N.Y. VIL Law § 11-1128

§ 11-1128 Sale or lease of water supply and distribution system.\nNotwithstanding the provisions of any other law, general or special, a\nvillage may (1) sell or lease its water supply and distribution system,\nor any part thereof, to a water authority, a county water district or a\njoint water works system established pursuant to article five-B of the\ngeneral municipal law or (2) sell, transfer or lease properties\nconstituting its water supply and distribution system, or any part\nthereof, for a fair consideration, to any person or public corporation\nfor any use other than the supply or distribution of water for potable\npurposes upon a determination by the board of trustees of the village\nthat the properties to be sold, transferred or leased are no longer\nnecessary for water supply or other village purposes. The proceeds of\nsuch sale, transfer or lease shall be deposited in a reserve fund\nestablished for the purpose of retiring outstanding obligations issued\nby the village to finance the cost of the facilities sold and shall be\nexpended only for such purpose, except as provided below. If the\nproceeds exceed the sum of all installments of principal of and interest\non such indebtedness due or to become due, or if, when all such\noutstanding obligations shall have been retired, any moneys remain\nunexpended in the reserve fund, such excess moneys may be used for any\nvillage purpose.\n