This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
IMPROVEMENT DISTRICTS -- Expenses (of extension to town water district)
WATER DISTRICTS -- Extension (cost charged only against properties in extension)
TOWN LAW §202(5): Pursuant to Town Law §202(5), the cost of an extension to a town water district is charged against only properties within the extension. The extension may also be charged a proportion of the costs of certain items of the original district, as may be determined by the town board.
You ask whether the cost of an improvement for an extension to an existing town water district is borne solely by the properties within the extension.
Towns are authorized to establish and extend water districts upon petition of owners of taxable real property within the proposed district or extension pursuant to the procedures in article 12 of the Town Law (§190 et seq.), or upon town board motion subject to permissive referendum requirements pursuant to the procedures in article 12-A of the Town Law (§209-a, et seq.). Under both articles 12 and 12-A, a public hearing is required (Town Law §§193, 209-d).
Town Law §202 contains provisions as to how expenses of the establishment or extension of a town water district are raised (see also Town Law §198[3][d]). Subdivision 3 of section 202 generally provides that the expenses of establishing a water district are assessed, levied and collected in the same manner and at the same time as other town charges (i.e., on an "ad valorem basis"; see, e.g., 1991 Opns St Comp No. 91-10, p 24), unless the petition, in the case of an article 12 district, or the notice of hearing, in the case of an article 12-A district, states that the costs of constructing the water system will be assessed in proportion as nearly as may be to the benefit that each lot or parcel will derive therefrom (i.e., on a "benefit basis"). Section 202(5) provides generally that the expense of an extension to a district is to be collected from "the several lots and parcels of land" within the extension on the same basis (ad valorem or benefit) as the original district. Subdivision 5 also makes provision for charging to the properties within the extension a portion of the costs of certain improvements of the original district as follows:
The expense of any extension to an existing water … district shall include all the costs and expenses occasioned by reason of such [extension] and in addition thereto such proportion of the cost of any reservoir or reservoirs, standpipes, water purification works, pumping stations and main water lines, including lands, of the original district … as the town board shall determine.
We have previously expressed the opinion that the purpose of the quoted provision is to authorize the town board to charge the extension with a "fair share" of the cost of those facilities that are used by the whole district, including extensions (16 Opns St Comp, 1960, p 61). There is no corresponding provision in section 202(5), however, for charging any portion of the expense of the extension to the original district (see, e.g., 19 Opns St Comp, 1963, p 169).1
Accordingly, pursuant to Town Law §202(5), the cost of an extension to a town water district is charged against only properties within the extension.2 The extension may also be charged a proportion of the costs of certain items of the original district, as may be determined by the town board.
June 2, 2003
Carey Wagner, Esq., Town Attorney
Town of Middletown
1 But see Town Law §206-a, setting forth a procedure for a town board, in connection with a proceeding to extend a district or consolidate districts, to determine to spread the cost of all existing and future debt of a district over the entire district, including all existing and future extensions (see 1999 Opns St Comp No. 99-12, p 27). Section 206-a also sets forth procedures to change the basis of assessment from ad valorem to benefit in certain circumstances.
2 Although not raised in the inquiry, we note that Town Law §202-a, which relates to the expense of maintaining improvements, does not contain a provision similar to that in section 202(5) for charging maintenance expenses of an extension only upon properties within the extension and provides for the preparation of detailed estimates of anticipated revenues and expenditures "for such district".