Local Government and School Accountability: Special District Consolidation in Towns

There are 932 towns in New York, which encompass all areas of the State except those within the boundaries of cities or Native American reservations.

There are more than 6,900 town special districts statewide. A special district may be generally described as a geographic area within a town established to provide certain services or improvements, such as water, sewer, drainage or refuse collection, to meet specific needs of property owners within the district.

Special districts are financed by charges against benefited properties within the district and, in some cases, user fees. There are two methods for assessing charges on behalf of town special districts – benefit assessments, which are charges imposed in proportion to the benefits received by a property, and ad valorem levies, which are imposed in the same manner and at the same time as real property taxes (generally, an amount per $1,000 of assessed value). Not all types of districts have the option of imposing both types of charges, and not all types of districts may impose user fees. Many towns administer multiple special districts, often providing the same type of service.

The Office of the State Comptroller (OSC) has long promoted the potential benefits of intermunicipal cooperation and, when appropriate, consolidation between local governments providing the same or similar services. Similarly, there are opportunities for achieving economies through cooperation and consolidation within a single local government.

The brochure is intended as a procedural guide for town boards and taxpayers interested in exploring ways to make their government more efficient through the consolidation of special districts within a town.

Consolidating Special Districts

Statutory Authority
Town Law section 206 authorizes and sets forth procedures for towns to consolidate two or more special districts located within the same town.

What Can Be Accomplished
Under Town Law section 206, a town may consolidate districts that were created for the same purpose (e.g., two or more water districts) or districts that have the same boundaries but were created for different purposes (e.g., a water and a sewer district having the same boundaries). Districts do not have to be adjoining in order to be consolidated.

If the districts being consolidated use different methods of assessing costs (benefit- versus ad valorem-based charges), then the town board would choose one of the two methods for future assessments on behalf of the consolidated district. Also, if one or more of the districts being consolidated is governed by a separate board of commissioners, the separate board(s) would be abolished and the consolidated district would be governed by the town board.

All property of the original districts may become the property of the consolidated district, and the cost of debt service for all the outstanding debt of the original districts may be raised by the consolidated district. Also, after the consolidation, there would be a single operating budget for the consolidated district and all future debt would be issued on behalf of the consolidated district.

How the Process is Initiated
The consolidation process may be initiated either by a resolution of the town board or by filing a proper petition with the town clerk that is signed by at least 10 percent of the owners of taxable property in each affected district.

Public Hearing Requirement
A public hearing is required whether the process is initiated by the town board or by petition. The public hearing is called by a town board resolution. In the case of a process initiated by petition, a resolution calling the hearing must be adopted within 20 days after the petition has been filed.

Public notice of the hearing must be published by the town clerk in the town’s designated newspaper at least 10 days prior to the date of the hearing, and must state the time and place of the hearing.

The town board then meets at the time and place specified and hears from interested parties concerning the proposed consolidation.

Resolution Process
After the public hearing, the town board may determine that it is in the public interest to:

If the town board makes the necessary determinations, it would then adopt a resolution, subject to permissive referendum, consolidating the districts.

Within 10 days of adopting the resolution, the town clerk must publish a notice of the adoption of the resolution in the town’s designated newspaper and post the notice on the clerk’s bulletin board. Notice may also be posted on the town’s website, if any.

The resolution (but not the consolidation) is effective 30 days after it is adopted unless a petition of the qualified electors of the districts calling for a referendum is filed with the town clerk.

Permissive Referendum
If a proper petition, signed by at least 25 qualified electors in each affected district, or by a proper number of qualified electors in any one affected district, is filed with the town clerk within 30 days after the adoption of the resolution (see Town Law section 206[5] for further information), the town board must hold a referendum between 20 and 30 days from the day of the filing. The town board can also choose to hold the referendum on its own motion, without the submission of a proper petition. The town clerk is required to have available proper forms for the petition.

The town board, by resolution, designates a separate voting place for each affected district and sets forth the proposition to be voted on. There must be separate voting places for each district affected by the proposed consolidation and the polls must be open, at a minimum, from 6 pm until 9 pm.

Only electors who are owners of taxable property in the affected special districts are eligible to vote. In order for the proposition to be approved, it must pass separately in each of the affected districts. The resolution for consolidation becomes effective once the proposition is passed.

Outstanding Debt
Unless the resolution for consolidation provides otherwise, all the property of the original districts becomes the property of the consolidated district, and the cost of debt service for all the outstanding debt of the original districts will be raised by the consolidated district.

Effective Date of Consolidation
If the resolution for consolidation became effective on or before October 1st, the consolidation is effective December 31st of that year. If the resolution for consolidation became effective after October 1st, the consolidation is effective on December 31st of the next calendar year.

Filings
A certified copy of the town board’s final determination consolidating the districts must be filed by the town clerk with the county clerk and with the State Comptroller’s Office.

