| Board Voting |
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| 1) |
Q: |
If there is a vacancy on the board of commissioners
and, in voting on a particular matter, one commissioner abstains,
one commissioner votes no and two commissioners vote yes
is the resolution passed? |
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A: |
The number of votes needed to pass any
issue before the board is based upon the total members
(five) that constitute a full board (General Construction
Law, §41). A simple majority would require at least
three (3) affirmative votes.
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Bank Accounts
/ Investments |
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| 2) |
Q: |
Can a fire district put its money in a savings
bank or savings and loan association? |
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A: |
There is no statutory authority for a fire
district to deposit or invest moneys in savings banks or
in savings and loan associations (Op. State Compt., No.
80-29; Op. State Compt., No. 83-129; General Municipal
Law, §§6-f, 11; Banking Law, §2; Town Law, §177;
Local Finance Law, §165.00; see Banking Law, §237). |
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| 3) |
Q: |
What is a "demand deposit" account? |
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A: |
A demand deposit account is a non-interest
bearing account from which payment can be required within
14 days (Banking Law, §2[13]; 12 USC, §§371a,
1828[g1; 3 NYCRR §20.1).
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| 4) |
Q: |
Does a "N.O.W." account meet the
requirements of being a separate bank account for general
and reserve fund purposes? |
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A: |
A N.O.W. account is a transactional account
C12 CYR §204.2[e]). It has been the opinion of this
Office that, as a general rule, whenever a municipal officer
or employee is authorized or required to deposit moneys
received in an official capacity, such moneys may be deposited
in a checking account or a N.C.W. account. N.O.W. accounts
are generally regarded as the functional equivalent of
checking accounts by both the general public and the banking
community.
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| 5) |
Q: |
Are both demand and time accounts required
to be collateralized? |
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A: |
Security over and above Federal Deposit
Insurance Corp (FDIC) coverage is required by statute to
protect a fire district from possible loss of funds in
the deposits and certificates of deposit. The type of security
is prescribed in the various investment statutes (General
Municipal Law, §§6-f, 11; Local Finance Law, §165.00).
Although the Town Law does not require that demand deposits
be collateralized (see Town Law, §177), we recommend
that all fire district's collateralize demand deposits
to the extent not covered by FDIC.
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| 6) |
Q: |
Is a money market deposit account an acceptable
form of investment? |
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A: |
Money market deposit accounts have all the
necessary characteristics to be classified as time deposit
accounts within the intent of Section 11 of the General Municipal
Law and therefore, are permissible investment vehicles through
banks or trust companies Cop. State Compt., No. 82-362).
They should not be confused, however, with money market
mutual funds which are not a permissible investment vehicle.
Fire districts may not purchase shares in a mutual fund
(op. State Compt., No. 87-14).
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| 7) |
Q: |
Can moneys from reserve funds and the general
fund be combined for investment purposes? |
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A: |
Moneys from reserve funds and moneys in
the general fund may be combined for purposes of investments
and securing a higher rate of return (Op. State Compt.,
No. 83-34). Accounting records must be maintained to identify
the amount invested from each fund, and the interest earned
must be divided and credited to the investing funds on
the same ratio as the principal invested. For example,
if four funds each contributed the same amount in an investment,
each fund would receive 25% of the interest earned.
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| Accounting Records |
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| 8) |
Q: |
Is the numbering system for the expansion
of the basic object of expenditures mandated by the Office
of the State Comptroller? |
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A: |
The use of expanded coding, as explained in
the Financial Information for Fire District Officials (page
2-A-11) is optional. The methodology used is to be determined
by the fire district. It is normally accomplished by expanding
the basic object.
| Example |
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| Personal Services
- .1 |
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Contractual
- .4 |
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Regular .11 |
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Travel |
.411 |
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Overtime .12 |
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Office Supplies |
.412 |
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Temporary .13 |
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Telephone |
.413 |
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Heat & Light |
.414 |
For reporting purposes, the total for .1 or .4 would
be reported.
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| Receipts Forms |
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| 9) |
Q: |
Does a fire district treasurer have to issue
a duplicate receipt for all money (checks or cash) received? |
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A: |
A receipt must be issued where there is
no other evidence available for audit (General Municipal
Law, §99-b). However, a fire district treasurer could
elect to prepare receipts for all moneys received to assist
in the recording process. All information pertinent to
the transaction would be noted on the receipt form and
serve as a reference when entering it into the cash receipts
record.
