Opinion 2008 - 5


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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

 

FIRE COMPANY -- Powers and Duties (amount payable to volunteer fire company under fire protection contract); (restrictions on use of money payable under fire protection contract); (submission of budget to village and town under fire protection contract)

FIRE PROTECTION AND PREVENTION -- Contracts (amounts payable to volunteer fire company); (restrictions on use of money by volunteer fire company); (submission of budget by volunteer fire company)

FIRE PROTECTION DISTRICTS -- Contracts (payment of amount directly to volunteer fire company); (restrictions on use of money by volunteer fire company); (submission of budget by volunteer fire company); (with village)

VILLAGES -- Fire Department and Fire Protection (terms and conditions of fire protection contracts)

TOWN LAW § 184; GENERAL MUNICIPAL LAW § 209-d: With respect to a fire protection contract between a village and a town on behalf of a fire protection district for the services of a village fire company: (1) there is no statutory requirement that any portion of the consideration under the contract be paid to the fire company; (2) subject to the cap of thirty-five per centum applicable if the village owns all of the fire apparatus to be used in carrying out the contract, the parties to the contract may determine the amount to be paid to the fire company, which amount may be based on any reasonable and equitable formula agreed to by the parties, including one based on total assessed value of property within the fire protection district; (3) the contract may provide for the town receiving fire protection to directly remit to the fire company the portion of the consideration payable to the fire company; (4) the fire protection contract may provide, as a negotiated term or condition, that the fire company's budget must be submitted to the village or town before funds are paid to the fire company under the contract; and (5) the fire protection contract may provide, as a negotiated term or condition, for the setting aside of monies paid to the fire company to be used for specified fire company purposes. Any such fire protection contract is subject to the consent of the fire company under General Municipal Law § 209-d.


You indicate that a village contracts to provide fire protection to a town fire protection district. The fire protection is provided by an incorporated volunteer fire company, the members of which constitute the village fire department. You ask the following: (1) Is the village required to pay to the fire company any amount of the consideration paid to the village under the fire protection contract? (2) May any consideration payable to the fire company under the fire protection contract be based on a percentage of the total assessed valuation of properties within the fire protection district? (3) May the fire protection contract provide that the town pay any consideration payable to the fire company directly to the company? (4) May the fire company be required to submit a budget to the village and town before receiving its share of the consideration under the contract? (5) May the village place restrictions on the use of the fire company's share of the consideration?

Town Law § 184 (1) authorizes a town board on behalf of a fire protection district to contract with, among other entities, a village for the provision of fire protection within the district. Pursuant to General Municipal Law § 209-d, the consent of the volunteer fire company that is to provide services under the fire protection contract between the town and the village is required (see 1990 Op St Comp No. 90-19, at 42). General Municipal Law § 209-d further states that any such contract for fire protection “may provide” for the payment of a portion of the consideration payable under the contract to the volunteer fire company to be expended for fire company purposes only. If the village owns all of the fire apparatus to be used in carrying out the contract, the portion of the consideration that may be paid to the fire company generally cannot exceed thirty-five per centum. 1 (17 Op St Comp No. 61-28, at 20 [1961]). Since the above-quoted language from General Municipal Law § 209-d is permissive in nature, it is evident that there is no statutory requirement that any portion of the consideration under the contract be paid to the fire company, and no amount may be paid unless provision is made for such payment in the contract ( see e.g . 24 Op St Comp No. 68-515, at 512 [1968]).

Except for the thirty-five per centum cap, there is no statutory direction regarding the amount that may be paid to the fire company. In the absence of any such direction, it is our opinion that it is for the parties to the contract, subject to the fire company's consent to the contract as required by General Municipal Law § 209-d, to determine the amount to be paid. Further, we believe that such amount may be based on any reasonable and equitable formula agreed to in the contract, including a formula based on total assessed value of property within the fire protection district.

General Municipal Law §209-d is silent with respect to whether the agreed upon amount to be paid to the fire company may be paid directly by the town to the fire company. In the absence of a statutory requirement to the contrary, we have expressed the opinion that the contract may provide for the town receiving fire protection to directly remit to the fire company the portion of the consideration payable to the fire company (31 Ops St Comp No. 75-1235, at 159 [1975]).

