2023 New York Laws › YFA - Yonkers financial emergency act 103/84

NEW YORK STATE FINANCIAL EMERGENCY ACT
OF NINETEEN HUNDRED EIGHTY-FOUR
FOR THE CITY OF YONKERS
Section
1. Short title
2. Definitions
3. Legislative declaration of financial emergency
4. General rights and prohibitions
5. Power   of   city  or  covered  organization  to  determine  the
expenditure of available funds
6. New York state emergency financial control board for the city of
Yonkers; created
7. Administration of the board
8. Functions of the board
9. Development of the financial plan
10. Establishment and application  of  emergency  financial  control
board fund for the city of Yonkers
11. Authorization for wage freeze
12. Prohibitions; penalties
13. Indemnification
14. Termination
Section  1.  Short  title. This act shall be known and may be cited as
the  "New  York  State  Financial  Emergency  Act  of  Nineteen  Hundred
Eighty-four for the City of Yonkers".
§  2.  Definitions. As used in this act, the following words and terms
shall have the following meanings  unless  the  context  shall  indicate
another or different meaning or intent.
1.  "Available  funds" means at any date the amounts in the fund which
are then available, as determined by the board, to  be  applied  to  the
purposes stated in paragraph (iii) of subdivision four of section ten of
this act after provision has been made for the application of amounts in
the  fund  for  the  purposes  stated  in  paragraphs  (i)  and  (ii) of
subdivision four of section ten of this act.
2. "Board" means the governmental agency created  by  section  six  of
this act.
3. "City" means the city of Yonkers.
4. "City manager" means the city manager of the city of Yonkers.
5. "Comptroller" means the comptroller of the state of New York.
6.  "Covered  organization"  means  any  governmental  agency,  public
authority or public benefit corporation which receives  or  may  receive
moneys directly, indirectly or contingently, (other than moneys received
for the sale of goods or the rendering of services or the loan of moneys
to  the  city)  from  the  city,  and  in  any  event  includes, without
limitation, the board of education of the city school  district  of  the
city of Yonkers.
Notwithstanding  the  foregoing,  the  board, by order made on its own
motion or on application of  a  covered  organization  may  specifically
exempt the organization from inclusion as a covered organization after a
finding  by  the  board that an exemption does not materially affect the
ability of the city to adopt and  maintain  a  budget  pursuant  to  the
provisions  of  this  act;  provided  that at the time of and during the
period of the exemption there is supplied to the board, an annual  audit
by  an  independent  certified  public  accounting  firm (or by a public
accountant licensed by the state of New York to conduct such audits)  of
the  organization's  financial  statements  performed in accordance with
generally accepted auditing  standards  and  a  report  thereon  by  the
auditor  which includes an opinion that the audited financial statements
have been prepared in  accordance  with  generally  accepted  accounting

principles  and  any other information as the auditor deems appropriate;
provided further however, that the board  may  terminate  the  exemption
after  a  determination  that the circumstances upon which the exemption
was granted are no longer applicable.
In  no  event  however,  shall the term "covered organization" mean or
include any governmental agency which is (i) a state public authority as
defined in section two hundred one of the civil service law, or  (ii)  a
governmental agency, authority, commission or instrumentality created by
compact  or agreement between the state of New York and another state or
states, or (iii) a subsidiary corporation of an agency described in  (i)
or (ii) hereof.
7. "Emergency period" means the period of time from the effective date
of  this  act  until  the  date  when  the board determines that (a) the
operating and capital funds of the city shall have been in  balance  for
three  fiscal years in accordance with the accounting methods prescribed
for the city's budget by  the  state  comptroller  pursuant  to  section
thirty-six  of  the  general  municipal law, (b) the amount of all loans
made by the state to the city to fund the operating deficit incurred  by
the  city  in  its  fiscal  year ending June thirtieth, nineteen hundred
eighty-four or any fiscal year thereafter has been repaid in  full,  and
(c)  the city has presented a financial plan that projects operating and
capital fund balance  for  the  four  years  covered  by  such  plan  in
accordance  with the accounting methods prescribed for the city's budget
by the state comptroller pursuant to section thirty-six of  the  general
municipal law.
8.  "Financial  plan"  means  the  financial  plan of the city and the
covered organizations to be developed pursuant to section nine  of  this
act, as from time to time modified.
9.  "Fund"  means  the  emergency financial control board fund for the
city of Yonkers established pursuant to subdivision one of  section  ten
of this act.
