Opinion 88-55


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

FIRE COMPANY- Powers and Duties (submission of books and records for audit)

FIRE PROTECTION AND PREVENTION -- Contracts (requiring submission of fire company books for audit); (regulating fund raising activities of village fire department)

VILLAGE BOARD -- Powers and Duties (requiring submission of fire company books for audit); (requiring submission of report by chief of fire department)

GENERAL MUNICIPAL LAW, §209-d; NOT-FOR-PROFIT CORPORATION LAW, §1402; VILLAGE LAW, §§4-412(3)(9), 10-1018: While there is no statute requiring the fire company which constitutes the village fire department to submit its books and records pertaining to receipt and expenditures of the proceeds from fire protection contracts and fund raising to the village board for audit, the village board may make such a requirement a condition to entering into fire protection contracts for outside service or to allowing the company to undertake the fund raising activities. Financial information concerning the department also may be obtained under the provisions of the Not-for-Profit Corporation Law and the Freedom of Information Law. The board of fire commissioners or, if there is no board of fire commissioners, the board of trustees may require the submission of a report by the chief of the fire department.

You ask whether a village has authority to audit or require the audit of the books and records of the incorporated fire company which constitutes the village fire department. You indicate that the village owns the apparatus used by the fire department. There is no contract for the provision of fire protection by the department to the village. However, the fire company receives moneys from contracts for fire protection provided outside the village and from its own fund raising activities. You ask whether these moneys are subject to audit by the village. You also ask if the village board of trustees may require the presentation of the report described in section 10-1018 of the Village Law, and if so, what may be included in that report.

Initially, we note that under section 10-1008 of the Village Law, the fire companies of a village constitute the village fire department. These fire companies are subject, in certain respects, to the control of the village authorities (Village Law, §§10-1000, 10-1002, 10-006; Not-For-Profit Corporation Law, §1402[e][1]; 1987 Opns St Comp No. 87-73, p110; 9 Opns St Comp, 1953, p 353). This is so regardless of whether the village or the fire company owns the apparatus used by the fire company (Opn No. 87-73, supra; 6 Opns St Comp, 1950, p 302). Based upon this relationship between a village and its fire department, it has been the position of this Office that a village must be a party to any contract for the provision of fire protection to an outside entity by a volunteer fire company located within the village (Opn No. 87-73, supra; 1981 Opns St Comp No. 81-247, p 380; 34 Opns St Comp, 1978, p 38; 26 Opns St Comp, 1970, p 189).

Under section 209-d of the General Municipal Law, however, no contract for outside fire protection by a volunteer company located within the village may be made without the consent of the fire company. In addition, we note that section 209-d imposes certain limitations on the amounts payable to the volunteer fire company under contracts to furnish fire protection to an outside area. If, as here, the municipality owns all the fire apparatus used in carrying out the contract, section 209-d limits the portion of the contract price which may be paid over to the volunteer fire company to 35% unless a greater portion was being paid over to the company under a contract entered into on or before March 15, 1941. It should also be noted that any moneys paid over to a fire company pursuant to section 209-d are to be "expended for fire department or company purposes only" (see 18 Opns St Comp, 1962, p 101).

While the village must be a party to any contract for outside service by the village fire department, we are aware of no statute requiring that the fire company which constitutes the village fire department submit to the village board its books and records of moneys received by the department under such contracts (1987 Opns St Comp No. 87-28, p 46; 1960 Opns St Comp No. 60-799, unreported). However, inasmuch as the village must be a party to any contract for outside service by the department, it would appear that, in circumstances when the fire department wishes to contract to provide outside service, the village, as a condition to entering into such a contract, could agree with the fire department that the department's books and records of the receipt and expenditure of the proceeds from the contract be submitted periodically to the village board for audit.

With respect to the department's fund raising activities, we note that, under General Municipal Law, §204-a, the fire company, before engaging in fund raising activities, must notify the governing board of the political subdivision having general control of the company that it proposes to conduct such activity (General Municipal Law, §204-a[8][a]). Further, the governing board, by resolution, may prohibit the company from engaging in fund raising activities or in any general or specific type of fund raising activity (General Municipal Law, §204-a[6][a]). Therefore, since a village board can prohibit a fire company from engaging in fund raising activities, it has been our opinion that the village board, instead of totally prohibiting such activities, may place reasonable conditions on the company's fund raising activities (1973 Opns St Comp No. 73-325, unreported; 22 Opns St Comp, 1966, p 491). These conditions may include requiring the submission of a financial report on the receipts and expenditures of proceeds of such activities and submission of books and records for audit.

