulations, must be sustained and, on the other hand, to ignore that finding in determining the allowable cost for interest.
Although the amount borrowed by Redwood may be less than the actual cost, as determined by Department regulations, it perverts the purpose of the regulations to construe them as only defining the upper limit for the amount of a loan agreement, thus justifying a conclusion that any such loan agreement for less than the actual cost as defined by the regulations is necessary for the acquisition of the facilities. [Sec. 75-02-07-05(1), N.D.A.C.] If funds from a source other than a loan are available to purchase the facility at a rate higher than actual costs, as determined by the Department, it follows that those funds are also available to purchase at a lower rate, i.e., at the actual cost as determined by the Department. It is disingenuous to conclude that the same amount loaned to purchase the facility at the higher rate is necessary to purchase the facility at the lower rate determined by the Department and to construe the regulations in a manner which permits such a result.
I assume it is not disputed that the reason for the entire Federal and State statutory and regulatory scheme herein involved is to prevent the expenditure of more tax dollars than are necessary for the purpose. The majority opinion sustains that objective insofar as it sustains the Department’s finding concerning the regulatory definition of actual cost. It contradicts that objective in holding that the Department was in error in concluding that interest costs are allowable only to the extent those costs represent borrowing which was necessary and proper for the acquisition of the facility, and that such amount was the difference between the $300,000 contribution from the investors and the “actual cost” as determined by the Department.
LEVINE, J., concurs.