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| Property Tax
Revenue |
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| 10) |
Q: |
When must the town supervisor turn tax moneys
over to the fire district treasurer? |
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A: |
When the taxes are collected and turned over
to the town supervisor, the supervisor shall "immediately" pay
the fire district treasurer the amount levied for district
purposes [Town Law, §181(1)].
While "immediately" has not been defined,
it is strongly recommended that this occur no later
than 72 hours after the tax collecting officer has
given the funds to the supervisor. However, nothing
would prevent earlier transmittal of district funds.
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| Spending
Limit |
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| 11) |
Q: |
Should a fire district recognize year-end
commitments, how is this accomplished and which year's spending
limit is impacted? |
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A: |
Commitments should be recognized in the year
in which the goods or services are ordered, not in the year
in which payment is made. The effect on the statutory spending
limitation would be recognized in the year that the commitment
is made, since proper fiscal management requires that both
an appropriation (budget) amount and the financial resources
needed be provided before the commitment is made. The moneys
may be disbursed when goods are received or services are
rendered in the subsequent fiscal year and would not impact
on that year's spending limitation (See Op. State Compt.,
No. 79-644).
Since appropriations lapse at the end of each fiscal
year, the current year s subsidiary appropriation accounts
must be encumbered (reduction of available balances)
to reflect outstanding commitments. The spending authority
for these amounts can then be carried forward to the
subsequent year. This is accomplished by increasing appropriations
in the new years budget and reflecting the encumbrances
as reductions to the new available balances. No board
resolution is needed to handle this accounting procedure.
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| 12) |
Q: |
Are fringe benefits to be considered a part
of the district spending limitation? |
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A: |
Fire district expenditures for fringe benefits,
which are authorized by statute or have been provided for
in a collective bargaining agreement, are part of the compensation
of district officers or employees and excludable from the
district's spending limit (Op. St. Compt., No. 87-33).
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| Purchasing |
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| 13) |
Q: |
What constitutes a true emergency purchase? |
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A: |
General Municipal Law, §103(4) clearly
states that contracts may be let without competitive bidding ".
. in the case of a public emergency arising out of an accident
or other unforeseen occurrence or condition whereby circumstances
affecting public buildings, public property or the life,
health, safety or property of the inhabitants of a political
subdivision or district therein, require immediate action
which cannot await competitive bidding . . ." The
board should formally declare the emergency and so indicate
their action (including justification) in the minutes of
the board.
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| 14) |
Q: |
Must fire district officials determine whether
a vendor is in fact the holder of a state contract? |
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A: |
Fire district officials should be certain
that a proposed purchase is from a vendor holding a current
state contract which has been extended to political subdivisions.
Thus, the district should obtain a listing of vendors who
hold state contracts or a copy of the contract from the
Office of General Services, Standards and Purchasing Group.
Their address is: Purchase Coordinator, Office of General
Services, Standards and Purchase Group, 38th Floor, Corning
Tower, Governor Nelson A. Rockefeller Empire State Plaza,
Albany, New York 12242, or your county purchase coordinator.
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| 15) |
Q: |
May the fire district sell or trade-in unneeded
or obsolete machinery or equipment? |
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Yes. However, the sale or trade-in must
be approved in accordance with the provisions of Section
176(23) of the Town Law. Refer to page #9-24 (last paragraph)
for an overview of the provisions.
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| Abstracts |
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| 16) |
Q: |
Is an abstract (listing of claims to be paid)
a mandated form and who would normally prepare and sign it? |
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A: |
There is no statutory requirement that
an abstract of claims be prepared. However, if an abstract
is used, it should be prepared and signed by the district
secretary where there is a separate district treasurer
or by the chairman of the board of commissioners where
the offices of secretary and treasurer are combined.
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| 17) |
Q: |
What are the practical uses of an abstract? |
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A: |
It is recommended that the board of commissioners
require its use for good management and internal control
purposes. Such a device serves as documentation of claims
audited and approved for payment by the district board and
as authorization for the fire district treasurer to disburse
moneys to the vendors as listed.
