2006 New York Code - Conditions On Extension Of Benefits To The City.

 
    * §  3038.  Conditions  on  extension  of  benefits to the city.   The
  corporation shall, at the time of  any  exchange  of  the  corporation's
  bonds  and  notes  for  short-term  obligations  of the city pursuant to
  subdivision two of section three thousand thirty-five of this chapter or
  any payment of funds of the corporation to the city or of  any  purchase
  from  the  city  of  its  obligations pursuant to section three thousand
  thirty-seven of this chapter, require the city to agree to  observe  and
  perform  the  conditions  set  forth  below  in  this section, with such
  limitations  as  to  the  implementation  of  such  conditions  as   the
  corporation   may,   subject   to   any  contract  with  bondholders  or
  noteholders, then approve; provided,  however,  that  no  such  specific
  limitations  shall  be  so  substantial  as  to effectively constitute a
  waiver of any such conditions. Any such conditions  may  thereafter,  in
  the  discretion  of  the  corporation,  subject  to  any  contract  with
  bondholders or noteholders, be further limited.  Such  conditions  shall
  cease  to  apply  when  all notes and bonds have been repaid or when the
  corporation has accumulated in its capital reserve funds or otherwise an
  amount equal to the principal of all outstanding  notes  and  bonds  and
  interest  accrued  thereon. The city shall have the right at any time to
  pay the corporation an amount which, when added to the  capital  reserve
  funds,  shall equal the principal of all outstanding notes and bonds and
  interest accrued thereon and redemption premium  if  any.  If  the  city
  makes  such payment at a time when the corporation has outstanding notes
  or bonds that are not then callable, the city shall  agree  to  pay  the
  corporation  on  demand  an amount equal to the amount, if any, by which
  the amount  of  interest  on  such  notes  or  bonds  shall  exceed  the
  corporation's  income  from  the investment of its funds. Subject to the
  foregoing, the conditions that the corporation shall require the city to
  observe and perform shall be as follows:
    1. The city shall deliver a certificate, executed by the mayor and the
  city comptroller in form prescribed by the corporation, (a) representing
  that the city is in compliance with the conditions  described  below  in
  this  section  as the corporation may specify, (b) undertaking to comply
  with any of such  specified  conditions  as  the  corporation  may  then
  require  and (c) stating that all local legislative and executive action
  then required to permit such compliance by the city has been taken.  The
  corporation may require the delivery with such certificate of an opinion
  of  the  city's  corporation  counsel  that  all  such  legislative  and
  executive action has been taken.
    2. (a) The city  shall,  within  ninety  days  after  the  first  such
  agreement,  initiate  steps  to adopt as the city's method of accounting
  for purposes of reporting to the corporation with respect to the  city's
  financial  condition and compliance with the conditions of this section,
  the accounting principles set forth in the state  comptroller's  uniform
  system  of  accounts  for municipalities, as the same may be modified by
  the state comptroller, in consultation with the  city  comptroller,  for
  application  to the city. The city shall complete the transition to such
  accounting method as promptly as reasonably practicable thereafter  and,
  in  any  event,  so that the audited financial statements for the fiscal
  year ending June thirtieth,  nineteen  hundred  seventy-eight  shall  be
  prepared  in accordance with such accounting methods, except as provided
  below in this subdivision. It is recognized that the  adoption  of  such
  accounting  principles  may  result  in substantial adjustments from the
  accounting principles now followed by the city. The corporation and  the
  city  shall consult, over the course of the introduction and adoption of
  such accounting system and the accounting methods referred to in section
  eight of the New York state financial emergency act for the city of  New
  York, and until the expiration of the fiscal year ending June thirtieth,
  nineteen  hundred  seventy-eight,  the  corporation  and  the  city  may
  formulate a mutually acceptable method of phasing such adjustments  into
  the  accounting  system described in this paragraph over such reasonable
  period,  not exceeding ten years, as the corporation may determine to be
  appropriate and the financial statements and  other  information  to  be
  furnished to the corporation may, notwithstanding any other provision of
  this  section three thousand thirty-eight be prepared in accordance with
  such determination.
