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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

BONDS AND NOTES -- Bond Resolution (when two-thirds vote required) -- Referendum Requirements (for tax certiorari judgments)

REAL PROPERTY TAXES AND ASSESSMENTS -- Certiorari Proceedings (authority to issue bonds to finance judgments)

LOCAL FINANCE LAW, §§10.00, 11.00(a)(33-a), 21.00, 33.00, 35.00: A town board may authorize the issuance of bonds to finance tax certiorari judgments. The resolution authorizing the issuance of the bonds must be authorized by a two-thirds vote of the town board and is neither subject to mandatory referendum nor is the town board authorized to provide for a referendum on its own motion.

You ask whether a town board may adopt a bond resolution for the purpose of financing a tax certiorari judgment and, if so, whether the resolution is subject to referendum or a super-majority vote of the board. You state that the town board consists of seven members.

Municipalities are authorized to issue bonds for municipal objects or purposes set forth in paragraph a of Local Finance Law, §11.00 if the municipality is authorized by law to expend money for or to accomplish the object or purpose (Local Finance Law, §§10.00[a], 21.00[a]; see also NY Const, art VIII, §2). Clearly, towns are authorized to expend moneys to pay refunds resulting from tax certiorari proceedings (see Real Property Tax Law, §726). Further, subparagraph 33-a of section 11.00(a), which is in effect until January 1, 1998 (see L 1992, ch 176), prescribes periods of probable usefulness specifically for the payment in a single fiscal year of judgments, compromised claims or settled claims resulting from court orders or proceedings brought pursuant to Real Property Tax Law, article 7. The periods of probable usefulness under section 11.00(a)(33-a) are 10, 15 or 20 years, depending on the amount of accumulated tax refunds to be paid. Accordingly, it is clear that a town board may authorize the issuance of bonds to finance tax certiorari judgments, subject, of course, to the limitations and procedures in the State Constitution and Local Finance Law (see also Real Property Tax Law, §726[4]; City of Rochester v Chiarella, 65 NY2d 92, 490 NYS2d 174; Cherey v City of Long Beach, 282 NY 382; 1984 Opns St Comp No. 84-32, p 40).

With respect to referendum and super-majority vote requirements, Local Finance Law, §33.00(a) provides that every bond resolution shall be adopted by at least a two-thirds vote of the voting strength of the finance board except that a three-fifths vote is sufficient if the bond resolution is subject to mandatory referendum or if the bond resolution provides that it shall be submitted to referendum in the manner authorized by or pursuant to the Local Finance Law. For this purpose, the town board is the town's finance board (Local Finance Law, §2.00[4][c]) and "voting strength" means the aggregate number of votes which all members of the finance board are entitled to cast (Local Finance Law, §2.00[12]).

Local Finance Law, §35.00(b) provides, with certain exceptions, that a bond resolution adopted by the town board shall be subject to permissive referendum or may be submitted to referendum on town board motion. One of the exceptions to these referendum provisions, however, is for a bond resolution authorizing the issuance of bonds for the payment of judgments against the town (Local Finance Law, §35.00[b][4]). Thus, a resolution authorizing the issuance of bonds to finance a judgment is neither subject to mandatory referendum, nor is the town board authorized to provide for a referendum on its own motion in the bond resolution (see Swanker v City of Amsterdam, 5 Misc 2d 932, 161 NYS2d 932; 1986 Opns St Comp No. 86-8, p 14). Accordingly, pursuant to section 33.00(a), the resolution must be adopted by a two-thirds vote of the town board (see 1979 Opns St Comp No. 79-52, unreported).

We note that, when a town has a seven-member town board, there is no difference in the number of votes necessary to pass a bond resolution by a two-thirds or three-fifths vote because in either case a minimum of five affirmative votes are required (see 10 Opns St Comp, 1954, p 357; Downing v Gaynor, 47 Misc 2d 543, 262 NYS2d 837). Therefore, in a town with a seven-member board, when a bond resolution is subject to permissive referendum pursuant to Local Finance Law, §35.00(b), five affirmative votes are required to adopt the resolution even if the board determines on its own motion in the resolution to submit the resolution to referendum.

February 10, 1993
Thomas D. Mahar, Jr., Esq., Town Attorney
Town of Poughkeepsie