§ 6-C — Capital reserve funds for counties, cities, villages, towns and sewer and water improvement districts

§ 6-c. Capital reserve funds for counties, cities, villages, towns and\nsewer and water improvement districts. 1. As used in this section:\n a. The term "governing board", insofar as it is used in reference to a\nvillage, shall mean the board of trustees thereof; insofar as it is used\nin reference to a town, shall mean the town board thereof; insofar as it\nis used in reference to a county, shall mean the legislative body\nthereof; insofar as it is used in reference to a city, shall mean the\n"local legislative body" thereof, as that term is defined in subdivision\nseven of section two of the municipal home rule law, as amended from\ntime to time; insofar as it is used in reference to a town or county\nimprovement district, shall mean the town board of the town or the\nlegislative body of the county in which such district is located unless,\nin the case of a town improvement district, such district has a separate\nboard of commissioners, in which case it shall mean such board of\ncommissioners.\n b. The term "capital improvement" shall mean:\n (1) Any physical public betterment or improvement or any preliminary\nstudies and surveys relative thereto.\n (2) Land or rights in land.\n (3) Any furnishings, equipment, machinery or apparatus for any\nphysical public betterment or improvement acquired at the time when such\nbetterment or improvement is constructed, reconstructed or acquired.\n c. The term "equipment" shall include any equipment, machinery or\napparatus not included in the definition of the term "capital\nimprovement" and for the acquisition of which a period of probable\nusefulness has been provided by law.\n d. The term "obligations" shall include bonds, notes, certificates or\nother evidences of indebtedness.\n 2. The governing board of any county, city, village, town or sewer and\nwater improvement district may establish capital reserve funds for the\nfinancing of all or part of the cost of:\n a. The construction, reconstruction or acquisition of a specific\ncapital improvement or the acquisition of a specific item or specific\nitems of equipment.\n b. The construction, reconstruction or acquisition of a type of\ncapital improvement or the acquisition of a type of equipment.\n 3. The provisions of paragraph two shall not apply to:\n a. Capital improvements to be constructed, reconstructed or acquired,\nor equipment to be acquired, on behalf of an improvement district or\nother similar district located within such municipality other than a\nsewer and/or water improvement district, or\n b. Capital improvements or equipment, all or part of the cost of which\nis to be borne by assessments for benefit or ad valorem taxes upon the\nreal property within an area of benefit within such municipality other\nthan a sewer and/or water improvement district.\n 4. If the governing board authorizes the establishment of a capital\nreserve fund for the financing of all or part of the cost of the\nconstruction, reconstruction or acquisition of a specific capital\nimprovement or the acquisition of a specific item or specific items of\nequipment, it shall set forth in such authorization the estimated\nmaximum cost thereof. However, if the authorization by such governing\nboard of the issuance of obligations for such capital improvement or\nequipment is required by law to be subject to a permissive or mandatory\nreferendum, then the authorization of the establishment of such a fund\nshall be subject to a permissive referendum. In the event that the\nauthorization by such governing board of the issuance of obligations for\nsuch capital improvement or equipment is required by law to be subject\nto a permissive or mandatory referendum only if such obligations are to\nhave a maturity of more than five years or not less than some other\nminimum period, then the authorization of the establishment of such a\nfund shall be subject to a permissive referendum only if the period of\nprobable usefulness of such capital improvement or equipment is equal to\nor more than such minimum period of maturity. A permissive referendum on\nthe authorization of the establishment of such a capital reserve fund\nshall be governed by:\n a. Sections twenty-four, twenty-five and twenty-six of the municipal\nhome rule law, as amended from time to time, so far as they may be\napplicable, in the case of cities.\n b. Article seven of the town law, as amended from time to time, in the\ncase of towns.\n c. Article nine of the village law, as amended from time to time, in\nthe case of villages.\n 5. There may be paid into any fund:\n a. Such an amount as may be provided therefor by budgetary\nappropriation or raised by tax therefor.\n b. Such revenues as are not required by law to be paid into any other\nfund or account, including the proceeds from the sale of any capital\nimprovement or equipment owned by such county, city, village or town.\nThis provision shall not prevent the use of town highway moneys for the\nestablishment of a capital reserve fund, provided that such moneys are\nexpended therefrom for the purpose for which they were levied or\nreceived, that the consent of the town superintendent of highways and\ntown board, together with the approval of the county superintendent of\nhighways, is given to the establishment thereof, and that such moneys\nare only expended therefrom on order of the town superintendent of\nhighways upon audit and with the consent of the town board.\n 7. The moneys in each such fund shall be deposited and secured in the\nmanner provided by section ten of this article. The governing board or\nthe chief fiscal officer of such municipality, if the governing board\nshall delegate such duty to him, may invest the moneys in each such fund\nin the manner provided in section eleven of this article. Any interest\nearned or capital gains realized on the moneys so deposited or invested\nshall accrue to and become part of each such fund. The separate identity\nof each such fund shall be maintained, whether its assets consist of\ncash or investments or both.