Opinion 90-61


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


LOCAL LAWS -- Preemption (financing town improvement districts)
IMPROVEMENT DISTRICTS -- Assessments (authority to impose benefit assessments in water supply district) -- Water Supply Districts (authority to impose benefit assessments)
WATER SUPPLY AND DISTRIBUTION -- Water Supply Districts (abolishment and reestablishment as water district); (authority to impose benefit assessments or user fees)

TOWN LAW, §§202(3), 202-a(1): A town may assess the costs of establishing and maintaining a water supply district only on an ad valorem basis, and not on a benefit basis. Also, a town may not establish a system of user fees to finance the costs of a water supply district.

You ask whether the costs of establishing and of operating and maintaining a town water supply district must be assessed only on an ad valorem basis.

Town Law, §§202 and 202-a provide the manner in which assessments shall be raised in town special districts established pursuant to Town Law, Articles 12 and 12-A. Subdivision 3 of section 202 provides that the expenses of establishment of a water supply district shall be raised on an ad valorem basis. Town Law, §202-a(1) provides that the cost of operation and maintenance of such a district shall be raised in the same manner as the cost of establishment, that is, on an ad valorem basis. There is no authority in the Town Law, however, to assess the cost of a water supply district on a benefit basis (cf. Town Law, §§202[3], 202-a, authorizing the assessment of the costs of a water district on a benefit basis under certain circumstances). Also, we note that there is no authority in the Town Law to establish a system of user fees to be paid by customers of a water supply district to finance the cost of such a district (cf. Town Law, §198[3][d], authorizing the establishment of user fees for water districts).

Further, it is our opinion that a town may not, by local law, provide for the imposition of benefit assessments or user fees to finance the costs of water supply districts. The State Legislature, by enacting provisions in Articles 12 and 12-A for financing town improvement districts, has created a comprehensive legislative scheme and evinced an intent to pre-empt the area of financing for improvement districts (Coconato v Town of Esopus, 152 AD2d 39, 547 NYS2d 953 lv den 76 NY2d 701, 558 NYS2d 891; 1986 Opns St Comp No. 86-53, p 89; see also Municipal Home Rule Law, §10[1][ii][d][3], which precludes a town from superseding provisions of the Town Law relating to special or improvement districts).

While a town may assess the costs of a water supply district only on an ad valorem basis, as noted above, the costs of a town water district, under certain circumstances, may be assessed on a benefit basis and the town board may establish a system of user fees to finance costs of the water district. In this regard, we note that Town Law, §207 prescribes a procedure for the town board of any town in which a water supply district was established prior to January 1, 1934 to reestablish such a water supply district as a water district.

February 6, 1990
Cornelius F. Healy
Deputy State Comptroller