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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Referendum Requirements (for bonds with proposed maturity of more than five years)

REAL PROPERTY -- Purchase (procedure for financing in towns); (need for referendum)

REFERENDUM -- Permissive (need for when town purchases real property and constructs town hall)

TOWN LAW, §220; LOCAL FINANCE LAW, §35.00: If a town board adopts separate resolutions to purchase land for a town hall with current year tax revenues and to construct the town hall using such revenues, each resolution would be subject to permissive referendum requirements. However, if a single board resolution authorizes both the purchase of land and the construction, all to be paid for with the current year tax revenues, then only that single resolution would be subject to permissive referendum requirements. If the town, subject to permissive referendum requirements under Local Finance Law, §35.00, authorizes the issuance of bonds to finance a portion of the construction costs, no additional permissive referendum procedures pursuant to Town Law, §220 would be required for the expenditure of any current year tax revenues on the construction.

You ask whether the construction of a new town hall is subject to permissive referendum if the town board previously has adopted a resolution subject to permissive referendum authorizing the purchase of the parcel of real property on which the town hall is to be constructed and specifying the location, purchase price and purpose for which the land was being acquired. Should the town decide to issue bonds with a proposed maturity of more than five years to finance a portion of the construction of the town hall, you ask whether a referendum is required on the bond resolution.

Town Law, §220 provides that a town board resolution to, among other things, "[p]urchase, lease, construct, alter or remodel a town hall, ... acquire necessary lands therefor, and equip and furnish such buildings for such purposes ..." is subject to permissive referendum requirements if the expenditure is to be paid for by taxes levied for the fiscal year in which the expenditure is to be made. No permissive referendum procedures are authorized or required pursuant to section 220 if the expenditure is paid for with surplus funds (Town Law, §220, last paragraph).

Since Town Law §220(3) relates both to the purchase of land for a town hall and the construction of a town hall, it is our opinion that if a town board adopts separate resolutions to purchase land for a town hall with current year tax revenues and to construct the town hall using such revenues, each resolution would be subject to permissive referendum requirements (see 1976 Opns St Comp No. 76-394, unreported). On the other hand, if a single board resolution authorizes both the purchase of land and the construction, all to be paid for with the current year tax revenues, then only that single resolution would be subject to permissive referendum requirements. Whether the original resolution in this instance authorized both the purchase of land for the town hall and the construction of the town hall, both to be paid for with the current year tax revenues, is a question of fact to be determined at the local level.

As to whether a referendum is required for the issuance of bonds with a proposed maturity of more than five years to finance a portion of the construction, Local Finance Law, §35.00, with certain exceptions, provides that bond resolutions of the town shall be subject to permissive referendum requirements, or may be submitted to referendum upon town board motion. Since it appears that none of the exceptions in section 35.00 would apply in the instant situation, it is our opinion that the proposed bond resolution would be subject to permissive referendum requirements. We note, however, that if the town, subject to permissive referendum requirements, authorizes the issuance of bonds to finance a portion of the construction costs, no additional permissive referendum procedures pursuant to Town Law, §220 would be required for the expenditure of any current year tax revenues on the construction (see Local Finance Law, §35.00[c]; Town Law, §220, last paragraph; In re Town Board of the Town of Islip, 12 NY2d 321, 239 NYS2d 541; Opn No. 76-394, supra; see also Glezen v Town Board of Richford, 192 Misc 658, 81 NYS2d 236; but cf. Matter of Podlas, 167 AD2d 971, 562 NYS2d 246, leave denied 76 NY2d 710, 563 NYS2d 62).

December 8, 1994
William D. Bavoso, Esq., Town Attorney
Town of Greenville