N.Y. Public Authorities Law § 3858: Control period

§ 3858. Control period. 1. A control period shall begin as of the

effective date of this title and may be reimposed during an advisory

period if the authority determines at any time that a fiscal crisis is

imminent or that any of the following events has occurred or that there

is a substantial likelihood and imminence of such occurrence: (a) the

city shall have failed to adopt a balanced budget, financial plan or

budget modification as required by sections thirty-eight hundred

fifty-six and thirty-eight hundred fifty-seven of this title, (b) the

city shall have failed to pay the principal of or interest on any of its

bonds or notes when due, (c) the city shall have incurred an operating

deficit of one percent or more in the aggregate results of operations of

any major fund of the city or a covered organization during its fiscal

year assuming all revenues and expenditures are reported in accordance

with generally accepted accounting principles, subject to the provisions

of this title, (d) the chief fiscal officer's certification at any time,

at the request of the authority or on the chief fiscal officer's

initiative, which certification shall be made from time to time as

promptly as circumstances warrant and reported to the authority, that on

the basis of facts existing at such time such officer could not make the

certification described in subdivision one of section thirty-eight

hundred fifty-one of this title, or (e) the city shall have violated any

provision of this title. A control period shall terminate when the

authority has determined that the city qualifies for the onset of an

advisory period as provided under subdivision one of section

thirty-eight hundred fifty-one of this title. After onset of an advisory

period, the authority shall annually consider paragraphs (a) through (e)

of this subdivision and determine whether, in its judgment, any of the

events described in such paragraphs have occurred and the authority

shall publish each such determination. Any certification made by the

chief fiscal officer hereunder shall be based on such officer's written

determination which shall take into account a report and opinion of an

independent expert in the marketing of municipal securities selected by

the authority, and the opinion of such expert and any other information

taken into account shall be made public when delivered to the authority.

Notwithstanding any part of the foregoing to the contrary, in no event

shall any control period continue beyond June thirtieth, two thousand

thirty-seven.

2. In carrying out the purposes of this title during any control

period, the authority:

(a) shall approve or disapprove the financial plan and the financial

plan modifications of the city, as provided in sections thirty-eight

hundred fifty-six and thirty-eight hundred fifty-seven of this title,

and shall formulate and adopt its own modifications to the financial

plan, as necessary; such modifications shall become effective upon their

adoption by the authority;

(b) may set a maximum level of spending for any proposed budget of any

covered organization;

(c) may impose a wage and/or hiring freeze: (i) During a control

period, upon a finding by the authority that a wage and/or hiring freeze

is essential to the adoption or maintenance of a city budget or a

financial plan that is in compliance with this title, the authority

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, other analogous contracts or interest arbitration

awards, now in existence or hereafter entered into, requiring such

salary or wage 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, other

analogous contracts or interest arbitration awards 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 other

suspended payments shall not be considered as part of compensation or

final compensation or of annual salary earned or earnable.

(ii) Notwithstanding the provisions of subparagraph (i) of this

paragraph, this subdivision shall not be applicable to employees of the

city or employees of a covered organization subject to a collective

bargaining agreement or an employee of the city or a covered

organization not subject to 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 authority as being an acceptable

and appropriate contribution toward alleviating the fiscal crisis of the

city. Any such agreement to a deferral 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;

(iii) Notwithstanding the provisions of subparagraphs (i) and (ii) of

this paragraph, no retroactive pay adjustments of any kind shall accrue

or be deemed to accrue during the period of wage freeze, and no such

additional amounts shall be paid at the time a wage freeze is lifted, or

at any time thereafter.

(d) shall periodically evaluate the suspension of salary or wage

increases or suspensions of other increased payments or benefits, and

may, if it finds that the fiscal crisis, in the sole judgment of the

authority has abated, terminate such suspensions;

(e) shall review and approve or disapprove any collective bargaining

agreement to be entered into by the city or any covered organization, or

purporting to bind, the city or any covered organization. Prior to

entering into any collective bargaining agreement, the city or any

covered organization shall submit a copy of such collective bargaining

agreement to the authority, accompanied by an analysis of the projected

costs of such agreement and a certification that execution of the

agreement will be in accordance with the financial plan. Such submission

shall be in such form and include such additional information as the

authority may prescribe. The authority shall promptly review the terms

of such collective bargaining agreement and the supporting information

in order to determine compliance with the financial plan, and shall

disapprove any collective bargaining agreement which, in its judgment,

would be inconsistent with the financial plan. No collective bargaining

agreement binding, or purporting to bind, the city or any covered

organization after the effective date of this title shall be valid and

binding upon the city or any covered organization unless first approved

by resolution of the authority.