The board resolution approving the payment of vendors'
claims could refer to the abstract by number (i.e., #1-1
for January; #2-1 for February), include abstract summary
information, and make reference to where a copy of the
abstract is filed. |
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| Audit of Claims |
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| 18) |
Q: |
What procedure is needed to prove that the
board of commissioners have audited and approved the claims? |
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A: |
The actual claim (voucher) should be examined
to determine that: it is properly itemized, there is evidence
of receipt, it is for a legal purpose, and that a budget
or appropriation balance is available against which to
charge the disbursement. The board of commissioners is
required to audit and approve claims for payment by resolution
at a public meeting (Op. State Compt., No. 82-158). The
vote of each commissioner should be noted in the minutes
(i.e., approving; disapproving; abstaining) and approval
by a board majority is required before payment can be authorized.
The board resolution would indicate any claim(s) not approved
by an individual commissioner (i.e. approved except claims
2 and 6; approved except for #1; approved).
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| 19) |
Q: |
Since most fire districts boards meet monthly,
can the commissioners, by resolution, provide that all claims
offering a discount be paid without prior audit? |
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A: |
Although the law provides several exceptions
to the pre-audit requirement, claims which offer a discount
for prompt payment is not one (Town Law, §176[4-a]).
To take advantage of such discounts, the board of commissioners
could schedule a special meeting to audit the claims involved
or have more than one regularly scheduled meeting a month.
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| Expenditures |
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| 20) |
Q: |
What device is available to prevent an over-expenditure
of appropriations? |
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A: |
The use of encumbrances. This is normally
accomplished during the fiscal year when a purchase order
system is in use. However, if the fire district does not
use a purchase order system, the Uniform System of Accounts
for Fire Districts provides the means for recording such
encumbrances. At a minimum, all district officers should
file a list of encumbrances with the district treasurer
at the end of each fiscal year.
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| 21) |
Q: |
What type of evidence can a fire district
official give to a vendor to indicate that a district purchase
is tax exempt? |
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A: |
Fire districts are not issued tax exempt numbers.
However, the law specifically exempts New York State and
its public corporations and political subdivisions, which
would include fire districts, from payment of sales tax (Tax
Law, §§111[a][l], 1230).
Some fire districts have contacted the State Department
of Taxation and Finance to obtain written confirmation
of their exempt status. They file a copy of the confirmation
with vendors requiring such proof. Generally, referral
to the above cited statute should be sufficient proof.
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| 22) |
Q: |
Are there types of payments which may be made
prior to the receipt of the goods or services ordered? |
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A: |
The following are examples of payments which
would be permissible prior to the receipt of the goods or
services ordered, when authorized by the board.
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| Fire protection |
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Op. State Compt., No. 87-50 |
| Progress payment - fire vehicle |
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Town Law, §176[23-a] |
| Earned vacation taken |
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General Municipal Law, §92[2] |
| Magazine subscriptions |
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Op. State Compt., No. 81-83 |
| Fire hydrant rental |
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Op. State Compt., No. 80-102 |
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| 23) |
Q: |
May a fire district offer monetary rewards
for the arrest and conviction of vandals? |
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Yes. The board of commissioners may establish
rules and regulations under which monetary awards, up to
$1,000, would be paid for the arrest and conviction of
individual(s) for vandalism or theft of district property
(Town Law, §176(31).
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| 24) |
Q: |
Is there a maximum amount which districts
may properly expend for awards or plaques given at the annual
inspection dinner? |
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A: |
This office has expressed the opinion that
fire districts may purchase inexpensive awards and plaques
of nominal value as an expense incidental to the annual inspection
dinner (Op. State Compt., No. 83-15; Op. State Compt., No.
79-141; Town Law, §176-d). The presentation of such
awards and plaques as an incident to the dinner would primarily
further a proper fire district purpose. If an award or plaque
has substantial value, however, the benefit would inure primarily
to the individual and not the fire district (Op. State Cornpt.,
No 87-10).
There is no fixed dollar Amount which in all cases
will delineate between an award or plaque providing
primarily a private benefit and one that provides
a benefit which is only incidental to the proper
fire district purpose. It is recommended that the
board adopt rules and regulations to define who is
eligible for an award (i.e., firefighter or the year;
long-term member ending service; heroic deeds). monetary
standards and justification therefore, types of award
to be given (i.e. plaque, trophy) and that the award
recipients will be determined by formal action of
the board at a public rneeting.
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| 25) |
Q: |
Is it proper to serve light refreshments
at a public dedication of a new fire station or fire truck? |
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A: |
No. A district may not expend moneys for refreshments
at a public dedication of a new fire house or fire truck.
