Can the City of Elmira use its charter-amendment power to abolish the state-created Elmira Water Board or change how its commissioners are selected and overseen?

Plain-English summary

The Elmira Water Board was created by a special state act in 1913 to run the City of Elmira's public water system. In 1950, the Legislature enacted a new enabling act codified as Article X-A of the Elmira City Charter. Under that act, the Water Board is a "body corporate" with five elected commissioners. It sets water rates, hires its own staff, can sue and be sued, and exercises the power of eminent domain to acquire property "in the name of the city." The City and the Water Board are interconnected financially (the City issues bonds for water-system capital projects, the City does not pay for water, the Water Board does not pay city property tax, and the City Chamberlain audits the Board's books), but operationally the Board runs independently.

The City Council had a dispute with the Water Board over surplus funds. The Water Board had denied a City request. Council members asked whether the City could amend the relevant Charter provisions to (1) eliminate the Water Board and transfer water-system control to the city government, (2) change the commissioners from elected to appointed, and (3) authorize the City Chamberlain to determine the amount of surplus available to the City each year. The Corporation Counsel asked the AG.

The AG said no to all three changes. The reasoning is structural.

The City's general charter-amendment power. A city may amend its charter by local law, including charter provisions originally enacted by the State (Op. Att'y Gen. (Inf.) Nos. 1984-123, 1976-199, 1974-276). The authority to amend the charter is co-extensive with the city's home-rule authority to adopt local laws. So the question is whether the proposed amendments are within the City's home-rule authority.

The Water Board is independent of the City. The Water Board's powers under the enabling act show that the Legislature meant it to be an independent entity, not a city department. It is a body corporate (§ 166-a), it sets water rates exclusively (§ 166-o), it appoints its own officers and employees and sets their salaries (§ 166-f, § 166-n(aa), (j)), it has eminent-domain power (§ 166-n(e), (f)), and its commissioners are independently elected (§ 166-d). The fact that the City and the Water Board have a financial nexus (the original water system was financed by city bonds, the City is on the hook for deficits) does not erase the Water Board's independence.

Consequence for home-rule authority. A city's home-rule authority under Article IX, § 2(c) of the Constitution and Municipal Home Rule Law § 10(1)(i) lets it adopt local laws on its property, affairs, or government. Article IX, § 2(c)(1) and Municipal Home Rule Law § 10(1)(ii)(a)(1) extend that power to creating or abolishing departments of city government and to the mode of selection of city officers. If the Water Board were a city department, the City could alter or eliminate it. But because the Legislature created the Water Board as an independent body, the AG concluded it is not part of the City's "property, affairs, or government," and the commissioners are not city officers. So the home-rule grants do not reach the Water Board. Only a new special act of the State Legislature can abolish or significantly alter it.

The AG analogized to public-authorities law. Under N.Y. Const. Art. X, § 5, only the Legislature can create or dissolve public authorities. City of Rye v. Metropolitan Transp. Authority, 24 N.Y.2d 627 (1969), and Town of Hoosick v. Eastern Rensselaer County Solid Waste Management Authority, 182 A.D.2d 37 (3d Dep't 1992), say the same about modification. The Elmira Water Board is not technically a public authority (it lacks the borrowing-plus-fee combination that defines one), but as an independent state-created entity performing a municipal function, the same principle applies: only the Legislature can fundamentally restructure it.

Mandatory referendum point (in passing). The AG did not need to reach this, but flagged in a footnote that any local law abolishing an elective office is subject to mandatory referendum under Municipal Home Rule Law § 23(2)(e), so even if the City had authority to make the commissioners appointive (it did not), the referendum requirement would also kick in.