10.  "Revenues"  mean  all  taxes, federal and state aid, rents, fees,
charges, payments, all proceeds from borrowings  and  other  income  and
receipts paid or payable to or for the account of the city or any of the
covered  organizations,  subject  to  the  requirements  imposed  by the
special fiscal act.
11. "Special fiscal act" means the special local  finance  and  budget
act  of  the  city  of  Yonkers,  as  enacted  by  chapter  four hundred
eighty-eight of the laws of nineteen hundred seventy-six.
12. "Mayor" means the mayor of the city of Yonkers.
§ 3. Legislative declaration of financial emergency.  The  legislature
hereby  finds  and  declares  that a state of financial emergency exists
within the city of Yonkers.
§ 4. General rights and prohibitions. 1.  Neither  the  city  nor  any
covered  organization  shall borrow or expend any moneys, or in any way,
directly or indirectly, expressly or implicitly engage its credit during
the emergency period except in compliance with the  provisions  of  this
act and the special fiscal act.
2.  Nothing contained in this act shall limit the right of the city or
any covered organization to comply with the provisions of  any  existing
contract with or for the benefit of the holders of any bonds or notes of
the  city  or  such  covered  organization or with the provisions of the
special fiscal act.
3. Nothing contained in this act shall  be  construed  to  impair  the
right of employees to organize or to bargain collectively.
§   5.  Power  of  city  or  covered  organization  to  determine  the
expenditure of available funds. Nothing contained in this act  shall  be
construed  to  limit  the power of the city or a covered organization to

determine, from time to time, within available funds for the city or for
such covered organization, the purposes for which expenditures are to be
made by the city or such covered organization and the  amounts  of  such
expenditures,  consistent with the aggregate expenditures then permitted
under the financial plan for the city or such covered organization.
§ 6. New York state emergency financial control board for the city  of
Yonkers;  created.  There is hereby created the New York state emergency
financial control board for the city of Yonkers. The board  shall  be  a
governmental  agency  and instrumentality of the state and it shall have
such powers and functions as are set forth in this act.
§ 7. Administration of the board. 1. The membership of the board shall
be the secretary of state, the comptroller (pursuant to his authority to
supervise the accounts of any political subdivision of the  state),  the
mayor  and  four  members  appointed by the governor with the advice and
consent of the  senate.  Such  appointed  members  shall  serve  at  the
pleasure  of  the governor. The secretary of state shall be the chairman
of the board and  he  or  his  representative  shall  preside  over  all
meetings  of  the  board.  The  board  shall act by majority vote of the
entire board. The board shall maintain a record of  its  proceedings  in
such form as it may determine, but such record shall indicate attendance
and  all  votes  cast  by  each  member.  The  secretary  of  state  and
comptroller shall be entitled to designate a representative  to  attend,
in  his place, meetings of the board and to vote or otherwise act in his
behalf. Written notice of such designation shall  be  furnished  to  the
board  by  the  designating  member prior to any meeting attended by his
representative. Any representative shall serve at the  pleasure  of  the
designating  member.   No representative shall be authorized to delegate
any of his duties or  functions  to  any  other  person.  The  temporary
president of the senate, speaker of the assembly, minority leader of the
senate  and  minority  leader  of the assembly shall each be entitled to
appoint a representative to the  board,  the  county  executive  of  the
county  of Westchester shall be entitled to appoint a county official as
a representative to the board and the board shall be entitled to appoint
a representative to the board to represent the employees of the city  of
Yonkers. Each such representative shall be entitled to receive notice of
and  to  attend  all  meetings of the board but shall not be entitled to
vote. Each representative shall serve at the pleasure of the  appointing
official  or  body,  shall be eligible for reappointment, and shall hold
office until his successor has been appointed.
2.  Notwithstanding  any  inconsistent  provisions  of  law,  general,
special  or  local,  no  officer  or employee of the state, or political
subdivision of the state, any governmental entity operating  any  public
school  or  college or other public agency or instrumentality or unit of
government which exercises governmental powers under  the  laws  of  the
state,  shall  forfeit  his  office  or  employment  by  reason  of  his
acceptance or appointment as a member, representative, officer, employee
or agent of the board nor shall service as such member,  representative,
officer,  employee  or  agent  of the board be deemed incompatible or in
conflict with such office or employment.
3. The members  of  the  board  appointed  by  the  governor  and  all
representatives  designated  by members of the board shall serve without
salary or per diem allowance but shall be entitled to  reimbursement  by
the  city  for actual and necessary expenses incurred in the performance
of official duties under this act, provided, however, that such  members
and  representatives  are  not,  at the time such expenses are incurred,
public employees otherwise entitled to such reimbursement.
