2023 New York Laws › GMU - General Municipal › Article 2 - General Municipal Finances › 6-E - Contingency and Tax Stabilization Reserve Fund for Municipal Corporations.

§  6-e.  Contingency  and tax stabilization reserve fund for municipal
corporations. 1. As used in this section:
a. "Annual budget" means the annual budget  or  estimate,  as  finally
adopted, of a municipal corporation which is required by law to adopt an
annual  budget  or  estimate of the expenditures to be made for a fiscal
year for the general support or for the expenses of  the  government  of
such municipal corporation during such fiscal year.
b.  "Base  year" means the most recent fiscal year for which an annual
report has been filed with the state  comptroller  pursuant  to  section
thirty of this chapter.
c.  "Chief  executive  officer"  means  a  chief  executive officer as
defined in paragraph five-a of section 2.00 of the local finance law.
d. "Chief fiscal officer" means a chief fiscal officer as  defined  in
paragraph five of section 2.00 of the local finance law.
e. "Eligible portion of the annual budget" means:
(1)  in  the  case of a contingency and tax stabilization reserve fund
established for a county, city, village or fire  district,  the  general
fund portion of the annual budget;
(2)  in  the  case of a contingency and tax stabilization reserve fund
established for a town, the town-wide  general  fund  and  highway  fund
portions of the annual budget; and
(3)  in  the  case of a contingency and tax stabilization reserve fund
established for the part of a town outside  any  villages,  the  general
fund and highway fund portions of the annual budget for such part of the
town.
f.  "Estimated  revenue" means revenue from a specific source which is
expected to be received during a fiscal year and which  is  included  in
the annual budget as finally adopted for that fiscal year.
g. "Governing board" means a governing board as defined in section two
of  this  chapter  and,  in  the case of a fire district, shall mean the
board of fire commissioners.
h. "Municipal corporation" means a municipal corporation as defined in
section two of this chapter and shall also include a fire district.
i. "Public emergency" means an epidemic, conflagration,  riot,  storm,
flood  or other sudden, unforeseen or unexpected occurrence or condition
which requires the immediate expenditure of moneys to protect the public
health,  safety  or  welfare  of  the  inhabitants  of   the   municipal
corporation.
j.  "Tentative budget" means the tentative budget prepared pursuant to
section three hundred fifty-four of the county law, section one  hundred
six  of  the town law or section 5-504 of the village law, the statement
of expenditures prepared pursuant to section one hundred  eighty-one  of
the  town law, or similar document prepared pursuant to general, special
or local law.
k. "Unanticipated expenditure" means an  expenditure  for  a  specific
purpose  for  which  there  is no or insufficient appropriation or which
will cause an appropriation to be insufficient that is necessitated by a
change in federal or state laws, rules or regulations,  a  court  order,
judgement or decree, a public emergency, or an industry-wide price, rate
or  premium  increase, which takes effect or occurs after final adoption
of  the  annual  budget  and  which  could  not  have  been   reasonably
anticipated prior to final adoption of the annual budget.
l.  "Unanticipated  revenue  loss"  means  estimated  revenue which is
rendered unreceivable because of a change  in  federal  or  state  laws,
rules  or  regulations,  a  court  order,  judgement or decree, or other
circumstance, which takes effect or occurs after final adoption  of  the
annual budget and which could not have been reasonably anticipated prior
to final adoption of the annual budget.
m.  "Unappropriated  unreserved  fund  balance"  means  the difference
between the total assets for a fund and the total liabilities,  deferred
revenues,   encumbered  appropriations,  amounts  appropriated  for  the
ensuing fiscal year's budget, and amounts reserved for  stated  purposes
pursuant  to  law,  including  reserve funds established pursuant to the
general municipal law for the fund, as determined through application of
the system of accounts prescribed by the state comptroller  pursuant  to
section thirty-six of this chapter.
n. "Voting strength" means the aggregate number of votes which all the
members of the governing board are entitled to cast.
2.  The  governing  board  of any municipal corporation, by resolution
subject to a permissive referendum, may establish a contingency and  tax
stabilization  reserve  fund  for  the municipal corporation and, in the
case of a town, also for the part of the town outside any villages. Such
permissive referendum shall be governed by:
a. in the case of a county,  sections  one  hundred  one  through  one
hundred three of the county law;
b.  in  the case of a city, sections twenty-four through twenty-six of
the municipal home rule law;
c. in the case of a town or the part of a town outside  any  villages,
article seven of the town law;
d. in the case of a village, article nine of the village law; and
e.  in  the case of a fire district, subdivision four of section six-g
of this article.
3. There may be  paid  into  the  contingency  and  tax  stabilization
reserve  fund  such  amounts  as  may  be provided therefor by budgetary
appropriation, unappropriated unreserved fund balance  in  the  eligible
portion  of  the annual budget, and such revenues as are not required by
law to be paid into any other fund or account; provided,  however,  that
no  amount  may  be  appropriated for payment into a contingency and tax
stabilization reserve fund which would cause the balance of the fund  to
exceed  ten percent of the eligible portion of the annual budget for the
fiscal year for which the appropriation would be made.