    (b) For the  fiscal  year  ending  June  thirtieth,  nineteen  hundred
  seventy-nine,  and  for  each fiscal year thereafter, the city's expense
  budget shall be prepared in accordance with the  provisions  of  section
  eight  of the New York state financial emergency act for the city of New
  York.
    3. The city shall take such action as may be necessary to  enable  the
  state  comptroller,  or  at his election an independent certified public
  accounting firm retained by the  city  but  satisfactory  to  the  state
  comptroller,   to  perform  an  annual  audit  and  to  furnish  to  the
  corporation an annual report, for the fiscal year ending June thirtieth,
  nineteen hundred seventy-eight upon  the  financial  statements  of  the
  city. For each subsequent fiscal year the city shall take such action as
  may be necessary to enable a nationally recognized independent certified
  public  accounting firm selected and retained by the city at its cost in
  accordance with the provisions of section seven-a of the New York  state
  financial  emergency  act  for the city of New York to perform an annual
  audit and to furnish to  the  corporation  an  annual  report  upon  the
  financial  statements of the city. Each such report shall be prepared in
  accordance with the accounting method prescribed under  subdivision  two
  of  this  section.  The  city  shall  make  available for inspection and
  copying all books, records, work papers and other data and  material  as
  required  by  the  state comptroller or the independent certified public
  accounting firm conducting such  audit  and  the  city  shall  make  its
  officers  and  employees  available  to  and  shall  cooperate with such
  auditors so as to permit such annual  audit  to  be  completed  and  the
  report  issued  to  the  city  and to the corporation within one hundred
  twenty days after the close of the fiscal year.  Such  report  shall  be
  made available to the public promptly thereafter.
    4.  Beginning  with  the  fiscal  year ending June thirtieth, nineteen
  hundred seventy-seven and for each  fiscal  year  thereafter,  the  city
  shall  deliver a proposed expense budget to the corporation. Delivery to
  the corporation shall be made concurrently with the  initial  submission
  of  the  proposed  expense  budget to the board of estimate and the city
  council, but in any event  not  later  than  fifty  days  prior  to  the
  beginning  of such fiscal year or such other date as the corporation may
  approve upon the request of the city. Beginning  with  the  fiscal  year
  ending  June  thirtieth,  nineteen  hundred  seventy-eight, and for each
  fiscal year thereafter, the proposed expense  budget  submitted  to  the
  corporation  shall be prepared in accordance with the accounting methods
  referred to in subdivision two of this section.  Such  budget  shall  be
  identical  to  the  proposed  expense  budget  submitted to the board of
  estimate and city council. The proposed expense budget delivered to  the
  corporation  shall  be  accompanied  by (i) a statement setting forth in
  detail the assumptions of income and expense used  in  its  preparation,
  (ii)  for  the  fiscal  year  ending  June  thirtieth,  nineteen hundred
  seventy-eight, a reconciliation of the differences, if any, between such
  proposed expense budget and the proposed expense  budget  based  on  the
  applicable  accounting  methods  set  forth in subdivision two a of this
  section but without  adjustments  or  modifications  permitted  by  this
  title, and for each subsequent fiscal year a reconciliation between such
  proposed  expense budget and the proposed budget based on the principles
  described in section eight of the New York state financial emergency act
  for the city of New York, and (iii) a certificate of the  mayor  stating
  that  such  assumptions  are  reasonable  and  that operation within the
  budget is feasible  and  explaining  the  reasons  for  any  differences
  therein from the proposed expense budget described in clause (ii) above.
  Subject to and in accordance with the provisions of section eight of the
  New  York state financial emergency act for the city of the New York, as
  the same may be amended from time to  time,  the  city  shall  in  every
  fiscal  year  adopt and maintain an expense budget in which the total of
  all income items equals or exceeds the total of all  expenditure  items.
