2023 New York Laws › EDN - Education › Title 1 - General Provisions › Article 10 - New York City Educational Construction Fund › 462 - Reserve Funds, Appropriations and Other Funds and Accounts.

§  462. Reserve funds, appropriations and other funds and accounts. 1.
(a) The fund shall create and establish a special fund (herein  referred
to  as  capital  reserve  fund), and, to secure bonds of the fund issued
prior to the twenty-fourth day of July,  nineteen  hundred  seventy-six,
shall pay into such capital reserve fund (1) any monies appropriated and
made  available by the state or the city of New York for the purposes of
such fund, (2) any proceeds of sale of notes  or  bonds  to  the  extent
provided in the resolution of the fund authorizing the issuance thereof,
and (3) any other monies which may be made available to the fund for the
purpose  of  such capital reserve fund from any other source or sources.
All moneys held in the capital reserve fund, established  for  bonds  of
the  fund  secured  by  such  capital reserve fund except as hereinafter
provided, shall be used solely for the payment of the principal of  such
bonds  as  the  same  mature,  required  payments  to  any  sinking fund
established  for  the  amortization  of  such  term  bonds  (hereinafter
referred  to  as "sinking fund payments"), the purchase or redemption of
such bonds, the payment of interest on such bonds or the payment of  any
redemption  premium  required  to  be  paid when such bonds are redeemed
prior to maturity;  provided,  however,  that  moneys  in  such  capital
reserve fund shall not be withdrawn therefrom at any time in such amount
as  would reduce the amount of such fund to less than the maximum amount
of principal and interest maturing and becoming  due  and  sinking  fund
payments  required to be made in any succeeding fiscal year on all bonds
of the fund secured by the capital reserve fund then outstanding, except
for the purpose of paying principal, interest and sinking fund  payments
becoming due on such bonds of the fund maturing and becoming due and for
the payment of which other monies of the fund are not available. For the
purposes  of  this  subdivision,  in  computing  the  maximum  amount of
principal maturing in any succeeding calendar year, the principal amount
of any term bonds which are to be amortized  by  sinking  fund  payments
shall  not be included in the computation. Any income or interest earned
by, or increment to, the capital reserve  fund  due  to  the  investment
thereof  may  be transferred to other funds or accounts to the extent it
does not reduce the amount of the capital reserve fund below the maximum
amount of principal and interest maturing and becoming due  and  sinking
fund payments required to be made in any succeeding calendar year on all
bonds of the fund then outstanding secured by the capital reserve fund.
(b) The fund shall not issue bonds secured by the capital reserve fund
at any time if the maximum amount of principal and interest maturing and
becoming  due  and  sinking  fund  payments  required  to  be  made in a
succeeding fiscal year on the bonds then to be issued and on  all  other
bonds  of  the fund then outstanding secured by the capital reserve fund
will exceed the amount of the  capital  reserve  fund  at  the  time  of
issuance  unless  the fund, at the time of issuance of such bonds, shall
deposit in the capital reserve fund from the proceeds of the bonds so to
be issued, or otherwise, an amount which, together with the amount  then
in  such fund, will be not less than the maximum amount of principal and
interest maturing and becoming due and sinking fund payments required to
be made in any succeeding fiscal year on such bonds then  to  be  issued
and  on  all  other  bonds  of  the fund then outstanding secured by the
capital reserve fund.
(c) To assure the continued operation  and  solvency  of  the  capital
reserve  fund  for  the  carrying  out  of  the  public purposes of this
article, provision is made in paragraph (a) of this subdivision for  the
accumulation  in  the  capital  reserve  fund  of an amount equal to the
maximum amount of principal and interest maturing and becoming  due  and
sinking  fund payments required to be made in any succeeding fiscal year
on all bonds of the fund then outstanding secured by the capital reserve

