Opinion 88-26


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Permissible Uses (financing construction of building by town for State Police use)

NEW YORK CONSTITUTION, ART. VIII, §2; EXECUTIVE LAW, §226; GENERAL MUNICIPAL LAW, §72-h; LOCAL FINANCE LAW, §11.00(a): A town may issue obligations to finance the construction of a building for use by the State Police on land owned by the State so long as the town retains an ownership interest in the building during the term of the bonds.

You ask whether a town may construct a building for State Police use on State land located in the town and finance the cost by the issuance of town obligations. You state that the town has no police force and that police protection is currently provided by the State Police from a station outside the town. You further state that the town is desirous of having a State Police facility located within the town so that it can obtain the benefits of increased police protection without having to incur the costs associated with the establishment and maintenance of a town police department.

Under the proposal presently being considered, the town would lease the land for a period of ten years from the State, construct the building in accordance with competitive bidding requirements, and then lease the building to the State Police. Although you indicate that the town will issue obligations to pay the costs of construction, you do not state whether the bonds will mature before the ten year lease between the State and the town expires. Also, you do not indicate whether any rent is to be paid by the State Police, and if so, whether it will be equal the town's debt service on the bonds. We understand, however, that title to the building would pass to the State at the end of the lease term.

There are two provisions in the Executive Law which may be pertinent to the proposal in question. Executive Law, §213 allows the Superintendent of State Police to establish a State Police substation in suitable localities for the efficient performance of State Police duties in rural areas and authorizes the acquisition of property in connection therewith. This provision, however, contains no authorization for a municipality to expend its own funds for such purposes. Rather, section 213 specifically provides that the State Legislature must appropriate money for the acquisition of such property and additionally, that the property is to be acquired by the Superintendent of State Police in the name of the people of the State.

The other provision of State law which may pertain to the proposal is section 226 of the Executive Law. That statute authorizes a town or village to contract with the State Police for the assignment of personnel and specifies certain terms and conditions of the contract, including the manner in which costs are to be calculated and paid by the municipality.

The obvious purpose of Executive Law, §226 is the same as the proposal under consideration here; that is, to provide a means whereby localities can obtain the benefits of State Police protection with the municipalities being responsible for the attendant costs. Section 226, however, only authorizes the payment of moneys by the municipalities to the State Police and does not contain any authorization for a municipality to otherwise compensate the State Police for the cost of their services, such as through the construction or furnishing of a building for State Police use. Therefore, neither section 213 nor 226 of the Executive Law authorizes a town to provide an existing building to house the State Police or to finance the construction of a new town building for that purpose in exchange for services of the State Police.

Notwithstanding the lack of specific authority in the Executive Law for providing a building to house the State Police, we note that General Municipal Law, §72-h provides broad general authorization for municipalities to sell, transfer or lease to, or exchange with, the State of New York or any agency or department thereof, with or without consideration, or for such consideration and upon such terms and conditions as are approved by the municipal governing board, any real property owned by the municipality. The initial term of any lease entered into under section 72-h may not exceed ten years. Under this provision, it is clear that a town could lease an existing town building to State Police for a period of ten years and could thereafter convey title to the building to the State Police, and that both the lease and conveyance could be either with or without consideration. Accordingly, the only remaining question is whether a town may issue debt for the sole purpose of constructing a building to be used by the State Police for a period of ten years with title then passing to the State Police.

Article VIII, §2 of the State Constitution contains restrictions on the issuance of indebtedness by municipalities and provides, in part, as follows:

"No county, city, town, village or school district shall contract any indebtedness except for county, city, town, village or school district purposes, respectively. * * *"

Therefore, unless the construction of a new building to be occupied by the State Police serves a town purpose, a town may not issue obligations to finance construction of such a building (see also Town Law, §§81 and 220 authorizing a town to construct necessary buildings for town purposes).

In our view, Executive Law, §226, which authorizes a town to contract with the State Police for the assignment of personnel and to pay the cost thereof, clearly demonstrates that the expenditure of town moneys to obtain the presence of State Police in a town is a proper town purpose. We similarly believe that the construction of a building to enable the State Police to provide that protection is also proper under Town Law, §§81 and 220.

Under the Local Finance Law, municipal corporations, including towns, may contract indebtedness for any municipal object or purpose having a period of probable usefulness set forth in section 11.00 of the Local Finance Law (Local Finance Law, §10.00). Subdivision 11 of the Local Finance Law, §11.00 prescribes a period of probable usefulness for the construction of a building that varies from 15 to 30 years depending on the classification of the building. Nothing in the Local Finance Law, however, indicates whether the municipality must own the building for which it is borrowing money.

This Office has previously expressed the opinion that municipal indebtedness may be issued in connection with property in which the municipality has a leasehold or other interest (1981 Opns St Comp No. 81-359, p 393). However, that opinion also states the municipality must retain its interest in the property so long as the obligations are to be outstanding (Opn No. 81-359, supra).

Applying the above principles to the proposal in question, we conclude that the town should retain an ownership interest in the building so long as the obligations issued to finance its construction are outstanding. In our view, the town's retention of such an interest is necessary to ensure that the proceeds of the obligations are used for the town purpose for which they were issued during the life of the bonds (NY Const, art VIII, §2). We note that both Article VIII, section 2 of the Constitution and the Local Finance Law, insofar as they require that indebtedness only be issued for the period prescribed by law, are intended to minimize the possibility that indebtedness will be outstanding longer than the improvement will be in service (see Andrello v Dulan, 49 Misc 2d 17, 266 NYS2d 738).

While it could be argued that a contractual commitment by the State Police to use the building to provide police services in the town during the ten year period would serve the same purpose, this approach would not afford the town any interest in the building in the event that the State Police are unable to continue to provide police service during that period. Therefore, it is our opinion that a town may issue obligations to finance the construction of a building for use by the State Police on land owned by the State so long as the town retains an ownership interest in the building during the term of the bonds.

Please note that the above opinion relates solely to the authority of the town to enter into the proposed transaction and that we are expressing no opinion as to the authority of the State Police in this regard.

May 24, 1988
Jerry J. Scarano Jr., Esq., Town Attorney
Town of Wilton