However, a district may make reasonable expenditures for
light refreshments (i.e., coffee, tea, cake) for the general
public at public meet ings, public drills, parades, funerals,
inspections and reviews (Town Law, §176[11]).
Light refreshments may also be provided to volunteer
firefighters at the scene of a serious fire or while
still on duty at the fire station immediately thereafter
(Op. State Compt., No. 72-88). Refreshments should
only be served under abnormal circumstances that
require volunteer firefighters to remain on duty
over long periods of time and under adverse conditions.
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| Training / Travel
Expense |
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| 26) |
Q: |
Do fire district officers need authorization
to attend a training school? |
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A: |
Yes. The district treasurer, as well as
other officers and employees, must receive authorization
from the district board before attending a training school
(General Municipal Law, §77-b). When authorized, all
actual and necessary expenses shall be a district charge
(see also Town Law, §178-a).
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| 27) |
Q: |
Can the fire district commissioners restrict
air travel to coach fare rate? |
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A: |
There is authorization for reimbursement
of actual and necessary expenses incurred by district officials
and chiefs in the execution of their duties (Town Law, §178-c).
The board, in developing and adopting travel rules and
regulations, could determine that coach fare rather than
the first-class rate would be the reasonable, actual and
necessary level of reimbursement for air travel. The regulations
should further provide for exceptions, when appropriate,
justifiable, and advance approval is obtained.
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| 28) |
Q: |
If a district official attends an out-of-state
conference and elects to travel by automobile, would the
travel be reimbursed at the district mileage rate, the cost
of commercial transportation or the lower of the two? |
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A: |
Once again, the question addresses the
reasonableness of the expense to be reimbursed. In establishing
its mileage allowance, the board could determine that,
if an official elects to use his or her personal vehicle
when public transportation is available, the reasonable
total reimbursement for mileage will not be great er than
the cost of public transportation. Naturally, the rules
and regulations adopted should contain enough flexibility
to permit the consideration of extenuating factors (i.e.,
time; distance; number of persons).
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| 29) |
Q: |
If the district mileage rate of reimbursement
is $.26 per mile and an individual travels 1,000 miles on
official business, should the district treasurer issue a "W-2",
a "1099-misc" or neither; and if a form is to be
issued how much will be reported? |
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A: |
Internal Revenue Service (I.R.S.) regulations
require that a W-2 be issued to each individual receiving
reimbursement for travel when the reimbursement rate exceeds
the federal rate. The W-2 must be issued for the gross
amount paid, and is not subject to a minimum. Therefore,
in our example, a W-2 in the amount of $260 (1,000 x .26)
would be issued if the federal rate of reimbursement was
less than $.26 per mile. (For 1989 the federal I.R.S. rate
was .25½).
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| 30) |
Q: |
What record should a fire chief or employee
keep to support claims for mileage reimbursement and how
would it be shown on the claim? |
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A: |
Officers and employees, including fire
chiefs, should maintain a trip" record to support
business use of personal vehicles. The record should include:
date, points of travel, purpose of travel, number of miles
and other pertinent information. Either a copy of the mileage
log should accompany the voucher or the details should
be shown on the claim to support the mileage reimbursement
requested.
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| 31) |
Q: |
If the district has established a rule whereby
officials must share a motel room (double occupancy) while
on district business or attending a conference, what rate
of reimbursement is allowed if only one official attends? |
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A: |
The district rules and regulations should
address exceptions to the "double occupancy rule".
For example, if the district knows in advance that only
one official requires lodging, then a room at the single
rate should be procured. However, if two officials are
scheduled to share a room and one official unexpectedly
can not attend, then the district must be prepared to pay
for the double room if alternate arrangements cannot be
made and the situation is properly documented.
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| 32) |
Q: |
Does the sales tax exemption apply to out-of-state
travel? |
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A: |
The sales tax exemptions set forth in Articles
28 and 29 of the New York State Tax Law are applicable
only to transactions consummated in New York State. The
applicability of sales tax imposed by state and local governments
outside of New York State would depend on the applicable
law of that state.
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| 33) |
Q: |
Are there situations when a fire district
is allowed to make an advance payment for travel purposes? |
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A: |
Yes. General Municipal Law, section 77-b[6]
provides for advances of money to cover estimated expenditures
for registration tees, travel, meals, lodging and tuition
for attendance at conferences as defined in section 77-b.