Consolidating Special Districts and Extensions

Towns are also authorized to consolidate districts with their extensions. Under Town Law section 206-a, a town may decide to spread the cost of all existing and future debt of a district, including debt issued for extensions to the district, over the entire district.

This determination may be made only in connection with a proceeding either to extend a district or to consolidate districts.

Requirements for the notice of public hearing and permissive referendum are provided for in section 206-a.

Other Consolidation and Cooperation Opportunities

There are other options available that may contribute to the efficient delivery of services provided by special districts through cooperative efforts:

Town Law section 208 – relates to joint administration and operation of special improvement districts with town functions.

Town Law section 192-a – relates to the building of facilities for water, sewer and drainage facilities in excess of those required for a proposed district or extension.

Town Law Article 12-C – relates to the construction and operation, as a town function, of town-outside-village water, sewer or drainage improvements and the dissolution of districts in connection with this function.

General Municipal Law Articles 5-B and 5-F – relates to the authorization to provide common water supply and drainage facilities.

General Municipal Law Articles 5-C, 5-D, and 5-E – relates to the development of excess water, sewer and drainage capacity for sale to other municipalities and districts.

General Municipal Law Article 5-G – relates to the general authorization given to municipal corporations and special districts to enter into agreements that allow them to perform their functions with one another on a cooperative or contractual basis, and for the provision of joint services and joint water, sewer and drainage projects.

General Municipal Law Article 6 – relates to the authorization for the provision of joint sewerage disposal systems, mutual aid for water services and joint solid waste management-resource recovery.

Overview of Consolidation Process

Options Available to Consolidate Fire Protection Services

Town Law section 172-b – relates to the consolidation of adjoining town fire protection districts.

Town Law section 172 – relates to the consolidation of adjoining fire districts.

Town Law section 172-d – relates to adding fire protection districts to adjoining fire districts.

Town Law article 11-A – relates to the establishment of joint town-village fire districts.