\n 8. An expenditure shall be made from a fund only by an authorization\nof the governing board and for a specific capital improvement or a\nspecific item or specific items of equipment, the cost of which may be\nfinanced therefrom. However, if a proposed expenditure is from a fund\nestablished for a type of capital improvement or equipment and if it is\nrequired by law that the authorization by such governing board of the\nissuance of obligations for such capital improvement or equipment be\nsubject to a permissive or mandatory referendum, then the authorization\nof such an expenditure shall be subject to a permissive referendum. In\nthe event that the authorization by such governing board of the issuance\nof obligations for such capital improvement or equipment is required by\nlaw to be subject to a permissive or mandatory referendum only if such\nobligations are to have a maturity of more than five years or not less\nthan some other minimum period, then the authorization of such an\nexpenditure shall be subject to a permissive referendum only if the\nperiod of probable usefulness of such capital improvement or equipment\nis equal to or more than such minimum period of maturity. Such a\npermissive referendum shall be governed in the manner provided in\nparagraph four of this section. Notwithstanding any other provision of\nthis section, but subject to the provisions of this paragraph, if a\ncapital reserve fund has been established for a specific capital\nimprovement and it is later determined that a part of the cost of such\ncapital improvement is to be borne by assessments for benefit or ad\nvalorem taxes upon real property within an area of benefit within a\nmunicipality, such fund may be expended to pay all or part of the share\nto be borne by the municipality at large.\n 9. The governing board may authorize the transfer to the credit of\nanother capital reserve fund of all or part of:\n a. The unexpended balance remaining in a fund established for a\nspecific capital improvement or a specific item or specific items of\nequipment, which improvement has been completed or acquired, or which\nequipment has been acquired, after deducting from such balance a sum\nsufficient to satisfy all outstanding claims arising from the\nconstruction, reconstruction or acquisition of such capital improvement\nor the acquisition of such equipment.\n b. The unexpended balance remaining in a fund established for a\nspecific item or specific items of equipment which have not been\nacquired or a specific capital improvement which has not been completed\nor acquired, or remaining in a fund established for a type of capital\nimprovement or a type of equipment. If the proposed transfer is from a\nfund established for a specific capital improvement or a specific item\nor specific items of equipment, the authorization of such transfer shall\nbe subject to a permissive referendum if the authorization of the\ncreation of a fund for such capital improvement or item or items of\nequipment was subject to a permissive referendum. A permissive\nreferendum on the authorization of such transfer shall be governed in\nthe manner provided in paragraph four of this section.\n c. Nothing in this subdivision shall be construed to authorize the\ntransfer to the credit of another capital reserve fund from a capital\nreserve fund having a different tax base.\n 9-a. The governing board also may appropriate for:\n 1. An object or purpose for which bonds may be issued, or\n 2. The payment of interest on and principal of indebtedness, other\nthan indebtedness evidenced by bonds and notes described in paragraphs A\nand D of section five of article eight of the state constitution, and\nindebtedness for assessable improvements or renewals thereof,\nall or part of the unexpended balance remaining in a fund established\nfor a specific capital improvement or specific item or items of\nequipment. Any such appropriation may not be made unless the improvement\nhas been completed or acquired, or the equipment has been acquired, and\nshall not include any moneys required to satisfy all outstanding claims\narising from the construction, reconstruction or acquisition of such\ncapital improvement or the acquisition of such equipment.\n 10. The chief fiscal officer shall keep a separate account for each\nfund established. Such account shall show:\n a. The date and amount of each sum paid into the fund.\n b. The interest earned by such fund.\n c. The capital gains or losses resulting from the sale of investments\nof the fund.\n d. The interest or capital gains which have accrued to the fund.\n e. The amount and date of each withdrawal from the fund.\n f. The assets of the fund, indicating the cash balance therein and a\nschedule of the amounts invested in federal or state obligations.\nThe chief fiscal officer, at the termination of each fiscal year, shall\nrender a detailed report of the operation and condition of each of such\nfunds to the governing board.\n 11. The members of the governing board are hereby declared trustees of\nsuch funds and shall be subject to all the duties and responsibilities\nimposed by law on trustees, and such duties and responsibilities may be\nenforced by the county, city, town or village, as the case may be, or by\nany board, commission, agency, officer or taxpayer thereof.\n 12. The members of the governing board shall be guilty of a\nmisdemeanor if they:\n a. Authorize a withdrawal from a fund for any purpose other than for a\ncapital improvement or an item or items of equipment, the cost of which\nhas been authorized to be financed in whole or in part from such fund.\n b. Expend any money withdrawn from a fund for a purpose other than\nthat for which it was authorized to be withdrawn.\nThe provisions of this paragraph shall be considered to be in addition\nto any other penalties provided by law.\n 13. Notwithstanding the foregoing provisions of this section, in any\ntown which is located wholly or partly within the Adirondack park and\nhas within its boundaries state lands subject to taxation assessed at\nmore than thirty per centum of the total taxable assessed valuation of\nthe town as determined from the assessment rolls of the town, as\ncompleted from time to time, a capital reserve fund shall not be\nestablished on and after May first, nineteen hundred forty-eight, unless\nthe state comptroller, on behalf of the state, shall consent thereto,\nand, on and after May first, nineteen hundred forty-eight, in any such\ntown no expenditure or transfer shall be made from a capital reserve\nfund heretofore or hereafter established unless the state comptroller,\non behalf of the state, shall consent thereto.\n