NY Loc Fin L § 10.10 (2021)
2021 New York Laws LFN - Local Finance Article 2 - Local Indebtedness Title 1 - Power to Contract Indebtedness and Periods of Probable Usefulness 10.10 - Municipalities and School Districts Authorized to Incur Debt to Liquidate Operating Deficits; Requirements and Procedures; Period of Probable Usefulne

§  10.10  Municipalities and school districts authorized to incur debt   to liquidate operating deficits; requirements and procedures; period  of   probable  usefulness.  In  the case of a municipality or school district   that is authorized by  a  special  or  general  law  to  incur  debt  to   liquidate an operating deficit:a.  no  bonds  to fund the liquidation of such a deficit may be issued   unless and until the state comptroller shall first  review  and  confirm   the  existence  of  the  deficit,  as  well as certify the amount of the   deficit. As soon as practicable after the  effective  date  of  the  law   authorizing  the incurrence of debt to fund the deficit, but in no event   prior to the close of the then current fiscal year of  the  municipality   in  the case of a projected deficit, the municipality or school district   shall prepare a report detailing the amount and cause of the deficit and   submit  to  the  state  comptroller  such  report,  together  with   the   municipality's  or  school  district's  independent audit report for its   last completed fiscal year, if any such audit report has been or  is  to   be  prepared,  and  such  other information as the state comptroller may   deem necessary. Within thirty days after receiving all necessary reports   and information, the state comptroller shall:1. perform such reviews as may be necessary;2. confirm the existence and certify the amount of the deficit; and3. provide notification to the finance board of  the  municipality  or   school district as to the existence and amount of any such deficit.b.  bonds  to  liquidate  such  deficit may not be issued in an amount   exceeding  the  amount  of  such  deficit  as  certified  by  the  state   comptroller.   If  the  municipality  or  school  district  issues  bond   anticipation notes for the purpose of liquidating such deficit prior  to   a determination by the state comptroller pursuant to paragraph a of this   section  in  an  amount  in  excess  of  the  amount  of such deficit as   confirmed by the state comptroller, the municipality or school  district   shall,  from  funds  other  than  proceeds of bonds or bond anticipation   notes, either redeem such bond anticipation notes in the amount by which   the amount of such bond anticipation notes exceeds the  amount  of  such   deficit  as  confirmed  by the comptroller or deposit a sum equal to the   amount by which such bond anticipation notes exceed the amount  of  such   deficit  as  confirmed  by  the  comptroller into a reserve fund for the   payment of bonded indebtedness that shall  be  established  pursuant  to   section six-h of the general municipal law.c.  for  each  fiscal  year occurring during the time deficit bonds or   bond anticipation notes issued in anticipation of the sale of such bonds   are outstanding, up to and including the last fiscal year  during  which   such  debt  or debt issued to refund such debt is outstanding, the chief   fiscal officer of the municipality or school district  on  whose  behalf   such  deficit  bonds  or notes have been issued shall monitor budgets of   the municipality or school district  and  for  each  budget,  prepare  a   quarterly  report  of summarized budget data depicting overall trends of   actual revenues and budget expenditures for  the  entire  budget  rather   than individual line items. Such reports shall compare revenue estimates   and  appropriations as set forth in such budget with the actual revenues   and  expenditures  made  to  date.  All  quarterly  reports   shall   be   accompanied  by  a  recommendation by the chief executive officer of the   municipality or  school  district  setting  forth  any  remedial  action   necessary  to  resolve  any  unfavorable  budget  variance including the   overestimation of revenues and the  underestimation  of  appropriations,   and  shall  be  completed within thirty days of the end of each quarter.   The chief fiscal officer shall also prepare, as part of such  report,  a   quarterly  trial balance of general ledger accounts. The above quarterly   budgetary reports and quarterly trial  balances  shall  be  prepared  in    accordance  with generally accepted accounting principles. These reports   shall be submitted to the governing board and chief executive officer of   such municipality or school district, the state director of the  budget,   the  state  comptroller,  the  chair  of  the  assembly  ways  and means   committee, the chair of the senate finance committee and, in the case of   a school district, the commissioner of education.d. beginning with the fiscal year during  which  the  municipality  or   school  district  is authorized to incur debt to finance the deficit, to   and including the last fiscal year during which such debt  or  any  debt   incurred to refund such debt is outstanding, the chief executive officer   or  other  individual  or individuals responsible for the preparation of   the tentative budget, or in the case of a town, the preliminary  budget,   shall submit the tentative or preliminary budget for the next succeeding   fiscal  year  to  the  state  comptroller  and,  in the case of a school   district, also to the commissioner of education, no  later  than  thirty   days  before  the  date  scheduled for the governing board's vote on the   adoption of the final budget or the last date on which the budget may be   finally adopted, whichever is sooner. The state comptroller and, in  the   case  of a school district, the commissioner of education, shall examine   such proposed budget and make such recommendations as deemed appropriate   thereon to the municipality or school district prior to the adoption  of   the budget, but no later than ten days before the date scheduled for the   governing  board's  vote on the adoption of the final budget or the last   date on which the budget must be  adopted,  whichever  is  sooner.  