Section 6-P. Employee benefit accrued liability reserve fund

1. The
  following terms when used or referred to in this section, shall have the
  following meaning:
    (a) "Municipal corporation" shall mean  a  municipal  corporation,  as
  defined in section two of this chapter, school district, except a school
  district in a city with a population of one hundred twenty-five thousand
  or  more,  board  of  cooperative educational services, fire district, a
  district corporation and a special improvement district  governed  by  a
  separate board of commissioners.
    (b)  "Employee  benefits"  shall mean the cash payment of the monetary
  value of accrued and accumulated  but  unused  and  unpaid  sick  leave,
  personal leave, holiday leave, vacation time, time allowances granted in
  lieu of overtime compensation and any other forms of payment for accrued
  but  unliquidated  time  earned  by  municipal  employees and payable to
  municipal employees upon termination of service, whether  by  retirement
  or  otherwise,  as  authorized  by  ordinance,  local law, or collective
  bargaining agreement or section six of the civil service law  for  which
  expenditures may be made pursuant to subdivision two of this section.
    2.  (a) The governing board of any municipal corporation may establish
  a reserve fund to be known as the  employee  benefit  accrued  liability
  reserve  fund.  Upon the creation of the fund, the municipality may make
  expenditures from the fund for any accrued employee benefit payment  due
  an  employee  of  the  municipal  corporation  upon  termination  of the
  employee's service, provided however, that no municipality shall make an
  expenditure from such fund  for  any  employee  benefit  for  which  the
  municipal  corporation  has  established  a reserve fund under any other
  provision of law.
    (b) Notwithstanding any other provision of law to the contrary,  where
  a  municipal corporation has previously established a reserve fund for a
  type of accrued employee benefits for which  expenditures  may  be  made
  under  paragraph (a) of this subdivision, the municipal corporation may,
  by resolution, discontinue such other  reserve  fund  and  transfer  any
  unexpended  balance  to the reserve fund established under this section;
  provided, however, that to the extent such unexpended balance is subject
  to any liabilities incurred or accrued against the other  reserve  fund,
  any  unexpended  balances  so  transferred  shall  only be used for such
  incurred  or  accrued  liabilities  including  expenses  in   connection
  therewith.  Prior  to  the discontinuance of the other reserve fund, the
  fiscal and legal officers of the municipal corporation shall certify  to
  the  governing board thereof the amount that may be necessary to satisfy
  all liabilities incurred or accrued against it.
    3. There may be paid into such fund:
    (a) such amounts as may be provided by budgetary appropriations;
    (b) amounts  from  any  other  fund  authorized  by  this  chapter  by
  resolution subject to permissive referendum; and
    (c) such other funds as may be legally appropriated.
    4.  The  moneys  in  such  fund  shall be deposited and secured in the
  manner provided by section ten of this article. The governing board,  or
  the chief fiscal officer of such municipal corporation, if the governing
  board  shall  delegate  such  duty to him, may invest the moneys in such
  fund in the manner provided by  section  eleven  of  this  article.  Any
  interest  earned  or  capital gain realized on the money so deposited or
  invested shall accrue to and become part of such fund.
    5. The chief fiscal officer shall account for this fund  separate  and
  apart from all other funds of the municipal corporation. Such accounting
  shall  show: the source, date and amount of each sum paid into the fund;
  the interest earned by such fund; capital gains or losses resulting from
  the sale of investments of this fund; the order, purpose  thereof,  date

  and  amount  of  each  payment  from  this fund; the assets of the fund,
  indicating cash balance and a schedule of investments. The chief  fiscal
  officer, within sixty days of the end of each fiscal year, shall furnish
  a  detailed  report  of  the operation and condition of this fund to the
  governing board. The chief fiscal officer shall  also  keep  a  separate
  account for each kind of employee benefit funded pursuant to subdivision
  two of this section.
    6.  Any  action  or  claim  for  accrued  employee  benefits  shall be
  compromised or settled by the governing board, officer  or  employee  of
  the  municipal corporation authorized to settle or compromise actions or
  claims on behalf of the municipal corporation.
    7. An expenditure may be made from this fund for the payment of all or
  part of the cost, including interest, of:
    (a) the cash payment of the monetary value of accumulated  or  accrued
  and  unused  sick  leave,  holiday leave, vacation leave, time allowance
  granted in lieu of overtime compensation and other forms of payment  for
  accrued  leave  time  and  benefits  due  to  a  municipal employee upon
  termination of municipal  employment  and  separation  from  service  as
  required  by  ordinance,  local  law, collective bargaining agreement or
  section six of the civil service law.
    (b) the reasonable costs of the administration of the reserve fund.
    (c) expert or professional services rendered in  connection  with  the
  investigation,  adjustment or settlement of claims, actions or judgments
  relating to claims for accrued employee  benefits  as  defined  in  this
  section.
    8. No member of the governing board shall:
    (a)  authorize  a  withdrawal from this fund for any purpose except as
  provided in this section; or
    (b) expend any money withdrawn from this fund for a purpose other than
  as provided in this section.
    Any member of the governing board who violates the provision  of  this
  subdivision shall be guilty of a misdemeanor.
    9.  If,  after  the  establishment  of  such  fund,  the  municipality
  determines that such fund is no longer needed, the moneys  remaining  in
  such  fund may be transferred to any other reserve fund of the municipal
  corporation authorized by this chapter that is comprised of moneys which
  were raised on the same tax base as  the  moneys  in  the  reserve  fund
  established  under  this section or section thirty-six hundred fifty-one
  of the education law, only to the extent that the moneys  in  this  fund
  shall  exceed  the  sum  sufficient  to  pay all liabilities incurred or
  accrued against it. Prior to the discontinuance of such fund, the fiscal
  and legal officers of such municipal corporation shall  certify  to  the
  governing  board  thereof  the amount that may be necessary to retain in
  such fund to satisfy all liabilities incurred or accrued against it  and
  such  sum  shall  be retained in the fund for payment of such amounts or
  until later certified that such funds are no longer needed.