Section 2-254. Effect of incorporation on all districts entirely within village

1. Whenever the term "district" is  used  in  this  section  it
  shall  be  construed  as  referring  to a fire district, fire protection
  district or fire alarm district, or a town special district, or  a  town
  improvement  district;  and  the  term  "governing body" as used in this
  section shall be  construed  as  referring  to  all  boards,  bodies  or
  persons, in which any of the governing powers of a district are vested.
    2.  If  on  the  date  of incorporation of a village the limits of the
  village are coterminous with the  limits  of,  or  wholly  include,  the
  territory  of  a district, such district shall cease to exist at the end
  of the fiscal year of such district next following the first day of June
  following  the  first  day  of  January  next  succeeding  the  date  of
  incorporation;  except as otherwise provided in this section, the powers
  and duties of the governing body of the district and of all the officers
  of the district in connection therewith shall then cease and  determine;
  and any board of commissioners, any office of commissioner and any other
  office of any such district shall also cease to exist at such time.
    * 2-a.  If the limits of a village incorporated prior to the first day
  of April, nineteen hundred sixty-five are coterminous  with  the  limits
  of,  or  wholly  include  the  territory  of,  a  district, the board of
  trustees of the village, by local law, may abolish any such district. In
  addition to any other notice required in connection with the adoption of
  such local law generally, thirty days' written notice of the hearing  to
  be  held  in  connection  with  such  local  law  shall  be given to the
  governing body of any such district and to the town clerk.  A  certified
  copy  of  any  such  local  law  shall  be served upon or mailed to such
  governing body  and  clerk  within  five  days  following  the  adoption
  thereof.  Except  as  otherwise provided in this section, the powers and
  duties of the governing body of a district so abolished and of  all  the
  officers  of  the  district  in  connection  therewith  shall  cease and
  determine upon the effective date of such local law  and  any  board  of
  commissioners,  any  office  of commissioner and any other office of any
  such district shall also cease to exist at such time. No such local  law
  shall  become  effective  except on the last day of a fiscal year of the
  town or district, as the case may be.
    * NB Effective until March 21, 2010
    * 2-a. If the limits of a village incorporated prior to the first  day
  of  April,  nineteen  hundred sixty-five are coterminous with the limits
  of, or wholly include  the  territory  of,  a  district,  the  board  of
  trustees  of  the village, by local law or pursuant to the provisions of
  article seventeen-A of the general municipal law, may abolish  any  such
  district.    In addition to any other notice required in connection with
  the adoption of such local law generally, thirty days' written notice of
  the hearing to be held in connection with such local law shall be  given
  to  the  governing  body  of  any such district and to the town clerk. A
  certified copy of any such local law shall be served upon or  mailed  to
  such  governing  body  and clerk within five days following the adoption
  thereof. Except as otherwise provided in this section,  the  powers  and
  duties  of  the governing body of a district so abolished and of all the
  officers of  the  district  in  connection  therewith  shall  cease  and
  determine  upon  the  effective  date of such local law and any board of
  commissioners, any office of commissioner and any other  office  of  any
  such  district shall also cease to exist at such time. No such local law
  shall become effective except on the last day of a fiscal  year  of  the
  town or district, as the case may be.
    * NB Effective March 21, 2010
    3.  a.  The obligations and the contracts of a district which shall so
  cease to exist and the obligations and  contracts  of  a  town  for  the

