Opinion 95 - 1


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

COMMUNITY DEVELOPMENT AGENCIES -- Officers and Employees (municipality's responsibility to pay health care costs)

INSURANCE -- Health Insurance (municipality's responsibility to pay health care cost of urban renewal agency employees)

MUNICIPAL CORPORATIONS -- Powers and Duties (contribution to urban renewal agency for health care benefits)

GENERAL MUNICIPAL LAW, §§503-a, 554: A city is not responsible for paying the cost of health care benefits to retirees of a city urban renewal agency. The city, however, may determine to provide city funds to the agency to cover costs of such benefits.

You state that an existing city urban renewal agency provides health care benefits to its retirees and ask whether the city is responsible for paying the cost of these benefits in the event the agency has insufficient funds to cover the cost. For purposes of this opinion, we assume the agency is properly providing and funding these benefits (see Civil Service Law, §§163[4], 200 et seq.; 1988 Opns St Comp No. 88-64, p 126).

A city urban renewal agency is "a corporate governmental agency, constituting a public benefit corporation" (General Municipal Law, §553[2]). As such, the agency has a corporate existence separate from the city (1981 Opns St Comp No. 81-117, p 119; 34 Opns St Comp, 1978 p 68).

Among other things, the agency has express authority, independent of the city, to appoint its own employees, prescribe their duties and fix their compensation (General Municipal Law, §554[7]). Therefore, since the agency, not the city, is the employer of employees appointed by the agency (see 1979 Opns St Comp No. 79-20, unreported; Civil Service Law, §§163[4], 201[6][a][v]), the agency is responsible for paying the costs of benefits properly due agency employees and former employees. There is no provision of law which makes the city secondarily responsible for such expenses of the agency (34 Opns St Comp, 1978, supra).

While the city is not required to pay these costs, we note that it is authorized to "make advances, loans, grants, subsidies, contributions and any other form of financial assistance to" the agency, for purposes of effectuating the purposes and provisions of the urban renewal statutes (General Municipal Law, §503-a[4]; see also General Municipal Law, §§501; 551). Pursuant to this grant of the authority, it is our opinion that the city, in its discretion, could determine to provide city funds to the agency to cover costs of health care benefits to retirees of the agency (see 34 Opns St Comp, 1978, p 68, supra).

Accordingly, a city is not responsible for paying the cost of health care benefits to retirees of a city urban renewal agency. The city, however, may determine to provide city funds to the agency to cover costs of such benefits.

February 15, 1995
Paul L. Wollman, Esq., City Attorney
City of Amsterdam