  For   the   fiscal   year   ending   June  thirtieth,  nineteen  hundred
  seventy-eight and each subsequent fiscal year the total  of  all  income
  items  shall  also equal or exceed the total of all expenditure items in
  each expense budget as adopted by the city, after  the  adjustments,  if
  any,  required  to  conform  to  the  accounting  methods referred to in
  subdivision two of this section  (except  as  may  be  modified  by  the
  application of subdivision five of this section) and the city shall also
  maintain   a   budget   balanced  in  accordance  with  such  accounting
  principles.  Prior  to  July  first,  nineteen  hundred  eighty-two  and
  notwithstanding any other provision of this section to the contrary, any
  expense  item  in  the  expense  budget  for any fiscal year, which item
  relates to contributions by the city or other  public  employer  to  any
  retirement system or pension fund, shall include only the amounts which,
  under  the provisions of law, rules or regulations expressly prescribing
  the method of determining  employer  contributions  to  such  retirement
  system  or  pension  fund  and  the time of payment thereof, are due and
  payable in such fiscal year, and no  such  expense  item  shall  include
  amounts  for  any  such  contribution  which,  under such laws, rules or
  regulations, do not become due and payable in such fiscal year.
    5. The city shall, over a period of six fiscal years,  beginning  with
  its  fiscal  year ending June thirtieth, nineteen hundred seventy-seven,
  eliminate from its capital  budget  those  expenses  that  are  properly
  includable  only in its expense budget, as determined in accordance with
  the accounting principles set forth in the state  comptroller's  uniform
  system  of  accounts  for municipalities, as the same may be modified by
  the state comptroller, in consultation with the  city  comptroller,  for
  application  to  the city. The determination of which items are properly
  includable only in the city's expense budget shall be made in accordance
  with the aforesaid accounting principles regardless of any  act  of  the
  legislature  prior  or  subsequent  to  the effective date of this title
  otherwise classifying such items. To implement the foregoing:
    (a) The mayor and the city comptroller shall, not later  than  October
  thirty-first, nineteen hundred seventy-five, certify to the corporation,
  a  list,  to  the best of their information, of the expense items in the
  city's capital  budget  for  the  fiscal  year  ending  June  thirtieth,
  nineteen hundred seventy-six, and the amount of each such item;
    (b)  The  comptroller  (or the independent certified public accounting
  firm then retained pursuant to subdivision three of this section)  shall
  prepare  a  determination of and shall report upon the expense items and
  the amount thereof in the city's capital  budget  for  the  fiscal  year
  ending  June  thirtieth,  nineteen  hundred  seventy-six  and  for  each
  subsequent fiscal year, in  accordance  with  the  aforesaid  accounting
  principles.  Such report shall also include a statement as to the city's
  compliance with the conditions of this subdivision for the  fiscal  year
  reported upon and in the budget for the succeeding fiscal year;
    (c)  Unless  the  corporation shall approve the inclusion of a greater
  amount with respect to any such fiscal year, the aggregate amount of all
  such expense items included in the capital budget,  including  judgments
  and  claims  related to other than capital projects, for the fiscal year
  ending June  thirtieth,  nineteen  hundred  seventy-seven  and  for  the
  following  fiscal  year  shall  be reduced at the cumulative rate of ten
  percent per year from the aggregate  amount  for  the  nineteen  hundred
  seventy-six  fiscal  year  set  forth  in  the report provided for under
  paragraph (b) of this subdivision (or set  forth  in  the  certification
  under paragraph (a) of this subdivision if such report has not then been
  prepared).  For  the fiscal year ending June thirtieth, nineteen hundred
  seventy-nine the maximum aggregate amount  of  all  such  expense  items
  included  in  the  capital  budget  shall  be four hundred fifty million
  dollars and for each of the following two  fiscal  years  the  aggregate
  amount of all such expense items included in the capital budget shall be
  substantially reduced from the aggregate amount for the nineteen hundred
  seventy-nine  fiscal  year.  For  the fiscal year ending June thirtieth,
  nineteen hundred eighty-two and thereafter, no such expense items  shall
  be included in the city's capital budget;
    (d)  For  the  fiscal  year  ending  June  thirtieth, nineteen hundred
  seventy-seven and continuing thereafter, the city shall not include  any
