Section 6-C. Capital reserve funds for counties, cities, villages, towns and sewer and water improvement districts

1. As used in this section:    a. The term "governing board", insofar as it is used in reference to a
  village, shall mean the board of trustees thereof; insofar as it is used
  in reference to a town, shall mean the town board thereof; insofar as it
  is  used  in  reference  to  a  county,  shall mean the legislative body
  thereof; insofar as it is used in reference to a city,  shall  mean  the
  "local legislative body" thereof, as that term is defined in subdivision
  seven  of  section  two  of the municipal home rule law, as amended from
  time to time; insofar as it is used in reference to  a  town  or  county
  improvement  district,  shall  mean  the  town  board of the town or the
  legislative body of the county in which such district is located unless,
  in the case of a town improvement district, such district has a separate
  board of commissioners, in which  case  it  shall  mean  such  board  of
  commissioners.
    b. The term "capital improvement" shall mean:
    (1)  Any  physical public betterment or improvement or any preliminary
  studies and surveys relative thereto.
    (2) Land or rights in land.
    (3)  Any  furnishings,  equipment,  machinery  or  apparatus  for  any
  physical public betterment or improvement acquired at the time when such
  betterment or improvement is constructed, reconstructed or acquired.
    c.  The  term  "equipment"  shall  include any equipment, machinery or
  apparatus  not  included  in  the  definition  of  the   term   "capital
  improvement"  and  for  the  acquisition  of  which a period of probable
  usefulness has been provided by law.
    d. The term "obligations" shall include bonds, notes, certificates  or
  other evidences of indebtedness.
    2. The governing board of any county, city, village, town or sewer and
  water  improvement  district may establish capital reserve funds for the
  financing of all or part of the cost of:
    a. The construction,  reconstruction  or  acquisition  of  a  specific
  capital  improvement  or  the acquisition of a specific item or specific
  items of equipment.
    b. The construction,  reconstruction  or  acquisition  of  a  type  of
  capital improvement or the acquisition of a type of equipment.
    3. The provisions of paragraph two shall not apply to:
    a.  Capital improvements to be constructed, reconstructed or acquired,
  or equipment to be acquired, on behalf of  an  improvement  district  or
  other  similar  district  located  within such municipality other than a
  sewer and/or water improvement district, or
    b. Capital improvements or equipment, all or part of the cost of which
  is to be borne by assessments for benefit or ad valorem taxes  upon  the
  real  property  within an area of benefit within such municipality other
  than a sewer and/or water improvement district.
    4. If the governing board authorizes the establishment  of  a  capital
  reserve  fund  for  the  financing  of  all  or  part of the cost of the
  construction,  reconstruction  or  acquisition  of  a  specific  capital
  improvement  or  the acquisition of a specific item or specific items of
  equipment, it shall  set  forth  in  such  authorization  the  estimated
  maximum  cost  thereof.  However, if the authorization by such governing
  board of the issuance of obligations for  such  capital  improvement  or
  equipment  is required by law to be subject to a permissive or mandatory
  referendum, then the authorization of the establishment of such  a  fund
  shall  be  subject  to  a  permissive  referendum. In the event that the
  authorization by such governing board of the issuance of obligations for
  such capital improvement or equipment is required by law to  be  subject
  to  a permissive or mandatory referendum only if such obligations are to

  have a maturity of more than five years or  not  less  than  some  other
  minimum  period,  then  the authorization of the establishment of such a
  fund shall be subject to a permissive referendum only if the  period  of
  probable usefulness of such capital improvement or equipment is equal to
  or more than such minimum period of maturity. A permissive referendum on
  the  authorization  of  the establishment of such a capital reserve fund
  shall be governed by:
    a. Sections twenty-four, twenty-five and twenty-six of  the  municipal
  home  rule  law,  as  amended  from  time to time, so far as they may be
  applicable, in the case of cities.
    b. Article seven of the town law, as amended from time to time, in the
  case of towns.
    c. Article nine of the village law, as amended from time to  time,  in
  the case of villages.
    5. There may be paid into any fund:
    a.   Such   an  amount  as  may  be  provided  therefor  by  budgetary
  appropriation or raised by tax therefor.
    b. Such revenues as are not required by law to be paid into any  other
  fund  or  account,  including  the proceeds from the sale of any capital
  improvement or equipment owned by such county, city,  village  or  town.
  This  provision shall not prevent the use of town highway moneys for the
  establishment of a capital reserve fund, provided that such  moneys  are
  expended  therefrom  for  the  purpose  for  which  they  were levied or
  received, that the consent of the town superintendent  of  highways  and
  town  board,  together with the approval of the county superintendent of
  highways, is given to the establishment thereof, and  that  such  moneys
  are  only  expended  therefrom  on  order  of the town superintendent of
  highways upon audit and with the consent of the town board.
    7. The moneys in each such fund shall be deposited and secured in  the
  manner  provided  by section ten of this article. The governing board or
  the chief fiscal officer of such municipality, if  the  governing  board
  shall delegate such duty to him, may invest the moneys in each such fund
  in  the  manner provided in section eleven of this article. Any interest
  earned or capital gains realized on the moneys so deposited or  invested
  shall accrue to and become part of each such fund. The separate identity
  of  each  such  fund  shall be maintained, whether its assets consist of
  cash or investments or both.
    8. An expenditure shall be made from a fund only by  an  authorization
  of  the  governing  board  and  for  a specific capital improvement or a
  specific item or specific items of equipment, the cost of which  may  be
  financed  therefrom.  However,  if a proposed expenditure is from a fund
  established for a type of capital improvement or equipment and if it  is
  required  by  law  that the authorization by such governing board of the
  issuance of obligations for such capital  improvement  or  equipment  be
  subject  to a permissive or mandatory referendum, then the authorization
  of such an expenditure shall be subject to a permissive  referendum.  In
  the event that the authorization by such governing board of the issuance
  of  obligations for such capital improvement or equipment is required by
  law to be subject to a permissive or mandatory referendum only  if  such
  obligations  are  to have a maturity of more than five years or not less
  than some other minimum  period,  then  the  authorization  of  such  an
  expenditure  shall  be  subject  to  a permissive referendum only if the
  period of probable usefulness of such capital improvement  or  equipment
  is  equal  to  or  more  than  such  minimum  period of maturity. Such a
  permissive referendum shall  be  governed  in  the  manner  provided  in
  paragraph  four  of this section. Notwithstanding any other provision of
  this section, but subject to the provisions  of  this  paragraph,  if  a
  capital  reserve  fund  has  been  established  for  a  specific capital