4. The board may delegate to one or more of its officers, employees or
agents, such powers and duties as the board may deem proper, except  any

duties  inconsistent  with  the  duties  and functions prescribed by any
other office or position any such person may hold.
§  8.  Functions of the board. 1. In carrying out the purposes of this
act, the board shall perform the following functions:
a. As set forth in section nine of  this  act,  the  board  shall  (i)
consult  with  the city and the covered organizations in the preparation
of the financial plan, and certify to the  city  the  revenue  estimates
approved  therein, (ii) prescribe the form of the financial plan and the
supporting information  required  in  connection  therewith,  and  (iii)
exercise  the  rights  of  approval,  disapproval  and modification with
respect to the financial plan, including but not limited to the  revenue
estimates contained therein.
b.  As set forth in section ten of this act, the board shall establish
and adopt procedures with respect to the deposit of revenues of the city
and the covered organizations in the fund and the disbursement of moneys
from the fund.
c. The board shall, from time to time  and  to  the  extent  it  deems
necessary  or desirable in order to accomplish the purposes of this act,
(i) review the operations, management, efficiency  and  productivity  of
such  city  operations  and  of  such  covered organizations or portions
thereof as the board may determine, and make reports thereon; (ii) audit
compliance with the financial plan  in  such  areas  as  the  board  may
determine;  (iii)  recommend  to  the city and the covered organizations
such measures relating to their operations, management,  efficiency  and
productivity  as  it  deems  appropriate  to  reduce  costs  and improve
services so as to advance the purposes of  this  act;  and  (iv)  obtain
information  on  the  financial  condition and needs of the city and the
covered organizations. Nothing herein shall diminish the powers  of  the
comptroller  otherwise  provided  by  law  and the board may request the
assistance of the comptroller in the performance of the above functions.
d. The  board  shall  (i)  receive  from  the  city  and  the  covered
organizations  and  from  the  comptroller,  and  review, such financial
statements  and  projections,  budgetary  data  and   information,   and
management  reports  and  materials  as  the  board  deems  necessary or
desirable to accomplish the purposes of this act, and (ii) inspect, copy
and  audit  such  books  and  records  of  the  city  and  the   covered
organizations  as  the  board deems necessary or desirable to accomplish
the purposes of this act.
e. All contracts entered into by the city or any covered  organization
must  be consistent with the provisions of this act and must comply with
the requirements of the financial plan as approved by  the  board.  With
respect  to all contracts or other obligations to be entered into by the
city or any covered  organization  after  May  first,  nineteen  hundred
eighty-four, requiring the payment of funds or the incurring of costs by
the city or any covered organization:
(i)  Within  twenty  days  from  May  2,  1984, the city manager shall
present to the board proposed regulations respecting the categories  and
types  of contracts and other obligations required to be reviewed by the
board pursuant to this subdivision. Within thirty days from May 2, 1984,
the board shall approve or modify and approve such proposed  regulations
or  promulgate  its  own in the event that such proposed regulations are
not submitted to it within the twenty days as provided for herein.  Such
regulation  may thereafter be modified by the board from time to time on
not less than thirty days notice  to  the  city  manager  on  or  before
December  31,  1991 and thereafter to the mayor and the city manager, or
mayor, respectively, may from time to time propose modifications to  the
board.  Unless  expressly  disapproved  or  modified by the board within
thirty days from the date of submission by the city  manager  or  mayor,

any  such proposed regulations or modifications shall be deemed approved
by the board;
(ii)  Prior  to entering into any contract or other obligation subject
to review of the board under its regulations, the city  or  any  covered
organization shall submit a copy of such contract or other obligation to
the  board  accompanied  by  an  analysis of the projected costs of such
contract or  other  obligation  and  a  certification  that  performance
thereof  will be in accordance with the financial plan, all in such form
and with such additional information as the  board  may  prescribe.  The
board  shall  promptly  review  the  terms  of  such  contract  or other
obligation  and  the  supporting  information  in  order  to   determine
compliance with the financial plan;
(iii)  The  board  shall,  by  order, disapprove any contract or other
obligation  reviewed  by  it  only  after  enactment  of  a   resolution
determining  that,  in its judgment, the performance of such contract or
other obligation would be inconsistent with the financial plan, and upon
such order the city or covered organization shall not  enter  into  such
contract or other obligation;
(iv)  If  the board approves the terms of a reviewed contract or other
obligation, the  city  or  covered  organization  may  enter  into  such
contract  or  other  obligation  upon  the terms submitted to the board.
