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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 (charging back portion of salary of town engineer) -- Real Property (use of proceeds from lease of district property)
MUNICIPAL FUNDS -- Accounting (charging a portion of town engineer’s salary to special district); (crediting interest earned on the investment of general fund, town-wide and town outside village monies); (crediting proceeds from the lease of town and special district property) -- Deposits and Investments (crediting interest earned on the investment of general fund, town-wide and town outside village monies) -- Part-Town Charges (expense of broadcasting meetings of the planning board and zoning board of appeals); (salary of registrar of vital statistics) -- Town Charges (salary of town engineer generally)
PUBLIC OFFICERS AND EMPLOYEES -- Compensation (salary of registrar of vital statistics); (town engineer)
WATER IMPROVEMENTS -- Real Property (proceeds from the lease of)
ZONING AND PLANNING -- Expenses (broadcasting meetings of the planning board and zoning board of appeals)
GENERAL MUNICIPAL LAW §11: In the absence of any statutory direction to the contrary, interest or earnings from the investment of monies of the general fund, town-wide would be credited to the general fund, town-wide and interest or earnings from the investment of monies of the general fund, part-town would be credited to the general fund, town outside village.
PUBLIC HEALTH LAW §4120: The salary of a town registrar of vital statistics, and related expenses, would be raised as a town outside village charge if the town and villages within the town each constitute separate primary registration districts and are not part of a single combined district.
TOWN LAW §§54, 64(2), 198(12)(a), 209-q: The proceeds of the lease of unneeded town property are credited to the town-wide portion of the general fund, irrespective of the location of the property, unless the property was acquired as a proper town outside village function or unless a statute provides otherwise. With certain exceptions, the proceeds of a lease of unneeded real property owned by, but not required for the purposes of, any town improvement district must be paid to the supervisor and credited to the district and may be expended for any purpose that would properly be charged against the entire district.
TOWN LAW §§20(2)(a), 27(1), 202-a(7): The salary of the town engineer is generally charged solely to the general fund, town-wide, although any portion of the town engineer’s salary attributable to services rendered on behalf of maintaining an improvement district may be charged back to the district.
TOWN LAW §§261, 271: It is proper for a town to allocate and charge against the general fund, part-town, that portion of the expense of the cable television director and assistant attributable to broadcasting meetings of the planning board and zoning board of appeals.
You ask whether revenues derived from the rental of town real property located in the area of the town outside of any incorporated village, and interest and earnings received on general fund monies temporarily invested, are to be credited to the general fund, town-wide or general fund, part-town. You indicate that the real property in question includes a town garage and a water tower. You do not indicate whether the water tower was constructed as a water district improvement (see Town Law, articles 12 and 12-A) or as a town improvement (see Town Law, article 12-C).
You also ask whether expenses budgeted within the town clerk’s office but attributable to a “cable television director and his assistant” and to the functions of the registrar of vital statistics, must be funded on a town-wide basis, or whether they may be funded, in whole or in part, on a town outside village basis. You indicate that the duties of the cable television director and assistant, in part, relate to broadcasting meetings of the planning board and zoning board of appeals on cable television. Finally, you ask whether a portion of the salary of the town engineer may be charged against town water or sewer districts.
As a general rule, unless a statute provides otherwise and except for revenues received as a result of a part-town function or activity, revenues received by a town are credited to the general fund, town-wide (2006 Opns St Comp No. 2006-3; 1990 Opns St Comp No. 90-1, p 1; 1980 Opns St Comp No. 80-784, p 214; see also, 1979 Opns St Comp No. 79-614, unreported; 29 Opns St Comp, 1973, p 173; 1970 Opns St Comp No. 70-753, unreported; 22 Opns St Comp, 1966, p 579). As such, in order for towns to credit revenues received through the rental of town property and the temporary investment of town monies to the general fund, part-town, there must be express statutory authority to do so, or the revenues must derive from a part-town function.
Town Law §64(2) allows the town board to lease unneeded town real property in the name of the town upon adoption of a resolution subject to permissive referendum. We have previously stated that it is generally permissible for towns to lease real property that is not currently needed for municipal purposes to private parties, so long as fair and adequate consideration is received (see, e.g., 1998 Opns St Comp No. 98-15, p 38; 1994 Opns St Comp No. 94-18, p 32; 1992 Opns St Comp No. 92-23, p 57; 1984 Opns St Comp No. 84-38, p 47).1
Although section 64(2) contains no requirement that a town conduct a public bidding process when leasing unneeded real property, the town board generally has a fiduciary duty to take appropriate steps to secure the best price obtainable in their judgment or the most beneficial terms and conditions in the public interest when leasing unneeded property (see, e.g., 1992 Opns St Comp No. 92-23, supra; 1990 Opns St Comp No. 90-37, p 84).