fund. In order further to assure such maintenance of the capital reserve
fund, the board of education shall annually request from the city of New
York and pay over to the fund, for deposit in the capital reserve  fund,
such  sum,  if any, as shall be certified by the chairman of the fund to
the board, the mayor and the director of management and  budget  of  the
city  of New York as necessary to restore the capital reserve fund to an
amount equal to the maximum amount of principal  and  interest  maturing
and  becoming  due  and sinking fund payments required to be made in the
next succeeding fiscal year on the bonds of the  fund  then  outstanding
secured  by  the  capital reserve fund; provided, however, that such sum
shall have been first appropriated by the city to  the  board  or  shall
otherwise  have  been  made  lawfully  available  to  the board for such
purpose. The chairman of the fund shall annually,  not  later  than  the
fifteenth  day  of February in each year, make and deliver to the board,
the mayor and the director of  management  and  budget  his  certificate
stating the amount, if any, required to restore the capital reserve fund
to  the amount aforesaid and the amount so stated, if any, shall be paid
to the fund by the board during the then  current  fiscal  year  of  the
fund.  In the event of the failure or inability of the board to pay over
the stated amount to the fund on or before  August  first  of  the  same
year,  the  chairman of the fund shall forthwith make and deliver to the
comptroller of the state of New York a further certificate restating the
amount so required and, after the comptroller of the state of  New  York
shall  have  given  written notice to the commissioner of education, the
mayor and director of management and budget, such amount shall  be  paid
over  to the fund by the comptroller of the state of New York out of the
next payment of state aid apportioned to the city of New York on  behalf
of  the  city school district of the city of New York for the support of
common schools or such other aid or assistance  payable  in  support  of
common  schools  as shall supersede or supplement such state aid for the
support of common schools, including federal moneys apportioned  by  the
state  to the city of New York on behalf of the city school district for
the support of common schools. Any amount so paid over to the fund shall
be deducted from the corresponding apportionment of state education  aid
or other aid or assistance for education otherwise credited to the board
of  education  for its purposes and shall not obligate the state to make
or entitle the city or the board of education to receive any  additional
or increased apportionment or payment of state aid for school purposes.
(d)  In  computing  the  amount  of  the  capital reserve fund for the
purposes of this section, securities in which all or a portion  of  such
fund  shall  be invested shall be valued at par, or if purchased at less
than par, at their cost to the fund.
2. The fund may create and establish with the comptroller  or  with  a
trustee  one  or  more  additional  funds  or  accounts  and, subject to
agreements with bondholders and noteholders, may pay into such funds  or
accounts  (i)  fees and charges collected by the fund, (ii) monies which
shall be transferred from the  capital  reserve  fund  pursuant  to  the
provisions  of  paragraph  (a)  of  subdivision one of this section, and
(iii) any other monies which may be made available to the fund from  any
other  source  or  sources.  The  monies held in or credited to any such
reserve fund or account may, in the discretion of the fund  but  subject
to  agreements with bondholders and noteholders, be used by the fund (a)
for the repayment of  advances  from  the  city  of  New  York,  (b)  to
reimburse  the board of education of the city of New York the reasonable
costs of services performed by  the  board  for  the  fund  pursuant  to
section  four  hundred fifty-five of this article, (c) to pay all costs,
expenses and charges  of  financing,  including  fees  and  expenses  of
trustees  and  paying  agents,  (d) for transfers to the capital reserve

fund, (e) for the payment of principal of and interest on bonds or notes
issued by the fund when the same shall become due, whether  at  maturity
or on call for redemption, and for the payment of any redemption premium
required  to  be  paid  where  such bonds or notes are redeemed prior to
their stated maturities, and to purchase bonds or notes  issued  by  the
fund,  (f)  for  such  other  corporate  purposes  as  the  fund  in its
discretion shall determine and provide, or (g) for payment to the  board
of education for school purposes.
3.  (a)  The  fund  may create and establish one or more special funds
(herein referred to as debt service reserve funds), and, to secure bonds
of the fund issued on or after the twenty-fourth day of  July,  nineteen
hundred  seventy-six, shall pay into each such debt service reserve fund
(1) any monies appropriated and made available by the state or  city  of
New  York  for  the  purposes  of such fund, (2) any proceeds of sale of
notes or bonds to the extent provided in  the  resolution  of  the  fund
authorizing  the issuance thereof, and (3) any other monies which may be
made available to the fund for the purposes of  any  such  debt  service
reserve fund from any other source or sources. All moneys held in a debt
service  reserve  fund,  except  as  hereinafter provided, shall be used
solely for the payment of the principal of bonds of the fund as the same
mature, required payments  to  any  sinking  fund  established  for  the
amortization  of  term  bonds  (hereinafter referred to as "sinking fund
payments"), so secured, the purchase or redemption of bonds of the  fund
so secured, the payment of interest on such bonds of the fund so secured
or  the  payment of any redemption premium required to be paid when such
bonds secured by a debt service  reserve  fund  are  redeemed  prior  to
maturity;  provided, however, that moneys in a debt service reserve fund
shall not be withdrawn therefrom at any time in  such  amount  as  would
reduce  the  amount  of  such fund to less than the debt service reserve
fund requirement established pursuant to the agreement with the  holders
of  the  bonds  of  the  fund secured by such debt service reserve fund,
except for the purpose of paying principal of, interest and sinking fund
payments becoming due on such bonds of the fund  maturing  and  becoming
due  and  for  the  payment  of  which  other monies of the fund are not
available. Any income or interest earned by, or  increment  to,  a  debt
service reserve fund due to the investment thereof may be transferred to
other funds or accounts to the extent it does not reduce the amount of a
debt   service   reserve  fund  below  the  debt  service  reserve  fund
requirement.
(b) The fund shall not issue bonds secured by a debt  service  reserve
fund at any time if the amount in such debt service reserve fund is less
than  the  debt service reserve fund requirement at the time of issuance
unless the fund, at the time of issuance of such bonds, shall deposit in
the debt service reserve fund from the proceeds of the bonds  so  to  be
issued,  or otherwise, an amount which, together with the amount then in
such fund,  will  be  not  less  than  the  debt  service  reserve  fund
requirement  established  by the agreement with the holders of the bonds
of the fund secured thereby.
(c) To assure the continued operation and solvency of the fund for the
carrying out of the public purposes of this article, provision  is  made
in  paragraph  (a)  of  this  subdivision for the accumulation in a debt
service reserve fund of an amount equal to the debt service reserve fund
requirement on all bonds of the fund then outstanding secured by a  debt
service  or  debt  service reserve fund. In order further to assure such
maintenance of a debt service reserve fund, the board of education shall
annually request from the city of New York and  pay  over  to  the  fund
after making the payment required by paragraph (c) of subdivision one of
this  section  for  deposit in a debt service reserve fund, such sum, if

