N.Y. Local Finance Law § 15.00: Indebtedness relative to municipal cooperative activities

§ 15.00 Indebtedness relative to municipal cooperative activities. a.

Legislative intent. The provisions of title one-A of article two of this

chapter are intended to effectuate the provisions of sections one and

two-a of article eight of the constitution, as in force and effect on

January first, nineteen hundred sixty, in relation to indebtedness

contracted, either jointly or severally, for (a) a joint service

described in section one of such article eight and (b) a joint water,

sewage or drainage project described in paragraphs B, D and F of section

two-a of such article eight.

b. Definitions. As used in this title:

1. The term "municipal corporation" means a county outside the city of

New York, a city, a town, a village, or a school district.

2. The term "municipality" means a county outside the city of New

York, a city, a town or a village.

3. The term "district," unless a specific type of district is referred

to, means a county or town improvement district for which the county or

town or towns in which such district is located is or are required to

pledge its or their faith and credit for the payment of the principal of

and interest on all indebtedness to be contracted for the purposes of

such district.

4. The term "joint service" means a municipal facility, service,

activity or undertaking described in section one of article eight of the

constitution, but shall not include any object or purpose the

indebtedness for which would be subject to the limitations of paragraph

a of section 150.00 of this chapter.

5. The term "joint water, sewage or drainage project" means a joint

project to provide for a common supply of water, the common conveyance,

treatment and disposal of sewage or a common drainage system, as

described in paragraphs B, D and F of section two-a of article eight of

the constitution.

6. The term "joint indebtedness" means indebtedness contracted for or

in relation to a joint service or a joint water, sewage or drainage

project and for which the joint faith and credit of the municipal

corporations or municipalities would be pledged for the payment thereof.

Such term also shall include (a) indebtedness on account of the

acquisition of real property the title to which has vested in the

municipal corporations or municipalities, or the title to which they

have agreed to accept pursuant to a contract therefor, and for which

payment has not been made, (b) indebtedness arising from contracts and

(c) involuntary indebtedness incurred in relation to a joint service or

a joint water, sewage or drainage project and for which the municipal

corporations or municipalities are jointly liable, where, from the

context of this title, it is evident that indebtedness on account of

real property liabilities, contract liabilities and involuntary

indebtedness are intended to be included within the meaning of the term.

7. The term "several indebtedness" means indebtedness contracted for

or in relation to a joint service or a joint water, sewage or drainage

project and for which the faith and credit of a single municipal

corporation or municipality would be pledged for the payment thereof.

Such term also shall include (a) indebtedness on account of the

acquisition of real property the title to which has vested in a

municipal corporation or municipality, or in the participating municipal

corporations or municipalities, or the title to which it has, or they

have, agreed to accept pursuant to a contract therefor, and for which

payment has not been made, (b) indebtedness arising from contracts and

(c) involuntary indebtedness incurred in relation to a joint service or

a joint water, sewage or drainage project and for which a municipal

corporation or a municipality is not jointly liable, where, from the

context of this title, it is evident that indebtedness on account of

real property liabilities, contract liabilities and involuntary

indebtedness are intended to be included within the meaning of the term.

c. Power to contract indebtedness; joint services and joint projects.

1. Municipal corporations. Two or more municipal corporations which

have agreed to provide a joint service, either directly or on behalf of

a district, pursuant to article five-G of the general municipal law, or

pursuant to any other law enacted by the legislature, may contract

either joint indebtedness or several indebtedness to provide for such

joint service. Such indebtedness shall not be contracted, however,

unless there is an applicable period of probable usefulness prescribed

in paragraph a of section 11.00 of this chapter under which each of the

participating municipal corporations, acting separately, either directly

or on behalf of a district, could have issued obligations pursuant to

this chapter.

2. Municipalities. Two or more municipalities which, either directly

or on behalf of a district, have agreed to provide a joint water, sewage

or drainage project pursuant to any law enacted by the legislature may

contract either joint indebtedness or several indebtedness to provide

for such joint project. Such indebtedness shall not be contracted,

however, unless there is an applicable period of probable usefulness

prescribed in paragraph a of section 11.00 of this chapter under which

each of the participating municipalities, acting separately, either

directly or on behalf of a district, could have issued obligations

pursuant to this chapter.

