Section 10.10. Municipalities and school districts authorized to incur debt to liquidate operating deficits; requirements and procedures; period of probable usefulness

In  the case of a municipality or school district  that is authorized by  a  special  or  general  law  to  incur  debt  to
  liquidate an operating deficit:
    a.  no  bonds  to fund the liquidation of such a deficit may be issued
  unless and until the state comptroller shall first  review  and  confirm
  the  existence  of  the  deficit,  as  well as certify the amount of the
  deficit. As soon as practicable after the  effective  date  of  the  law
  authorizing  the incurrence of debt to fund the deficit, but in no event
  prior to the close of the then current fiscal year of  the  municipality
  in  the case of a projected deficit, the municipality or school district
  shall prepare a report detailing the amount and cause of the deficit and
  submit  to  the  state  comptroller  such  report,  together  with   the
  municipality's  or  school  district's  independent audit report for its
  last completed fiscal year, if any such audit report has been or  is  to
  be  prepared,  and  such  other information as the state comptroller may
  deem necessary. Within thirty days after receiving all necessary reports
  and information, the state comptroller shall:
    1. perform such reviews as may be necessary;
    2. confirm the existence and certify the amount of the deficit; and
    3. provide notification to the finance board of  the  municipality  or
  school district as to the existence and amount of any such deficit.
    b.  bonds  to  liquidate  such  deficit may not be issued in an amount
  exceeding  the  amount  of  such  deficit  as  certified  by  the  state
  comptroller.   If  the  municipality  or  school  district  issues  bond
  anticipation notes for the purpose of liquidating such deficit prior  to
  a determination by the state comptroller pursuant to paragraph a of this
  section  in  an  amount  in  excess  of  the  amount  of such deficit as
  confirmed by the state comptroller, the municipality or school  district
  shall,  from  funds  other  than  proceeds of bonds or bond anticipation
  notes, either redeem such bond anticipation notes in the amount by which
  the amount of such bond anticipation notes exceeds the  amount  of  such
  deficit  as  confirmed  by the comptroller or deposit a sum equal to the
  amount by which such bond anticipation notes exceed the amount  of  such
  deficit  as  confirmed  by  the  comptroller into a reserve fund for the
  payment of bonded indebtedness that shall  be  established  pursuant  to
  section six-h of the general municipal law.
    c.  for  each  fiscal  year occurring during the time deficit bonds or
  bond anticipation notes issued in anticipation of the sale of such bonds
  are outstanding, up to and including the last fiscal year  during  which
  such  debt  or debt issued to refund such debt is outstanding, the chief
  fiscal officer of the municipality or school district  on  whose  behalf
  such  deficit  bonds  or notes have been issued shall monitor budgets of
  the municipality or school district  and  for  each  budget,  prepare  a
  quarterly  report  of summarized budget data depicting overall trends of
  actual revenues and budget expenditures for  the  entire  budget  rather
  than individual line items. Such reports shall compare revenue estimates
  and  appropriations as set forth in such budget with the actual revenues
  and  expenditures  made  to  date.  All  quarterly  reports   shall   be
  accompanied  by  a  recommendation by the chief executive officer of the
  municipality or  school  district  setting  forth  any  remedial  action
  necessary  to  resolve  any  unfavorable  budget  variance including the
  overestimation of revenues and the  underestimation  of  appropriations,
  and  shall  be  completed within thirty days of the end of each quarter.
  The chief fiscal officer shall also prepare, as part of such  report,  a
  quarterly  trial balance of general ledger accounts. The above quarterly
  budgetary reports and quarterly trial  balances  shall  be  prepared  in

