§ 2-254 Effect of incorporation on all districts entirely within
village. 1. Whenever the term "district" is used in this section it
shall be construed as referring to a fire district, fire protection
district or fire alarm district, or a town special district, or a town
improvement district; and the term "governing body" as used in this
section shall be construed as referring to all boards, bodies or
persons, in which any of the governing powers of a district are vested.

2. If on the date of incorporation of a village the limits of the
village are coterminous with the limits of, or wholly include, the
territory of a district, such district shall cease to exist at the end
of the fiscal year of such district next following the first day of June
following the first day of January next succeeding the date of
incorporation; except as otherwise provided in this section, the powers
and duties of the governing body of the district and of all the officers
of the district in connection therewith shall then cease and determine;
and any board of commissioners, any office of commissioner and any other
office of any such district shall also cease to exist at such time.

2-a. If the limits of a village incorporated prior to the first day of
April, nineteen hundred sixty-five are coterminous with the limits of,
or wholly include the territory of, a district, the board of trustees of
the village, by local law or pursuant to the provisions of article
seventeen-A of the general municipal law, may abolish any such district.
In addition to any other notice required in connection with the adoption
of such local law generally, thirty days' written notice of the hearing
to be held in connection with such local law shall be given to the
governing body of any such district and to the town clerk. A certified
copy of any such local law shall be served upon or mailed to such
governing body and clerk within five days following the adoption
thereof. Except as otherwise provided in this section, the powers and
duties of the governing body of a district so abolished and of all the
officers of the district in connection therewith shall cease and
determine upon the effective date of such local law and any board of
commissioners, any office of commissioner and any other office of any
such district shall also cease to exist at such time. No such local law
shall become effective except on the last day of a fiscal year of the
town or district, as the case may be.

3. a. The obligations and the contracts of a district which shall so
cease to exist and the obligations and contracts of a town for the
benefit of or chargeable to such a district shall not be impaired by
this section.

b. Notwithstanding the dissolution of a district pursuant to this
section,

(1) an amount shall be levied and collected annually sufficient to pay
in regular course the principal of and interest on all bonds or
obligations issued pursuant to the local finance law or otherwise by or
on behalf of such district which are outstanding and unpaid as of the
date of the dissolution of the district. Such annual levy and collection
shall continue until all such outstanding bonds and obligations are paid
in full.

(2) all levies, assessments, fees, rates or other charges of the
district unpaid as of the date of dissolution and all penalties and
interest thereon shall be collected.

(3) all moneys collected under subparagraph two of this paragraph
which would be available for district purposes if the district were not
dissolved shall be applied to the payment of all obligations of the
district, other than those described in subparagraph one of this
paragraph, which are due and payable at the time of the dissolution of
the district. All such moneys so collected and not required for such
purpose shall be paid over to the village treasurer.

(4) the levies, collections and payments described in subparagraphs
one, two and three of this paragraph shall be made in the same manner as
if the district had not been dissolved, except that for the purposes of
this paragraph:

(a) if a fire district is dissolved, the board of trustees of the
village shall constitute the board of fire commissioners of the former
fire district and

(b) if a district other than a fire district is dissolved, the powers
of the governing body of the district shall be exercised and performed
by the town board of the town in which the district is located.

(5) in lieu of the requirements set forth in subparagraph one of this
paragraph, the board of trustees by resolution, subject to permissive
referendum, may provide that the village shall assume responsibility for
the levy and collection, as a general village charge, of all amounts
required to pay the bonds or obligations therein described. In such
event the village shall annually pay an amount sufficient to pay the
principal and interest on such bonds or obligations as same become due
and payable in regular course. In the case of bonds or obligations of a
district other than a fire district, such payment shall be made to the
supervisor of the town in which the district is located. In the case of
fire district bonds or obligations, payment shall be made directly to
the holder of such bonds or obligations. The board of trustees shall
give written notice of such resolution to the town board before same
shall become effective. Nothing herein contained shall prevent the
village from prepaying to the town for the purpose of redeeming such
bonds or obligations, other than those of a fire district, in whole or
in part provided the bonds or obligations permit such part payment or
redemption. Nothing herein contained shall prevent the village from
prepaying or redeeming such fire district bonds or obligations in whole
or in part provided the bonds or obligations permit such part payment or
redemption.

c. All contracts of or on behalf of and chargeable to a district which
ceases to exist hereunder, including all amounts unpaid under such
contracts but excluding all amounts unpaid thereunder which were due and
payable at the time of dissolution of such district, other than
obligations incurred pursuant to the local finance law, shall, to the
extent they are the responsibility of or beneficial to such a district,
be assumed by the village and all expenditures under such contracts
shall be charged as provided in subdivision six of this section. The
terms and conditions and all rights of or on behalf of the district,
including any right of amendment or rescission of such contract, shall
inure to the benefit of the village.

4. The governing body of a district shall be responsible for the
payment of all obligations of the district other than those described in
subparagraph one of paragraph b of subdivision three of this section
which are due and payable at the time of the dissolution of the
district. The governing body of a district shall be responsible for the
payment of all obligations of the district described in subparagraph one
of paragraph b of subdivision three of this section.