Failure of the board to notify the city or covered  organization  within
thirty  days (or such additional time, not exceeding thirty days, as the
board shall have notified the  city  or  covered  organization  that  it
requires  to complete its review and analysis) after submission to it of
a contract or other obligation that such contract  or  other  obligation
has  been  disapproved  shall  be  deemed  to  constitute board approval
thereof.
f. The board shall review the terms of  each  proposed  long-term  and
short-term  borrowing  by  the  city  and any covered organization to be
effected during the emergency period after May first,  nineteen  hundred
eighty-four, and no such borrowing shall be made unless it complies with
the  provisions  of the special fiscal act and is approved by the board.
The board shall consult and coordinate with the comptroller with respect
to the borrowings of the city and any  covered  organization  and  shall
receive  reports from the comptroller on his review of borrowings by the
city. No covered organization shall be prohibited from issuing bonds  or
notes to pay outstanding bonds or notes.
g.  The  board  shall  receive  quarterly reports from the comptroller
setting forth the debt service requirements on all bonds  and  notes  of
the city and covered organizations for the following quarter.
h.  The board shall issue, to the appropriate official of the city and
the  covered  organization,  such  orders  as  it  deems  necessary   to
accomplish  the  purposes  of  this  act,  including but not limited to,
timely and satisfactory implementation of an  approved  financial  plan.
Any  order  so  issued shall be binding upon the official to whom it was
issued and failure to comply with such order shall subject the  official
to the penalties described in section twelve of this act.
i. The board shall coordinate with the comptroller with respect to the
performance   of   its   review  and  monitoring  of  the  revenues  and
expenditures of the city and covered organizations.
2. In carrying out its functions under this act, including making  its
determination  whether  to  approve  or  disapprove  a financial plan or
financial  plan  modification  of  the  city,  the  board  shall  ensure
compliance  by  the  city  with  the requirements imposed by the special
fiscal act, and all the requirements  of  such  act  shall  apply  to  a
financial  plan  of  the  city.  Nothing  contained in this act shall be
construed to amend, repeal, be inconsistent with, less stringent or less

restrictive than the special  fiscal  act.  If  any  inconsistencies  or
conflicts  between this act and the special fiscal act shall result from
the operations of the board or otherwise, the provisions of the  special
fiscal  act  shall  control  as  provided  in subdivision (F) of section
fourteen of the special fiscal act.
3. a. Notwithstanding  the  provisions  or  limitations  of  any  law,
general, special or local, including the charter of the city of Yonkers,
an  impasse panel, arbitrator, collective bargaining board, fact finding
or similar type of panel, body or  individual  which  is  authorized  to
recommend  or  award  an  increase  in  wages  or fringe benefits to any
employee of the city or  covered  organization  shall,  in  addition  to
considering  any  standard  or  factor  required  to  be  considered  by
applicable law, also take  into  consideration  and  accord  substantial
weight  to  the financial ability of the city or covered organization to
pay the cost of such increase in wages or fringe benefits.
b. Any determination pursuant to article eight of the labor law or any
agreement or stipulation entered into in lieu thereof which provides for
an increase in wages or fringe benefits of any employee of the  city  or
covered  organization  shall, in addition to considering any standard or
factor required to be considered  by  applicable  law,  also  take  into
consideration  and accord substantial weight to the financial ability of
the city or covered organization to pay the cost  of  such  increase  in
wages or fringe benefits.
c.  Any  party  to  a proceeding before a panel, body or individual as
described in paragraph a or b of this subdivision may commence a special
proceeding in the appellate division, second department, supreme  court,
state of New York, to review the determination as to the city or covered
organization's  financial  ability  to  pay.  Such  proceeding  shall be
commenced not later than thirty days after the final  determination  has
been  made  by the panel, body or individual. Such proceeding shall have
preference over all other cases in such appellate division,  other  than
cases relating to the election law.
d.  The court shall make a de novo review of the record solely for the
purpose of determining whether an award  of  an  increase  in  wages  or
fringe   benefits  was  within  the  city's  or  covered  organization's
financial ability to pay. The court's findings as to such issue shall be
based upon a preponderance of all the evidence set forth in the  record.
