Richard W. Youngman, Esq. Town Counsel Town of Lyons

You inquire whether the Grist Mill Water District in the Town of Lyons was established in accordance with law.

Article 12 of the Town Law was the source of authority for formation of the district. You state that a petition was duly filed for the establishment of the district (Town Law, §§ 191, 192) and that a hearing on the petition was properly noticed and conducted (Town Law, § 193). Following the hearing the town board determined that:

The petition was legally sufficient;

All property within the proposed district would be benefited;

All benefited property was included in the proposed district; and

It was in the public interest to establish the district. (Town Law, § 194 [1]).

Based upon these determinations, the town board adopted a resolution approving the establishment of the water district (Town Law, § 194 [2] [b]). No further action under Article 12 was taken by the town board. You ask whether the resolution of approval under section 194 (2) (b) established the district or whether a final order was necessary, presumably in accordance with section 194 (5), which requires an order by the town board approving or denying the petition to establish the district in accordance with the decision of the State Comptroller.

We interpret Article 12 as providing two means to establish a town water district. One is to be utilized when issuance of town debt is planned to pay the costs of the district and the other when no town debt is planned. When issuance of town debt is planned, district formation is a multi-step process requiring, after the filing of the petition and the public hearing, adoption by the town board of a resolution making the required determinations under section 194 (2) (b) of the Town Law, application to the State Comptroller for permission to establish the district (Town Law, § 194 [3] [a]), and adoption by the town board of an order approving or denying the petition in accordance with the decision of the State Comptroller (Town Law, § 194 [5]). District establishment is complete upon the adoption of the order approving the petition.

If issuance of town debt is not planned, the town board, following the filing of the petition and the public hearing, need only adopt a resolution under section 194 (2) (b) of the Town Law. Once adopted, the resolution establishes the district and no subsequent application to the State Comptroller or order by the town board is required (Town Law, § 194 [6]).

The above interpretation is supported by section 195 (1) of the Town Law which requires the town clerk to record a certified copy of the determination or order of the town board establishing the district in the office of the county clerk within ten days of the adoption of the order or determination. We believe that "determination" is a reference to the resolution establishing the district after making the required determinations under section 194 (2) (b) and "order" refers to the order of the town board establishing the district after receipt of the comptroller's approval under Town Law, § 194 (5).

The resolutions of the Lyons Town Board calling for a public hearing and approving the formation of the district indicate that there were no plans to issue debt to finance the costs of the Grist Mill Water District. The costs were to be paid by the private land developer. This being the case, the district was established upon the adoption by the town board of the resolution under section 194 (2) (b) of the Town Law and no application to the State Comptroller or subsequent order by the town board was required.

We note that the recording of the determination or order commences a thirty day statute of limitations within which an aggrieved party must apply for an order of certiorari to review district formation. Also, within ten days of adoption, a copy of the determination or order must be filed with the Department of Audit and Control (Town Law, § 195 [1] [2]).

Assuming that the proceedings of the Town of Lyons were technically and procedurally in accordance with Article 12 of the Town Law, the Grist Mill Water District was established upon adoption by the town board of the resolution under section 194 (2) (b) of the Town Law. Only if issuance of indebtedness is proposed to finance the cost of a district, is establishment delayed until the town board adopts an order following the approval of the State Comptroller.