RESOLUTION AUTHORIZING TRANSFER OF USDA-RD SHORT TERM ASSET RESERVE FUND TO THE WATER FUND TO COVER EMERGENCY REPAIR COSTS FOR WELL 12

The resolution describes the USDA-RD Short Term Asset Reserve Fund as maintained 'in line with requirements of the USDA-RD loan' for 'short term asset repair or replacement.' It is unclear whether this fund was established under a specific New York State statutory authority (e.g., GML §6-c capital reserve or §6-d repair reserve) or solely pursuant to a federal loan covenant. If it was established under GML §6-c or §6-d, expenditures from it must conform to the statutory purpose, withdrawal procedures, and any referendum requirements of that section. If it is purely a contractual reserve required by USDA-RD, the Board should confirm with counsel that a simple majority resolution is sufficient authorization for withdrawal and that no USDA-RD consent or notification is required before transfer. Counsel review is recommended to clarify the fund's legal basis and applicable withdrawal rules.

GML §103 generally requires competitive bidding for public contracts above the applicable threshold. An emergency exception exists, but it typically requires a documented finding of emergency by the appropriate officer or board. The resolution recites the factual basis for the emergency (low-level alarm, same-day pump failure and replacement) but does not explicitly invoke the GML §103 emergency exception or reference any prior emergency declaration. The Board should confirm with counsel that the emergency procurement is adequately documented in the record to satisfy the statutory exception, and that the expenditure amounts ($2,851.23 and $2,075.45) are consistent with applicable thresholds and any prior emergency authorization.

The OSC Local Government Management Guide on Reserve Funds states that 'reserve funds have specific intended purposes and requirements as set forth in law' and that 'there should be a clear purpose or intent for reserve funds that aligns with statutory authorizations.' The WHEREAS clauses assert the fund is intended for 'short term asset repair or replacement,' which appears facially consistent with the proposed use. However, OSC guidance also emphasizes that the governing board should maintain clear documentation of the fund's authorizing instrument and permissible uses. The resolution would benefit from a citation to the specific USDA-RD loan provision or state statutory section that authorizes this use, so that the record is clear for any future OSC audit.

The OSC Reserve Funds guide notes that 'the separate identity of each such fund shall be maintained, whether its assets consist of cash or investments or both' (quoting GML §6-c(7)), and emphasizes 'visibility of reserve fund transactions' as a best practice. The resolution directs the Treasurer to transfer $4,926.68 from the reserve account and pay the two invoices directly. The Board may wish to confirm that the accounting treatment will reflect the transfer as a withdrawal from the reserve fund and a corresponding expenditure in the Water Fund, consistent with OSC's guidance on reserve fund accounting records and reports, and that the annual financial report (AUD) will reflect the transaction accurately.

The metadata records a unanimous vote with mover (Kjarval) and seconder (Allen) noted, which satisfies basic procedural requirements under Robert's Rules and Village Law §4-414. However, for a resolution authorizing a reserve fund withdrawal — particularly one tied to a federal loan covenant — some recorded deliberation on the fund's permissible uses and the emergency procurement basis would strengthen the record. This is a documentation best-practice concern rather than a validity defect, but it may be relevant if the action is later reviewed by OSC or USDA-RD.