Authorizes the city of Newburgh to issue deficit bonds and notes until December 31, 2012 pursuant to the city of Newburgh fiscal recovery act.
Ayes (8): Martins, Ball, Little, McDonald, Ritchie, Stewart-Cousins, Oppenheimer, Klein
Ayes (61): Adams, Addabbo, Alesi, Avella, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Espaillat, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Huntley, Johnson, Kennedy, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Oppenheimer, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
Nays (1): Ball
TITLE OF BILL: An act to amend the city of Newburgh fiscal recovery act, in relation to extending the final authorized date of issuance of deficit bonds and notes by such city
PURPOSE: The purpose of this bill is to provide that the City of Newburgh (the "City") may provide interim financing to liquidate its projected deficits over a one year period by issuing bond anticipation notes until such liquidation is permanently financed by the issuance of bonds on or before December 31, 2012.
SUMMARY OF PROVISIONS: This bill, which would be effective immediately upon enactment, would amend Section 5 of Chapter 223 of the Laws of 2010 in order to provide that the City is authorized to issue bonds on or before December 31, 2012, rather than December 31, 2011, for the purpose of liquidating certain deficits. This change in date would permit the City to finance such deficits on an interim basis through the issuance of bond anticipation notes maturing no later than December 31, 2012, in accordance with applicable provisions of the Local Finance Law.
EXISTING LAW: Chapter 223 of the Laws of 2010 authorized the City to issue bonds on or before December 32, 2011, in an aggregate principal amount not to exceed fifteen million dollars ($15,000,000) (exclusive of the costs and expenses incidental to the issuance of the bonds authorized to be issued by such chapter) for the specific object or purpose of liquidating actual deficits in the City's general fund, special revenue fund, and capital projects fund existing at the close of the City's 2010 fiscal year. In anticipation of the issuance of such bonds, bond anticipation notes are authorized to be issued, however such notes have to mature no later than December 31, 2011.
JUSTIFICATION: The City's financial advisor has advised that the cost of financing liquidation of such deficits can be minimized if the City can issue bond anticipation notes during the first five year period starting with the initial borrowing on August 30, 2010, since interest rates on such notes are significantly less than bonds. The total savings to the City if bond anticipation notes can be issued in 2012, rather than bonds, is currently estimated to be approximately $200,000 for the 2012 fiscal year.
The City issued $12,000,000 bond anticipation notes on August 30, 2010 to provide interim financing pursuant to Chapter 223 of the Laws of 2010. Once the City's audited financial statements for the 2010 fiscal year are complete, the City will submit its required report on the deficits together with such financial statements to the State Comptroller so he can verify the amount of such deficits. It may be necessary to borrow up to $3,000,000 in addition to the previous $12,000,000 to finance the entire authorized amount, therefore any
achievable savings on interim financing will help the City finance such deficits in the most cost-effective manner.
LEGISLATIVE HISTORY: New Bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 4938--A 2011-2012 Regular Sessions IN SENATE May 2, 2011 ___________Introduced by Sen. LARKIN -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the city of Newburgh fiscal recovery act, in relation to extending the final authorized date of issuance of deficit bonds and notes by such city THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 5 of chapter 223 of the laws of 2010, constituting the city of Newburgh fiscal recovery act, is amended to read as follows: S 5. Deficit bond and deficit note issuance authorization. The city is hereby authorized to issue bonds, subject to the provisions of this act, on or before December 31,
2012, in an aggregate principal amount not to exceed fifteen million dollars ($15,000,000) (exclusive of the costs and expenses incidental to the issuance of the bonds authorized to be issued by this section) for the specific object or purpose of liqui- dating actual deficits in its general fund, the special revenue fund, and the capital projects fund existing at the close of its 2010 fiscal year. In anticipation of the issuance of such bonds, deficit notes are hereby authorized to be issued. S 2. This act shall take effect immediately, provided that the amend- ments to the city of Newburgh fiscal recovery act, made by section one of this act, shall not affect the expiration and repeal of such act, and shall expire and be deemed repealed therewith.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. S LBD11048-02-1