IMPROVEMENT DISTRICTS -- Reserve Fund (authority to establish)
MUNICIPAL FUNDS -- Capital Reserve Fund (creation of by town for improvement district)
GENERAL MUNICIPAL LAW, §6-c(3)(a); TOWN LAW, §55-a: A town
other than a suburban town may not establish a capital reserve
fund for improvement district purposes.
There is no general authorization for towns other than suburban towns to establish capital reserve funds for improvement district purposes. In this regard, we note that General Municipal Law, §6-c, which authorizes towns generally to establish capital reserve funds, specifically provides in subdivision (3)(a) that the provisions of that section authorizing the establishment of capital reserve funds shall not apply to:
Accordingly, it is our opinion that, absent special legislation (see, e.g., L 1974, ch 642), towns other than suburban towns may not establish capital reserve funds for improvement district purposes. We note that our reference to special legislation is not intended as a recommendation with regard to any such legislation.
While towns generally may not establish capital reserve funds for district purposes, it should be noted that towns are authorized to establish repair reserve funds on behalf of improvement districts (General Municipal Law, §6-d). Moneys from such a fund may be used to pay for repairs of capital improvements or equipment so long as the repairs are of a type which do not recur annually or at shorter intervals (General Municipal Law, §6-d[a]).
March 22, 1988