  benefit  of  or  chargeable  to such a district shall not be impaired by
  this section.
    b.  Notwithstanding  the  dissolution  of  a district pursuant to this
  section,
    (1) an amount shall be levied and collected annually sufficient to pay
  in regular course  the  principal  of  and  interest  on  all  bonds  or
  obligations  issued pursuant to the local finance law or otherwise by or
  on behalf of such district which are outstanding and unpaid  as  of  the
  date of the dissolution of the district. Such annual levy and collection
  shall continue until all such outstanding bonds and obligations are paid
  in full.
    (2)  all  levies,  assessments,  fees,  rates  or other charges of the
  district unpaid as of the date of  dissolution  and  all  penalties  and
  interest thereon shall be collected.
    (3)  all  moneys  collected  under  subparagraph two of this paragraph
  which would be available for district purposes if the district were  not
  dissolved  shall  be  applied  to  the payment of all obligations of the
  district, other  than  those  described  in  subparagraph  one  of  this
  paragraph,  which  are due and payable at the time of the dissolution of
  the district. All such moneys so collected and  not  required  for  such
  purpose shall be paid over to the village treasurer.
    (4)  the  levies,  collections and payments described in subparagraphs
  one, two and three of this paragraph shall be made in the same manner as
  if the district had not been dissolved, except that for the purposes  of
  this paragraph:
    (a)  if  a  fire  district  is dissolved, the board of trustees of the
  village shall constitute the board of fire commissioners of  the  former
  fire district and
    (b)  if a district other than a fire district is dissolved, the powers
  of the governing body of the district shall be exercised  and  performed
  by the town board of the town in which the district is located.
    (5)  in lieu of the requirements set forth in subparagraph one of this
  paragraph, the board of trustees by resolution,  subject  to  permissive
  referendum, may provide that the village shall assume responsibility for
  the  levy  and  collection,  as a general village charge, of all amounts
  required to pay the bonds or  obligations  therein  described.  In  such
  event  the  village  shall  annually pay an amount sufficient to pay the
  principal and interest on such bonds or obligations as same  become  due
  and  payable in regular course. In the case of bonds or obligations of a
  district other than a fire district, such payment shall be made  to  the
  supervisor  of the town in which the district is located. In the case of
  fire district bonds or obligations, payment shall be  made  directly  to
  the  holder  of  such  bonds or obligations. The board of trustees shall
  give written notice of such resolution to the  town  board  before  same
  shall  become  effective.  Nothing  herein  contained  shall prevent the
  village from prepaying to the town for the  purpose  of  redeeming  such
  bonds  or  obligations, other than those of a fire district, in whole or
  in part provided the bonds or obligations permit such  part  payment  or
  redemption.  Nothing  herein  contained  shall  prevent the village from
  prepaying or redeeming such fire district bonds or obligations in  whole
  or in part provided the bonds or obligations permit such part payment or
  redemption.
    c. All contracts of or on behalf of and chargeable to a district which
  ceases  to  exist  hereunder,  including  all  amounts unpaid under such
  contracts but excluding all amounts unpaid thereunder which were due and
  payable at  the  time  of  dissolution  of  such  district,  other  than
  obligations  incurred  pursuant  to the local finance law, shall, to the
  extent they are the responsibility of or beneficial to such a  district,

  be  assumed  by  the  village  and all expenditures under such contracts
  shall be charged as provided in subdivision six  of  this  section.  The
  terms  and  conditions  and  all rights of or on behalf of the district,
  including  any  right of amendment or rescission of such contract, shall
  inure to the benefit of the village.
    4. The governing body of a  district  shall  be  responsible  for  the
  payment of all obligations of the district other than those described in
  subparagraph  one  of  paragraph  b of subdivision three of this section
  which are due and  payable  at  the  time  of  the  dissolution  of  the
  district.  The governing body of a district shall be responsible for the
  payment of all obligations of the district described in subparagraph one
  of paragraph b of subdivision three of this section.
    5. Upon a district ceasing to  exist  hereunder,  all  property  of  a
  district  shall automatically become the property of the village and, in
  connection therewith, the governing body and any other officer or person
  empowered to transfer title to or having the custody or control  of  any
  moneys  of  such  district,  any  moneys  in a reserve fund, any real or
  personal property of such district or used or applied for  the  purposes
  of  such  district,  any  policies  of insurance for the benefit of such
  district, any documents, instruments and other  muniments  of  title  to
  district  property  and  of  any  official books, records and other data
  relating to the operation and management of such district shall  prepare
  or cause to be prepared an inventory of all such property, shall certify
  same, shall deliver same to the village clerk and shall:
    a.  pay  over  to the village treasurer all such moneys except so much
  thereof as was collected for the purpose  of  paying  principal  of  and
  interest  on  bonds  or  other  obligations issued pursuant to the local
  finance law or otherwise by or on behalf of  the  district  and  further
  except  so  much of the balance of such moneys as may be required to pay
  those obligations of the district described in subdivision four of  this
  section. The village treasurer on receipt of such moneys, shall set same
  aside  and  apply  them  pursuant to law to the purposes of the district
  which ceases to exist hereunder so long  as  the  village  continues  to
  provide  the service or function thereof and thereafter to be applied in
  reduction of village taxes  levied  against  the  area  of  such  former
  district;  provided,  however,  that so long as the village provides the
  service or function of the former district any  moneys  held  by  or  on
  behalf  of  a  district  in  a reserve fund subject to the provisions of
  article two of the general municipal law or section fifty-five-a of  the
  town law shall be held and administered by the village as a reserve fund
  subject  to those provisions of article two of the general municipal law
  pertaining to villages for the same or similar  purpose  for  which  any
  such fund was established.
    * d.  surrender  and  deliver all such insurance policies, books, such
  real or personal property.
    * NB (Should be b.)
    c. assign such policies of insurance and its  interest  thereunder  to
  the extent permitted therein to the village.
    d.  surrender  and deliver all such insurance policies, books, records
  and other data to the village clerk. Copies of official  books,  records
  and other data relating to the operation and management of such district
  and certified by the officer responsible for same shall be sufficient to
  satisfy the requirements of this paragraph. No fees or expenses shall be
  charged  for the making of such copies and same shall be entitled to the
  same admissibility in evidence in a court proceeding  as  the  originals
  thereof.
    e.  surrender  and  deliver  all  other such personal property to such
  village officer, employee, board or commission as the board of  trustees