5. Upon a district ceasing to exist hereunder, all property of a
district shall automatically become the property of the village and, in
connection therewith, the governing body and any other officer or person
empowered to transfer title to or having the custody or control of any
moneys of such district, any moneys in a reserve fund, any real or
personal property of such district or used or applied for the purposes
of such district, any policies of insurance for the benefit of such
district, any documents, instruments and other muniments of title to
district property and of any official books, records and other data
relating to the operation and management of such district shall prepare
or cause to be prepared an inventory of all such property, shall certify
same, shall deliver same to the village clerk and shall:

a. pay over to the village treasurer all such moneys except so much
thereof as was collected for the purpose of paying principal of and
interest on bonds or other obligations issued pursuant to the local
finance law or otherwise by or on behalf of the district and further
except so much of the balance of such moneys as may be required to pay
those obligations of the district described in subdivision four of this
section. The village treasurer on receipt of such moneys, shall set same
aside and apply them pursuant to law to the purposes of the district
which ceases to exist hereunder so long as the village continues to
provide the service or function thereof and thereafter to be applied in
reduction of village taxes levied against the area of such former
district; provided, however, that so long as the village provides the
service or function of the former district any moneys held by or on
behalf of a district in a reserve fund subject to the provisions of
article two of the general municipal law or section fifty-five-a of the
town law shall be held and administered by the village as a reserve fund
subject to those provisions of article two of the general municipal law
pertaining to villages for the same or similar purpose for which any
such fund was established.

b. surrender and deliver all such insurance policies, books, such real
or personal property.

c. assign such policies of insurance and its interest thereunder to
the extent permitted therein to the village.

d. surrender and deliver all such insurance policies, books, records
and other data to the village clerk. Copies of official books, records
and other data relating to the operation and management of such district
and certified by the officer responsible for same shall be sufficient to
satisfy the requirements of this paragraph. No fees or expenses shall be
charged for the making of such copies and same shall be entitled to the
same admissibility in evidence in a court proceeding as the originals
thereof.

e. surrender and deliver all other such personal property to such
village officer, employee, board or commission as the board of trustees
of the village shall designate The failure of the governing body or any
other officer or person to comply with the requirements of this
subdivision shall in no way impair the automatic transfer to the village
of the right, title or interest of the district of, in or to such
property.

6. Upon a district ceasing to exist hereunder and until such time as
the village may discontinue the service or function pursuant to
subdivision seven of this section, the service or function of such
former district shall become a village service or function and shall be
continued as, in the discretion of the board of trustees of the village,
may be needed in all territory which previously received same and the
board of trustees shall have all the powers and duties granted by law to
village officials in connection with such service or function and such
additional powers formerly held by the governing body or any officer of
the district which may be necessary to continue the service or function
of the district, provided, however:

a. if the limits of a district which ceases to exist hereunder are
wholly within but are not coterminous with those of the village and the
service or function formerly provided by such district is not extended
outside the limits of the former district, all the costs and expenses of
such service or function may be chargeable only to the territory of such
former district.

b. if the limits of a district which ceases to exist hereunder are
wholly within but are not coterminous with those of the village and the
service or function formerly provided by such district is extended
outside the limits of such former district, so much of all costs and
expenses of such extension of service or function to such outside
territory as is represented by the payment of the principal and interest
on obligations incurred therefor by the village pursuant to the local
finance law may be chargeable to and collected from such outside
territory; and all other costs and expenses of such service or function
may be chargeable only to that part of the entire territory of the
village in which such service or function is provided. In any event and
regardless of the territory to which such other costs and expenses may
be made chargeable, same shall be apportioned and collected uniformly
and without discrimination within such territory.

c. upon any fire district ceasing to exist hereunder, all fire, hose,
protective or hook and ladder companies and all authorized squads or
other units of such district, including the memberships thereof, shall
continue to exist and shall not be affected thereby except as follows:

(1) the members of all such companies, squads or units shall
constitute a corporation and the fire department of the village.

(2) all such companies, squads or units shall thereafter be subject to
and governed by all the provisions of this chapter regulating and
pertaining to any such company, squad or unit and the fire department of
the village.

d. upon the incorporation of a village all existing fire, hose,
protective or hook and ladder companies and all other firemanic squads
or units independently organized and incorporated which are not
companies, squads or units of any fire district ceasing to exist
hereunder and the boundaries of which companies, squads or units as
specified in their certificates of incorporation or charters or any laws
establishing such companies, squads or units are coterminous with or
wholly included within the limits of the village and the memberships
thereof shall continue to exist and shall not be affected thereby except
as follows:

(1) the members of all such companies, squads or units shall
constitute a corporation and the fire department of the village.

(2) all such companies, squads or units shall thereafter be subject to
and governed by all the provisions of this chapter regulating and
pertaining to any such company, squad or unit and the fire department of
the village.

e. all officers and employees of any district which ceases to exist
hereunder shall to the greatest extent practicable in the discretion of
the board of trustees be continued in the same or similar positions as
village employees and, in connection therewith, shall have all the
rights provided by the civil service law as if their former positions
with the district had originally been established by the village.

7. The board of trustees of the village at any time by local law may
discontinue the service or function of the former district in all or any
part of the village; provided, however, that any such local law shall be
subject to a permissive referendum of the qualified voters in the
territory receiving the service or function at the time of the adoption
of such local law and in which the service or function is proposed to be
discontinued. For the purpose of such referendum such territory shall be
considered as if it comprised the entire territory of the village.

8. This section shall not apply to any special assessment area or any
area of assessment for benefit the boundaries of which are coterminous
with or wholly included within the limits of the village, which was
established only to pay the original cost of any special improvement or
facility or any addition thereto, benefitting such area. As to any such
area the assessments therein established shall continue to be levied and
collected as if the village had not been incorporated. However, any such
publicly owned improvement or facility shall become the property of the
village in the same manner as provided in subdivision five of this
section for property of a district.

9. Any other special assessment area or any other area of assessment
for benefit the boundaries of which are coterminous with or wholly
included within the limits of a village, shall be considered as a
district subject to the provisions of this section and chapter if same
was established not only to pay the original cost of any special
improvement or facility, or any addition thereto, benefitting such area
but also to pay the cost of the operation, maintenance, repair or
replacement thereof.