3. General provisions. (a) The financing of a joint service or a joint

water, sewer or drainage project may include but shall not be limited to

(1) the acquisition of land and permanent and temporary rights in land,

(2) the original furnishings, equipment, machinery or apparatus for a

physical public betterment or improvement or required for the purposes

for which the public betterment or improvement is to be used, and the

replacement of such furnishings, equipment, machinery or apparatus, (3)

the acquisition, construction, reconstruction, conversion or

alterations, of, or additions to, buildings, (4) the acquisition of

motor vehicles, machinery or apparatus to be used in the work of

constructing, reconstructing, converting, altering, or adding to,

repairing or maintaining a physical public betterment or removing the

snow and ice therefrom, (5) appraisals of real property by experts to

assist in the assessment thereof for taxation, (6) the payment of

judgments, claims, awards or sums described in and subject to the

limitations of subdivision thirty-three of paragraph a of section 11.00

and required to be paid because of such joint service or joint water,

sewage or drainage project, (7) the temporary financing in anticipation

of the collection of taxes, assessments, rents, rates or charges or the

receipt of money as provided in subdivision thirty-six of paragraph a of

section 11.00, (8) the financing of the protection of tax liens and

foreclosure costs described in and subject to the limitations of

subdivision thirty-seven of paragraph a of section 11.00 and (9) the

temporary financing of miscellaneous expenditures by the issuance of

budget notes as provided in subdivision forty of paragraph a of section

11.00.

(b) A municipal corporation shall not contract indebtedness for a

joint service, and a municipality shall not contract indebtedness for a

joint water, sewage or drainage project, to a greater extent than it is

authorized by law to spend money for any such service or project and

provided also that this section shall not relieve any such unit of

government of any duty imposed by law to include in its annual budget or

tax levy or otherwise to pay from current funds all or part of any

expenditure that it may make for any such service or project.

(c) Where the agreement between the municipal corporations or

municipalities in relation to any joint service or any joint water,

sewage or drainage project does not provide that the indebtedness which

is to be contracted is to be joint indebtedness, the amounts of

indebtedness which are to be contracted severally by the parties to the

agreement shall be in the proportions specified in the agreement. Where

the agreement does not provide how the indebtedness shall be contracted,

and the parties cannot otherwise agree, the indebtedness shall be

contracted as joint indebtedness.

(d) Any involuntary indebtedness which is incurred because of a joint

service or joint water, sewage or drainage project shall, until

satisfied, be deemed the joint indebtedness of the parties to the

agreement. The payment of any such indebtedness, however, may be

financed by the issuance of obligations severally by such parties for

specific proportions of the amount thereof according to the terms of the

agreement. Where the agreement does not provide how such involuntary

indebtedness shall be financed, and the parties cannot otherwise agree,

the obligations issued to finance the payment thereof shall be joint

indebtedness.

(e) Where joint indebtedness is contracted pursuant to the provisions

of this section the participating municipal corporations or

municipalities, by joint action of their finance boards or their chief

fiscal officers, as the case may be, may issue obligations pursuant to

the provisions of this chapter in the same manner as a single county,

city, town, village or school district and shall pledge the joint faith

and credit of the issuers for the payment of all such indebtedness.

(f) Notwithstanding any other provision of this title, or of any other

provision of law, in relation to (1) the allocation and apportionment of

joint indebtedness for the purpose of determining the debt-contracting

power of a municipal corporation or municipality or (2) the exclusion of

any such joint indebtedness in determining the debt-contracting power of

a municipal corporation or municipality, the liability of the

participating municipal corporations or municipalities for the payment

of the principal of an interest on such joint indebtedness shall be a

joint liability of the participating municipal corporations or

municipalities.

(g) Where there has been a pledge of the faith and credit of any

municipal corporation or municipality pursuant to section 100.00 of this

chapter for the payment of any several indebtedness, or of any joint

indebtedness, in relation to a joint service or a joint water, sewage or

drainage project, provisions shall be made annually by appropriation for

the payment of the interest thereon and of the amounts required for the

redemption thereof in compliance with the provisions of section two of

article eight of the constitution. If at any time the respective

appropriating authorities of any such municipal corporation or

municipality shall fail to make such appropriations, a sufficient sum

shall be set apart from the first revenues thereafter received and shall

be applied to such purposes. The chief fiscal officer of any such

participating municipal corporation or municipality may be required to

set apart and apply such revenues as aforesaid at the suit of any holder

of obligations issued for any such indebtedness. All laws requiring the

withholding of state aid in the event of the default in the payment of

the principal of and interest on indebtedness shall be applicable in the

event of a default in the payment of the principal of and interest on

any such several indebtedness or joint indebtedness.

(h) The powers which may be exercised by a finance board in relation

to such joint indebtedness or several indebtedness shall include, but

shall not be limited to, the following:

1. Determining the period of probable usefulness for any object or

purpose or class thereof.

2. Determining the subdivision of paragraph a of section 11.00 of this

chapter which applies to any object or purpose or class thereof.

3. Authorizing the issuance of bonds and the issuance and renewal of

bond anticipation notes, capital notes, tax anticipation notes, revenue

anticipation notes and budget notes subject to the provisions of this

section and sections 21.00, 23.00, 24.00, 25.00, 28.00, 29.00, 30.00,

31.00, 32.00, 33.00, 33.10, 34.00, 35.00, 36.00, 37.00, 38.10, 39.00,

40.00 and 41.10 of this chapter.