  new  or  additional item in its capital budget which, in accordance with
  the aforesaid accounting principles, is properly includable only in  its
  expense budget; and
    (e)  To  implement  this  subdivision,  and  in  order to provide full
  disclosure of all expense items properly includable only in the  expense
  budget,  the  city  shall  include in its expense budget for each fiscal
  year by appropriation all  expense  items  which  are  included  in  its
  capital  budget  for  such fiscal year pursuant to paragraph (c) of this
  subdivision including judgments and claims related to other than capital
  projects, such items shall be stated separately and distinctly  and  the
  city  may include in such expense budget as items of income, in addition
  to all other items of income properly includable in such expense  budget
  pursuant  to  this  section, all amounts to be applied to the payment of
  such expense items,  which  amounts  may  be  derived  from  any  source
  available to the city during such fiscal year, provided that such income
  shall be listed separately and distinctly.
    6.  If  after  the adoption of the expense budget for any fiscal year,
  any increase therein, or an increase  in  total  expenditures  shall  be
  proposed,  the  mayor  shall  cause such proposal to be submitted to the
  corporation concurrently with its submission to the  board  of  estimate
  and the city council, together with a statement of the source of current
  income  or other identifiable and currently available funds required for
  the payment of such additional amounts.
    7. Commencing at such time as the corporation  may  specify,  but  not
  later  than  December  1, 1975 the city budget director shall deliver to
  the corporation, not less than thirty days before  each  fiscal  quarter
  (except,  within  thirty days after the commencement of the first fiscal
  quarter), an expenditure plan to implement the city expense  budget  for
  such  fiscal quarter and within amounts based on current income or other
  identifiable and currently available funds.  The  city  budget  director
  shall  deliver  to  the  corporation within thirty days after the end of
  each such fiscal quarter covered by an expenditure plan,  an  operations
  report reflecting results of city operations for such fiscal quarter and
  whether  the city has operated within the related expenditure plan. Each
  expenditure plan and operations report shall be  in  such  form  as  the
  corporation  may  specify  and  shall  be  certified  by the city budget
  director and shall detail and report upon action taken by  the  city  to
  maintain a balanced expense budget.
    8. The city shall comply in all material respects with the expenditure
  limitations  in  its  budgets  as adopted or modified in accordance with
  subdivisions four and six of this section, and with section eight of the
  New York state financial emergency act for the city of New York  as  the
  same may from time to time be amended.
    9. a. The city shall not, at any time issue any short-term obligations
  which  would  cause  the  aggregate  principal amount of its outstanding
  short-term obligations plus the aggregate principal amount of all  notes
  and  bonds  issued  by  the  corporation (less any notes or bonds of the
  corporation  which  have  been  refunded,  renewed,  redeemed,  paid  or
  cancelled and less any notes and bonds deemed to have been paid pursuant
  to  the  provisions  of any contract with noteholders or bondholders and
  less any notes other than notes issued in anticipation of  the  issuance
  of  bonds  of  the corporation, or bonds of the corporation issued for a
  purpose  set  forth  in  subparagraph  (b)  of  section  three  thousand
  thirty-seven  or  in subparagraph eighteen of section three thousand ten
  of this  article,  and  less  any  notes  other  than  notes  issued  in
  anticipation  of  the  issuance of bonds of the corporation, or bonds of
  the corporation issued for the purpose of making deposits  into  any  of
  its  capital  reserve  funds, and less any short-term obligations of the
  city then held by the corporation) to exceed (i) six billion six hundred
  million (hereinafter called the base debt limit) plus (ii) an additional
  amount, not exceeding ten percent of  the  base  debt  limit;  provided,
  however, that during the fiscal years ending June 30, 1976 and 1977 such
  additional amount may not exceed thirty per cent of the base debt limit,
  during  the  fiscal  year ending June 30, 1978 the additional amount may
  not exceed twenty-five per cent of  the  base  debt  limit,  during  the
  fiscal  year  ending June 30, 1979, the additional amount may not exceed
  twenty per cent of the base debt  limit,  and  during  the  fiscal  year
  ending  June  30,  1980 the additional amount may not exceed fifteen per
  cent of the base debt limit.
