Opinion 88-2


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

REAL PROPERTY TAXES AND ASSESSMENTS -- Assessments (special assessment area for refuse collection in village)

LOCAL LAWS -- Refuse and Garbage Collection (imposition of benefit assessment for in village)

REFUSE AND GARBAGE -- Collection of (means of financing collection in villages)

MUNICIPAL HOME RULE LAW, §10(1)(ii)(e)(2); VILLAGE LAW, §5-518: A village, by local law, may establish one or more assessment areas for garbage collection service and provide for the imposition of special assessments upon properties benefited to finance the cost of such service.

MUNICIPAL HOME RULE LAW, §10(1)(ii)(9-a): A village, by local law, may establish a system of users fees to pay for garbage collection services.

You ask if a village, which intends to provide garbage collection services for all residents by contracting with a private carter after competitive bidding, may pay for such services by levy of special assessments based upon a "per housing unit" charge, rather than through general taxation. If such assessments may be imposed, you inquire with regard to the manner in which they may be collected. Finally, you ask whether a village may impose user fees for the collection of garbage.

There is no provision in the Village Law which authorizes villages to establish assessment areas for garbage collection services and to charge the cost of such services to the properties benefited in proportion to the benefits received. Section 10(1)(ii)(e)(2) of the Municipal Home Rule Law, however, specifically authorizes a village to enact a local law pertaining to:

"The authorization, making, confirmation and correction of benefit assessments for local improvements."

Therefore, in our opinion, pursuant to this statute, a village may adopt a local law establishing assessment areas for the purpose of financing local improvements (1985 Opns St Comp No. 85-24, p 33).

In Opn No. 85-24, supra, we stated that, for purposes of Municipal Home Rule Law, §10(1)(ii)(e)(2), a local improvement does not necessarily have to be founded in a physical improvement, but can also be based upon a service which enhances the value of the property in the benefited area. Therefore, if the village determines that the provision of garbage collection services by the village will enhance the value of property receiving the service, it is our opinion that the village may adopt a local law pursuant to section 10(1)(ii)(e)(2) of the Municipal Home Rule Law establishing one or more assessment areas for garbage collection services. Such a local law may also provide for the imposition of special assessments upon properties benefited by the service pursuant to an equitable benefit formula. Please note however that, in reaching the above conclusion, we are not suggesting that other municipal services which are required to be provided to the public at large, such as fire and police protection, may be financed as "a local improvement."

Determinations of which properties are benefited by the improvement and the amount of the benefit conferred on such properties involve the exercise of the legislative powers of the governing board. Such determinations will not be interfered with by the courts unless shown to be so arbitrary or unjust as to amount to a confiscation of property (1987 Opns St Comp No. 87-64, p 96; DWS v County of Dutchess, 110 AD2d 837, 487 NYS2d 870).

This Office is obviously not in a position to determine the factual questions of whether all properties within the village would be benefited by the improvement and, therefore, properly included in the assessment area, or whether the village's proposed "per housing unit" benefit formula is reasonable. As a general guide, however, we note that in evaluating whether a particular parcel is benefited by an improvement, the courts have held that the test to be applied is whether the improvement generally enhances the value of the property (DWS, supra). Further, in Skinner v Village of Sylvan Beach, 113 AD2d 1000, 494 NYS2d 580, the court, in passing on whether vacant properties which did not use a sewer improvement were subject to assessment, stated that "(i)t is settled law that all properties within an area to be serviced by an improvement 'are to some extent at least actually benefited, and, therefore, assessable'". With regard to the benefit formula, we note that it should be designed to equitably distribute the cost of the improvement in proportion to the benefits received (see Village Law, §§14-1416, 22-2200; 1975 Opns St Comp, No. 75-225, unreported).

In 1980 Opns St Comp No. 80-533, p 151, we alluded to several other requirements which must be considered by a village when it enacts a local law pertaining to a local improvement. In that opinion, we stated as follows:

"Since such a local law must be consistent with the requirements of due process of law, it would have to provide for notice, public hearing and the right to review prior to the imposition of any assessments. In this regard, requirements at least equal to those contained in section 22-2200 of the Village Law should be included in the local law (see also McKinney's Unconsolidated Laws, §§5651-5657). Also, since Village Law, §5-532 expressly prohibits the supersession of the provisions of Article 5 (Finances) of the Village Law, the provisions of this article relating to the collection and lien of special assessments would, of course, apply and could not be affected by the local law."