Surplus determination. The Charter divides responsibility between Water Board treasurer (who manages funds) and City Chamberlain (who examines books and verifies balances). Section 166-r requires Water Board funds to be used for water-system purposes. Section 166-o lets the City request profits or surplus for general municipal use, but does not name who determines the amount of the surplus. Reading the enabling act as a whole, the AG concluded that the Legislature intended the Water Board, not the City, to determine the existence and amount of any surplus. The City's auditing role under §§ 166-g and 166-n(h) is an oversight function, not authority to displace the Board's financial judgment. And for the same reasons the City could not abolish or restructure the Board, the City could not enact a local law transferring surplus-determination authority to the City Chamberlain.

The bottom line for Elmira: if the City wants more control over the Water Board, it has to ask the State Legislature for a new special act. Local-law amendments to Article X-A of the City Charter cannot reach that far.

Currency note

This opinion was issued in 2007. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why does it matter that the Water Board was created by special state act rather than by city charter alone?
A city's home-rule authority extends to city departments and city officers but not to entities the State created as independent. The Legislature reserved the power to structure the Water Board, so the Legislature retains the power to restructure it. A city's local-law power does not reach there.

Can the City negotiate with the Water Board for more control?
Within the existing statutory framework, yes. The opinion does not say the City and the Board cannot work cooperatively on financial planning. It says the City cannot unilaterally amend the Charter to take over.

Is the Elmira Water Board a public authority?
Technically no. Public authorities have the combination of indebtedness power plus the power to collect rates, fees, or charges. The Elmira Water Board does not issue its own bonds; the City does that. So it is not a "public authority" within the constitutional sense. But the AG treats it as a structurally analogous independent body for purposes of who can restructure it.

Could the Legislature dissolve the Water Board?
Yes, by special act. The AG's whole point is that the Legislature, not the City, holds that power. If the City wants the Water Board gone or reformed, the path runs through Albany.

Is the Chamberlain's audit power useless?
No. The City Chamberlain can examine books and verify financial balances, and the City Council and Mayor can inspect the Board's accounts. Those are real oversight tools. They just do not include the power to determine the Board's annual surplus.

Background and statutory framework

The Elmira Water Board is one of New York's older state-created municipal water boards. Its 1913 enabling act (L. 1913, ch. 660) authorized the City to issue bonds and the Board to operate the system. The 1950 enabling act (L. 1950, ch. 535) codified the current framework in Article X-A of the Elmira City Charter. The structure has been amended in part by local law but the essential body-corporate status was set by state act.

Municipal home-rule authority in New York runs from Article IX of the Constitution and the Municipal Home Rule Law. Section 10(1)(ii)(c)(1) of that Law specifically authorizes cities to amend their own charters. The general home-rule grants in § 10(1)(i) and § 10(1)(ii)(a)(1) cover property, affairs, government, departments, and officers. None of those extends to an entity that the Legislature created independent of the City.

The public-authority structural rule comes from Article X, § 5 and is fleshed out by City of Rye v. MTA (1969) and Town of Hoosick (1992). Even where an entity is not technically a public authority, those cases inform how courts treat state-created independent entities that perform municipal functions.

The substantive water-rate and water-system authority for cities sits in General City Law § 20(2), (7), (7-a) and Second Class City Law §§ 94, 95. Those would matter if the City operated its own water system. They do not give the City a back-door power over a state-created water board.