    b. In addition to the foregoing limitation the city shall not, at  any
  date,  issue  any short-term obligations which would cause the aggregate
  principal amount of its outstanding  short-term  obligations  (excluding
  bond  anticipation  notes)  plus  the  aggregate principal amount of all
  notes and bonds issued by the corporation (less (i) any notes  or  bonds
  which  have been refunded or renewed and any notes or bonds in an amount
  equal to the aggregate principal amount of bond  anticipation  notes  of
  the  city  acquired  by the corporation, whether or not then held by the
  corporation (except bond anticipation notes of the city acquired by  the
  corporation  in consideration of the surrender by the corporation to the
  city of bond anticipation notes of the city), and  any  notes  or  bonds
  issued  for  a  purpose  set  forth  in  subparagraph (b), (c) or (d) of
  section three thousand thirty-seven, in  subdivision  two-a  of  section
  three  thousand  thirty-three, or subparagraph eighteen of section three
  thousand ten of this article,  and  less  any  notes  or  bonds  of  the
  corporation  issued  for  the purpose of making deposits into any of its
  capital reserve funds, (ii) any short-term obligations of the city  then
  held by the corporation other than bond anticipation notes and (iii) any
  short-term  obligations  of  the city issued and payable within the same
  fiscal year) to exceed four billion five hundred million  dollars  plus,
  in  the  discretion  of the board of directors, an additional amount not
  exceeding five hundred million dollars plus, in the  discretion  of  the
  board  of directors, until June thirtieth, nineteen hundred seventy-six,
  a further additional amount not exceeding two hundred million dollars.
    c. Notwithstanding any other provision of this  act,  the  corporation
  shall  not  have the authority to modify or waive the limitations on the
  aggregate amount of  outstanding  short-term  obligations  of  the  city
  permitted  to  be  outstanding  in  excess  of  the  limits specified in
  paragraphs (a) and (b) of this subdivision.
    d.  Not  less than twenty days prior to the issuance of any short-term
  obligations by the city, other than such obligations to be issued to the
  corporation, on or after July first, nineteen hundred seventy-five,  the
  city  comptroller shall deliver to the corporation a notice of intent to
  issue such obligations, specifying the amount and proposed terms thereof
  and the authority under  which  such  obligations  are  proposed  to  be
  issued,  together  with  a  certificate  of  the  city  budget  director
  specifying the  purpose  and  the  proposed  source  of  funds  for  the
  redemption  thereof.  The  city comptroller and the city budget director
  shall provide such additional information and  shall  be  available  for
  consultation  as  the corporation may request. If, within ten days after
  the receipt of such a notice from the city, the  corporation  determines
  after  consultation  with  the  city  comptroller  and  the  city budget
  director, that the  issuance  of  such  obligations  would  violate  the
  limitation  of  this  subdivision,  the corporation shall deliver to the
  city comptroller a certified copy  of  such  determination  within  such
  10-day  period  and the city comptroller shall not thereafter issue such
  obligations.
    * NB The corporation shall continue for a term  ending  the  later  of
  July  1, 2008 or one year after its liabilities have been fully paid and
  discharged per § 3033 sub 1.