Unless the parties stipulate otherwise, arguments or submission shall be
had within fifteen days after commencement of the special proceeding and
the  court shall render its decision within fifteen days thereafter. All
questions, other than the question relating to the determination,  shall
be  reviewed  by  the  appellate  division in the same proceeding in the
manner provided by article seventy-five or seventy-eight  of  the  civil
practice  law  and rules as may be appropriate, notwithstanding that the
issue would otherwise have been cognizable in the first instance  before
a  special  or  trial  term  of  the  supreme  court. If an appeal shall
otherwise lie from such determination of the appellate division  to  the
court  of  appeals,  notice  of such appeal shall be filed within thirty
days after the entry of the final order or  judgment  of  the  appellate
division if such appeal is of right or within ten days after entry of an
order  granting  leave  to appeal, and such appeal shall have preference
over all other appeals other than appeals relating to the election law.
e. At any stage of any proceeding under paragraph a, b or c hereof  or
any  appeal  from an order or judgment therefrom the board may intervene
as a party on the issue of the financial ability of the city or  covered
organization to pay the cost of an increase in wages or fringe benefits.
f.  For  the  purposes  of  this subdivision, financial ability to pay
shall mean the financial ability of the city or covered organization  to

pay  the  cost  of  any  increase  in  wages  or fringe benefits without
requiring an increase in the level of city  taxes  as  approved  in  the
financial  plan of the city in effect at the time of the commencement of
a proceeding under paragraph a or b hereof.
§  9. Development of the financial plan. 1. Pursuant to the procedures
contained in subdivision two of this section, each year the  city  shall
develop,  and  may  from  time  to time modify, with the approval of the
board, a four year financial plan covering  the  city  and  the  covered
organizations.  Each such financial plan and financial plan modification
shall conform to the requirements of subdivision three of  this  section
and  shall  (a) provide that the operating and capital funds of the city
will be balanced in accordance with the accounting system and procedures
prescribed by the comptroller pursuant  to  section  thirty-six  of  the
general  municipal  law,  and  (b)  comply  with the requirements of the
special fiscal act.
2. The financial plan shall be developed and approved,  and  may  from
time  to time be modified, with the approval of the board, in accordance
with the following procedures:
a. Commencing with  the  city's  fiscal  year  beginning  July  first,
nineteen hundred eighty-four, and not later than fifty days prior to the
beginning  of  such fiscal year and each fiscal year thereafter, or such
other date as the board may approve at the request of the city, the city
shall prepare and submit a financial plan to the board covering the four
year period beginning with such fiscal year. On such  dates,  the  mayor
shall also submit to the board the city's proposed operating and capital
budgets  for  the  ensuing  fiscal  year  and a certificate of the mayor
stating that  such  budgets  are  consistent  with  the  financial  plan
submitted  therewith,  that  the  budgets conform in all respects to the
requirements of the special fiscal act, and that  operation  within  the
budgets is feasible.
b.  Not more than forty-five days after submission of a financial plan
or  more  than  thirty  days  after  submission  of  a  financial   plan
modification,  the  board  shall determine whether the financial plan or
financial plan modification is complete and complies with the provisions
of subdivision one of this section and shall approve or  disapprove  the
financial  plan  or  financial  plan modification in accordance with the
provisions of this section.
c. If the board determines that the financial plan or  financial  plan
modification  is  complete  and complies with the standards set forth in
subdivision one of this section, the board shall approve  the  financial
plan or financial plan modification. Upon making such determination, the
board  shall  make  a  certification  to  the city setting forth revenue
estimates approved by the board in accordance with such determination.
d. The board shall  disapprove,  by  resolution,  the  financial  plan
proposed by the city if, in the judgment of the board, such plan:
(i) is incomplete;
(ii)  fails  to  contain projections of revenues and expenditures that
are based on reasonable  and  appropriate  assumptions  and  methods  of
estimation;
(iii)  fails  to  provide  that operations of the city and the covered
organizations will be conducted  within  the  cash  resources  available
according to the board's revenue estimates; or
(iv)  fails  to  comply with the provisions of subdivision one of this
section.
e. In disapproving a financial plan  or  financial  plan  modification
proposed   by  the  city,  the  board  may  direct  that  the  aggregate
expenditures in  any  period  be  reduced  to  conform  to  the  revenue

estimates  certified by the board to achieve the objectives set forth in
subdivision one of this section.
f.  In the event that the city shall, for any reason, fail to submit a
financial plan, as required pursuant to paragraph a of this subdivision,
or to adopt a financial plan approved by the board, or in the event that
the board has not, for any reason permitted under this act,  approved  a
financial  plan  submitted  by the city, the board, after enactment of a
resolution so finding, shall formulate and adopt a financial plan to  be
effective  until  the  board  approves a financial plan submitted by the
city. All budgets and operations of the city or a  covered  organization
shall  be  in conformance and compliance with the financial plan then in
effect.