Such   recommendations  shall  be  made after examination into the estimates of   revenues and expenditures of such municipality or school  district.  The   governing  board  of  the municipality or school district, no later than   five days prior to the adoption of the budget,  shall  review  any  such   recommendations   and  may  make  adjustments  to  its  proposed  budget   consistent with any recommendations made by the state  comptroller  and,   in  the case of a school district, by the commissioner of education. Any   recommendations that the board rejects shall be explained in writing  to   the  state  comptroller  and, in the case of recommendations made by the   commissioner of education, to the commissioner. The action  or  inaction   of  the  state  comptroller  or the commissioner of education under this   section shall not be construed to  affect  the  legal  validity  of  any   budget  of  the municipality or school district nor to affect the powers   or duties of the municipality or school district  with  respect  to  the   local budget process, provided, however, that the municipality or school   district  may not issue bonds for any object or purpose unless and until   adjustments to its proposed budget consistent with  any  recommendations   made  by the state comptroller and, in the case of a school district, by   the commissioner of education, are made,  or  any  such  recommendations   that   are  rejected  have  been  explained  in  writing  to  the  state   comptroller and, in the case of school districts,  the  commissioner  of   education.e.  beginning  with  the  fiscal year during which the municipality or   school district is authorized to incur debt to finance the  deficit,  to   and  including  the  last fiscal year during which such debt or any debt   incurred to refund such debt is outstanding, the chief executive officer   or other officer or officers responsible  for  the  preparation  of  the   tentative  budget,  or in the case of a town, the preliminary budget, of   the municipality or school district, within thirty days after the  final   adoption  of  the  budget  for  the  next  succeeding fiscal year, shall   prepare a three-year financial plan covering the next succeeding  fiscal   year and the two fiscal years thereafter. The financial plan shall, at a   minimum,   contain   projected   employment   levels,  projected  annual   expenditures  for  personal  service,  fringe   benefits,   non-personal    services  and  debt service; appropriate reserve fund amounts; estimated   annual revenues including projection of property tax rates, the value of   the taxable real property and resulting tax levy, annual growth in sales   tax  and  non-property  tax  revenues;  and the proposed use of one-time   revenue sources. Copies of the financial plan shall be provided  to  the   chief  executive and chief fiscal officers of the municipality or school   district, the state director of the budget, the state  comptroller,  the   chair  of  the  assembly  ways  and means committee and the chair of the   senate finance committee. This  financial  plan  requirement  shall  not   apply  to  the  extent a municipality or school district is subject to a   different multi-year financial plan requirement under state law.f. beginning with the fiscal year during  which  the  municipality  or   school  district  is authorized to incur debt to finance the deficit, to   and including the last fiscal year during which such debt  or  any  debt   incurred to refund such debt is outstanding, the chief fiscal officer of   the  municipality  or school district shall notify the state comptroller   at least fifteen days prior to the issuance of any  bonds  or  notes  or   entering  to any installment purchase contract and the state comptroller   may review and make recommendations regarding the affordability  to  the   municipality  or  school  district  of  any  such  proposed  issuance or   contract.g. to facilitate the marketing of bonds authorized pursuant to law  to   be  issued  to  fund a deficit, the municipality or school district may,   notwithstanding any limitation on the private sales of bonds provided by   law and subject to the approval of the state comptroller  of  the  terms   and conditions of such sales:1.  arrange for the underwriting of such bonds at private sale through   negotiated fees or by sale of such bonds to an underwriter  at  a  price   less  than  the  sum  of par value of, and the accrued interest on, such   obligations; or2. arrange for the private  sale  of  such  bonds  through  negotiated   agreement, with compensation for such sales to be provided by negotiated   agreement   and/or  negotiated  fee,  if  required.  The  cost  of  such   underwriting or private placement shall be deemed a preliminary cost for   purposes of section 11.00 of this title.h. the financing of a deficit, when authorized by a special or general   law as hereinbefore described, is hereby declared to  be  an  object  or   purpose  of  the  municipality or school district for which indebtedness   may  be  incurred,  the  period  of  probable  usefulness  of  which  is   determined  to be ten years, computed from the date of such bonds or the   date of the first bond anticipation note issued in anticipation  of  the   sale of such bonds, whichever is earlier.i. except as provided in this section or in the general or special law   authorizing   the  incurrence  of  debt  to  finance  the  deficit,  all   proceedings in connection with the issuance of such debt  shall  be  had   and  taken  in accordance with the provisions of this chapter, provided,   however, that any resolution or resolutions authorizing the issuance  of   such  bonds  shall  not  be  subject to either a mandatory or permissive   referendum.  To  the  extent  the  provisions  of   this   section   are   inconsistent  with  any  general, special or local law concerning budget   procedures, this section shall apply and any budget schedule  set  forth   in any such law shall be modified to conform with this section.