any, as shall be certified by the chairman of the fund to the board, the
mayor and the director of  the  budget  of  the  city  of  New  York  as
necessary  to  restore such debt service reserve fund to an amount equal
to  the  debt service reserve fund requirement for the bonds of the fund
secured by such debt service reserve fund; provided, however, that  such
sum shall have been first appropriated by the city to the board or shall
otherwise  have  been  made  lawfully  available  to  the board for such
purpose. The chairman of the fund shall annually,  not  later  than  the
fifteenth  day  of February in each year, make and deliver to the board,
the mayor and the director of the budget  his  certificate  stating  the
amount,  if  any, required to restore a debt service reserve fund to the
amount aforesaid and the amount  so  stated  after  making  the  payment
required  by  paragraph  (c)  of subdivision one of this section if any,
shall be paid to the fund by the board during the  then  current  fiscal
year  of the fund. In the event of the failure or inability of the board
to pay over the stated amount to the fund on or before August  first  of
the same year, the chairman of the fund shall forthwith make and deliver
to  the  comptroller  of  the  state  of  New York a further certificate
restating the amount so required and, after the comptroller of the state
of New York shall have given written notice  to  the  commissioner,  the
mayor  and  director of the budget, such amount after making the payment
required by paragraph (c) of subdivision one of this  section  shall  be
paid over to the fund by the comptroller of the state of New York out of
the  next  payment  of  state aid apportioned to the city of New York on
behalf of the city school district of the  city  of  New  York  for  the
support  of  common  schools  or such other aid or assistance payable in
support of common schools as shall supersede or  supplement  such  state
aid  for  the  support  of  common  schools,  including  federal  moneys
apportioned by the state to the city of New York on behalf of  the  city
school  district  for  the support of common schools. Any amount so paid
over to the fund under paragraph (c) of subdivision one of this  section
shall   be  deducted  from  the  corresponding  apportionment  of  state
education aid  or  other  aid  or  assistance  for  education  otherwise
credited  to  the  board  of  education  for  its purposes and shall not
obligate the state to make or entitle the city or the board of education
to receive any additional or increased apportionment or payment of state
aid for school purposes.
(d) In computing the amount of any debt service reserve fund  for  the
purposes  of  this section, securities in which all or a portion of such
fund shall be invested shall be valued at par, or if purchased  at  less
than par, at their cost to the fund.
(e)  The  maximum  debt  service reserve fund requirement for any debt
service reserve fund created pursuant  to  this  subdivision  shall  not
exceed  the  amount  of principal and interest maturing and becoming due
and sinking fund payments required to be made in any year on  all  bonds
of  the  fund secured by such debt service reserve fund. For purposes of
this subdivision, in computing the maximum amount of principal  maturing
in  any  year,  the  principal  amount of any term bonds which are to be
amortized by  sinking  fund  payments  shall  not  be  included  in  the
computation.
4.  In  addition  to the funds permitted to be established pursuant to
subdivision two hereof, the fund  may  create  and  establish  with  the
comptroller  or  with a trustee one or more additional funds or accounts
and, subject to agreements with bondholders  and  noteholders,  may  pay
into  such funds or accounts (i) fees and charges collected by the fund,
(ii) monies which shall be transferred from a debt  service  or  reserve
fund  pursuant  to the provisions of paragraph (a) of subdivision one of
this section, and (iii) any other monies which may be made available  to

the  fund  from  any  other  source  or  sources.  The monies held in or
credited to any such fund may, in the discretion of the fund but subject
to agreements with bondholders and noteholders, be used by the fund  (a)
for  the  repayment  of  advances  from  the  city  of  New York, (b) to
reimburse the board of education of the city of New York the  reasonable
costs  of  services  performed  by  the  board  for the fund pursuant to
section four hundred fifty-five of this article, (c) to pay  all  costs,
expenses  and  charges  of  financing,  including  fees  and expenses of
trustees and paying agents, (d) for transfers to a  debt  service  or  a
debt  service  reserve  fund, (e) for the payment of principal, interest
and sinking fund payments for any bonds or notes issued by the fund when
the  same  shall  become  due,  whether  at  maturity  or  on  call  for
redemption, and for the payment of any redemption premium required to be
paid  where  such  bonds  or  notes  are  redeemed prior to their stated
maturities, and to purchase bonds or notes issued by the fund,  (f)  for
such  other  corporate  purposes  as  the  fund  in its discretion shall
determine and provide, or (g) for payment to the board of education  for
school purposes.