g. After the initial adoption  of  the  financial  plan,  the  revenue
estimates  certified  by  the  board  and  the  financial  plan shall be
regularly reexamined by the board in consultation with the city and  the
covered  organizations  and  the city shall provide a modified financial
plan in such detail and  within  such  time  period  as  the  board  may
require. In the event of reductions in such revenue estimates, or in the
event  the  city  or a covered organization shall expend funds at a rate
that would exceed the aggregate expenditure limitation for the  city  or
covered  organization  prior  to  the expiration of the fiscal year, the
city  shall  submit  a  financial  plan  modification  to  effect   such
adjustments in revenue estimates and reductions in total expenditures as
may  be  necessary  to  conform  to  such  revised  revenue estimates or
aggregate expenditure limitations. If, within a time period specified by
the board, the city fails to make such modifications after reductions in
revenue estimates, or to provide a modified plan in  detail  and  within
such  time period required by the board, the board, after enactment of a
resolution so finding, may formulate and adopt such modifications to the
financial  plan,  such  modifications  to  become  effective  on   their
adoption.
h.   The   city   may,  from  time  to  time,  submit  financial  plan
modifications for review by the board.  The  board  shall  approve  such
modifications  unless,  in the judgment of the board, such modifications
would constitute grounds for disapproval of a financial plan pursuant to
paragraph d of this subdivision.
3. The financial plan shall be in such form  and  shall  contain  such
information  for  each year during which the financial plan is in effect
as the board may specify, shall include the city  and  all  the  covered
organizations,  and  shall, in such detail as the board may from time to
time prescribe, include statements of all estimated revenues and of  all
expenditures  and  cash  flow  projections  of  the city and each of the
covered organizations.
4. The financial plan shall, except to the extent waived by the  board
with  respect  to  any limited period, include any information which the
board may request  to  satisfy  itself  that  (i)  projected  employment
levels,  collective  bargaining  agreements and other action relating to
employee costs, capital construction and such other matters as the board
may  specify,  are  consistent  with  the  provisions  made   for   such
obligations  in  the  financial  plan,  (ii)  the  city  and the covered
organizations are taking whatever action is necessary  with  respect  to
programs  mandated  by state and federal law to ensure that expenditures
for such programs are limited to and covered by the expenditures  stated
in  the  financial  plan,  and  (iii)  adequate reserves are provided to
maintain  essential  programs  in   the   event   revenues   have   been
overestimated or expenditures underestimated for any period.
5.  For  each  financial  plan  and  financial plan modification to be
prepared and submitted  by  the  city  to  the  board  pursuant  to  the

provisions  of  this  section, the covered organizations shall submit to
the city such information with respect to their projected  expenditures,
revenues  and cash flows for each year covered by such financial plan or
modification  as  the  city  shall  determine. Notwithstanding any other
provision of law limiting the authority of the city with respect to  any
covered organization, the city, in the preparation and submission of the
financial plan and modifications thereof, shall (except for debt service
or  for  other  expenditures  to  the  extent that such expenditures are
required by law) have the power to determine the aggregate  expenditures
to  be  allocated  to any covered organization in the financial plan and
any modifications thereto.
§ 10. Establishment and application  of  emergency  financial  control
board  fund  for  the  city of Yonkers. 1. There is hereby established a
fund designated the emergency financial control board fund for the  city
of  Yonkers.  Commencing  on the effective date of the initial financial
plan approved by the board and for the duration of the emergency period,
all revenues received or to be received  by  the  city  or  any  covered
organization  shall,  unless  exempted  by  order of the board or to the
extent otherwise required by the special fiscal act, be revenues of  the
fund  and  shall  be  for  the  account  of the city and the appropriate
covered organizations, but disbursement from the fund shall be  made  by
the  board in accordance with the approved financial plan, except to the
extent  otherwise  required  by  the  special  fiscal   act,   expressly
prohibited  by  federal  law  or  where such revenues are pledged to the
payment of any outstanding bonds, notes or other obligations of  covered
organizations.  Notwithstanding the foregoing, the board shall authorize
the city to make all disbursements of city revenues from the board fund,
which disbursements shall  be  made  in  accordance  with  the  approved
financial plan; provided, that the board may withdraw such authorization
if  it  determines  that (a) any disbursements made or to be made by the
city have not been or are likely  not  to  be  in  compliance  with  the
approved  financial plan, (b) the city has violated any other provisions
of this act or the special fiscal act, or (c) the city has  violated  an
agreement  with  any holder or guarantor of bonds or notes issued by the
city or a state financing agency. Commencing on the  effective  date  of
the  initial  financial plan approved by the board, and for the duration
of  the  emergency  period,  all  funds  and  accounts  established   or
thereafter  established  by the city of the covered organizations shall,
unless exempted by order of the board, thereafter be funds and  accounts
of  the  fund  except  to  the  extent otherwise required by the special
fiscal act, expressly  prohibited  by  federal  law  or  to  the  extent
prohibited by covenants or agreements relating to any outstanding bonds,
notes  or  other obligations of covered organizations. All such accounts
of the board shall have such captions and entries  as  the  board  shall
determine  to be necessary to credit the foregoing revenues and receipts
to the fund. The moneys of the fund shall not be deemed to be  money  of
the state or money under its control.