4. a. The moneys in a contingency and tax stabilization  reserve  fund
may  be  expended  only  pursuant  to  an  appropriation  for  a purpose
authorized by this subdivision. Except as provided  in  paragraph  e  of
this  subdivision,  such  an  appropriation  shall be made only upon the
recommendation of the chief executive officer  and  the  adoption  of  a
resolution  appropriating  the recommended amount by at least two-thirds
of the voting strength of the governing board.
b. The moneys in a contingency and tax stabilization reserve fund  may
be  used  to  finance  an  unanticipated  revenue loss chargeable to the
eligible  portion  of  the  annual  budget,  subject  to  the  following
limitations:
(1)  the  maximum  amount  of  moneys  in the fund that may be used to
finance an unanticipated revenue loss shall equal either the  amount  of
the  revenue  actually  received  for the base year or the amount of the
estimated revenue for the current fiscal year, whichever is less,  minus
the amount of the revenue actually received for the current fiscal year;
and
(2) the moneys in the fund may be used only to finance that portion of
the  unanticipated  revenue  loss  which,  as a matter of law, cannot be
financed with amounts available in any other account or fund.
c. The moneys in a contingency and tax stabilization reserve fund  may
be  used  to  finance  an  unanticipated  expenditure  chargeable to the
eligible  portion  of  the  annual  budget,  subject  to  the  following
limitations:
(1)  the  maximum  amount  of  moneys  in the fund that may be used to
finance an unanticipated expenditure shall equal the sum of  the  amount
of  the  unanticipated  expenditure and the amount appropriated for that
purpose for the current fiscal year minus either the amount appropriated
for  that  purpose for the current fiscal year or the actual expenditure
for the same purpose in the base year, whichever is greater; and
(2) the moneys in the fund may be used only to finance that portion of
an unanticipated expenditure which,  as  a  matter  of  law,  cannot  be
financed with amounts available in any other account or fund.
d.  The  moneys  in the contingency and tax stabilization reserve fund
may be used to lessen or prevent any projected increase in excess of two
and one-half percent in the amount of the real property tax levy  needed
to  finance  the  eligible  portion  of  the  annual budget for the next
succeeding fiscal year. The maximum amount of moneys in  the  fund  that
may  be  used  for  this  purpose shall equal the difference between the
projected amount of such real property tax levy and one hundred two  and
one-half  percent  of the amount of the real property tax levy needed to
finance the eligible portion of the annual budget for the current fiscal
year.
e. When preparing the tentative budget of a municipal corporation,  if
the current balance of a contingency and tax stabilization reserve fund,
as  shown  by  the  statement  of  the  chief fiscal officer required by
subdivision six of this section, exceeds ten  percent  of  the  eligible
portion  of  the  annual budget for the current fiscal year, such excess
shall be used to reduce the amount of  real  property  taxes  needed  to
finance  the  eligible  portion  of  the  annual  budget  for  the  next
succeeding fiscal year.
5. The moneys in the contingency and tax  stabilization  reserve  fund
shall  be  deposited  in  one  or  more  of the banks or trust companies
designated, in the manner provided by law, as depositories of the  funds
of  such municipal corporation. The governing board, or the chief fiscal
officer having custody of such money of such municipal  corporation,  if
the  governing  board  shall  delegate  such duty to him, may invest the
moneys in such fund in obligations specified in section eleven  of  this
article.  Any  interest  earned or capital gain realized on the money so
deposited or invested shall accrue to and become part of such fund.
6. The chief fiscal officer shall account for the contingency and  tax
stabilization  reserve  fund  separate and apart from all other funds of
the municipal corporation. Such accounting shall show: the source,  date
and  amount  of each sum paid into the fund; the interest earned by such
fund; capital gains or losses resulting from the sale of investments  of
the   fund;   the  order,  source  thereof,  date  and  amount  of  each
appropriation from this fund; the assets of the  fund,  indicating  cash
balance  and  a schedule of investments. Not later than sixty days after
the start of each fiscal year and at such times as may  be  required  by
the  governing  board,  the  chief  fiscal  officer shall furnish to the
governing board a detailed report of the operation and condition of  the
fund during the preceding fiscal year which shall include a statement of
receipts  and  disbursements, and a statement of the balance of the fund
as of the last day of such preceding fiscal year and such other dates as
may be specified by the governing board.  Not  later  than  thirty  days
prior  to  the last date provided by law for the filing of the tentative
budget, the chief fiscal officer shall furnish to the  officer  or  body
responsible  for  preparing  the  tentative  budget  a  statement of the
current balance of the fund.
7. The members of the governing board are hereby declared trustees  of
the  moneys  in  the  contingency and tax stabilization reserve fund and
shall be subject to all duties and responsibilities imposed  by  law  on

trustees,  and  such  duties and responsibilities may be enforced by the
municipal corporation or by any board, commission,  agency,  officer  or
taxpayer thereof.
8.  Any  officer  of  a  municipal  corporation  shall  be guilty of a
misdemeanor if he or she willfully and knowingly  causes  the  municipal
corporation to:
a.  Appropriate  moneys  from  the  contingency  and tax stabilization
reserve fund for any purpose not authorized by this section.
b. Expend any money from the contingency and tax stabilization reserve
fund for a purpose other than that for which it was appropriated.
The provisions of this subdivision shall be considered to be in addition
to any other penalties provided by law.
* 4. Moneys in such fund shall be deposited and secured in the  manner
provided  by  section  ten  of  this article. The moneys in such fund so
deposited shall be kept in a separate bank account. The governing  board
or the chief fiscal officer of such municipality, if the governing board
shall  delegate  such duty to him, may invest the moneys in such fund in
the manner provided in section eleven  of  this  article.  Any  interest
earned  or capital gains realized on the moneys so deposited or invested
shall accrue to and become part of such  fund.  Such  board  or  officer
shall  incur  no  personal  liability  on account of any investment made
pursuant to the provisions of this section.
* NB sb. 4 amended by Ch. 708/92, § 3  is  to  former  section  6-E  -
repealed Ch. 655/92