  accordance  with generally accepted accounting principles. These reports
  shall be submitted to the governing board and chief executive officer of
  such municipality or school district, the state director of the  budget,
  the  state  comptroller,  the  chair  of  the  assembly  ways  and means
  committee, the chair of the senate finance committee and, in the case of
  a school district, the commissioner of education.
    d. beginning with the fiscal year during  which  the  municipality  or
  school  district  is authorized to incur debt to finance the deficit, to
  and including the last fiscal year during which such debt  or  any  debt
  incurred to refund such debt is outstanding, the chief executive officer
  or  other  individual  or individuals responsible for the preparation of
  the tentative budget, or in the case of a town, the preliminary  budget,
  shall submit the tentative or preliminary budget for the next succeeding
  fiscal  year  to  the  state  comptroller  and,  in the case of a school
  district, also to the commissioner of education, no  later  than  thirty
  days  before  the  date  scheduled for the governing board's vote on the
  adoption of the final budget or the last date on which the budget may be
  finally adopted, whichever is sooner. The state comptroller and, in  the
  case  of a school district, the commissioner of education, shall examine
  such proposed budget and make such recommendations as deemed appropriate
  thereon to the municipality or school district prior to the adoption  of
  the budget, but no later than ten days before the date scheduled for the
  governing  board's  vote on the adoption of the final budget or the last
  date on which the budget must be  adopted,  whichever  is  sooner.  Such
  recommendations  shall  be  made after examination into the estimates of
  revenues and expenditures of such municipality or school  district.  The
  governing  board  of  the municipality or school district, no later than
  five days prior to the adoption of the budget,  shall  review  any  such
  recommendations   and  may  make  adjustments  to  its  proposed  budget
  consistent with any recommendations made by the state  comptroller  and,
  in  the  case  of  a  school district, by the commissioner of education,
  within fifteen days after  receipt  of  any  such  recommendations.  Any
  recommendations  that the board rejects shall be explained in writing to
  the state comptroller and, in the case of recommendations  made  by  the
  commissioner  of  education, to the commissioner. The action or inaction
  of the state comptroller or the commissioner  of  education  under  this
  section  shall  not  be  construed  to  affect the legal validity of any
  budget of the municipality or school district nor to affect  the  powers
  or  duties  of  the  municipality or school district with respect to the
  local budget process, provided, however, that the municipality or school
  district may not issue bonds for any object or purpose unless and  until
  adjustments  to  its proposed budget consistent with any recommendations
  made by the state comptroller and, in the case of a school district,  by
  the  commissioner  of  education,  are made, or any such recommendations
  that  are  rejected  have  been  explained  in  writing  to  the   state
  comptroller  and,  in  the case of school districts, the commissioner of
  education.
    e. beginning with the fiscal year during  which  the  municipality  or
  school  district  is authorized to incur debt to finance the deficit, to
  and including the last fiscal year during which such debt  or  any  debt
  incurred to refund such debt is outstanding, the chief executive officer
  or  other  officer  or  officers  responsible for the preparation of the
  tentative budget, or in the case of a town, the preliminary  budget,  of
  the  municipality or school district, within thirty days after the final
  adoption of the budget  for  the  next  succeeding  fiscal  year,  shall
  prepare  a three-year financial plan covering the next succeeding fiscal
  year and the two fiscal years thereafter. The financial plan shall, at a
  minimum,  contain  projected   employment   levels,   projected   annual

  expenditures   for   personal  service,  fringe  benefits,  non-personal
  services and debt service; appropriate reserve fund  amounts;  estimated
  annual revenues including projection of property tax rates, the value of
  the taxable real property and resulting tax levy, annual growth in sales
  tax  and  non-property  tax  revenues;  and the proposed use of one-time
  revenue sources. Copies of the financial plan shall be provided  to  the
  chief  executive and chief fiscal officers of the municipality or school
  district, the state director of the budget, the state  comptroller,  the
  chair  of  the  assembly  ways  and means committee and the chair of the
  senate finance committee. This  financial  plan  requirement  shall  not
  apply  to  the  extent a municipality or school district is subject to a
  different multi-year financial plan requirement under state law.
    f. beginning with the fiscal year during  which  the  municipality  or
  school  district  is authorized to incur debt to finance the deficit, to
  and including the last fiscal year during which such debt  or  any  debt
  incurred to refund such debt is outstanding, the chief fiscal officer of
  the  municipality  or school district shall notify the state comptroller
  at least fifteen days prior to the issuance of any  bonds  or  notes  or
  entering  to any installment purchase contract and the state comptroller
  may review and make recommendations regarding the affordability  to  the
  municipality  or  school  district  of  any  such  proposed  issuance or
  contract.
    g. to facilitate the marketing of bonds authorized pursuant to law  to
  be  issued  to  fund a deficit, the municipality or school district may,
  notwithstanding any limitation on the private sales of bonds provided by
  law and subject to the approval of the state comptroller  of  the  terms
  and conditions of such sales:
    1.  arrange for the underwriting of such bonds at private sale through
  negotiated fees or by sale of such bonds to an underwriter  at  a  price
  less  than  the  sum  of par value of, and the accrued interest on, such
  obligations; or
    2. arrange for the private  sale  of  such  bonds  through  negotiated
  agreement, with compensation for such sales to be provided by negotiated
  agreement   and/or  negotiated  fee,  if  required.  The  cost  of  such
  underwriting or private placement shall be deemed a preliminary cost for
  purposes of section 11.00 of this title.
    h. the financing of a deficit, when authorized by a special or general
  law as hereinbefore described, is hereby declared to  be  an  object  or
  purpose  of  the  municipality or school district for which indebtedness
  may  be  incurred,  the  period  of  probable  usefulness  of  which  is
  determined  to be ten years, computed from the date of such bonds or the
  date of the first bond anticipation note issued in anticipation  of  the
  sale of such bonds, whichever is earlier.
    i. except as provided in this section or in the general or special law
  authorizing   the  incurrence  of  debt  to  finance  the  deficit,  all
  proceedings in connection with the issuance of such debt  shall  be  had
  and  taken  in accordance with the provisions of this chapter, provided,
  however, that any resolution or resolutions authorizing the issuance  of
  such  bonds  shall  not  be  subject to either a mandatory or permissive
  referendum.  To  the  extent  the  provisions  of   this   section   are
  inconsistent  with  any  general, special or local law concerning budget
  procedures, this section shall apply and any budget schedule  set  forth
  in any such law shall be modified to conform with this section.