2. The deposit of revenues into the fund and the investment or deposit
of  moneys  therein  shall  be  made  in accordance with and pursuant to
procedures established by the board and the special fiscal act.
3. In order to assure compliance with the financial  plan,  the  board
shall from time to time adopt procedures controlling the disbursement of
moneys from the fund.
4.  If  at  any time the board determines that the amount then held in
the fund or the amount estimated by the board to be held in the fund  is
or  will  be insufficient to meet the expenditures in the amounts and at
the times required by  the  financial  plan,  the  board  shall  require
disbursements  from  the  fund  to  be  made  in  the following order or

priority unless otherwise required  by  law  of  the  United  States  of
America:  (i)  the  payment  of amounts from the fund to comply with the
provisions of  the  special  fiscal  act,  (ii)  the  payment  of  other
liabilities  having  statutory  or  contractual  priority over remaining
liabilities of the city and the covered organizations whose  moneys  are
included  in  the fund, and (iii) the payment of other obligations on an
allocated basis as specified by the city for expenditures in  accordance
with  the financial plan provided that, in the event that the city fails
to so specify, the board may withhold  payment  of  any  of  such  other
obligations or may direct their payment pro rata.
5. The board shall cause to be performed such pre-audit and post-audit
reviews of the fund and disbursements therefrom as it may determine.
§  11.  Authorization  for wage freeze. 1. Upon a finding by the board
that a wage freeze is essential to the adoption or maintenance of a city
budget that is in compliance with this act, the board,  after  enactment
of  a  resolution  so  finding, may declare a fiscal crisis. Upon making
such a declaration, the board shall  be  empowered  to  order  that  all
increases  in  salary or wages of employees of the city and employees of
covered organizations which will take effect after the date of the order
pursuant  to  collective  bargaining  agreements  or   other   analogous
contracts,  now  in  existence or hereafter entered into, requiring such
salary increases as of any date thereafter are suspended. Such order may
also provide that  all  increased  payments  for  holiday  and  vacation
differentials, shift differentials, salary adjustments according to plan
and  step-ups  or  increments for employees of the city and employees of
covered organizations which will take effect after the date of the order
pursuant  to  collective  bargaining  agreements  or   other   analogous
contracts  requiring  such  increased payments as of any date thereafter
are, in the same manner, suspended. For the purposes  of  computing  the
pension  base  of  retirement  allowances,  any suspended salary or wage
increases and any suspended other payments shall not  be  considered  as
part of compensation or final compensation or of annual salary earned or
earnable.  The suspensions authorized hereunder shall continue until one
year after the date of the order and, to the extent of any determination
of the board  that  a  continuation  of  such  suspensions,  to  a  date
specified  by the board, is necessary in order to achieve the objectives
of the financial plan, such suspensions shall be continued to  the  date
specified  by such board, which date shall in no event be later than the
end of the  emergency  period,  provided  that  such  suspensions  shall
terminate  with  respect  to  employees who have agreed to a deferral of
salary or wage increase upon the certification of the agreement  by  the
board pursuant to subdivision two of this section.
2.  This  section  shall not be applicable to employees of the city or
employees of a covered organization covered by a  collective  bargaining
agreement  or  an  employee  of  the  city or a covered organization not
covered by  a  collective  bargaining  agreement  where  the  collective
bargaining representative or such unrepresented employee has agreed to a
deferment  of salary or wage increase, by an instrument in writing which
has been certified by the board as being an acceptable  and  appropriate
contribution  toward alleviating the fiscal crisis of the city. Any such
agreement to a deferment of salary or wage increase may provide that for
the purposes of computing the pension base of retirement allowances, any
deferred  salary  or  wage  increase  may  be  considered  as  part   of
compensation  or  final  compensation  or  of  annual  salary  earned or
earnable.
3. The board may,  if  it  finds  that  the  fiscal  crisis  has  been
sufficiently alleviated or for any other appropriate reason, direct that
the  suspensions  of  salary  or  wage increases or suspensions of other

increased  payments  or  benefits  shall,  in  whole  or  in  part,   be
terminated.
