N.Y. Education Law § 486: Reserve funds, appropriations and other funds and accounts

§ 486. 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 shall pay into such capital reserve

fund (1) any monies appropriated and made available by the state or the

city of Yonkers 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 monies held in the capital 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, the

purchase of bonds of the fund, the payment of interest on such bonds of

the fund 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moneys in such capital reserve fund shall not be withdrawn therefrom at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 in any succeeding fiscal year on all bonds of the fund then

outstanding, except for the purpose of paying principal of and interest

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, 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

in any succeeding calendar year on all bonds of the fund then

outstanding.

(b) The fund shall not issue bonds at any time if the maximum amount

of principal and interest maturing and becoming due in a succeeding

fiscal year on such bonds then to be issued and on all other bonds of

the fund then outstanding 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 in any

succeeding fiscal year on such bonds then to be issued and on all other

bonds of the fund then outstanding.

(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 the capital

reserve fund of an amount equal to the maximum amount of principal and

interest maturing and becoming due in any succeeding fiscal year on all

bonds of the fund then outstanding. In order further to assure such

maintenance of the capital reserve fund, the board of education shall

annually request from the city of Yonkers 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 the budget of the city of Yonkers as necessary to restore

the capital reserve fund to an amount equal to the maximum amount of

principal and interest maturing and becoming due in the next succeeding

fiscal year on the bonds of the fund then outstanding; 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 and the mayor 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 mayor a further certificate

restating the amount so required and such amount shall be paid over to

the fund by the commissioner of finance out of the next payment of state

aid apportioned to the city of Yonkers on behalf of the city school

district of the city of Yonkers for the support of common schools. Any

amount so paid over to the fund shall be deducted from the corresponding

apportionment of state aid 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 commissioner of finance

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 Yonkers, (b) to reimburse

the board of education of the city of Yonkers the reasonable costs of

services performed by the board for the fund pursuant to section four

hundred seventy-nine 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.