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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.
STATE COMPTROLLER -- Approval by (of town water improvement)
TOWNS -- Powers and Duties (State Comptroller's permission for water improvement)
WATER IMPROVEMENTS -- State Comptroller's Permission (when required)
WATER SUPPLY AND DISTRIBUTION -- Town Improvements (need for State Comptroller's permission)
TOWN LAW § 209-q (13) (a): When a town proposes or is required to issue indebtedness to finance a water improvement, the town must obtain the State Comptroller's permission for the improvement if the total estimated cost of the improvement, including amounts to be financed both by the issuance of obligations and from other sources, exceeds one-tenth of one percent of the full valuation of taxable real property in the area of the town outside of any villages.
You ask whether the threshold in Town Law § 209-q (13) (a), which triggers the need to obtain the State Comptroller's approval for a town water improvement, is based on the total cost of the improvement or only on the amount of the improvement to be financed by the issuance of bonds or notes.
Under Town Law article 12-C (§ 209-q et seq.), a town may provide a water improvement as a town function in the area of the town outside of any villages or in any portion of that area. Town Law § 209-q (8) provides that the cost of constructing such an improvement, as the town board in its discretion determines, is borne either (1) partly by the area of the town outside of any villages and partly by the lands benefited thereby, (2) wholly by the area of the town outside of any village, or (3) wholly by the lands benefited thereby. 1 If the town board determines that some or all of the cost of a water improvement is to be borne by the area of the town outside of any villages, that portion of the cost to be borne by the area of the town outside of any villages must be raised as part of the general levy for town outside village purposes or, if there are no villages within the town, as a part of the general levy for town purposes (see 1989 Ops St Comp No. 89-54, at 122; 1986 Ops St Comp No. 86-45, at 74).2
Town Law § 209-q (13) (a), as amended by chapter 512 of the Laws of 1974, sets forth when the approval of the State Comptroller is required for a town water improvement. It provides, in pertinent part, as follows:
Where it is proposed or required that the town shall finance the cost of any … water improvement authorized by this section by the issuance of bonds, notes, certificates or other evidences of indebtedness of the town therefor and where the estimated expense of such improvement shall exceed one-tenth of one percent of the full valuation of the taxable real property in the area of the town outside of villages, the permission of the State Comptroller shall be required for such … water improvement.
Thus, when a town proposes or is required to issue indebtedness to finance a water improvement, the town must obtain the State Comptroller's permission if the "estimated expense of such improvement" exceeds one-tenth of one percent of the full valuation3 of taxable real property in the area of the town outside of any villages (see e.g. 1987 Ops St Comp No. 87-27, at 43; Office of the State Comptroller's Disapproval Mem, Bill Jacket, L 1974, ch 521, at 2). 4
In setting forth the threshold for when the State Comptroller's approval is required for a water improvement, Town Law § 209-q (13) refers to the total estimated expense of the "improvement," and not to the amount of the indebtedness issued to finance the cost of the improvement. Therefore, the amount of indebtedness to be issued to finance the improvement is not the pertinent figure for purposes of determining whether the State Comptroller's approval is required. Rather, the "one-tenth of one percent" threshold is applied to the total estimated cost of the improvement, including amounts to be financed both by the issuance of obligations and from other sources (see e.g. Office for Local Government Mem, Bill Jacket, L 1974, ch 512, at 8 [noting that the purpose of the threshold was to eliminate the need for the State Comptroller's approval of an improvement financed by the issuance of indebtedness that "does not involve the expenditure of a large amount of money."]).
Accordingly, when a town proposes or is required to issue indebtedness to finance a water improvement, the town must obtain the State Comptroller's permission for the improvement if the total estimated cost of the improvement, including amounts to be financed both by the issuance of obligations and from other sources, exceeds one-tenth of one percent of the full valuation of taxable real property in the area of the town outside of any villages.
May 6, 2009
Paul T. Rubery, Esq., Town Attorney
Town of Palmyra
1 A resolution authorizing any part of the cost of a water improvement to be borne the area of the town outside of any villages is subject to permissive referendum requirements (Town Law § 209-q [11] [a]; see e.g. 23 Ops St Comp No. 67-309, at 250 [1967]).
2 Irrespective of the manner in which a town determines to finance the capital cost of the improvement, the cost of management, maintenance, operation and repair of the improvement is a charge upon the area of the town outside of any villages (Town Law § 209-q [12]; see e.g. 1987 Ops St Comp No. 87-70, at 106).
3 The term "full valuation of taxable real property" is not defined in the Town Law § 209-q. The legislative history of L 1974, ch 512, which amended Town Law § 209-q (13) to add the reference to "full valuation," indicates, however, that the term was intended to mean the assessed value of taxable real property, as shown on the last completed assessment roll, divided by the equalization rate determined by the State officer or agency charged with the duty of such determination (currently, the Office of Real Property Services) (Office for Local Government Mem, Bill Jacket, L 1974, ch 521, at 10). This definition is consistent with that set forth in L 1972, ch 950, § 8 (d), as amended by L 1973, ch 260, a special act for the Town of Colonie, upon which L 1974, ch 521 was modeled (see Office for Local Government Mem, Bill Jacket, L 1974, ch 521, at 8).
4 Note that when no indebtedness is proposed or required to be issued to finance the water improvement, the Comptroller's approval is not required, irrespective of the "estimated expense of the improvement."