Even if the village does not obtain access to the fire company's books and records by agreement as a condition to entering into a fire protection contract or by making such access a condition to allowing fund raising activities, it still may be able to obtain a significant amount of financial information concerning these funds. In this regard, we note that the Court of Appeals has held that the Freedom of Information Law [F.O.I.L] (Public Officers Law, §§84, et seq.) is applicable to records of a village fire department (Matter of Westchester Rockland Newspapers v Kimball, 50 NY2d 575, 430 NYS2d 574; see also S.W. Pitts, et al. v Capital Newspapers, Albany County, Special Term, December 4, 1987, Index No, 8400/87). Further, an incorporated fire company's use of funds is subject to the applicable provisions of the Not-For-Profit Corporation Law which provide, in part, that:

"It shall be the duty of the directors of all fire, hose, protective or hook and ladder corporations incorporated under a general law or of a fire corporation formed under this section in territory outside of cities or villages, or a majority of them, on or before the fifteenth day of January in each year, to make and file in the county clerk's office, where the certificate of incorporation is filed a verified certificate, stating the names of the directors and officers of the corporation, containing an inventory of its property, a statement of its liabilities and that the corporation has not engaged, directly or indirectly, in any business other than that set forth in its certificate of incorporation." (Not-For-Profit-Corporation Law, §1402[f])

The Not-For-Profit Corporation Law also provides that the board of a not-for-profit corporation shall present at the annual meeting of members a report, verified by the president and treasurer or by a majority of the directors, or certified by an independent or certified public accountant, showing in appropriate detail (1) the assets and liabilities, including the trust funds, of the corporation as of the end of a twelve month fiscal period terminating not more than six months prior to said meeting; (2) the principal changes in assets and liabilities, including trust funds, during said fiscal period; (3) the revenue or receipts of the corporation, both unrestricted and restricted to particular purposes during said fiscal period; (4) the expenses or disbursements of the corporation, for both general and restricted purposes, during said fiscal period; and (5) the number of members of the corporation as of the date of the report, together with a statement of increase or decrease in such number during said fiscal period, and a statement of the place where the names and places of residence of the current members may be found. The report must be filed with the records of the corporation and either a copy or abstract thereof entered in the minutes of the procedures of the annual meeting (Not-For-Profit Corporation Law, §519). Therefore, to the extent the above certificate and report are records which must be disclosed under F.O.I.L., the village will be able to obtain financial information regarding the fire department by making a request for records under that statute.

Finally, in relation to your inquiry on the report that is to be prepared by the chief of the fire department, We note that section 10-1018 of the Village Law states, as did section 208 of the Village Law of 1909 from which it was derived, that the chief "shall, whenever required by the board of fire commissioners, report to the board on the condition of the property of the department and such other information respecting the department as may be required" (emphasis added). In this regard, we note that the board of trustees acts as a board of fire commissioners only when there is no separate board of fire commissioners (see Village Law, 10-1006[12]). Therefore, it is our opinion, under Village Law, §10-1018, the board of trustees may only require the preparation of a financial report of fire department funds by the chief of the fire department when there is no board of fire commissioners. Accordingly, since your inquiry indicates that there is a board of fire commissioners in your village, that board rather than the village board is empowered to require the preparation of a report by the chief of the fire department. To the extent that 9 Opns St Comp, 1953, p 276 reaches a conclusion which is inconsistent with this paragraph, it is hereby superseded.

However, we note that section 10(1)(ii)(e)(3) of the Municipal Home Rule Law authorizes villages to adopt local laws which supersede provisions of the Village Law relating to the property, affairs or government of the village unless the Legislature shall have expressly prohibited the adoption of such a local law. We are aware of no provision of the law which would prohibit the adoption of a local law superseding the provisions of section 10-1018 (1980 Opns St Comp No. 80-746, unreported; cf. Village Law, §5-532). Therefore, it would appear that the village could adopt a local law superseding the provisions of section 10-1018 and authorize the board of trustees to require the report from the chief of the fire department, even tho the village has a separate board of fire commissioners.

If a report under section 10-1018 is required by the board of fire commissioners or the board of trustees, as the case may be, it would appear, from the language of that section, that the contents of the report are to be determined, in the first instance, by the board making the request. Consequently, the board of fire commissioners, if any, or the board of trustees may request information from the chief in the detail it deems necessary.

November 28, 1988
Joseph Balok, Esq., Village Attorney
Village of Millport