Citations

• Elmira City Charter Article X-A, including §§ 166-a (body corporate), 166-d (commissioners), 166-f (officers and salaries), 166-g (Chamberlain audit), 166-i (rule-making), 166-n (system operation, property acquisition, employees), 166-o (water rates, surplus), 166-r (treasurer, fund management), 166-s (city covers deficits), 166-t (city bonds for capital), 166-u (tax exemption).
• Municipal Home Rule Law § 10(1)(i) (property/affairs/government); § 10(1)(ii)(a)(1) (departments, officers); § 10(1)(ii)(c)(1) (charter amendment); § 23(2)(e) (mandatory referendum for abolishing elective offices).
• N.Y. Const. Art. IX § 2(c), § 2(c)(1) (home rule); Art. X § 5 (public authorities).
• General City Law § 20(2), § 20(7), § 20(7-a) (city water-system powers).
• Second Class City Law §§ 94, 95 (water-system powers).
• L. 1913, ch. 660 (original Elmira water-board act); L. 1950, ch. 535 (current enabling act).
• City of Rye v. Metropolitan Transp. Authority, 24 N.Y.2d 627 (1969) (only Legislature can create public authorities).
• Town of Hoosick v. Eastern Rensselaer County Solid Waste Management Authority, 182 A.D.2d 37 (3d Dep't 1992) (only Legislature can create, modify, or dissolve public corporations).
• Op. Att'y Gen. (Inf.) Nos. 1984-123, 1976-199, 1974-276 (city home-rule charter-amendment power covers provisions originally enacted by state).
• 1975 Op. Att'y Gen. (Inf.) 201 (city lacks authority to modify Yonkers Parking Authority structure).
• 1977 Op. Att'y Gen. (Inf.) 172 (abolition of elected office is subject to mandatory referendum).
• New York State Department of State, Revising City Charters in New York State (March 2007).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/I_2007-6_pw.pdf

Original opinion text

ELMIRA CITY CHARTER §§ 166-a, 166-d, 166-f(a), 166-f(b), 166-f(h), 166-g, 166-i, 166-n, 166-n(aa), 166-n(d), 166-n(e), 166-n(f), 166-n(h), 166-n(j), 166-o, 166-r, 166-s, 166-t, 166-u; MUNICIPAL HOME RULE LAW §§ 10(1)(I), 10(1)(ii)(a)(1), 10(1)(ii)(c)(1), 23(2)(e); NEW YORK STATE CONSTITUTION ART. IX, § 2(c), ART. IX, § 2(c)(1), ART. X, § 5; GENERAL CITY LAW §§ 20(2), 20(7), 20(7-a); SECOND CLASS CITY LAW §§ 94, 95; SESSION LAWS 1913 CHAPTER 660, 1913 CHAPTER 660, § 7, 1950 CHAPTER 535

The city cannot abolish the state-created Elmira Water Board or provide that the Water Board commissioners be appointed by city officials. Under the provisions of the City Charter, the City Chamberlain does not have authority to determine the amount of Water Board surplus funds, and the City lacks authority to amend the Charter to give the City Chamberlain such power.

August 28, 2007

J. William O'Brien
Corporation Counsel
City of Elmira
Department of Law
City Hall
317 East Church Street
Elmira, NY 14901

Informal Opinion No. 2007-6

Dear Mr. O'Brien:

You have asked several questions concerning the City's authority to amend provisions of the Elmira City Charter that govern the Elmira Water Board. These provisions were enacted by the State Legislature in 1950. You ask whether the City has authority to pass a local law (1) eliminating the Water Board and transferring to the City government direct control of water matters or (2) providing that the commissioners of the Water Board, who are currently elected, be appointed by city officials. If the City has authority to enact these laws, you inquire whether such laws would be subject to mandatory referendum. You also ask whether the current provisions of the City Charter relating to oversight of the Water Board authorize the City Chamberlain to determine the surplus to be paid over to the City each year and, if not, whether the City may enact a local law so providing and whether such law would be subject to mandatory referendum. For the reasons that follow, we conclude that the City lacks authority to abolish the Water Board or to give the City power to appoint Water Board Commissioners, and that amendment of the City Charter by special act of the State Legislature would be required to accomplish either of these changes. We also conclude that the current provisions of the City Charter do not give the City Chamberlain authority to determine the annual amount of any surplus in Water Board funds, and that the City is without authority to amend the Charter to grant the City Chamberlain such authority.

THE ELMIRA WATER BOARD

The Elmira Water Board was originally established pursuant to special act of the State Legislature in 1913 to operate a public water system for the City of Elmira. See Act of May 23, 1913, ch. 660, 1913 N.Y. Laws 1733. In 1950, the Legislature enacted a new enabling act for the Water Board, which is codified as Article X-A of the Elmira City Charter. See Act of Apr. 10, 1950, ch. 535, 1950 N.Y. Laws 1292. These charter provisions, as subsequently amended in part by local law, currently govern the administration and operation of the Water Board.