Therefore, Articles 5 and 22 of the Village Law should be carefully scrutinized before a local law is adopted pursuant to Municipal Home Rule Law, §10(1)(ii)(e)(2).

Section 5-518 is among the provisions of Article 5 which relate to special assessments and which can not be superseded by local law. In accordance with subdivision two of that section, whenever an expenditure is made or a contract awarded for a purpose for which bonds cannot be issued, the amount of the assessment may be paid without penalty at any time within thirty days after the date the assessment is finally fixed, determined and confirmed (section 5-518[2]). If any assessment is not paid within that thirty-day period, however, payments thereafter are subject to penalties at the rate of one-half of one percent for each month or portion thereof until the assessment is paid or discharged (section 5-518[4]). If a special assessment is not paid prior to the end of the fiscal year, the assessment with penalties is levied with the annual tax (section 5-518[5]).

It is our opinion that special assessments imposed pursuant to subdivision 2 of section 5-518 may not be levied in the first instance with village taxes, but must be levied on a separate assessment roll (see 12 Opns St Comp, 1956, p 378). Although nothing in subdivision 2 of section 5-518 specifically refers to separate assessment rolls, we note that section 1420 of the Real Property Tax Law, which pertains to the levy of village taxes, has no application to the levy of special assessments (see Real Property Tax Law, §102[20]). We also note that subdivision 3 of section 5-518, which pertains to assessments for expenditures or contracts made for a purpose for which bonds may be issued, expressly provides that where the assessment is to be collected in annual installments, the board of trustees may determine that such installments shall be collected at the same time as real property taxes. Subdivision 3 further provides that when the board so elects, the installment shall be extended on a separate column in the annual tax roll and enforced in the same manner as real property taxes in the first instance. Therefore, since Article 14 of the Real Property Tax Law does not authorize the levy of special assessments and since nothing contained in section 5-518(2) authorizes a village to levy special assessments imposed pursuant to that subdivision on the village tax roll, we conclude that such special assessments must, in the first instance, be levied on a separate assessment roll.

As an alternative to financing village garbage collection services by special assessments, we note we have previously concluded that a village, by local law, may also finance such services by the imposition of contractual user fees (1979 Opns St Comp, No. 79-307, p 52). Unlike special assessments, users fees are contractual in nature and are a charge for actual use of the service (see Silkman v Water Commissioners 152 NY 326; 30 Opns St Comp, 1974, p 83). A system of user fees may be established with varying rates to be charged to different classes of users related to the varying benefits received by each class, so long as, in accordance with constitutional equal protection guarantees, there is a rational basis for distinguishing among the various classes of users (NY Const, art I, §11; Elmwood-Utica House v Buffalo Sewer, 65 NY2d 489, 492 NYS2d 935; Opns No. 79-307, supra; 1980 Opns St Comp No. 80-329, p 97).

We also note, however, that neither the Village Law, nor any other State statute of which we are aware, specifically provides authority to place user fees imposed for refuse collection services on the tax roll for inclusion as part of the village tax (cf. Town Law, §198[9][c] providing for the levy and collection of delinquent refuse and garbage town district user charges as a tax). In addition, it is our opinion that a village may not, by local law, provide for the collection of either current or delinquent user fees for refuse collection services as a tax (1986 Opns St Comp No. 86-76, p 120; 1986 Opns St Comp No. 86-88, p 135). Nonetheless, we have expressed the opinion that, pursuant to Municipal Home Rule Law, §10[1][a][9-a], a municipality, by local law, may provide for the placing of current user fees as a separate item on real property tax bills (1976 Opns St Comp No. 76-1115, unreported; 24 Opns St Comp, 1968, p 857). Similarly, subject to the requirement of Village Law, §5-518[2] that assessments under that subdivision may be paid without penalty within thirty days after confirmation and the further requirement that such assessments be levied on a separate assessment roll, a local law could provide that such special assessments may also be included on the bill as a separate item. If this procedure is adopted, however, the user fees or special assessments would not become part of the tax and the taxpayer would retain the right to pay taxes and the user fees or assessments separately.

February 2, 1988
Richard S. MacAlpine, Treasurer
Village of Oneida Castle