Bill S6910-2013

Relates to EFC financing and the town of Cairo

Relates to long-term environmental facilities corporation financing and the town of Cairo; provides relief by validating and ratifying the town of Cairo's actions with respect to a bond anticipation note and renewals.

Details

Actions

  • Jun 19, 2014: returned to senate
  • Jun 19, 2014: passed assembly
  • Jun 19, 2014: home rule request
  • Jun 19, 2014: ordered to third reading rules cal.469
  • Jun 19, 2014: substituted for a9191
  • Jun 18, 2014: referred to ways and means
  • Jun 18, 2014: DELIVERED TO ASSEMBLY
  • Jun 18, 2014: PASSED SENATE
  • Jun 18, 2014: HOME RULE REQUEST
  • Jun 18, 2014: ORDERED TO THIRD READING CAL.1514
  • Jun 18, 2014: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • Mar 28, 2014: REFERRED TO LOCAL GOVERNMENT

Votes

Memo

BILL NUMBER:S6910

TITLE OF BILL: An act to legalize, validate, ratify and confirm certain actions taken by the town of Cairo, Greene county, New York, with respect to obligations heretofore issued, and authorizing the issuance of obligations of said town with respect thereto

PURPOSE OR GENERAL IDEA OF BILL:

This legislation is intended to provide legislative relief by validating and ratifying the Town of Cairo's actions with respect to a bond anticipation note and renewals thereof, notwithstanding the fact that the Town did not make a principal payment in 2011 or 2012, as required by Section 23.00 of the local finance law.

SUMMARY OF SPECIFIC PROVISIONS:

Section one outlines the history of the bond resolutions adopted by the Town of Cairo, a bond anticipation note and renewal thereof, and a prior principal payment made on such note in 2010 by the Town, issued to finance the construction of certain improvements to their sewer plant and sewer system.

Section two provides that such notes are validated, ratified and confirmed.

Section three provides that the bond shall be issued in all other respects, in accordance with provisions of the Local Finance Law.

Section four provides standard protections so that if a court invalidates any part of this act, it does not invalidate the entire act.

Section five provides for an immediate effective date.

JUSTIFICATION:

The Town of Cairo adopted its bond resolutions authorizing the aggregate issuance of $2,915,000 obligations under the Local Finance Law in anticipation of financing the cost of improvements to its wastewater treatment plant and system.

Pursuant to such bond resolutions, the Town of Cairo issued a bond anticipation note on December 24, 2008 in the principal amount of $750,000.00, renewed such note on December 24, 2009 and December 23, 2010, and made a principal payment of $29,285 on said bond anticipation note on December 24, 2010 and also obtained short term financing through the New York State Environmental Facilities Corporation (EFC) on September 29, 2011 in the maximum aggregate amount of $2,885,715.00, which refinanced the outstanding principal balance of said bond anticipation note of $720,715.

Section 23.00 of Local Finance Law requires an initial principal payment to be made within two years from the original issuance date of the bond anticipation note of December 24, 2008 and additional principal payments to be made prior to the termination of each twelve months' period succeeding the initial principal payment.

While the Town made a principal payment in 2013, the Town did not make the required principal payments in 2011 and 2012 towards the note held by EFC that refinanced the original bond anticipation note in accordance with the provisions of Section 23.00.

Section 21.00 of the local finance law also requires that no annual installment of bonds on bond anticipation notes shall be more than fifty per centum of the smallest prior installment, except that the municipality may determine to provide for substantially level or declining annual debt service. This bill is needed to provide legislative relief by validating and ratifying the Town's actions with respect to timing and amount of the principal payments on the note. The legislation is needed in order to allow the Town to obtain permanent financing from EFC to refund the subject note.

PRIOR LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None to the State.

EFFECTIVE DATE:

This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6910 IN SENATE March 28, 2014 ___________
Introduced by Sen. TKACZYK -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to legalize, validate, ratify and confirm certain actions taken by the town of Cairo, Greene county, New York, with respect to obli- gations heretofore issued, and authorizing the issuance of obligations of said town with respect thereto THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative findings. It is hereby found and determined that: (i) the town of Cairo, Greene county, New York, has heretofore duly adopted bond resolutions authorizing the aggregate issuance of $2,915,000 serial bonds to finance the upgrade and expansion to the town's wastewater treatment plant, construction of a force main, and additional improvements to its sewer system; (ii) pursuant to such bond resolutions, said town issued a bond anticipation note in the principal amount of $750,000 on December 24, 2008 and renewals of said bond antic- ipation note on December 24, 2009 and December 23, 2010 and made a prin- cipal payment of $29,285 on said bond anticipation note on December 23, 2010; (iii) pursuant to such bond resolutions, said town also obtained short term financing through the New York state environmental facilities corporation ("EFC") on September 29, 2011 in the maximum aggregate amount of $2,885,715.00, which refinanced the outstanding principal balance of said bond anticipation note of $720,715; (iv) the town did not make the minimum principal payments on the EFC short term financing bond anticipation notes of $19,300 for 2011 and $20,000 for 2012 until December 2013; (v) section 21.00 of the local finance law states that no annual installment of bonds or bond anticipation notes shall be more than fifty per centum of the smallest prior installment, except that the municipality may determine to provide for substantially level or declin- ing annual debt service, and section 23.00 of the local finance law states that notes or the renewals thereof shall not extend more than two years beyond the original date of issue unless a portion of such notes or the renewals thereof shall be redeemed from a source other than the proceeds of bonds within two years from such original date of issue and
unless a further portion thereof shall be so redeemed prior to the termination of each twelve months' period succeeding the date such original portion was so redeemed; and (vi) the timing of the town's payments on the EFC note render it incapable of amortizing a long-term conversion of the short-term EFC financing to comply with the aforesaid amortization requirements of sections 21.00 and 23.00 of the local finance law. S 2. Notwithstanding the defects described in section one of this act, the bond anticipation notes and any renewals thereof issued by the town of Cairo as described in section one of this act, and all resolutions, acts and proceedings heretofore adopted or taken by the town board and the supervisor of said town in relation thereto, are hereby validated, ratified and confirmed and any principal payment made by such town in 2013 on the bond anticipation note shall be deemed to be in compliance with the amortization requirements of sections 21.00, 23.00, and 169.00 of the local finance law. S 3. Except as otherwise set forth in this act, the bonds and bond anticipation notes, and renewals thereof, issued pursuant to this act shall be issued in accordance with the provisions of the local finance law. S 4. If any clause, sentence, subdivision, paragraph or part of this act be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder ther- eof, but shall be confined in its operation to the clause, sentence, subdivision, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered. S 5. This act shall take effect immediately.

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