Opinion 2002 - 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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

REFERENDUM -- Mandatory (content of proposition to establish a service award program for volunteer firefighters); (need for when amending a service award program for volunteer firefighters)
VOLUNTEER FIREFIGHTERS -- Service Award Programs (content of proposition to establish);
(procedure to amend)

GENERAL MUNICIPAL LAW 216(1), (2), (3), 217: When establishing a service award program for volunteer firefighters, if the program is to provide credit for up to five years of firefighting service rendered prior to the establishment of the program, the proposition authorizing the establishment of the program must state, in addition to certain other information, the extent to which the prior service credit will be provided. There is no requirement, however, that the proposition contain a statement of the maximum service credit that may be earned under the program, the program's entitlement age, or the coverage and amount of any life insurance utilized in the program. Amendments to a service award program are subject to mandatory referendum, regardless of the effect of the amendment on the cost of the program.

This is in reply to your request for our opinion as to a number of issues arising in connection with a service award program for volunteer firefighters. Specifically, you ask:

  1. whether a proposition authorizing the establishment of a service award program must expressly state or refer to the following features of the program: prior service credit; maximum service credit; entitlement age; and life insurance coverage and amount;

  2. whether an amendment to a service award program which would add or change any of the above features, without increasing the cost of the program, would be subject to referendum;

  3. assuming that a "no-cost" amendment to a service award program is not subject to referendum, whether any increase in cost attributable to an amendment and, hence the need for a referendum, must be determined on the basis of the program's annual total cost or cost per firefighter; and

  4. assuming that a "no-cost" amendment to a service award program is not subject to referendum, whether an amendment that would increase the cost of the program would be subject to referendum if the increased cost were to be financed from "grant" monies from a local business, monies raised through fire company fund raising activities, or "excess funding" in the program, including amounts previously appropriated to fund the "frozen initial liability" attributable to prior service credit, but no longer needed for that purpose because that liability has been paid.

Article 11-A of the General Municipal Law (214 et seq.) authorizes certain "political subdivisions" to establish service award programs for volunteer firefighters. Section 216(1) and (2) require a service award program to be established by the adoption of a resolution by the affirmative vote of at least sixty percent of the governing board of a political subdivision and the subsequent approval of a proposition by the eligible voters at a mandatory referendum (see General Municipal Law 216[1], [2], 216-a[2]; see also 1990 Opns St Comp No. 90-57, p 131; 1989 Opns St Comp No. 89-41, p 98).

Section 216(3) of the General Municipal Law specifies the information that must be stated in a proposition described in section 216(1) or (2). Pursuant to this provision, the proposition must state whether the service award program is a "defined contribution program" or a "defined benefit program" (General Municipal Law 216[3][a]). The proposition must also state "the estimated annual cost of the service award program, including the estimated annual administration fee, the projected monthly award to be paid to eligible volunteer firefighters and the estimated annual cost per covered participant" (General Municipal Law 216[3][a], [b]).

In addition to the above requirements of section 216(3), several provisions in article 11-A refer to the referendum requirement or cross-reference the procedures in section 216. Section 218(d) and (e) of the General Municipal Law authorize defined contribution programs to provide optional additional line-of-duty disability and death benefits in an amount equal to an amount "stated in the referendum under which the program was established or amended ". Section 219(c) authorizes defined benefit programs to provide benefits prior to the tenth anniversary of the establishment of the program to a maximum of five years of active firefighting service per participant, "but only to the extent authorized pursuant to section two hundred sixteen of [article 11-A]." With one exception not here relevant (see General Municipal Law 216-a), there do not appear to be any other provisions of article 11-A which require information to be included in a proposition establishing a service award program.

Thus, based on the foregoing, since section 217(d) authorizes a service award program to provide prior service credit, "but only to the extent authorized pursuant to section two hundred sixteen of [article 11-A]," we believe that both the resolution and the proposition to establish a program providing this benefit must state the extent to which the prior service credit will be provided. There is no requirement, however, that a proposition to establish a service award program contain a statement of the maximum service credit 1, the program's entitlement age, or the coverage and amount of any life insurance utilized in the program 2.

With respect to whether a referendum is required to amend a service award program when the amendment would not increase the cost of the program, we note that section 216(3)(d) of the General Municipal Law provides, in relevant part, that a service award program "may be amended in the same manner as it was created in accordance with the provisions of [article 11-A] by following the procedures set forth in subdivision one or two of this section." As noted above, section 216(1) and (2) require a service award program to be established by the affirmative vote of at least sixty percent of the governing board of a political subdivision followed by the approval of a proposition by the eligible voters at a mandatory referendum. Therefore, the procedure for amending a service award program is essentially the same as the procedure for establishing the program; that is, the adoption of an amendment requires the affirmative vote of at least sixty percent of the governing board followed by the approval of a proposition by the eligible voters at a mandatory referendum.

Because a proposition to establish a service award program, after identifying the type of program, is only required to state certain information relating to the cost of the program, it can be argued that an amendment to a service award program should not be subject to referendum unless it would have the effect of changing any of the cost information stated in the proposition to establish the program. On its face, however, section 216(3)(d) applies to amendments to a service award program, without regard to the effect of the amendment on the cost of the program. We do not see any compelling reason to depart from the literal language of the statute. Accordingly, under these circumstances, we believe that the best and most prudent reading of the statute is that amendments to a service award program are subject to mandatory referendum, regardless of the effect of the amendment on the cost of the program 3.

January 8, 2002

Jeffrey A. Tait, Esq., Town Attorney
Town of Binghamton

1 Service credit under a service award program is referred to as a "year of firefighting service" (see, e.g., General Municipal Law 215[11], 217[a]-[c]). Insofar as here relevant, the only express limitation on crediting "years of firefighting service" is that a service award cannot be based on more than 40 "years of firefighting service" (see General Municipal Law 218[b], 219[b]). We express no opinion as to whether a service award program may provide for a maximum service credit of less than 40 years.

2 Although Article 11-A provides for the payment of certain death benefits (see General Municipal Law 218[e], 219[f]), it does not expressly provide for the use of life insurance to fund these benefits. Nonetheless, in appropriate circumstances, it may be proper to utilize life insurance to fund death benefits (see Report On Volunteer Firefighter Length of Service Award Programs 2001-PS-2, Office of the State Comptroller, Division of Municipal Affairs, July 2001). For purposes of this opinion, we assume the propriety of the use of life insurance for this program.

3 In view of the above conclusion, we need not address the remaining questions posed for our consideration. We note, however, that section 217(b) of the General Municipal Law provides, in part, that "[a]ny amounts attributable to forfeiture of a participant's service award shall be used to reduce contributions for service award program participants and shall not in any case be used to increase benefits for other participants. The preceding shall not preclude amendment of a service award program to provide for an increase in benefits." Therefore "excess funding" in a service award program attributable to forfeitures must be used to reduce contributions to the program and not to fund increased benefits.