4. Prescribing the terms, form and contents of obligations, the place

of payment thereof, and providing for the sale, execution, issuance and

delivery and cancellation thereof subject to the provisions of this

section and sections 50.00, 51.00, 52.00, 53.00, 54.00, 55.00, 55.10,

56.00, 57.00, 58.00, 59.00, 60.00, 61.00, 62.00, 62.10, 63.00 and 63.10

of this chapter, except as otherwise provided in subparagraph (u) of

this subdivision.

5. Entering into contracts with a bank or trust company for the place

of payment of obligations and for the purpose of having a bank or trust

company act as paying agent or as registration agent subject to the

provisions of this section and sections 54.00 and 70.00 of this chapter.

6. Adopting the procedure specified in sections 80.00 and 81.00 of

this chapter which would be requisite to making sections 82.00, 83.00

and 84.00 of this chapter applicable.

7. Repealing or revoking resolutions or certificates authorizing the

issuance of obligations, subject, however, to the provisions of section

41.00 of this chapter.

8. Refunding of capital notes pursuant to the provisions of section

91.00 of this chapter, except that the provisions of paragraph b of

section 107.00 of this chapter shall not be applicable in any such

refunding of joint indebtedness or several indebtedness.

9. Reissuing obligations in place of lost, destroyed, partially

destroyed or defaced obligations pursuant to section 104.00 of this

chapter.

10. Depositing and investing the proceeds of obligations subject to

the provisions of section 165.00 of this chapter.

11. Authorizing the temporary use of funds pursuant to section 165.10

of this chapter.

(i) The finance boards of the participating municipal corporations or

municipalities shall provide that the place of payment of bonds or notes

constituting joint indebtedness shall be in the office of an appropriate

officer of one of the participating municipal corporations or

municipalities if a contract is not made with a bank or trust company as

the place of payment as provided in section 54.00 of this chapter.

(j) The finance boards of the participating municipal corporations or

municipalities shall designate an appropriate officer of one of the

participating municipal corporations or municipalities as registration

agent in relation to any bonds or notes constituting joint indebtedness

if a contract is not entered into with a bank or trust company to act as

registration agent as provided in section 70.00 of this chapter. The

officer so designated shall perform all of the duties and keep all of

the records in relation to such joint indebtedness required by sections

70.00, 71.00, 72.00, 73.00, 74.00, 75.00 and paragraph d of section

164.00 of this chapter.

(k) The finance board of the participating municipal corporations or

municipalities shall designate an appropriate officer of one of the

participating municipal corporations or municipalities to keep the

record of any bonds or notes constituting joint indebtedness as required

by section 163.00 of this chapter.

(l) Notwithstanding any other provisions of this section, if any power

of a finance board of any participating municipal corporation or

municipality may be delegated to its chief fiscal officer or to any

other official or body under any section of this chapter, such chief

fiscal officer or other official or body may exercise the powers so

delegated in relation to matters to which this title and other

provisions of this chapter apply.

(m) Notwithstanding any other provisions of this section, where any

power may be delegated to the chief fiscal officers of the participating

municipal corporations or municipalities pursuant to this section, the

finance boards of the participating municipal corporations or

municipalities may agree that any such power may be delegated to and

exercised by one of such chief fiscal officers.

(n) Where any action is taken in relation to joint indebtedness for

which the joint faith and credit of the participating municipal

corporations or municipalities would be pledged, or in relation to

obligations issued pursuant to this chapter, the finance boards of each

of the participating municipal corporations or municipalities must

separately authorize such action to be taken, except as otherwise

provided in subparagraphs (l) and (m) of this subdivision. Such separate

authorization by each such finance board shall be subject to the

provisions of this chapter, and of local laws enacted pursuant to this

chapter, which would be applicable in the event that the object or

purpose in relation to which action is being taken was the object or

purpose solely of the county, city, town, village or school district

which the finance board represents.

(o) Where the fiscal years of the participating municipal corporations

or municipalities are not the same and where joint indebtedness is to be

or has been contracted by the issuance or renewal of tax anticipation

notes, revenue anticipation notes, capital notes and budget notes or any

action is required to be taken in, or limitation is applicable in

connection with, a "fiscal year," the finance boards of such

participants may determine that the "fiscal year" for such purposes

shall be the same as the fiscal year of one of the participants.

(p) Notwithstanding the provisions of section 31.00 of this chapter,

any school district which is a participating municipal corporation in

relation to a joint service may, in connection with such joint service,

adopt one or more bond resolutions or capital note resolutions

authorizing the issuance of bonds or capital notes as several

indebtedness, or may participate in the adoption of any such resolution

authorizing the issuance of bonds or capital notes as joint

indebtedness, for a class of objects or purposes for which objects or

purposes serial bonds may be issued, subject, however, to the applicable

provisions of section 37.00 of this chapter.