Section 64 does not indicate whether the proceeds of leases of unneeded town property are to be credited to the town-wide or part-town fund. We believe, however, that the coincidental physical location of a parcel in the incorporated or unincorporated area of the town is not germane to the determination of where the proceeds are credited. Rather, applying the general principle noted above, the proceeds of the lease would be credited to the general fund, town-wide, irrespective of the location of the property, unless the property was acquired as a proper town outside village function or unless a statute provides otherwise (see 1976 Opns St Comp No. 76-417, unreported).
Town Law §198(12) is such a statute that provides for a different disposition of the proceeds of a lease. Section 198(1) contains specific provisions with respect to the proceeds of a lease of unneeded real property owned by, but not required for the purposes of, any town improvement district. Section 198(12)(a) of the Town Law generally requires that the receipts from the lease must be paid to the supervisor and credited to the district, and may be expended for any purpose that would properly be charged against the entire district (but see Town Law §198[12][b-e], concerning the sale or lease of all or part of the property or facilities of a district to, among other entities, another municipality or a public authority).2
In connection with the specific examples given in the inquiry, we have previously concluded that the construction and maintenance of a town highway garage is a town-wide charge (see, e.g., 1972 Opns St Comp No. 72-800, unreported; 20 Opns St Comp, 1965, p 554). Therefore, the revenues derived from the lease of the garage would be credited to the general fund, town-wide.
In the case of a water tower, the application of the lease revenues would be dependent on the manner in which the town initially financed the water tower. A town containing one or more villages may determine to construct a water tower as a town outside village function, with capital costs charged to the entire area of the town outside of villages, pursuant to article 3-A or 12-C of the Town Law (Town Law §§54[8], 209-q[8]).3 In that case, in our view, the town could lease a temporarily unneeded portion of the tower, subject to public hearing requirements (see Town Law §§54[1][b], 198[12][a], 209-q[1][c]), and the lease payments would be credited to the general fund, part-town (see also Town Law §§54[14][b], 209-q[14][b]). A town may also construct a water tower as a special district improvement pursuant to articles 12 or 12-A of the Town Law. In the case of the lease of unneeded real property owned by, but not required for the purposes of, any improvement district, section 198(12)(a) of the Town Law, as noted, generally requires that the receipts from the lease must be paid to the supervisor and credited to the district and may be expended for any purpose that would properly be charged against the entire district.4
As to the interest and earnings from the investment of general fund monies, General Municipal Law §11 authorizes the local governments, including towns, to temporarily invest monies, including general fund monies, not needed for immediate expenditure. Neither section 11 nor any other provision indicates whether interest and earnings from the investment of general fund monies is to be credited town-wide or part-town.5
Our Office, however, has previously concluded that, in the absence of any statutory direction to the contrary (see, e.g., General Municipal Law §11[5]), interest earned as a result of investments is credited to the fund from which the investment was made (see, e.g., 1992 Opns St Comp No. 92-47, p 117; 5 Opns St Comp, 1949, p 189; see also, e.g., Williamsburg Savings Bank v Town of Solon, 136 NY 465 and Havender v Brodbeck, 83 Misc 9, 144 NYS 418, noting the general rule that “interest follows principal”). As such, if general fund, town-wide monies are invested under section 11, any interest or earnings would be credited to the general fund, town-wide. Likewise, if monies of the general fund, part-town are invested, any interest or earnings would be credited to that fund.
With respect to town expenses, generally, all real property taxes raised for town purposes must be levied on the whole area of the town, including the real property located in villages situated within the town, unless there is a State statute that requires or permits any given expenditure to be raised from taxes levied on only the unincorporated area of the town (see, e.g., 2002 Opns St Comp No. 2002-15, p 33;1989 Opns St Comp No. 89-61, p 135; 1980 Opns St Comp No. 80-784, supra; 1980 Opns St Comp No. 80-334, p 98; see also Incorporated Village of Ardsley v Town of Greenburgh, 79 AD2d 628, 433 NYS2d 626, mod 55 NY2d 915, 449 NYS2d 27). As to the salary of the town engineer, we have previously concluded that the salary of the town engineer is generally charged solely to town-wide general fund (1972 Opns St Comp No. 72-800, unreported). Town Law §202-a(7), however, provides an exception to this general rule.
Section 202-a(7) authorizes a town board to apportion against and charge to the expense of maintaining any special district improvement an allowance for services rendered by any town officer or employee, when the services have been necessary to and occasioned by reason of maintenance of a district improvement.6 Accordingly, any portion of the town engineer’s salary attributable to services rendered on behalf of maintaining an improvement district may be charged back to the district under section 202-a(7) (see, e.g., 1978 Opns St Comp No. 78-933, p 179; 1975 Opns St Comp No. 75-600, unreported; 1967 Opns St Comp No. 67-475, unreported; cf. 1994 Opns St Comp No. 94-1, p 1).7
Concerning the expenses attributable to the cable television director and his assistant that work within the town clerk’s office, we have previously concluded that the salary of a town clerk, as a town-wide elected officer, generally is a town-wide expense (1989 Opns St Comp No. 89-61, supra; but see Town Law §§202[1], 202-a[7], discussed supra). Nonetheless, it does not follow that every expense arising out of the operations of the clerk’s office, even those performed in furtherance of a town outside village function, necessarily must be charged on a town-wide basis ( cf. 1984 Opns St Comp No. 84-60, p 76).
