N.Y. Public Authorities Law § 3959: Control period

§ 3959. Control period. 1. The authority shall impose a control period

at any time that any of the following events has occurred or that there

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

county shall have failed to adopt a balanced budget within time frames

prescribed in the county charter, financial plan or budget modification

as required by sections thirty-nine hundred fifty-six and thirty-nine

hundred fifty-seven of this title; (b) the county shall have failed to

pay the principal of or interest on any of its bonds or notes when due;

(c) the county shall have incurred a major operating funds deficit of

one percent or more in the aggregate results of operations of such funds

of the county 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

comptroller's certification at any time, at the request of the authority

or on the comptroller'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 the

comptroller could not make the certification described in paragraph (b)

of subdivision one of section thirty-nine hundred fifty-one of this

title; or (e) the county shall have violated any provision of this

title. The authority shall terminate any such control period when it

determines that none of the conditions which would permit the authority

to impose a control period exist. After termination of a control 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

comptroller hereunder shall be based on the comptroller'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 the later of (i) December

thirty-first, two thousand thirty-nine, or (ii) the date when all bonds

of the authority are refunded, discharged or otherwise defeased.

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 county, as provided in section thirty-nine

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 county 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 county 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 county

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

county or employees of a covered organization subject to a collective

bargaining agreement or an employee of the county 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

county. 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 county or any covered organization,

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

entering into any collective bargaining agreement, the county 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 county or any covered

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

binding upon the county or any covered organization unless first

approved by resolution of the authority;

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

interest arbitration panel. Notwithstanding any other evidence presented

by the county, 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 county;

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

financial plan should the county or any covered organization have failed

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

provided, however, the authority shall provide seven days notice of its

determination that the county 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 county or any covered

organization;

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

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

thousand five, review the terms of and comment, within thirty days after

notification by the county or covered organization of a proposed

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

to be issued by the county 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 county or covered organization of a proposed

borrowing to the county executive, the comptroller, the legislature, the

director of the budget, the chair of the state senate finance committee,

the chair of the state assembly ways and means committee and the state

comptroller and indicate approval or disapproval of the proposed

borrowing. Notwithstanding the foregoing, neither the county nor any

covered organization shall be prohibited from issuing bonds or notes to

pay outstanding bonds or notes; and, provided further, revenue

anticipation notes issued in July two thousand five, shall be excluded

from this requirement;

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

of the county and any covered organizations as the authority may

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

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

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

recommend to the county 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 review and approve or disapprove the terms of any proposed

settlement of claims against the county or any covered organization in

excess of fifty thousand dollars;

(l) may obtain from the county, the covered organizations, the

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 county and the covered organizations as the

authority deems necessary or desirable to accomplish the purposes of

this title;

(m) may perform such audits and reviews of the county and any agency

thereof and any covered organizations as it deems necessary; and

(n) 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 county 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

county 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 county or of any of the covered organizations shall involve the

county 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 county 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 county 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 county executive; and any

officer or employees of the county 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 county or of a covered

organization, the county executive 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.