Opinion 90-23


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 -- Debt Limit (exclusion from - cities of Buffalo, Rochester and Syracuse)

STATE CONSTITUTION, ARTICLE VIII, §§6, 12; LOCAL FINANCE LAW, §105.00: The cities of Buffalo, Rochester and Syracuse may exclude from their constitutional debt limitations indebtedness contracted by them for so much of the cost of any public improvement as is required by local law or ordinance to be assessed against real property, to the extent that the outstanding debt, when added to previously excluded and retired debt issued since January 1, 1928 for such purpose, does not exceed $10,000,000 in the case of Buffalo and Rochester and $5,000,000 in the case of Syracuse.

This is in reply to your request for our opinion as to the application of article 8, §6 of the State Constitution which provides an exclusion from the debt limitation imposed upon the cities of Buffalo, Rochester and Syracuse.

Article 8, §6 provides as follows:

In ascertaining the power of the cities of Buffalo, Rochester and Syracuse to contract indebtedness, in addition to the indebtedness excluded by section 5 of this article, there shall be excluded:

Indebtedness not exceeding in the aggregate the sum of ten million dollars, heretofore or hereafter contracted by the city of Buffalo or the city of Rochester and indebtedness not exceeding in the aggregate the sum of five million dollars heretofore or hereafter contracted by the city of Syracuse for so much of the cost and expense of any public improvement as may be required by the ordinance or other local law therein assessing the same to be raised by assessment upon local property or territory.

Thus, article 8, §6 provides an additional debt exclusion for the cities of Rochester and Buffalo in the aggregate amount of up to $10 million and forSyracuse in an aggregate amount not exceeding $5 million for indebtedness contracted for so much of the cost of any public improvement as is required by local law or ordinance to be assessed against real property.

Article 8, §6 of the Constitution, when read alone, appears to grant to the above cities a continuing aggregate exclusion of up to $10 million or $5 million, as the case may be, for any such debt "heretofore or hereafter" contracted; that is, as excluded debt is retired, the amount retired would again become available for the exclusion. The Constitution, however, also provides that nothing in article 8 of the Constitution "shall be construed to prevent the legislature from further restricting the powers herein specified of any county, city, town, village or school district to contract indebtedness ..." (NY Const, art 8, §12). Pursuant to this reservation of power, the Legislature has enacted Local Finance Law, §105.00.

Section 105.00 provides that, in ascertaining their power to contract indebtedness, the cities of Buffalo, Rochester and Syracuse may exclude outstanding indebtedness contracted by these cities for so much of the cost of any public improvement as is required by local law or ordinance to be assessed against real property, but only "to the extent that such outstanding indebtedness together with other indebtedness initially contracted therefor from time to time after January [1, 1928] and since retired" aggregates a sum not in excess of $10 million for Buffalo and Rochester and $5 million for the city of Syracuse. Section 105.00 further provides that "[a]ny indebtedness thereafter contracted for such purposes in excess of such sums shall not be so excluded." Therefore, section 105.00 of the Local Finance Law, in effect, has limited the exclusions granted by article 8, §6 by providing that the $10 million and $5 million amounts are one-time, declining exclusions. Accordingly, outstanding indebtedness may be excluded under section 105.00, but only to the extent that the outstanding debt, when added to retired debt issued after January 1, 1928 and already excluded under section 105.00, does not exceed the $10 million or $5 million limits.

This interpretation of section 105.00 is supported by a report of the Municipal Finance Commission, a temporary State Commission, created by L 1939, c 958. In that report, section 105.00 of the Local Finance Law is explained as follows:

This section is new. Section 12 of article 8 of the State Constitution empowers the Legislature to restrict the power of any city to contract indebtedness. The Commission has exercised this power in providing that the exclusion granted by §6 of article 8 of the State Constitution of indebtedness contracted for assessable improvements by the cities of Buffalo, Rochester and Syracuse, becomes a fixed exclusion as of January 1, 1928. Thus, once an exclusion is granted pursuant to this section and the indebtedness so excluded is paid, the amount of exclusion that may thereafter be claimed will be reduced by the amount of the indebtedness retired.

Therefore, the cities of Buffalo, Rochester and Syracuse, pursuant to article 8, §6 as limited by Local Finance Law, §105.00, may currently exclude from their debt limits outstanding indebtedness issued for so much of the cost of an improvement as is required by local law or ordinance to be assessed against real property, but only to the extent the outstanding debt, when added to previously excluded and retired debt issued since January 1, 1928 for such purpose, does not exceed $10 million in the case of Buffalo and Rochester and $5 million in the case of Syracuse.

July 5, 1990
Cornelius F. Healy
Deputy State Comptroller