  of  the village shall designate The failure of the governing body or any
  other officer  or  person  to  comply  with  the  requirements  of  this
  subdivision shall in no way impair the automatic transfer to the village
  of  the  right,  title  or  interest  of  the district of, in or to such
  property.
    6. Upon a district ceasing to exist hereunder and until such  time  as
  the  village  may  discontinue  the  service  or  function  pursuant  to
  subdivision seven of this section,  the  service  or  function  of  such
  former  district shall become a village service or function and shall be
  continued as, in the discretion of the board of trustees of the village,
  may be needed in all territory which previously received  same  and  the
  board of trustees shall have all the powers and duties granted by law to
  village  officials  in connection with such service or function and such
  additional powers formerly held by the governing body or any officer  of
  the  district which may be necessary to continue the service or function
  of the district, provided, however:
    a. if the limits of a district which ceases  to  exist  hereunder  are
  wholly  within but are not coterminous with those of the village and the
  service or function formerly provided by such district is  not  extended
  outside the limits of the former district, all the costs and expenses of
  such service or function may be chargeable only to the territory of such
  former district.
    b.  if  the  limits  of a district which ceases to exist hereunder are
  wholly within but are not coterminous with those of the village and  the
  service  or  function  formerly  provided  by  such district is extended
  outside the limits of such former district, so much  of  all  costs  and
  expenses  of  such  extension  of  service  or  function to such outside
  territory as is represented by the payment of the principal and interest
  on obligations incurred therefor by the village pursuant  to  the  local
  finance  law  may  be  chargeable  to  and  collected  from such outside
  territory; and all other costs and expenses of such service or  function
  may  be  chargeable  only  to  that  part of the entire territory of the
  village in which such service or function is provided. In any event  and
  regardless  of  the territory to which such other costs and expenses may
  be made chargeable, same shall be apportioned  and  collected  uniformly
  and without discrimination within such territory.
    c.  upon any fire district ceasing to exist hereunder, all fire, hose,
  protective or hook and ladder companies and  all  authorized  squads  or
  other  units  of such district, including the memberships thereof, shall
  continue to exist and shall not be affected thereby except as follows:
    (1)  the  members  of  all  such  companies,  squads  or  units  shall
  constitute a corporation and the fire department of the village.
    (2) all such companies, squads or units shall thereafter be subject to
  and  governed  by  all  the  provisions  of  this chapter regulating and
  pertaining to any such company, squad or unit and the fire department of
  the village.
    d. upon the incorporation  of  a  village  all  existing  fire,  hose,
  protective  or  hook and ladder companies and all other firemanic squads
  or  units  independently  organized  and  incorporated  which  are   not
  companies,  squads  or  units  of  any  fire  district  ceasing to exist
  hereunder and the boundaries of which  companies,  squads  or  units  as
  specified in their certificates of incorporation or charters or any laws
  establishing  such  companies,  squads  or units are coterminous with or
  wholly included within the limits of the  village  and  the  memberships
  thereof shall continue to exist and shall not be affected thereby except
  as follows:
    (1)  the  members  of  all  such  companies,  squads  or  units  shall
  constitute a corporation and the fire department of the village.

    (2) all such companies, squads or units shall thereafter be subject to
  and governed by all  the  provisions  of  this  chapter  regulating  and
  pertaining to any such company, squad or unit and the fire department of
  the village.
    e.  all  officers  and employees of any district which ceases to exist
  hereunder shall to the greatest extent practicable in the discretion  of
  the  board  of trustees be continued in the same or similar positions as
  village employees and, in  connection  therewith,  shall  have  all  the
  rights  provided  by  the civil service law as if their former positions
  with the district had originally been established by the village.
    7. The board of trustees of the village at any time by local  law  may
  discontinue the service or function of the former district in all or any
  part of the village; provided, however, that any such local law shall be
  subject  to  a  permissive  referendum  of  the  qualified voters in the
  territory receiving the service or function at the time of the  adoption
  of such local law and in which the service or function is proposed to be
  discontinued. For the purpose of such referendum such territory shall be
  considered as if it comprised the entire territory of the village.
    8.  This section shall not apply to any special assessment area or any
  area of assessment for benefit the boundaries of which  are  coterminous
  with  or  wholly  included  within  the limits of the village, which was
  established only to pay the original cost of any special improvement  or
  facility  or any addition thereto, benefitting such area. As to any such
  area the assessments therein established shall continue to be levied and
  collected as if the village had not been incorporated. However, any such
  publicly owned improvement or facility shall become the property of  the
  village  in  the  same  manner  as  provided in subdivision five of this
  section for property of a district.
    9. Any other special assessment area or any other area  of  assessment
  for  benefit  the  boundaries  of  which  are coterminous with or wholly
  included within the limits of  a  village,  shall  be  considered  as  a
  district  subject  to the provisions of this section and chapter if same
  was established not only  to  pay  the  original  cost  of  any  special
  improvement  or facility, or any addition thereto, benefitting such area
  but also to pay the  cost  of  the  operation,  maintenance,  repair  or
  replacement thereof.