Opinion 96 - 15


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

BUILDING INSPECTOR -- Expenses (judgment arising from his or her actions)

MUNICIPAL FUNDS -- Part-town Charges (payment of judgment arising from part-town function) -- Town Charges (payment of judgment arising from townwide function)

TOWN BOARD -- Powers and Duties (authority to apportion the cost of certain judgments between part-town and townwide portions of general fund)

TOWN SUPERVISOR -- Expenses (judgment arising from his or her actions)

ZONING AND PLANNING -- Expenses (judgment arising from zoning and planning function)

TOWN LAW, §§121, 138, 261: The amount necessary to pay a judgment arising from the conduct of the building inspector or from the town's planning and zoning activities is properly chargeable to the area of the town outside of any villages. If the town board determines that a judgment arises partially from the actions of the building inspector or from the town's planning and zoning activities and partially from townwide functions, the town board should apportion the cost of the judgment equitably between the part-town and townwide portions of the general fund.

This is in reply to your inquiry concerning the payment of a judgment rendered against the town as a result of the revocation of a building permit. In the case in question, the trial court found that the actions of former town officials in revoking a building permit were arbitrary and capricious and that the town was liable, under the provisions of 42 USC §1983, for damages resulting from the revocation of the building permit (Town of Orangetown v Magee, 156 Misc 2d 881, 594 NYS2d 951, affd 215 AD2d 469, 626 NYS2d 511, affd 88 NY2d 41, _____ NYS2d _____). The trial court noted that the former town supervisor, some members of the town board, the former town attorney, and the former building inspector were involved in an "orchestrated effort" to revoke the building permit (156 Misc 2d at 894, 594 NYS2d at 960). The Appellate Division and the Court of Appeals indicated that the revocation of the building permit was within the purview of the building inspector, and also cited the town supervisor's direction to the building inspector to revoke the building permit in relation to making a determination of the town's liability under 42 USC §1983 (see 215 AD2d at 470, 626 NYS2d at 513; 88 NY2d at 53, _____ NYS2d at _____). You ask whether the damages payable pursuant to this judgment are a townwide or a part-town charge.

The general rule is that all taxes for town purposes must be levied on the whole area of the town, unless the Legislature, by statute, requires or permits any given expenditure to be paid for from taxes levied only on the unincorporated area of the town (1987 Opns St Comp No. 87-37, p 59; 1980 Opns St Comp No. 80-334, p 98; see also Incorporated Village of Ardsley v Town of Greenburgh, 79 AD2d 628, 433 NYS2d 626, affd as mod 55 NY2d 915, 449 NYS2d 27). With respect to the payment of judgments, section 121 of the Town Law provides that, whenever a final judgment has been recovered against a town, the town board may provide the amount necessary to pay the judgment by taxation or pursuant to the Local Finance Law. Section 121 is silent as to whether the amount necessary to pay a judgment is to be raised on a townwide basis or on a part-town basis (1987 Opns St Comp No. 87-35, p 56; cf. Town Law, §64[22] which specifies that certain expenditures must be townwide charges).

If only section 121 were considered in applying the general rule discussed above, the amount of a judgment would always be a townwide charge because section 121 does not require or permit the cost of a judgment to be charged to the area of the town outside of any villages. This Office has, however, previously indicated that section 121 is not controlling on this issue. Rather, we have expressed the opinion that the cost of settling a claim or action arising in connection with a function, the cost of which is authorized or required to be charged only to the area of the town outside of any villages, is a cost of that function and is, therefore, chargeable to the area of the town outside of any villages (Opn No. 87-35, supra; see also Opn No. 87-37, supra; 23 Opns St Comp, 1967, p 741; 1980 Opns St Comp No. 80-456, unreported).

In this instance, section 138 of the Town Law makes all charges and expenses, including salaries, incurred by the building inspector and his or her deputies and assistants in connection with the building inspector's duties under that section a part-town charge (1989 Opns St Comp No. 89-61, p 135). In relation to expenditures by a town for zoning and planning purposes, section 261 of the Town Law provides that ". . . all charges and expenditures incurred under this article [Article 16 of the Town Law] for zoning and planning shall be a charge upon the taxable property of that part of the town outside of any incorporated village or city." Given that provisions of the sections 138 and 261 of the Town Law clearly make the charges and expenses of the building inspector and of the town's planning and zoning activities part-town charges, we conclude that the amounts necessary to pay a judgment against the town that arises from the conduct of the building inspector or from the town's planning and zoning activities are chargeable to the area of the town outside of any villages.

Having reached the above conclusion in relation to the payment of a judgment that arises from the conduct of the building inspector or from the town's zoning and planning activities, we emphasize that in the case that occasioned this inquiry, the courts, as noted above, cited not only the actions of the former building inspector, but also the actions of the former supervisor, members of the town board, and the former town attorney in finding the town liable under 42 USC §1983. This Office is not in a position to determine the extent to which the judgment here may be attributable to the actions of the building inspector or to the town's planning and zoning activities and the extent to which the judgment may be attributable to the actions of the town supervisor or other town officers whose functions or activities are funded on a townwide basis.

We believe that it is the responsibility of the town board, upon review of the courts' decisions and with the advice of the town attorney, to make an initial determination in this regard (see Town Law, §§64[1], 119). If the town board determines that the judgment arises partially from the actions of the building inspector or from the town's planning and zoning activities and partially from townwide functions, the town board should apportion the cost of the judgment equitably between the part-town and townwide portions of the general fund (see Opn No. 87-37, supra).

Therefore, pursuant to the apportionment made by the town board, the area of the town outside of any villages, alone, would be responsible for that portion of the judgment, if any, determined to be attributable to the actions of the building inspector or to the town's zoning and planning activities. The portion of the judgment, if any, determined to be attributable to town officers or activities funded on a townwide basis would be raised as a townwide charge on all taxable property in the town, including taxable property within any villages. Consequently, owners of taxable real property in the areas of the town outside of any villages will be subject to taxation for both portions of the judgment, while the owners of taxable real property within any villages will be subject to taxation for only that portion of the judgment determined to be attributable to town officers or activities funded on a townwide basis.

July 1, 1996
James K. Riley, Esq., Town Attorney
Town of Orangetown