LOCAL FINANCE LAW, §56.00: A municipal finance board may not,
pursuant to Local Finance Law, §56.00, delegate to the chief
fiscal officer of the municipality the board's power to hire
bond counsel. 12 Opns St Comp, 1956, p 68 is hereby
You have asked whether 12 Opns St Comp, 1956, p 68 still represents the views of this Office. That opinion concluded that Local Finance Law, §56.00(a) authorizes a finance board of a municipality to delegate the authority to hire bond attorneys to the chief fiscal officer of the municipality.
Section 56.00 of the Local Finance Law provides as follows:
Thus, in essence, section 56.00 vests in the finance board of the municipality the power to sell and issue obligations of the municipality and authorizes the finance board to delegate to its chief fiscal officer those powers. In this regard, we note that section 63.00 of the Local Finance Law, which is expressly referred to in section 56.00, provides that whenever bonds of an issue not exceeding $500,000 are sold at private sale, the issuer is required to furnish the purchaser with a written opinion of an attorney that the bonds have been duly authorized and issued in accordance with the Constitution and laws of the State and are valid and legally binding obligations of the issuer.
In general, the power to authorize contracts is vested in the municipal governing board (see, e.g., Town Law, §64; Village Law, §1-102; County Law, §215). In prior opinions, this Office has concluded that, as a general rule, in the absence of express authority, legislative or discretionary powers, including the power to authorize contracts, cannot be delegated by a municipal governing board (see, e.g., 1986 Opns St Comp 86-31, p 52). We have also recognized, however, that a municipal governing board may delegate its power to authorize contracts, by resolution, when authorized to do so by statute (1987 Opns St Comp 87-43, p 66). Therefore, contracts between a municipality and its bond counsel generally are required to be authorized by the governing board of the municipality unless a state or local law provides for the delegation of that authority.
As noted, Local Finance Law, §56.00(a) vests in the finance board of a municipality, and authorizes the finance board to delegate to the fiscal officer, those powers and duties necessary to effectuate the public or private sale and issuance of obligations of the municipality. In the case of public sales, this would include complying with public notice requirements, opening the bids and making the award to the low bidder. In the case of private sale, it would include negotiating the rate of interest and issuing the obligations.
Although the bond counsel may provide legal assistance with respect to the sale and issuance of obligations, it is apparent that the services provided by bond counsel generally encompass much more than advising the issuer with respect to the mechanics of the sale and issuance. Bond counsel is often involved in all phases of debt issuance and advises the finance board on legal issues arising both prior to and after the sale and issuance, pertaining to, among other things, statutory provisions relating to the investment of the proceeds of obligations, the structure of the indebtedness, and the manner of authorizing its issuance, including compliance with any applicable voter approval requirements and estoppel provisions.
Given the lack of an express grant of authority to delegate the function of contracting with bond counsel, and the broad range of responsibilities which may be performed by bond counsel in connection with municipal borrowing, we believe that 12 Opns St Comp, 1956, p 68 was incorrect when it concluded that the retention of bond counsel was a power or duty "incidental to the sale or issuance of obligations" which could be delegated to the chief fiscal officer under Local Finance Law, §56.00(a).
12 Opns St Comp, 1956, p 68 is hereby superseded to the extent inconsistent herewith.
July 5, 1990