Bill S7315-2009

Authorizes the city school district of the city of Mt. Vernon to finance a deficit by the issuance of serial bonds and/or bond anticipation notes

Authorizes the city school district of the city of Mt. Vernon to finance a deficit by the issuance of serial bonds and/or bond anticipation notes.

Details

Actions

  • Jul 30, 2010: VETOED MEMO.6734
  • Jul 19, 2010: DELIVERED TO GOVERNOR
  • Jun 28, 2010: returned to senate
  • Jun 28, 2010: passed assembly
  • Jun 28, 2010: ordered to third reading rules cal.390
  • Jun 28, 2010: substituted for a10159
  • Jun 18, 2010: referred to ways and means
  • Jun 18, 2010: DELIVERED TO ASSEMBLY
  • Jun 18, 2010: PASSED SENATE
  • Jun 10, 2010: ADVANCED TO THIRD READING
  • Jun 9, 2010: 2ND REPORT CAL.
  • Jun 8, 2010: 1ST REPORT CAL.791
  • Jun 2, 2010: REPORTED AND COMMITTED TO FINANCE
  • Mar 29, 2010: REFERRED TO EDUCATION

Votes

VOTE: COMMITTEE VOTE: - Education - Jun 2, 2010
Ayes (16): Oppenheimer, Breslin, Serrano, Johnson C, Espada, Stavisky, Huntley, Addabbo, Foley, Flanagan, Saland, LaValle, Seward, Marcellino, Little, Padavan
Ayes W/R (1): Squadron
Absent (1): Montgomery
Excused (1): Morahan

Memo

 BILL NUMBER:  S7315

TITLE OF BILL : An act to authorize the city school district of the city of Mount Vernon to finance a deficit by the issuance of serial bonds and/or bond anticipation notes and providing for other matters in connection therewith

PURPOSE : This legislation would allow the school district to convert this outstanding obligation into a deficit reduction bond as a revenue source and would provide a longer time frame for repayment.

JUSTIFICATION : The enactment of this bill would allow the school district to maintain the current level of repayment of the budget and not require a further increase in the property tax levy. However, If such legislation is not approved, the school district will need to identify 4.4 million else where in the 2009-10 budget of $203,175,490 that could be reallocated to the expenditure function to cover the balance of the principle repayment of the budget note. Finding sufficient funds is not likely due to the loss of "spin up" lottery aid of $5,000,000 from the Governor's veto and continued pressure on special education costs. This could cause the district to default and severely impact its .already weak credit rating. Repayment of this amount by a budget appropriation in the up coming 2010-11 budget would require an additional property tax increase of almost 4%. during a. budget already -adversely effected by reductions' in state aid of $6,449,000. Since repayment of a budget is not a contingent item, other budgetary costs directly effecting educational services would have to be reduced.

FISCAL IMPLICATIONS : In the prior year of 2007-08, the Mount.Vernon City School District incurred greater than expected costs for special education and foster care, the cost associated with the opening of buildings post-construction and energy costs. As a result, the School District was required to issue a budget note of 5.5 million in June 2008 to finance these costs. Under accounting guidelines, a budget is not recorded as revenue but as a liability on the General Fund balance sheet. Budget notes are generally required to be repaid in full in the succeeding fiscal year if issued prior to the to the public's vote on the next fiscal year's budget in May. Since the budget note was not issued until June 2008, repayment was not required in the 2008/09 fiscal year but is required by the end of the 2009/10 fiscal year. Although funds were not budgeted in 2008-09, the School District did make a $500,000 payment against this budget note by reallocating other unexpended resources, thereby reducing the outstanding obligation to $5.0 million at June 30, 2009. The School District's adopted budget includes an appropriation of $600,000 for the repayment of the budget note, leaving the balance of approximately $4.4 million unbudgeted for the payment of the budget note.

EFFECTIVE DATE : This Act shall take effect immediately.

Text

STATE OF NEW YORK ________________________________________________________________________ 7315 IN SENATE March 29, 2010 ___________
Introduced by Sen. HASSELL-THOMPSON -- read twice and ordered printed, and when printed to be committed to the Committee on Education AN ACT to authorize the city school district of the city of Mount Vernon to finance a deficit by the issuance of serial bonds and/or bond anticipation notes and providing for other matters in connection ther- ewith THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The city school district of the city of Mount Vernon (here- inafter referred to in this act as the "district"), in the county of Westchester, is hereby authorized to issue serial bonds, subject to the provisions of section 10.10 of the local finance law, on or before June 30, 2010, in an aggregate principal amount not to exceed six million dollars ($6,000,000.00) for the specific object or purpose of liquidat- ing actual deficits in its general fund and school lunch fund at the close of the fiscal year ending June 30, 2009. In anticipation of the issuance and sale of such serial bonds, bond anticipation notes are hereby authorized to be issued. S 2. The specific object or purpose referred to in section one of this act is hereby declared to be a public purpose which the district is hereby authorized to accomplish and the period of probable usefulness thereof is hereby authorized to be ten years. S 3. Notwithstanding the provisions of any other law, general, special or local, the board of education of the district is hereby authorized to levy a tax to be collected in annual installments sufficient to pay the principal of and interest on said bonds and bond anticipation notes and to adopt a bond resolution authorizing the serial bonds authorized to be issued pursuant to this act. S 4. Amounts provided from the proceeds of obligations issued pursuant to this act in excess of the amount of the deficit as confirmed by the state comptroller shall be accounted for in the same manner as prescribed by the state comptroller pursuant to section 36 of the gener- al municipal law for real property taxes levied for a planned balance pursuant to subdivision 21 of section 2021 of the education law.
S 5. For purposes of subdivision 4 of section 2023 of the education law, expenditures for debt service on obligations issued pursuant to this act shall be disregarded in determining the total spending of the district under a contingency budget. S 6. If any clause, sentence, subdivision, paragraph, section 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 thereof, 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 7. This act shall take effect immediately.

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