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	Special District Consolidation in Towns Consolidation Brochure [pdf] Special Districts in New York State \| Consolidating Special Districts \| Consolidating Special Districts and Extensions \| Other Consolidation and Cooperation Opportunities \| Overview of Consolidation Process \| Options Available to Consolidate Fire Protection Services \| More Information Special Districts in New York State There are 932 towns in New York, which encompass all areas of the State except those within the boundaries of cities or Native American reservations. There are more than 6,900 town special districts statewide. A special district may be generally described as a geographic area within a town established to provide certain services or improvements, such as water, sewer, drainage or refuse collection, to meet specific needs of property owners within the district. Special districts are financed by charges against benefited properties within the district and, in some cases, user fees. There are two methods for assessing charges on behalf of town special districts – benefit assessments, which are charges imposed in proportion to the benefits received by a property, and ad valorem levies, which are imposed in the same manner and at the same time as real property taxes (generally, an amount per $1,000 of assessed value). Not all types of districts have the option of imposing both types of charges, and not all types of districts may impose user fees. Many towns administer multiple special districts, often providing the same type of service. The Office of the State Comptroller (OSC) has long promoted the potential benefits of intermunicipal cooperation and, when appropriate, consolidation between local governments providing the same or similar services. Similarly, there are opportunities for achieving economies through cooperation and consolidation within a single local government. The brochure is intended as a procedural guide for town boards and taxpayers interested in exploring ways to make their government more efficient through the consolidation of special districts within a town. Back to Top Consolidating Special Districts Statutory Authority Town Law section 206 authorizes and sets forth procedures for towns to consolidate two or more special districts located within the same town. What Can Be Accomplished Under Town Law section 206, a town may consolidate districts that were created for the same purpose (e.g., two or more water districts) or districts that have the same boundaries but were created for different purposes (e.g., a water and a sewer district having the same boundaries). Districts do not have to be adjoining in order to be consolidated. If the districts being consolidated use different methods of assessing costs (benefit- versus ad valorem-based charges), then the town board would choose one of the two methods for future assessments on behalf of the consolidated district. Also, if one or more of the districts being consolidated is governed by a separate board of commissioners, the separate board(s) would be abolished and the consolidated district would be governed by the town board. All property of the original districts may become the property of the consolidated district, and the cost of debt service for all the outstanding debt of the original districts may be raised by the consolidated district. Also, after the consolidation, there would be a single operating budget for the consolidated district and all future debt would be issued on behalf of the consolidated district. How the Process is Initiated The consolidation process may be initiated either by a resolution of the town board or by filing a proper petition with the town clerk that is signed by at least 10 percent of the owners of taxable property in each affected district. Public Hearing Requirement A public hearing is required whether the process is initiated by the town board or by petition. The public hearing is called by a town board resolution. In the case of a process initiated by petition, a resolution calling the hearing must be adopted within 20 days after the petition has been filed. Public notice of the hearing must be published by the town clerk in the town’s designated newspaper at least 10 days prior to the date of the hearing, and must state the time and place of the hearing. The published notice must also: Describe, in general terms, the proposed consolidation (e.g., identify the districts to be consolidated); State the proposed basis of future assessments, if the method of assessing costs (benefit or ad valorem) will be changed; State that consolidation will result in the abolition of the offices of the district commissioners, if any of the affected districts has a separate board of commissioners; and State the proposed disposition of property and indebtedness of the original districts. The town board then meets at the time and place specified and hears from interested parties concerning the proposed consolidation. Resolution Process After the public hearing, the town board may determine that it is in the public interest to: Consolidate some or all of the districts and, where appropriate Assess future costs of the consolidated district on a particular basis (benefit or ad valorem) Abolish any existing boards of commissioners. If the town board makes the necessary determinations, it would then adopt a resolution, subject to permissive referendum, consolidating the districts. Within 10 days of adopting the resolution, the town clerk must publish a notice of the adoption of the resolution in the town’s designated newspaper and post the notice on the clerk’s bulletin board. Notice may also be posted on the town’s website, if any. The notice must: State the date the resolution was adopted; State that the resolution is subject to permissive referendum; Contain an abstract of the resolution, describing in general terms the districts that are being consolidated (it may also include information relating to property and outstanding debt of the original districts); Specify the offices of commissioner, if any, to be abolished; and Where applicable, specify the basis for future assessments of costs (benefit or ad valorem). The resolution (but not the consolidation) is effective 30 days after it is adopted unless a petition of the qualified electors of the districts calling for a referendum is filed with the town clerk. Permissive Referendum If a proper petition, signed by at least 25 qualified electors in each affected district, or by a proper number of qualified electors in any one affected district, is filed with the town clerk within 30 days after the adoption of the resolution (see Town Law section 206[5] for further information), the town board must hold a referendum between 20 and 30 days from the day of the filing. The town board can also choose to hold the referendum on its own motion, without the submission of a proper petition. The town clerk is required to have available proper forms for the petition. The town board, by resolution, designates a separate voting place for each affected district and sets forth the proposition to be voted on. There must be separate voting places for each district affected by the proposed consolidation and the polls must be open, at a minimum, from 6 pm until 9 pm. Only electors who are owners of taxable property in the affected special districts are eligible to vote. In order for the proposition to be approved, it must pass separately in each of the affected districts. The resolution for consolidation becomes effective once the proposition is passed. Outstanding Debt Unless the resolution for consolidation provides otherwise, all the property of the original districts becomes the property of the consolidated district, and the cost of debt service for all the outstanding debt of the original districts will be raised by the consolidated district. Effective Date of Consolidation If the resolution for consolidation became effective on or before October 1st, the consolidation is effective December 31st of that year. If the resolution for consolidation became effective after October 1st, the consolidation is effective on December 31st of the next calendar year. Filings A certified copy of the town board’s final determination consolidating the districts must be filed by the town clerk with the county clerk and with the State Comptroller’s Office. Back to Top Consolidating Special Districts and Extensions Towns are also authorized to consolidate districts with their extensions. Under Town Law section 206-a, a town may decide to spread the cost of all existing and future debt of a district, including debt issued for extensions to the district, over the entire district. This determination may be made only in connection with a proceeding either to extend a district or to consolidate districts. Requirements for the notice of public hearing and permissive referendum are provided for in section 206-a. Back to Top Other Consolidation and Cooperation Opportunities There are other options available that may contribute to the efficient delivery of services provided by special districts through cooperative efforts: Town Law section 208 – relates to joint administration and operation of special improvement districts with town functions. Town Law section 192-a – relates to the building of facilities for water, sewer and drainage facilities in excess of those required for a proposed district or extension. Town Law Article 12-C – relates to the construction and operation, as a town function, of town-outside-village water, sewer or drainage improvements and the dissolution of districts in connection with this function. General Municipal Law Articles 5-B and 5-F – relates to the authorization to provide common water supply and drainage facilities. General Municipal Law Articles 5-C, 5-D, and 5-E – relates to the development of excess water, sewer and drainage capacity for sale to other municipalities and districts. General Municipal Law Article 5-G – relates to the general authorization given to municipal corporations and special districts to enter into agreements that allow them to perform their functions with one another on a cooperative or contractual basis, and for the provision of joint services and joint water, sewer and drainage projects. General Municipal Law Article 6 – relates to the authorization for the provision of joint sewerage disposal systems, mutual aid for water services and joint solid waste management-resource recovery. Back to Top Overview of Consolidation Process Back to Top Options Available to Consolidate Fire Protection Services Town Law section 172-b – relates to the consolidation of adjoining town fire protection districts. Town Law section 172 – relates to the consolidation of adjoining fire districts. Town Law section 172-d – relates to adding fire protection districts to adjoining fire districts. Town Law article 11-A – relates to the establishment of joint town-village fire districts. For More Information: For questions regarding special district consolidation, contact your town attorney or OSC’s Division of Legal Services at (518) 474-5586 Back to Top