§  12.  Prohibitions; penalties. 1. During the emergency period (i) no
officer or employee of the city or of any of the  covered  organizations
shall  make  or  authorize an obligation or other liability in excess of
the amount available therefor  under  the  financial  plan  as  then  in
effect; (ii) no officer or employee of the city or of any of the covered
organizations shall involve the city or any of the covered organizations
in  any  contract  or  other  obligation or liability for the payment of
money for any purpose required to be approved by the board  unless  such
contract  has been so approved and unless such contract or obligation or
liability is in compliance with the financial plan as then in effect.
2. No  officer  or  employee  of  the  city  or  any  of  the  covered
organizations  shall  take any action in violation of any valid order of
the board or shall fail or refuse to take any  action  required  by  any
such  order  or  shall  prepare,  present  or  certify  any  information
(including any projections or estimates) or report for the board or  any
of  its  agents  that is false or misleading, or, upon learning that any
such information is false or misleading, shall fail promptly  to  advise
the board or its agents thereof.
3.  In  addition  to any penalty or liability under any other law, any
officer or employee of the city or any of the covered organizations  who
shall violate subdivision one or two of this section shall be subject to
appropriate  administrative  discipline,  including,  when circumstances
warrant, suspension from duty without pay  or  removal  from  office  by
order  of  either the governor or the mayor; and any officer or employee
of the city or any of the covered organizations who shall knowingly  and
willfully  violate  subdivision  one  or two of this section shall, upon
conviction, be guilty of a misdemeanor.
4. In the case of a violation  of  subdivision  one  or  two  of  this
section  by  an  officer  or  employee of the city or any of the covered
organizations, the mayor or the chief executive officer of such  covered
organization  shall  immediately report to the board all pertinent facts
together with a statement of the action taken thereon.
§ 13. Indemnification. 1. The state shall save harmless and  indemnify
members, officers and employees of and representatives to the board, all
of whom shall be deemed officers and employees of the state for purposes
of  section  seventeen  of  the  public officers law, against any claim,
demand, suit, or judgment arising by reason of any act  or  omission  to
act by such member, officer, employee or representative occurring in the
discharge of his duties and within the scope of his service on behalf of
such  board  including  any  claim,  demand,  suit  or judgment based on
allegations  that  financial  loss  was  sustained  by  any  person   in
connection with the acquisition, disposition or holding of securities or
other  obligations.  In  the  event  of  any such claim, demand, suit or
judgment, a member, officer or employee  of  or  representative  to  the
board  shall  be  saved  harmless  and  indemnified, notwithstanding the
limitations of subdivision  one  of  section  seventeen  of  the  public
officers  law,  unless  such  individual  is  found  by a final judicial
determination not to have acted, in good faith, for a purpose  which  he
reasonably  believed  to  be in the best interest of the board or not to
have had reasonable cause to believe that his conduct was lawful.
2. In connection with any such claim, demand, suit, or  judgment,  any
member,  officer  or employee of or representative to the board shall be
entitled to representation by private counsel of his choice in any civil
judicial proceeding whenever the attorney general determines based  upon
his  investigation and review of the facts and circumstances of the case
that representation by the attorney general would be inappropriate.  The

attorney  general  shall  notify  the  individual  in  writing  of  such
determination that the individual  is  entitled  to  be  represented  by
private  counsel.  The  attorney  general may require, as a condition to
payment   of   the  fees  and  expenses  of  such  representative,  that
appropriate groups of  such  individuals  be  represented  by  the  same
counsel.  If  the  individual  or  groups  of individuals is entitled to
representation by private counsel under the provisions of this  section,
the  attorney  general  shall  so certify to the comptroller. Reasonable
attorneys fees and litigation expenses shall be paid  by  the  state  to
such  private counsel from time to time during the pendency of the civil
action or proceeding, subject to certification that  the  individual  is
entitled  to  representation  under  the  terms  and  conditions of this
section by the chairman of the board, upon the audit and warrant of  the
comptroller.  The provisions of this subdivision shall be in addition to
and shall not supplant any indemnification or other benefits  heretofore
or  hereafter  conferred  upon  members,  officers,  or employees of and
representatives to the board by section seventeen of the public officers
law, by action of  the  board  or  otherwise.  The  provisions  of  this
subdivision  shall  inure only to members, officers and employees of and
representatives to the board, shall not enlarge or diminish  the  rights
of any other party, and shall not impair, limit or modify the rights and
obligations of any insurer under any policy of insurance.
§  14.  Termination. Six months after the end of the emergency period,
the existence of the board and all other  provisions  of  this  act  not
theretofore terminated shall terminate.