There is no statute that requires a volunteer fire company of a village fire department, which provides services under a fire protection contract between a village and a town, to submit a budget to the village or town before receiving funds under the contract (see e.g. 1987 Ops St Comp No. 87-28, at 46; 1975 Ops St Comp No. 75-75; 1960 Ops St Comp No. 60-799). Moreover, once the money has been paid over to the fire company, there is no statutory obligation for the fire company to render an accounting to the village or the town (18 Ops St Comp No. 62-172, at 101 [1962]; 1960 Ops St Comp No. 60-799, supra; compare General Municipal Law §209-z [containing an annual audit requirement applicable to certain fire companies that contract to provide fire protection] 2). We have expressed the opinion, however, that as a negotiated term or condition of a fire protection contract between a village and a town, the contract could provide that the fire company books and records pertaining to the receipt and expenditure of that portion of the contract consideration paid to the fire company will be submitted periodically for audit by the village (1988 Ops St Comp No. 88-55, at 111). Similarly, we believe that, as a negotiated term or condition of the fire protection contract, the contract could provide for the fire company's budget to be submitted to the village or town before funds are paid to the fire company under the contract, subject to the fire company's consent to the contract.

Finally, General Municipal Law § 209-d provides that the portion of the consideration paid to the fire company must be expended for fire company purposes only and provides no authority to the village unilaterally to restrict the use of those monies to particular fire company purposes (18 Ops St Comp No. 62-172, at 101, supra). Nonetheless, we have expressed the opinion that, as part of the negotiated fire protection contract, provision may be made for the setting aside of monies paid to the fire company to be used for specified fire company purposes (1981 Ops St Comp No. 81-347, at 380). The contract, of course, would remain subject to the consent of the fire company under General Municipal Law § 209-d.

Accordingly, with respect to a fire protection contract between a village and a town on behalf of a fire protection district for the services of a village fire company: (1) there is no statutory requirement that any portion of the consideration under the contract be paid to the fire company; (2) subject to the cap of thirty-five per centum applicable if the village owns all of the fire apparatus to be used in carrying out the contract, the parties to the contract may determine the amount to be paid to the fire company, which amount may be based on any reasonable and equitable formula agreed to by the parties, including one based on total assessed value of property within the fire protection district; (3) the contract may provide for the town receiving fire protection to directly remit to the fire company the portion of the consideration payable to the fire company; (4) the fire protection contract may provide, as a negotiated term or condition, that the fire company's budget must be submitted to the village or town before funds are paid to the fire company under the contract; and (5) the fire protection contract may provide, as a negotiated term or condition, for the setting aside of monies paid to the fire company to be used for specified fire company purposes. Any such fire protection contract is subject to the consent of the fire company under General Municipal Law § 209-d.

December 26, 2008

Howard I. Krantz, Esq., Village Attorney
Village of Lake George

1 The thirty-five per centum cap may be exceeded if a greater portion of the consideration was being paid on March 15, 1941, under a contract entered into on or before that date. In that case, a portion of the consideration no greater than the amount that was being paid on that date may be paid to the fire company under contracts entered into on or after that date.

2 We believe the audit requirement in General Municipal Law § 209-z is not applicable here. General Municipal Law § 209-z applies when any “fire company” with a certain amount of revenues “contracts” with, among other entities, a town to provide fire protection services. Although a fire company of a village fire department must consent, and may be a party, to a fire protection contract between the village and a town, the fire company is not a necessary party to the fire protection contract between the town and the village ( see e.g. 1987 Ops St Comp No. 87-73, at 110; 26 Ops St Comp No. 70-769, at 189 [1970]). Therefore, in our view, such a fire company does not “contract” with the town to provide fire service within the contemplation of General Municipal Law § 209-z. This conclusion is supported by the legislative history of General Municipal Law § 209-z. As originally enacted, General Municipal Law § 209-z provided for audits of an “entity” that contracts with a city, town, village or fire district to provide fire protection services (L 2006, ch 237). General Municipal Law § 209-z was amended in 2007 to clarify that the audit requirement does not apply when a municipality, such as a village, contracts to provide fire protection to another municipality or fire district. The 2007 amendment replaced the word “entity” with “fire company” (L 2007, ch 555). The purpose of this change was to make clear that the audit requirement did not apply when a municipality contracts to provide fire protection services to other municipalities and fire districts (Office of the State Comptroller's Approval Mem, Bill Jacket, L 2007, ch 555, at 14).