Under these provisions, the Elmira Water Board has some attributes of an independent entity, while other characteristics create a close relationship between the Water Board and the Elmira city government. While the enabling act provides that the City's water department consists of the Water Board, it also denominates the Water Board as a "body corporate" with the power to sue and be sued. Elmira City Charter § 166-a. Further, the Water Board controls and operates the water system "for and in the name of the city of Elmira." Id. § 166-n. The Board is authorized to establish rules and regulations governing its administration and the operation of the water system, but the City may adopt ordinances to aid in enforcement of the Board's regulations. Id. § 166-i. Although the Board consists of five independently-elected commissioners, the commissioners file a bond to the City upon taking office and may be removed from office for cause by the City Council. Id. § 166-d. The Board has authority to appoint and remove its officers and employees, and to determine their salaries. Id. § 166-f(a),(b); id. § 166-n(aa),(j). The City Corporation Counsel serves as counsel to the Water Board, but may receive an additional salary for this position as determined by the Water Board. Id. § 166-f(h). Although the Water Board is authorized to acquire property, including through condemnation, it acquires property "in the name of the city." Id. § 166-n(d),(e).

The finances of the Water Board and the City are interconnected in a number of ways. The City financed the original purchase of the water works system through the issuance of city bonds, see Act of May 23, 1913, ch. 660, § 7; http://www.elmirawaterboard.org/charter.html (History of the Water System), and under the current charter provisions the City is obligated to raise funds for capital improvements to the water system through taxes or the issuance of bonds, although the City Council must concur in the need to raise the additional money. Elmira City Charter § 166-t. The Water Board does not pay taxes on its property, id. § 166-u, and the City does not pay the Water Board for its water usage, id. § 166-o. The money the Water Board receives from the collection of water rates and penalties is managed by the Water Board treasurer and kept in a separate fund to be used for water board purposes, the operation and maintenance of the water system, the payment of principal and interest on the City's Water Board-related obligations, extensions and additions to the water system, and maintenance of a reserve fund. Id. § 166-r. The water rates set by the Water Board must be sufficient for these purposes, but may also include an amount equivalent to the taxes that the Water Board would otherwise be paying to the City on its property, and the Water Board may earn a fair return on the value of its property. Id. § 166-o. Upon a timely request by the City Council, any profits or surplus in Water Board funds may be used by the City for general municipal purposes. Id. § 166-o. Additionally, the City is statutorily obligated to provide for the payment of any Water Board deficiencies. Id. § 166-s.

Consistent with the financial interdependence between the Water Board and the City, the City Chamberlain is authorized to examine the books of the Water Board and annually verifies to the City Council the financial balances of the Water Board. Id. § 166-g. The Mayor and City Council are also authorized to inspect the books and accounts of the Water Board and the Board must submit an annual financial report to the Council. Id. § 166-n(h).

Recently, the Water Board denied a request from the City for surplus Water Board funds. Members of the City Council who question the Water Board's assessment of its financial condition have inquired whether the City may amend the relevant charter provisions to obtain greater control over the Water Board.

ANALYSIS

Your questions concern the authority of the City to adopt local laws amending the state-enacted provisions of the City Charter governing the Elmira Water Board. It is well-settled that a city has authority to amend its charter by local law. Municipal Home Rule Law § 10(1)(ii)(c)(1) (authorizing cities to amend their charter by local law pursuant to authority of the Municipal Home Rule Law). We have applied this rule to include those charter provisions that were originally enacted by the State Legislature. See, e.g., 1984 Op. Att'y Gen. (Inf.) 123; 1976 Op. Att'y Gen. (Inf.) 199; 1974 Op. Att'y Gen. (Inf.) 276. With certain exceptions not relevant here, a city's authority to amend its charter is co-extensive with that of its home rule powers to adopt local laws. See New York State Department of State, James A. Coon Local Government Technical Series, Revising City Charters in New York State 2 (March 2007). Thus, the primary issue is whether the types of local laws with which you are concerned fall within the City's home rule powers.