(f) shall act jointly with the city in selecting members of any

interest arbitration panel. Notwithstanding any other evidence presented

by the city, the covered organization or any recognized employee

organization, the arbitration panel must, prior to issuing any final

decision, provide the authority with the opportunity to present evidence

regarding the fiscal condition of the city;

(g) shall take any action necessary in order to implement the

financial plan should the city or any covered organization have failed

to comply with any material action necessary to fulfill the plan,

provided, however, the authority shall provide seven (7) days notice of

its determination that the city or any covered organization has not

complied prior to taking any such action.

(h) may review and approve or disapprove contracts or other

obligations binding or purporting to bind the city or any covered

organization;

(i) shall, with respect to any proposed borrowing by or on behalf of

the city or any covered organization on or after July first, two

thousand three, review the terms of and comment, within thirty days

after notification by the city or covered organization of a proposed

borrowing, on the prudence of each proposed issuance of bonds or notes

to be issued by the city or covered organization and no such borrowing

shall be made unless first reviewed, commented upon and approved by the

authority. The authority shall comment within thirty days after

notification by the city or covered organization of a proposed borrowing

to the mayor, the comptroller, the council, the director of the budget

and the state comptroller and indicate approval or disapproval of the

proposed borrowing. Notwithstanding the foregoing, neither the city nor

any covered organization shall be prohibited from issuing bonds or notes

to pay outstanding bonds or notes; and, provided further, the first

issuance of debt pursuant to chapter six hundred five of the laws of two

thousand, as amended, shall be excluded from this requirement;

(j) may review the operation, management, efficiency and productivity

of the city and any covered organizations as the authority may

determine, and make reports thereon; examine the potential to enhance

the revenue of the city or any covered organization; audit compliance

with the financial plan in such areas as the authority may determine;

recommend to the city and the covered organizations such measures

relating to their operations, management, efficiency and productivity as

the authority deems appropriate to reduce costs, enhance revenue, and

improve services so as to advance the purposes of this title;

(k) may require the city to undertake certain actions to advance

serious and in-depth exploration of a merger of services with the

county, including identification and analysis of options; development of

a detailed fiscal and programmatic plan; identification of city, county,

and state impediments; and fostering of informed public debate;

(l) may review and approve or disapprove the terms of any proposed

settlement of claims against the city or any covered organization in

excess of fifty thousand dollars;

(m) may obtain from the city, the covered organizations, comptroller,

and the state comptroller, as appropriate, all information required

pursuant to this section, and such other financial statements and

projections, budgetary data and information, and management reports and

materials as the authority deems necessary or desirable to accomplish

the purposes of this title; and inspect, copy and audit such books and

records of the city and the covered organizations as the authority deems

necessary or desirable to accomplish the purposes of this title;

(n) may perform such audits and reviews of the city and any agency

thereof and any covered organizations as it deems necessary; and

(o) may issue, from time to time and to the extent it deems necessary

or desirable in order to accomplish the purposes of this title, to the

appropriate official of the city and each covered organization, such

orders necessary to accomplish the purposes of this title, 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 subdivision

three of this section.

3. (a) During any control 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 authority unless such contract has been

so approved and unless such contract or obligation or liability is in

compliance with the approved financial plan as then in effect.

(b) 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 authority 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 to the authority 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 authority or its agents thereof.

(c) 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 paragraph (a) or (b) of this subdivision 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 employees

of the city or any of the covered organizations who shall knowingly and

willfully violate paragraph (a) or (b) of this subdivision shall, upon

conviction, be guilty of a misdemeanor.

(d) In the case of a violation of paragraph (a) or (b) of this

subdivision by an officer or employee of the city or of a covered

organization, the mayor or the chief executive officer of such covered

organization shall immediately report to the authority all pertinent

facts together with a statement of the action taken thereon.