Opinion 90-4

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 The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

BONDS AND NOTES -- Permissible Uses (financing dredging of pond within village)
REAL PROPERTY TAXES AND ASSESSMENTS -- Assessments (special assessments in village)
VILLAGES -- Powers and Duties (imposition of benefit assessments for drainage)

LOCAL FINANCE LAW, §11.00(a)(3); VILLAGE LAW, §§4-412(3)(1), 22-2200: A village may dredge a privately owned pond within the village where such pond is an integral part of the village's drainage system and where the filled in condition is a result of its drainage function. The entire cost of the dredging may be assessed against the property benefited. If the village authorizes such dredging, the cost may be financed through the issuance of bonds if the village has an interest in the property during the time the obligations are outstanding.

This is in reply to your letter concerning the dredging of a pond within the village. You indicate that the pond, which is privately owned and almost entirely surrounded by private property, serves as a significant portion of a drainage basin for a large portion of the village. You also indicate that the pond, over the past several years, has become filled with silt and, as a consequence, no longer serves its drainage function. In addition, you state that the pond has become a breeding place for insects and other wildlife and the silt has created an area of unstable, "quicksand-like", material. Finally, you indicate that the owners of certain of the properties surrounding the pond have asked the village to explore the possibility of having the village dredge the pond and assess the cost on the properties the village board of trustees deems benefited by the dredging.

Based upon the above facts, you ask whether special legislation by the Legislature is necessary to authorize the village to undertake the dredging of the pond and assess the cost against the owners of the property benefited. You also ask whether, assuming that the village is authorized to do the work, bonds may be issued to finance the cost of the dredging.

Section 4-412(3)(1) of the Village Law provides that a village board of trustees:

...[m]ay, for the purpose of arresting and preventing damage to property within the village resulting from floods or erosion, construct drains, culverts, dams and bulkheads, and dredge channels, and regulate watercourses, ponds and watering places within or without the village. ***

The authorization in Village Law, §4-412(3)(1), however, must be read in conjunction with Article VIII, §1 of the State Constitution which prohibits municipalities from giving or loaning money or property to or in aid of any individual or private corporation, association or undertaking. Article VIII, §1 generally prohibits the expenditure of municipal moneys for the benefit of private parties unless it is in furtherance of a proper municipal purpose and is undertaken pursuant to a statutory obligation or properly authorized contract under which the municipality receives fair and adequate consideration (see, e.g., 1989 Opns State Comp No. 89-50, p 112; 1987 Opns State Comp No. 87-27, p 43; 1981 Opns State Comp No. 81-325, p 353). It would not contravene Article VIII, §1 to expend municipal moneys in connection with private property if it is determined that the expenditure furthers a proper municipal purpose and only incidentally benefits private owners (see, e.g., Opn No. 89-50, supra). It is well established that an incidental private benefit will not invalidate a project which has as its primary object a proper public purpose (see e.g., Matter of Waldo's v Village of Johnson City, 74 NY2d 718, 544 NYS2d 809; Murphy v Erie County, 28 NY2d 80, 320 NYS2d 29; Denihan Enterprises v O'Dwyer, 302 NY 451; Rodrigues v Town of Beekman, 120 AD2d 724, 502 NYS2d 778).

Based on these constitutional principles, this Office has previously stated that a village, pursuant to Village Law, §4-412(3)(1), may dredge a pond located on private property if the pond serves as an integral part of the village's drainage system and the undesirable conditions in the pond are attributable to its use as a part of the drainage system (1977 Opns St Comp No. 77-426, unreported). Similarly, if the village board of trustees determines in this instance that the privately owned pond serves as an integral part of the village's drainage system and that the accumulation of silt in the pond is a result of its status as part of the system, then it may undertake the dredging of the pond pursuant to section 4-412(3)(1) without the enactment of special legislation. The village, of course, should acquire the necessary rights prior to performing any work on the private property.

With respect to the method of charging the cost of the improvement, section 4-412(3)(1) provides that:

***[t]he cost of the work, including the acquisition of property, shall be a charge against the village, except that in respect of improvements wholly within the village, or that part thereof located therein, the work may be done wholly at the expense of the village or of the owners of the property benefited, or part at the expense of each as a local improvement. ***

In accordance with this provision, it has been our opinion that a village, in its discretion, may provide that all or a portion of the cost of a drainage project shall be assessed against the owners of the properties benefited by the project (1987 Opns St Comp No. 87-92, p 135). Any benefit assessments imposed pursuant to section 4-412(3)(1) must be determined, apportioned, and assessed in the manner provided by section 22-2200 of the Village Law (see Opn No. 87-92, supra). Therefore, if the village determines that the drainage work furthers a proper village purpose and undertakes the dredging, the entire cost of the dredging so authorized may be assessed on the properties benefited thereby.

In relation to your inquiry concerning the issuance of bonds to finance the cost of the dredging, we note that section 22-2200(3) of the Village Law provides that if any portion of the local improvement is to be borne by the village at large, or if the entire expense of such improvement is to be assessed against the property benefited thereby, then "such expense may be financed pursuant to the local finance law." Under the Local Finance Law, municipalities, including villages, may contract indebtedness for any municipal object or purpose having a period of probable usefulness set forth in section 11.00 of the Local Finance Law (Local Finance Law, §10.00; NY Const, art VIII, §2). Subdivision (3) of paragraph (a) of section 11.00 provides a period of probable usefulness of ten years for "such dredging, minor repairs or cleaning out as are necessary from time to time for the preservation and restoration to their original condition" of drainage improvements.

Nothing in Local Finance Law, §11.00(a)(3) indicates that the municipality must own the drainage improvement that is to be dredged. In this instance, however, it is our opinion that the village should, at the very least, obtain easements from the owners of the pond to restrict the owners from taking any actions which prevent the pond from fulfilling its village drainage function. Such easements would ensure that the pond is a "drainage improvement" within the meaning of Local Finance Law, §11.00(a)(3) for which bonds may be issued to finance the cost of the dredging. Such easements would also ensure that pond continues to fulfill its drainage function during the life of the bonds. It has been the opinion of this Office that, where municipal indebtedness is issued in connection with property not owned by the municipality, the municipality must retain an interest in the property to ensure that the financed improvement is used for a municipal purpose during the life of the obligations (1988 Opns St Comp No. 88-26, p 47; 1981 Opns St Comp No. 81-359, p 393).

Therefore, based on the foregoing, if the village board determines that the drainage work furthers a proper village purpose, it may issue obligations to finance the cost of the dredging authorized pursuant to Village Law, §4-412(3)(1). The village should, however, at a minimum, obtain easements in the privately owned pond to ensure that pond continues to serve a village drainage function.

February 27, 1990
John C. Bailey, Esq., Village Attorney
Village of Orchard Park