Opinion 97 - 6


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

COUNTIES -- Emergency (911) Telephone System (use of surcharge revenues to construct housing for enhanced emergency telephone system) -- Powers and Duties (expenditure of revenues derived from surcharge imposed to establish and maintain E911 system)

MUNICIPAL FUNDS -- Appropriations and Expenditures (expenditure by county of revenues derived from surcharge imposed to establish and maintain E911 system)

WORDS AND PHRASES -- "Maintaining" (as including construction of appropriate housing for E911 system) -- "Operations and maintenance costs" (as distinguished from construction or acquisition) -- "System Costs" (as including construction and incidental costs for purposes of County Law, article 6)

COUNTY LAW, §§300, 301(8), 303, 308: The cost of constructing an addition to house an enhanced emergency telephone (E911) system which is determined by the county governing board to be necessary to properly house the system and to assure effective operation and maintenance of the system is a "system cost" within the meaning of County Law, §301(8). Further, the services of an architect and a construction manager incidental to the construction project also are "system costs".

You state that the county has established an enhanced emergency telephone system ("E911") and has imposed the surcharge authorized by County Law, article 6 (§§300-309). You ask whether costs associated with the construction of an addition to an existing building for purposes of housing the E911 operations, including costs of an architect and construction manager, are proper expenditures of the E911 surcharge revenues.

Article 6, enacted by chapter 756 of the Laws of 1989, relates to the establishment and administration by counties of an E911 service. One of the stated purposes of article 6 is to "provide counties with a funding mechanism to assist in the payment of the costs associated with establishing and maintaining an E911 system ..." (County Law, §300). Provision is made for any county, except a county wholly contained within a city, and every city having a population of a million or more people, which has established an E911 system to impose by local law a surcharge not to exceed 35 cents per access line per month on the customers of every telephone corporation providing local exchange access service within such municipality (County Law, §303[1]). Section 307 authorizes the expenditure of surcharge moneys only for payment of "system costs" as permitted by article 6.

Prior to 1996, "system costs" was defined in County Law, §301(8) as "... the costs associated with obtaining and maintaining the telecommunications equipment and the telephone services costs necessary to establish and provide an E911 system". Section 308(4) provided that "[c]osts incurred for personnel needed to operate an E911 system, including training and compensation thereof, the housing of system equipment and all other costs not included within the meaning of system costs shall be a municipality expense" (Emphasis added).

Based on these provisions, we have previously concluded that, since "system costs is defined to include the costs "associated with" obtaining and maintaining telecommunications equipment, the definition encompasses not only the actual costs of acquiring and maintaining the equipment, but also those costs necessarily incidental thereto (1995 Opns St Comp No. 95-5, p 8; 1990 Opns St Comp No. 90-51, p 116). We also had concluded that section 308(4) prohibited the expenditure of surcharge money for the purposes set forth therein (id.).

Chapter 309 of the Laws of 1996 amended section 301(8) to define "system costs" as "... the costs associated with obtaining and maintaining the telecommunications equipment, all operations and maintenance costs and the telephone services costs necessary to establish and provide an E911 system" (L 1996, ch 309, §242; emphasis added). Chapter 309 also repealed the provisions of section 308(4), including the prohibition on the use of surcharge money to pay for the costs of housing system equipment (L 1996, ch 309, §244).

Ordinarily, the costs of "maintaining", or "operations and maintenance costs" relate to items such as the recurring expenses of the day-to-day functioning and upkeep of facilities or equipment, as distinguished from the expense of construction or acquisition (see, e.g., Smull v Delaney, 175 Misc 795, 25 NYS2d 387; 1979 Opns St Comp, No. 79-398, unreported; cf., DaBolt v Bethlehem Steel Corp., 92 AD2d 70, 459 NYS2d 503 appeal dismissed 60 NY2d 701 467 NYS2d 1029). However, it is a general rule of statutory construction that " ... in enacting an amendment of a statute the Legislature, by changing the language, is deemed to have intended to materially change the law, and courts must seek the new legislative purpose and construe the law so that it may be effectuated, for otherwise the amendment would be nugatory" (McKinney's Statutes, §193).

In this instance, we believe the amended definition of "system costs", coupled with the repeal of the prohibition against using surcharge money for system housing costs, evince a legislative intent that the costs "associated with ... maintaining the telecommunication equipment [and] all operations and maintenance costs ... necessary to ... provide an E911 system" include the costs of constructing appropriate housing for the E911 system. We also believe, however, that the county governing board must first determine that the construction is necessary to properly house the E911 system and to assure effective operation and maintenance of the system. If services of an architect (see Education Law, §7209[3]) and a construction manager are necessitated by, and incidental to, the construction project for this purpose, they may also be included within "system costs" (see Opn No. 90-51, supra).

Accordingly, to the extent that constructing an addition is determined by the county governing board to be necessary to properly house the E911 system and assure effective operation and maintenance, the construction costs, including the incidental costs of hiring an architect and a construction manager for the project, are "system costs" within the meaning of County Law, §301(8) for which surcharge moneys may be expended.

February 27, 1997
Carol A. Bogle, Esq., Senior Assistant County Attorney
County of Dutchess