(q) A bond resolution, a capital note resolution or a budget note

resolution adopted in compliance with the provisions of sections 32.00

and 40.00 of this chapter for a joint service or a joint water, sewage

or drainage project shall state the total amount of the indebtedness

which is to be contracted severally by the issuance of bonds, capital

notes or budget notes by each of the participating municipal

corporations or municipalities for the object or purpose or class

thereof set forth in the resolution, or, if joint indebtedness is to be

contracted, any such resolution shall set forth the total amount of the

joint indebtedness which is to be contracted and the amounts which it is

estimated will be allocated and apportioned to each of the participating

municipal corporations or municipalities for the purpose of ascertaining

their debt-contracting powers.

(r) Notices to be published in relation to a mandatory or permissive

referendum pursuant to sections 33.10, 35.00, 36.00 and 37.00 of this

chapter, and notices required to be published in connection with the

voting of a special tax or a tax to be collected in installments as a

condition precedent to the adoption of a bond resolution for a joint

service or joint water, sewage or drainage project, shall state the

total amount of the indebtedness which is to be contracted severally by

the issuance of bonds and capital notes by each of the participating

municipal corporations or municipalities for the object or purpose or

class thereof for which it is proposed that bonds or capital notes will

be issued, or, if joint indebtedness is to be contracted, any such

notice shall set forth the total amount of the joint indebtedness which

is to be contracted and the amounts which it is estimated will be

allocated and apportioned to each of the participating municipal

corporations or municipalities for the purpose of ascertaining their

debt-contracting powers.

(s) The notice required to be published in an official newspaper

pursuant to section 81.00 of this chapter shall, where joint

indebtedness is to be incurred, be published in the official newspaper

or newspapers of each of the participating municipal corporations or

municipalities or if there be no such newspaper or newspapers, then in

one or more newspapers having general circulation in such municipal

corporations or municipalities as the finance boards shall designate,

except that where any newspaper is the official newspaper of all of the

participating municipal corporations or municipalities or is the only

newspaper designated by the finance boards as a newspaper having general

circulation in all of the participating municipal corporations or

municipalities only one notice need be published in any such newspaper.

(t) If bonds which would constitute several indebtedness are sold at

private sale pursuant to the provisions of paragraph b of section 63.00

of this chapter, the amount of such bonds shall be included in any

computation of the total amount of bonds which may be sold at private

sale in any fiscal year of the issuer.

(u) Bonds which would constitute joint indebtedness may be sold at

private sale pursuant to and, except as hereinafter provided, subject to

the provisions of paragraph b of section 63.00 of this chapter. The

total amount of such bonds which may be so sold at private sale in any

calendar year shall not exceed one million dollars. The limitation of

paragraph b of section 63.00 in relation to the total amount of bonds

which may be sold at private sale in any fiscal year of the issuer shall

not be applicable to bonds sold pursuant to this subparagraph. The

amount of any bonds sold pursuant to this subparagraph shall not be

included in computing the total amount of bonds not constituting joint

indebtedness which could be sold at private sale in any fiscal year of

the issuer pursuant to paragraph b of section 63.00.

(v) The provisions of paragraph b of section 107.00 of this chapter in

relation to down payment shall not apply in relation to any joint

service or joint water, sewage or drainage project which is to be

financed in whole or in part by the issuance of obligations constituting

joint indebtedness or several indebtedness of the participating

municipal corporations or municipalities.

(w) The limitations on the amount of budget notes which may be issued

in any fiscal year and which are set forth in subdivisions two and three

of paragraph a of section 29.00 of this chapter and in paragraph i of

such section shall not be applicable to budget notes issued for the

purposes permitted by such subdivisions two and three of paragraph a and

such paragraph i of section 29.00 and in relation to a joint service or

a joint water, sewage or drainage project. Such budget notes issued for

such purposes shall not affect the power of a county, city, town,

village or school district to issue budget notes for other purposes

under such provisions of section 29.00 of this chapter.

(x) The provisions of sections 160.00, 160.10, 161.00, 162.00, 165.00,

166.00, 167.00, 170.00 and 180.00 of this chapter relating to action by

the finance board, delegation of powers and duties, negotiability of

obligations, tax exemption, use of proceeds, inclusive of premiums, from

the sale of obligations, legal actions and appeals, powers to adopt

local laws and liberal construction, and all other pertinent provisions

of this chapter essential to effectuate the objects and purposes of this

title, shall be applicable in relation to the indebtedness and financing

of a joint service or a joint water, sewage or drainage project, except

as otherwise expressly provided in this title.