The board, by legislative action, should include within
its rules and regulations a procedure fcr use of cash travel
advances.
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| Reserve Funds |
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| 34) |
Q: |
What is the procedure for A fire district
to invest its own reserve fund moneys in tax anticipation
notes (TANs) and revenue anticipation notes (RANs) that it
will issue and is a referendum required? |
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A: |
A fire district may invcst reserve fund moneys
in its own obligations COeneral Municipal Law, §6-f).
Consideration must be given to the cash flaw needs of the
reserve fund to insure that the amount invested will be repaid
on a timely basis and available when needed.
The transaction should be handled as though it was
being made with an outside party. An actual obligation
(i.e. T.A.N., R.A.N.) should be prepared setting
forth the time for redemption, rate of interest and
other legally required information. It should be
noted in the Register of Investments. The investment
of reserve moneys is an interfund exchange of assets
and not an expenditure of fund resources. Therefore,
no referendum is needed.
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| 35) |
Q: |
Is an expenditure from a capital reserve subject
to a referendum? |
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A: |
Expenditures are subject to permissive referendum
it the reserve was created for a general purpose (i.e., type
of equipment or type of capital improvement). In that case,
no referendum procedure was required in its establishment
general municipal Law,§6-g].
Chapter 6 of the Financial Information for Fire
District Officials contains a more detailed
explanation of reserve fund referendum requirements.
It should be read in conjunction with the applicable
section of the General Municipal Law
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| 36) |
Q: |
May a single checking or N.O.W. account be
used when a fire district has two or more reserve funds? |
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A: |
It depends on the statutory regulations
for the particular type of reserve fund involved. Moneys
of Repair Reserves (§6-d[4]), Capital Reserves (§6-g[6]),
Reserves for Bonded Debt C§6-h[9]), Workers' Compensation
Reserves (§6-j[3]) and Mandatory Reserves (§6-1[6])
must be deposited in separate bank accounts. Furthermore,
if you have more than one of a particular type (i.e., two
or more capital reserves) each individual reserve would
require a separate checking account (See page 6-2 of Financial
Information for Fire District Officials). Any interest
earned on a N.O.W. account must be divided and credited
to each reserve fund on the same ratio as the principal
invested.
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| Court Appearances |
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| 37) |
Q: |
What is the "chief officer's authorization" which
must accompany any claim for reimbursement for "lost
wages" pursuant to General Municipal Law, §72-o? |
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A: |
The authorization should be a written statement
by the chief officer stating that the volunteer is authorized
to be reimbursed in accordance with the resolution of the
board of fire commissioners implementing the provisions
of General Municipal Law, §72-0. The chief should
issue the authorization, subject to any rules or regulations
governing the fire department, only if the six criteria
listed in section 72-o[1] are satisfied. Such rules and
regulations should, as a minimum, require the volunteer
seeking authorization to provide the chief with a written
statement indicating that each of the six criteria listed
in section 72-o[1] is satisfied. In addition to the chief
officer's authorization, any claim for reimbursement pursuant
to section 72-o must also be accompanied by a copy of the
subpoena and the chief officer's statement that heishe
was notified of the volunteer's receipt of a subpoena.
If the claim for reimbursement includes an amount for actual
lost wages, a statement of the volunteer's employer must
be attached indicating the amount of wages actually lost.
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| 38) |
Q: |
Does a volunteer firefighter who is self-employed
qualify for reimbursement for lost wages for a court appearance
(pursuant to a subpoena) and, if yes, how would the amount
of lost wages be determined? |
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A: |
The statute does not provide for reimbursement
of self-employed individuals (General Municipal Law, §72-o),
since the statute provides that any claim for reimbursement
must have a statement from the volunteer's employer to
substantiate the amount of wages lost (Op. State Compt.,
No 89-40).
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| 39) |
Q: |
May a fire district Commissioner be reimbursed
for lost wages because the commissioner is subpoenaed to
testify in a case in which the fire distirat is a defendant? |
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A: |
A fire district may not reimburse a fire
district commissioner for lost wages because the commissioner
is subpoenaed to testify in a case in which the fire distirct
is the defendant, unless the commissioner is a member of
a fire company and, in that capacity, is subpoenaed to
testify, and is eligible for reimbursement pursuant to
General Municipal Law, §72-o Op. State Compt., No.
89-40).
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