According to the information provided, the cable television director and his assistant are responsible, in part, for broadcasting meetings of the planning board and zoning board of appeals on the public access channel on cable television. Pursuant to Town Law §261, charges and expenses incurred for town zoning and planning are a charge upon the part-town, general fund (see also Town Law §271). Therefore, it would be proper for the town to charge against the general fund, part-town, that portion of the expense of the cable television director and assistant attributable to broadcasting meetings of the planning board and zoning board of appeals (see, gen., 1984 Opns St Comp No. 84-60, supra; see also 26 Opns St Comp 1970, p 25; 24 Opns St Comp 1968, p 226).
Title II of article 41 of the Public Health Law (§4120 et seq.) governs registrars of vital statistics. Section 4120(1) of the Public Health Law indicates that “(e)xcept as otherwise provided in this article, each city, incorporated village and town in the state shall constitute a separate primary registration district….” Subdivision 2(a) of section 4120 provides that the Commissioner of Health may combine two or more primary registration districts into a single primary registration district, with the approval of the legislative body of the county in which each affected district is located. Assuming the town and villages within the town, in this instance, each constitute a separate primary registration district and are not part of a single combined district, the town and villages would each provide for their own registrar within the respective districts. As such, the salary of a town registrar of vital statistics, and related expenses, would be raised as a town outside village charge (see, e.g., 11 Opns St Comp, 1955, p 539; 10 Opns St Comp, 1954, p 377).
In summary, therefore, it is our opinion that: (1) the proceeds of the lease of unneeded town property would be credited to the town-wide portion of the general fund, irrespective of the location of the property, unless the property was acquired as a proper town outside village function or unless a statute provides otherwise; (2) with certain exceptions, the proceeds of a lease of unneeded real property owned by, but not required for the purposes of any town improvement district must be paid to the supervisor and credited to the district and may be expended for any purpose that would properly be charged against the entire district; (3) in the absence of any statutory direction to the contrary, interest or earnings from the investment of monies of the general fund, town-wide would be credited to the general fund, town-wide and interest or earnings from the investment of monies of the general fund, part-town would be credited to the general fund, town outside village; (4) the salary of the town engineer is generally charged solely to town-wide general fund, although any portion of the town engineer’s salary attributable to services rendered on behalf of maintaining an improvement district may be charged back to the district; (5) it is proper for a town to allocate and charge against the general fund, part-town, that portion of the expense of the cable television director and assistant attributable to broadcasting meetings of the planning board and zoning board of appeals; and (6) the salary of a town registrar of vital statistics, and related expenses, would be raised as a town outside village charge if the town and villages within the town each constitute separate primary registration districts and are not part of a single combined district.
December 29, 2006
Paul J. Feiner, Town Supervisor
Town of Greenburgh
1 Although apparently not at issue here, note that General Municipal Law §72-h authorizes towns, among other local governments, to sell or lease their real property to another municipal corporation, school district, BOCES, fire district, the State of New York or the United States government and any agency or department thereof, either with or without consideration.
2 Pursuant to Town Law §198(12)(a), when the value of the property to be leased exceeds $1,000, a public hearing is required.
3 Note that there is no authority, generally, for a town containing one or more villages to finance a water tower as a town-wide general fund purpose (see, e.g., 1986 Opns St Comp No. 86-45, p 74).
4 The inquiry also refers to a lease of town real property to an alcohol treatment facility. The inquiry does not, however, indicate the purpose for which the property was acquired and, therefore, we cannot reach any conclusion as to the proper application of the lease revenues. The town, however, should apply the general principles enunciated herein to make such determination, in the first instance.
5 Compare, e.g., General Municipal Law §6-c[7], providing that interest and earnings realized on the investment of monies in a capital reserve fund “shall accrue to and become a part of each such fund” and Local Finance Law §165.00, prescribing the application of interest and earnings on the investment of the proceeds or bonds and notes.
6 Town Law §202-a(7) also provides that the town board may separately compensate any town officer or employee for services necessary to or occasioned by reason of maintenance of a district improvement and include the amount so paid in the expense of such maintenance.
7 Although apparently not at issue here, we note that pursuant to section 202(1) of the Town Law, town boards are authorized to apportion against and charge to the cost of establishing a district an allowance for services rendered by salaried town employees when such services are necessary to or occasioned by reason of making the particular improvement.