N.Y. Public Authorities Law § 3058: Conditions on extension of benefits to the city

§ 3058. Conditions on extension of benefits to the city. The

corporation shall, at the time of any exchange of the corporation's

bonds and notes for obligations of the city pursuant to subdivision two

of section three thousand fifty-five of this title or any payment of

funds of the corporation to the city or of any purchase from the city of

its obligations pursuant to section three thousand fifty-seven of this

title, require the city to agree to observe and perform the conditions

set forth below in this section, with such limitations as to the

implementation of such conditions as the corporation may, subject to any

contract with bondholders or noteholders, then approve; provided,

however, that no such specific limitations shall be so substantial as to

effectively constitute a waiver of any such conditions. Any such

conditions may thereafter, in the discretion of the corporation, subject

to any contract with bondholders or noteholders, be further limited.

Such conditions shall cease to apply when all notes and bonds have been

repaid or when the corporation has accumulated in its bond reserve funds

or otherwise an amount equal to the principal of all outstanding notes

and bonds and interest accrued thereon. The city shall have the right at

any time to pay the corporation an amount which, when added to the bond

reserve funds, shall equal the principal of all outstanding notes and

bonds and interest accrued thereon and redemption premium if any. If the

city makes such payment at a time when the corporation has outstanding

notes or bonds that are not then callable, the city shall agree to pay

the corporation on demand an amount equal to the amount, if any, by

which the amount of interest on such notes or bonds shall exceed the

corporation's income from the investment of its funds. Subject to the

foregoing, the conditions that the corporation shall require the city to

observe and perform shall be as follows:

1. The city shall deliver a certificate, executed by the chief

executive officer in form prescribed by the corporation, (a)

representing that the city is in compliance with the conditions

described below in this section as the corporation may specify, (b)

undertaking to comply with any of such specified conditions as the

corporation may then require, and (c) stating that all local legislative

and executive action then required to permit such compliance by the city

has been taken. The corporation may require the delivery with such

certificate of an opinion of the city's corporation counsel that all

such legislative and executive action has been taken.

2. For the fiscal year ending December thirty-first, nineteen hundred

ninety-six, and for each fiscal year thereafter, the city's budgets

shall be prepared in accordance with the provisions of chapter seven

hundred twenty-one of the laws of nineteen hundred ninety-four, as

amended from time to time.

3. Each fiscal year the city shall take such action as may be

necessary to enable an independent certified public accounting firm

selected and retained by the city at its cost to perform an annual audit

and to furnish to the corporation an annual report upon the financial

statements of the city. Each such report shall be prepared in accordance

with the generally accepted accounting principles. The city shall make

available for inspection and copying all books, records, work papers and

other data and material as required by the independent certified public

accounting firm conducting such audit and the city shall make its

officers and employees available to and shall cooperate with such

auditors so as to permit such annual audit to be completed and the

report issued to the city and to the corporation within one hundred

twenty days after the close of the fiscal year. Such report shall be

made available to the public promptly thereafter.

4. Beginning with the fiscal year ending December thirty-first,

nineteen hundred ninety-six and for each fiscal year thereafter, the

city shall deliver its proposed budgets to the corporation. Delivery to

the corporation shall be made concurrently with the initial submission

of the proposed budgets to the city council, but in any event not later

than fifty days prior to the beginning of such fiscal year or such other

date as the corporation may approve upon the request of the city. The

proposed budgets submitted to the corporation shall be prepared in

accordance with the accounting methods referred to in subdivision three

of this section. Such budgets shall be identical to the proposed budgets

submitted to the city council. The proposed budgets delivered to the

corporation shall be accompanied by (i) a statement setting forth in

detail the assumptions of income and expense used in preparation, and

(ii) a certificate of the chief executive officer stating that such

assumptions are reasonable and that operation within the budgets is

feasible. Subject to and in accordance with the provisions of chapter

seven hundred twenty-one of the laws of nineteen hundred ninety-four, as

the same may be amended from time to time, the city shall in every

fiscal year adopt and maintain budgets in which the total of all revenue

items equals or exceeds the total of all expenditure items.

5. If after the adoption of the budgets for any fiscal year, any

increase therein, or an increase in total expenditures shall be

proposed, the chief executive officer shall cause such proposal to be

submitted to the corporation concurrently with its submission to the

city council, together with a statement of the source of current

revenues or other identifiable and currently available funds required

for the payment of such additional amounts.

6. Commencing at such time as the corporation may specify, but not

later than February first, nineteen hundred ninety-six, the city budget

director shall deliver to the corporation, not less than thirty days

before each fiscal quarter (except, within thirty days after the

commencement of the first fiscal quarter), an expenditure plan to

implement the city budgets for such fiscal quarter and within amounts

based on current income or other identifiable and currently available

funds. The city budget director shall deliver to the corporation within

thirty days after the end of each such fiscal quarter covered by an

expenditure plan, an operations report reflecting results of city

operations for such fiscal quarter and whether the city has operated

within the related expenditure plan. Each expenditure plan and

operations report shall be in such form as the corporation may specify

and shall be certified by the city budget director and shall detail and

report upon action taken by the city to maintain balanced budgets.

7. The city shall comply in all material respects with the expenditure

limitations in its budgets as adopted or modified in accordance with

subdivisions four and five of this section, and with chapter seven

hundred twenty-one of the laws of nineteen hundred ninety-four, as the

same may from time to time be amended.