A. Abolishing the Water Board or Changing the Mode of Selection of Its Commissioners

You have asked whether the City is authorized to adopt local laws amending the City Charter to eliminate the Elmira Water Board and transfer direct control of water matters to the city government or to change the method of selecting Water Board commissioners from election by the general public to appointment by city officials. As noted, the issue is whether such laws fall within the City's home rule powers.

A city is authorized to adopt local laws relating to its property, affairs, or government that are not inconsistent with the provisions of the Constitution or with any general law. N.Y. Const. Art. IX, § 2(c); Municipal Home Rule Law § 10(1)(i). A city is also authorized to adopt local laws creating or abolishing departments of city government or relating to the mode of selection of its officers that are not inconsistent with the provisions of the Constitution or with any general law, except to the extent that the Legislature restricts the adoption of such local laws. N.Y. Const. Art. IX, § 2(c)(1); Municipal Home Rule Law § 10(1)(ii)(a)(1). Additionally, cities are specifically authorized by state law to acquire property for, construct, and operate a water works system. See General City Law § 20(2),(7); Second Class City Law §§ 94, 95; see also General City Law § 20(7-a) (authorizing cities to sell city water system to a water authority, county water district or joint water works system). The control and operation of a public water system thus appears to relate to the city's property, affairs or government, and to the extent the administrators of a city water system are officers or employees of the city, their mode of selection would fall within the city's home rule powers. Thus, it is likely that the City would have home rule authority to amend its charter provisions in relation to the Water Board if the City operated the water system and the Water Board were part of the city government.

Under its state-created enabling act, however, we believe the Elmira Water Board is sufficiently independent of the City of Elmira so that it cannot be considered part of the city government within the meaning of the relevant home rule provisions. Most significantly, the Water Board was created as a "body corporate," with the power to sue and be sued and with exclusive authority to set water rates and to bring enforcement actions in relation thereto. Elmira City Charter §§ 166-a, 166-o. Additionally, although the original acquisition of the water system was financed through the issuance of city bonds and the city may incur additional debt for capital improvements, the water charges are intended to provide sufficient revenue to operate and maintain the system and for payments on water-system related city obligations. See id. §§ 166-r, 166-t. Finally, the Water Board administers the water system independently of the city government. The Board appoints its officers and employees, and determines their salaries. Id. § 166-f(a),(b); id. § 166-n(aa),(j). It has authority to execute all necessary contracts and to exercise the power of eminent domain to acquire real property. Id. § 166-n(e),(f).

Although the relevant charter provisions also establish a nexus between the City and the Water Board (the Board is designated a city department and holds property in the name of the City), we believe that by endowing it with these significant powers, the Legislature intended the Water Board to exist as an independent entity. For this reason, we conclude that the Water Board is not part of the City's "property, affairs, or government" and that the independently-elected Water Board commissioners are not city officers for purposes of the City's home rule powers. Consequently, we do not believe the City has authority to amend its Charter by local law to abolish the Water Board and transfer its functions to the city government or provide that Water Board commissioners shall be appointed by city officials rather than elected by the general public. Enactment of another special act by the State Legislature would be required to effect these changes.

In light of our conclusion that the City does not have home rule authority to enact such laws, we need not reach the question whether such local laws would be subject to mandatory referendum. We note, however, that local laws abolishing elective offices are subject to mandatory referendum under the Municipal Home Rule Law. See Municipal Home Rule Law § 23(2)(e) (providing that a local law is subject to mandatory referendum if it abolishes an elective office); 1977 Op. Att'y Gen. (Inf.) 172 (local law abolishing position of elected town receiver of taxes and replacing it with appointive office is subject to mandatory referendum).

