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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

MUNICIPAL FUNDS -- Capital Reserve Fund (creation of by town to finance closure of landfill); (payment of landfill fees into fund)

LANDFILL -- Closure (creation of capital reserve fund to finance)

REFUSE AND GARBAGE -- Solid Waste Facility (creation of capital reserve fund to finance closure of landfill)

GENERAL MUNICIPAL LAW, §6-c: A town may establish a capital reserve fund to finance the cost of closing and capping a landfill owned by the town and may pay into that fund landfill fees imposed to defray such cost.

You ask whether a town may establish a capital reserve fund to finance the cost of closing and capping a landfill owned by the town and, if so, whether landfill fees, imposed to defray the cost of closing and capping the landfill, may be paid into that fund.

General Municipal Law (GML), §6-c authorizes town boards to establish capital reserve funds for the purpose of financing all or part of the cost of the "construction, reconstruction or acquisition" of a specific or type of "capital improvement" (GML, §6-c[2]). A "capital improvement" includes "any physical public betterment or improvement or any preliminary studies and surveys relative thereto" as well as the contemporaneous acquisition of related "furnishings, equipment, machinery or apparatus" (GML, §6-c[1][b][1],[3]).

Town Law, §220(5) authorizes town boards to establish one or more public dumps or dumping grounds. In addition, Town Law, §221(1) authorizes town boards to provide for the collection, separation, treatment, processing and disposal of solid waste and, for these purposes, to construct, operate and maintain "solid waste management facilities" (see also GML, §120-w). A "solid waste management facility" is any facility employed beyond the initial solid waste collection process including, among other things, sanitary landfills and other solid waste disposal facilities (see Environmental Conservation Law, §27-0701[2]).

The operation of solid waste management facilities is governed by rules and regulations promulgated by the Department of Environmental Conservation (see Environmental Conservation Law, §27-2703; 6 NYCRR 360). Presently, these rules and regulations provide that upon permanent termination of use of a solid waste management facility, the owner or operator of the facility must properly close and maintain such facility, so as to prevent adverse environmental or health impacts including contravention of surface or ground water quality standards, gas migration, odors, and vectors (6 NYCRR 360.8[a][21]). These rules and regulations also provide that in the case of landfills, minimum closure measures must include at least two feet of final cover, an established grass cover crop, and sufficient grading to direct water off the fill area so as to minimize infiltration and preclude ponding (id). Effective December 31, 1988, the landfill closure requirements will be expanded to include generally, among other things: a site investigation, consisting of hydrogeologic, explosive gas, surface leachate and vector investigations; a final cover system consisting of a gas venting layer, overlaid by a low permeability barrier layer and a barrier protection layer, and a topsoil layer; a landfill gas control system; and, in certain cases, a perimeter gas collection system, a leachate collection system, a vector remediation program, or a combination thereof (see State Register, November 16, 1988, p. 15, Notice of Adoption, Solid Waste Management Program, I.D. No. ENV-17-88-00026-A, adding, inter alia, 6 NYCRR 360-2.15, effective December 31, 1988).

Based on the landfill closure requirements discussed above, we believe that the work required to close and cap a municipal landfill, including preparation of preliminary studies and surveys and contemporaneous acquisitions of related furnishings, equipment, machinery or apparatus, constitutes "construction" of a "physical public betterment or improvement" within the meaning and intent of General Municipal Law, §6-c (GML, §6-c[1][b],[2]). Moreover, we believe the enactment of Local Finance Law, §11.00(a)(6-b), fixing a 10 year period of probable usefulness for abandonment of a refuse disposal area, while in itself not conclusive, is further support for the above conclusion. By establishing the period of probable usefulness, the State Legislature has expressly recognized that expenditures to close and cap a municipal landfill will provide environmental and public health benefits into the future as well as in the present (see Andrello v Dolan, 49 Misc 2d 17, 260 NYS2d 738). Therefore, we conclude that a town may establish a capital reserve fund to finance the cost of closing and capping the town landfill.

We note that the procedures for establishing and expending moneys from a capital reserve fund vary depending on whether the fund is established to finance the cost of a "specific" or "type" of capital improvement (GML, §6-c[2],[4],[8]). Where a town establishes a capital reserve fund to finance a specific capital improvement, such as closing and capping a particular landfill, the creation of the fund may be subject to permissive referendum requirements, but expenditures from the fund are not subject to referendum. However, where a town establishes a capital reserve fund to finance a type of capital improvement, such as landfill improvements generally, the creation of the fund is not subject to a referendum, but expenditures from the fund may be subject to permissive referendum requirements (see GML, §6-c[4],[8]; Local Finance Law, §§11.00[a][6-b], 35.00; see also 1979 Opns St Comp, No. 79-42, p 7).

As to whether landfill fees may be paid into a capital reserve fund established to defray the cost of closing and capping the landfill, we note, initially, that this Office has previously expressed the opinion that, subject to constitutional equal protection requirements (NY Const, art 1, §11), towns have authority pursuant to Town Law, §221 to establish a system of contractual fees for use of a town landfill (18 Opns St Comp, 1962, p 200; 24 Opns St Comp 1968, pgs 335, 541; 1971 Opns St Comp, No. 71-667, unreported; Town Law, §221[2]). Further, GML, §6-c(5) provides that there may be paid into a capital reserve fund:

"a. Such an amount as may be provided therefore by budgetary appropriation or raised by tax therefore.

b. [S]uch revenues as are not required by law to be paid into any other fund or account...".

Therefore, the town board may appropriate moneys to be raised by landfill fees into a capital reserve fund established to defray the cost of closing and capping the landfill (see 1980 Opns St Comp No. 80-272, p 73; 1977 Opns St Comp No. 77-817, unreported, 7 Opns St Comp, 1951, p 6).

Accordingly, in our opinion, a town may establish a capital reserve fund to finance the cost of closing and capping the town landfill and may pay into that fund landfill user fees imposed to defray such cost.

December 28, 1988
James E. Maher, Esq., Town Attorney
Town of Harrietstown