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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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

FIRE DISTRICTS -- Powers and Duties (transfer from capital reserve fund into general fund prohibited)

GENERAL MUNICIPAL LAW, §6-g: A fire district board of commissioners may not authorize the transfer of the unexpended balance of a capital reserve fund into the fire district's general fund. It may, however, authorize a transfer of these moneys into another capital reserve fund in accordance with General Municipal Law, §6-g(8).

You ask whether a fire district, subject to voter approval, may transfer the unexpended balance of a capital reserve fund established for the acquisition of new equipment into the general fund.

General Municipal Law, §6-g governs capital reserve funds in fire districts. Subdivision 2 of section 6-g authorizes a board of fire commissioners to establish a capital reserve fund to finance all or part of the cost of, among other things, the acquisition of a type, or specific item or items, of equipment. A resolution for the establishment of a capital reserve fund to finance the acquisition of a specific item or items of equipment must set forth the estimated cost thereof and is subject to permissive referendum (General Municipal Law, §6-g[3]; see Local Finance Law, §38.00[a]).

With respect to the use of the unexpended balance of a capital reserve fund for the acquisition of equipment, subdivision 8 of section 6-g provides that the board may authorize the transfer of all of part of such a balance to the credit of another capital reserve fund subject, in the case of a capital reserve fund established for a specific item or items of equipment which have not been acquired, to permissive referendum requirements. There is no authority in section 6-g or any other provision of law to transfer capital reserve funds to the general fund of the fire district, irrespective of whether voter approval is obtained (1977 Opns St Comp No. 77-787, unreported; see Town of Evans v Catalino, 103 Misc 2d 261, 425 NYS2d 918 mod on other grnds 88 AD2d 780, 451 NYS2d 523 app dsmd 58 NY2d 601, 458 NYS2d 1025 app dsmd 58 NY2d 687, 458 NYS2d 543 rearg den 58 NY2d 824, 459 NYS2d 1030; see also General Municipal Law, §6-g[11]; cf. General Municipal Law, §6-e, authorizing the establishment of contingency and tax stabilization reserve funds; General Municipal Law, §11[3], authorizing a fire district to invest capital reserve fund moneys in obligations of the fire district).

Accordingly, a fire district board of commissioners may not authorize the transfer of the unexpended balance of a capital reserve fund into the fire district's general fund. It may, however, authorize a transfer of these moneys into another capital reserve fund in accordance with General Municipal Law, §6-g(8).

June 4, 1996
Alfred A. Volkmann, Esq., Attorney at Law
Fire Island Pines Fire District