We note that our conclusion that the City lacks home rule power to abolish or significantly alter the structure of the Water Board is consistent with a municipality's power with respect to a local public authority. Although the Water Board differs from a public authority in that it does not have the power both to contract indebtedness and to collect charges, rates or fees, cf. N.Y. Const. Art. X, § 5, it is similar to a public authority in that it performs a municipal function while operating as an independent entity. It is well-settled that only the State Legislature has authority to create and dissolve public authorities, and thus municipalities lack authority to significantly modify their structure. See City of Rye v. Metropolitan Transp. Authority, 24 N.Y.2d 627 (1969) (under Article X, § 5 of the New York Constitution, only the state legislature is authorized to create public authorities); Town of Hoosick v. Eastern Rensselaer County Solid Waste Management Authority, 182 A.D.2d 37 (3d Dep't 1992) (noting that "the Legislature alone has the power to create, modify and dissolve public corporations" and concluding that municipality therefore lacked authority to unilaterally withdraw from public authority); 1975 Op. Att'y Gen. (Inf.) 201 (city lacks authority to modify structure of the Yonkers Parking Authority).

B. City's Authority to Determine Water Board Surplus

Your final question concerns the provisions of the City Charter governing the duties of the Water Board treasurer and the City Chamberlain, who serves as head of the City's department of finance and as city treasurer. Under the Charter, the City Chamberlain is authorized to examine the books of the Water Board and annually verifies to the City Council the financial balances of the Water Board. Id. § 166-g. The Mayor and City Council are also authorized to inspect the books and accounts of the Water Board, and the Board is required to submit an annual financial report to the Council. Id. § 166-n(h). The Charter also provides that upon a timely request by the City Council, profits or surplus in Water Board funds may be used by the City for general municipal purposes. Id. § 166-o. Your question is whether the City Chamberlain has authority under the present charter provisions to determine the amount of such surplus funds and, if not, whether the City may enact a local law amending the Charter to give the City Chamberlain such authority.

Interpreting the charter provision authorizing the City to use Water Board surplus funds for general municipal purposes in the context of the Water Board enabling act as a whole, we believe the Legislature intended to vest the Water Board, rather than the City, with the authority to determine the amount of any surplus Water Board funds.

The Water Board treasurer has responsibility for managing the Water Board's funds and they are maintained in a separate account to be used for Water Board purposes. Elmira City Charter § 166-r. The Legislature has given the Water Board exclusive authority to set water rates and has designated the specific Water Board purposes for which they must be used, including operation and maintenance expenses, the retiring of Water Board-related city debt, and extensions and improvements to the water system. Id. § 166-r. The Water Board may also set the water rates to allow it to earn an amount equivalent to the taxes that the Water Board would otherwise pay to the City on its property if it were privately owned and to earn a fair return on the value of its property. Id. § 166-o. Under these provisions, the Water Board retains authority to determine its financial status, and must use such information in setting the water rates. See id.

The City, in contrast, has only the authority to examine the Water Board's books and financial records and to verify the Board's financial balances. Id. §§ 166-g, 166-n(h). We believe the authority to examine the accounts and verify the balances was intended as an accounting oversight function, rather than as a grant of authority to the City to determine the amount of any surplus or profit that may be made available to the City for general municipal purposes. Under the current charter provisions, such authority rests with the Water Board. Further, consistent with our previous conclusion that the City lacks authority to fundamentally alter the relationship between the Water Board and the city government, we also conclude that the City lacks authority to enact a local law specifically authorizing the City Chamberlain to determine the amount of such surplus funds.

CONCLUSION

For the foregoing reasons, we conclude that the City lacks home rule authority to abolish the state-created Elmira Water Board or provide that the Water Board commissioners shall be appointed by city officials rather than elected by the general public. Under the current provisions of the City Charter, the City Chamberlain does not have authority to determine the amount of Water Board surplus funds that may be available to the City for general municipal purposes, and the City lacks authority to amend the Charter to give the City Chamberlain such power.

Very truly yours,

KATHRYN SHEINGOLD
Assistant Attorney General
In Charge of Opinions