  improvement and it is later determined that a part of the cost  of  such
  capital  improvement  is  to  be  borne by assessments for benefit or ad
  valorem taxes upon real property within an  area  of  benefit  within  a
  municipality,  such fund may be expended to pay all or part of the share
  to be borne by the municipality at large.
    9. The governing board may authorize the transfer  to  the  credit  of
  another capital reserve fund of all or part of:
    a.  The  unexpended  balance  remaining  in  a  fund established for a
  specific capital improvement or a specific item  or  specific  items  of
  equipment,  which  improvement  has been completed or acquired, or which
  equipment has been acquired, after deducting from  such  balance  a  sum
  sufficient   to   satisfy   all  outstanding  claims  arising  from  the
  construction, reconstruction or acquisition of such capital  improvement
  or the acquisition of such equipment.
    b.  The  unexpended  balance  remaining  in  a  fund established for a
  specific item or  specific  items  of  equipment  which  have  not  been
  acquired  or a specific capital improvement which has not been completed
  or acquired, or remaining in a fund established for a  type  of  capital
  improvement  or  a type of equipment. If the proposed transfer is from a
  fund established for a specific capital improvement or a  specific  item
  or specific items of equipment, the authorization of such transfer shall
  be  subject  to  a  permissive  referendum  if  the authorization of the
  creation of a fund for such capital improvement  or  item  or  items  of
  equipment   was   subject  to  a  permissive  referendum.  A  permissive
  referendum on the authorization of such transfer shall  be  governed  in
  the manner provided in paragraph four of this section.
    c.  Nothing  in  this  subdivision shall be construed to authorize the
  transfer to the credit of another capital reserve fund  from  a  capital
  reserve fund having a different tax base.
    9-a. The governing board also may appropriate for:
    1. An object or purpose for which bonds may be issued, or
    2.  The  payment  of  interest on and principal of indebtedness, other
  than indebtedness evidenced by bonds and notes described in paragraphs A
  and D of section five of article eight of the  state  constitution,  and
  indebtedness for assessable improvements or renewals thereof,
  all  or  part  of the unexpended balance remaining in a fund established
  for a  specific  capital  improvement  or  specific  item  or  items  of
  equipment. Any such appropriation may not be made unless the improvement
  has  been completed or acquired, or the equipment has been acquired, and
  shall not include any moneys required to satisfy all outstanding  claims
  arising  from  the  construction,  reconstruction or acquisition of such
  capital improvement or the acquisition of such equipment.
    10. The chief fiscal officer shall keep a separate  account  for  each
  fund established. Such account shall show:
    a. The date and amount of each sum paid into the fund.
    b. The interest earned by such fund.
    c.  The capital gains or losses resulting from the sale of investments
  of the fund.
    d. The interest or capital gains which have accrued to the fund.
    e. The amount and date of each withdrawal from the fund.
    f. The assets of the fund, indicating the cash balance therein  and  a
  schedule of the amounts invested in federal or state obligations.
  The  chief fiscal officer, at the termination of each fiscal year, shall
  render a detailed report of the operation and condition of each of  such
  funds to the governing board.
    11. The members of the governing board are hereby declared trustees of
  such  funds  and shall be subject to all the duties and responsibilities
  imposed by law on trustees, and such duties and responsibilities may  be

  enforced by the county, city, town or village, as the case may be, or by
  any board, commission, agency, officer or taxpayer thereof.
    12.  The  members  of  the  governing  board  shall  be  guilty  of  a
  misdemeanor if they:
    a. Authorize a withdrawal from a fund for any purpose other than for a
  capital improvement or an item or items of equipment, the cost of  which
  has been authorized to be financed in whole or in part from such fund.
    b.  Expend  any  money  withdrawn from a fund for a purpose other than
  that for which it was authorized to be withdrawn.
  The provisions of this paragraph shall be considered to be  in  addition
  to any other penalties provided by law.
    13.  Notwithstanding  the foregoing provisions of this section, in any
  town which is located wholly or partly within the  Adirondack  park  and
  has  within  its  boundaries state lands subject to taxation assessed at
  more than thirty per centum of the total taxable assessed  valuation  of
  the  town  as  determined  from  the  assessment  rolls  of the town, as
  completed from time to  time,  a  capital  reserve  fund  shall  not  be
  established on and after May first, nineteen hundred forty-eight, unless
  the  state  comptroller,  on behalf of the state, shall consent thereto,
  and, on and after May first, nineteen hundred forty-eight, in  any  such
  town  no  expenditure  or  transfer shall be made from a capital reserve
  fund heretofore or hereafter established unless the  state  comptroller,
  on behalf of the state, shall consent thereto.