Opinion 90-25


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.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 DISTRICTS -- Powers and Duties (authority to contract for water supply and hydrants) -- Taxes (authority to assess previously incurred costs on a zone of assessment)
FIRE HYDRANTS -- Fire Districts (authority to contract for)
PUBLIC CONTRACTS -- Approval (effect of failure to obtain proper approval)

TOWN LAW, §176(12),(27); STATE CONSTITUTION, ART. VIII, §1: A fire district is not obligated to compensate a private water-works corporation for the rental of fire hydrants unless a properly authorized contract for such rental exists. Property owners within a zone of assessment in a fire district cannot be assessed retroactively for costs incurred by the district prior to the establishment of the zone. 33 Opns St Comp, 1977, p 184 and 5 Opns St Comp, 1949, p 345 are superseded to the extent inconsistent.

This is in response to your inquiry concerning payments to a water-works corporation for the rental of fire hydrants within a fire district. You indicate that within the past three years, a water-works corporation was incorporated to serve an area within the fire district and that the corporation installed fire hydrants in its service area. You also state that the fire district board of fire commissioners established a zone of assessment for that portion of the district in which hydrants had been installed and subsequently entered into a written agreement with the corporation for the rental of the hydrants. You indicate that the water-works corporation thereafter billed the fire district for hydrant rentals for the period since the hydrants became operational.

You ask whether the fire district is obligated to pay the water-works corporation for the rental of the fire hydrants from the time the hydrants became operational or only from the date of the written rental agreement. You also ask whether the cost of hydrant rental may be assessed against the properties in the zone of assessment from the time the hydrants became operational, from the time the zone of assessment was established, or only from the date of the execution of the written hydrant rental agreement.

Article VIII, §1 of the State Constitution generally requires that there be a legal obligation, either statutory or contractual, by a municipality before funds may be paid to a private individual or entity in furtherance of a proper municipal purpose (see, e.g., Antonopoulou v Beame, 32 NY2d 126, 343 NYS2d 346; Piro v Bowen, 76 AD2d 392, 430 NYS2d 847, app den 52 NY2d 702, 437 NYS2d 1025; 1989 Opn St Comp No. 89-50, p 112). With respect to the creation of a municipal contract, the Court of Appeals, in Seif v City of Long Beach, 286 NY 382, stated as follows at p 387:

Where the Legislature provides that valid contracts may be made only by specified officers or boards and in specified manner, no implied contract to pay for benefits furnished by a person under an agreement which is invalid because it fails to comply with statutory restrictions and inhibitions can create an obligation or liability of the [municipality].

Thus, as a general rule, the creation of a contractual obligation of a municipality can result only from an affirmative determination to create the obligation in the manner prescribed by law, even when the municipality has accepted and retained benefits of services performed by a claimant (City of Zanesville v Mohawk Data Sciences Corp., 97 AD2d 64, 468 NYS2d 271; see also Syracuse Orthopedic Associates v City of Syracuse, 136 AD2d 923, 524 NYS2d 916; Business Jet v County of Nassau, 105 AD2d 679, 481 NYS2d 119; Lutzken v City of Rochester, 7 AD2d 498, 184 NYS2d 483).

Under section 176(12) of the Town Law, the board of commissioners of a fire district is authorized to contract for a supply of water and for the furnishing, erection, maintenance, care and replacement of fire hydrants within the district. There is nothing in that section or any other provision of law, however, which requires a written contract for this purpose (see 1981 Opns St Comp No. 81-230, p 248, which discussed a hydrant rental agreement with a town water district; see also 1981 Atty Gen [Inf Opns] 274; but cf., General Obligations Law, §5-701, which requires certain agreements to be in writing). Thus, the board of fire commissioners may assent to a hydrant rental agreement by simple resolution, unless the parties have agreed that there will be no binding agreement until it is in writing and signed by both parties (see Municipal Consultants v Town of Ramapo, 47 NY2d 144, 417 NYS2d 218; 10 McQuillin, Municipal Corporations, §29.03).

From the foregoing, therefore, it appears that the fire district would be obligated to pay the water-works corporation for the rental of the fire hydrants from the time the hydrants became operational until the date of the written rental agreement if it is determined that the parties did not contemplate that a signed writing was required to create a binding contract and the board, by resolution, assented to the contract (see, Municipal Consultants v Town of Ramapo, supra). This Office is not in a position to determine the intent of the parties in this regard. Rather, such determination must be made, in the first instance, by the fire district and the water-works corporation.

If it is determined that the board of fire commissioners did not properly assent to the contract, the commissioners may wish to consider the doctrine of ratification. As a general rule, whatever acts public officials may do or authorize to be done in the first instance may subsequently be adopted or ratified by them with the same effect as though properly done under prior authority ( see, gen., 10A McQuillin, Municipal Corporations, §29.104; 1983 Opns St Comp, No. 83-208, p 270; 1979 Opns St Comp, No. 79-770, p 166). Consequently, if a municipal governing board ratifies a contract, the municipality then would have a contractual obligation to pay claims accruing under the contract and there would be no gift in violation of article VIII, §1 (see Gaynor v Port Chester, 174 App Div 122, 160 NYS 978). Whether an improperly authorized contract existed here and whether it would be appropriate for the board of fire commissioners to ratify that contract are determinations which, we believe, must be made by the commissioners.

In relation to the assessment of the cost of hydrant rental on the properties in a zone of assessment, section 176(27) authorizes the board of fire commissioners, after a public hearing upon notice, to establish within the district one or more zones in which the rate of tax for fire district purposes is, because of some special service or benefit not common to the entire district, different from the rate of tax for other zones or for the portion of the district not included in any zone. The notice of the hearing must specify "the items of expense of the district which shall be charged against such zone or zones..." (Town Law, §176[27]). Section 176(27) further provides that:

After such zone or zones shall be established, the annual statement of expenditures, filed pursuant to section one hundred eighty-one of this chapter, shall specify the amounts to be raised by taxation in said zone or zones, which are not to be a general charge against all of the property of the fire district, and such amounts shall be levied only upon the property included in such zone or zones. [Emphasis added]

Section 176(27) appears to contemplate the assessment of property owners within a zone of assessment on a prospective basis, that is, for costs incurred subsequent to the establishment of the zone or zones, for the special service or benefit they receive. We find no authority for the fire district to charge back to a zone of assessment, retroactively, costs incurred by the district prior to the establishment of the zone.

Under the circumstances outlined in your inquiry, it is our opinion that, assuming the fire district determines that it is obligated to pay the cost of hydrant rental prior to the date of the written rental agreement, the property owners within the zone of assessment may be assessed only for the expense of the rental of the hydrants incurred after the zone was established. The cost of any hydrant rental which the district is obligated to pay and which was incurred prior to the establishment of the zone of assessment would be raised from the district as a whole (Town Law, §181).

33 Opns St Comp, 1977, p 184 and 5 Opns St Comp, 1949, p 345 are superseded to the extent that they suggest that a private water-works corporation would be entitled to receive compensation for the use of fire hydrants even in the absence of a properly authorized contract.

July 5, 1990
Neil S. Weiner, Esq., Attorney at Law
Jonesville Fire District