YONKERS, N.Y. — A state board today assumed control of Yonkers' finances and threatened defiant City Council members with criminal charges in an effort to force them to accept a court-ordered desegregation plan.
"In short, our goal is to save Yonkers from itself," said Secretary of State Gail Shaffer, head of the Yonkers Emergency Financial Control Board. The board voted 5 to 1 to impose a wage and hiring freeze and made council members who refuse to obey rules for fiscal responsibility subject to misdemeanor charges.
The four council members who voted against the desegregation plan ordered by U.S. District Judge Leonard Sand already are paying fines and face a threat of imprisonment beginning Thursday on Sand's contempt of court citation.
The U.S. 2nd District Court of Appeals today said it would rule on a city request to stay $500-a-day fines against the councilmen and bankrupting fines against Yonkers. The panel did not say when it would rule.
UPDATE: The current board, which was created by emergency statute in 1984, when Yonkers was so short of funds it risked having to shut its schools, consists of seven members. Its chairwoman is Gail S. Shaffer, New York's Secretary of State.
The board is largely an oversight body or watchdog agency that takes steps only when the city is deemed to be causing serious damage to its financial well-being, according to William Brown, a spokesman for the Department of State. But the board is also empowered to control the city's finances and could at any time stop payments by the city to prevent it from incurring further debt.
It was in exchange for state aid in 1984, which saved the Yonkers school system from closing, that the city agreed to allow the Emergency Financial Control Board to oversee its finances. Preserving the City's Assets.
It was in 1975 that Yonkers neared bankruptcy and was first placed under the state Emergency Financial Control Board - much the way New York City was during its fiscal crisis in the mid-1970's.
The board pulled out in 1980, and for about four years Yonkers struggled to regain its financial stability. In April 1984, the city was faced with a projected $40 million deficit. The city's Board of Education, which is dependent on the city for financing, had a $12 million budget deficit and threatened to shut the school system unless the city provided the necessary funds.
To avert the closing, the city obtained a $9 million loan from the state in exchange for allowing yet another state board to oversee its fiscal affairs.
That same board is now overseeing the city's fiscal affairs.
NOTE: More Updates Bellow
Details:
The New York State Emergency Financial Control Board (E.F.C.B.) for the City of Yonkers was created in 1975 (Ch. 871) to oversee the financial recovery of the then nearly bankrupt city of Yonkers -- With the approval of the board, the city developed a financial plan to cope with the crises. The act of 1975 gave the E.F.C.B. the right of approval and disapproval of all contracts and loans entered into by the city.
The members of the E.F.C.B. consisted of the State Comptroller, the Mayor and City Manager of Yonkers, the Secretary of State and three members appointed by the Governor, with the consent of the Senate. The State Comptroller was the chairman of the Board.
NEW YORK STATE FINANCIAL EMERGENCY ACT OF NINETEEN HUNDRED EIGHTY-FOUR
FOR THE CITY OF YONKERS
Section
1. Short title
2. Definitions
3. Legislative declaration of financial emergency
4. General rights and prohibitions
5. Power of city or covered organization to determine the
expenditure of available funds
6. New York state emergency financial control board for the city of
Yonkers; created
7. Administration of the board
8. Functions of the board
9. Development of the financial plan
10. Establishment and application of emergency financial control
board fund for the city of Yonkers
11. Authorization for wage freeze
12. Prohibitions; penalties
13. Indemnification
14. Termination
Section 1. Short title. This act shall be known and may be cited as
the "New York State Financial Emergency Act of Nineteen Hundred
Eighty-four for the City of Yonkers".
§ 2. Definitions. As used in this act, the following words and terms
shall have the following meanings unless the context shall indicate
another or different meaning or intent.
1. "Available funds" means at any date the amounts in the fund which
are then available, as determined by the board, to be applied to the
purposes stated in paragraph (iii) of subdivision four of section ten of
this act after provision has been made for the application of amounts in
the fund for the purposes stated in paragraphs (i) and (ii) of
subdivision four of section ten of this act.
2. "Board" means the governmental agency created by section six of
this act.
3. "City" means the city of Yonkers.
4. "City manager" means the city manager of the city of Yonkers.
5. "Comptroller" means the comptroller of the state of New York.
6. "Covered organization" means any governmental agency, public
authority or public benefit corporation which receives or may receive
moneys directly, indirectly or contingently, (other than moneys received
for the sale of goods or the rendering of services or the loan of moneys
to the city) from the city, and in any event includes, without
limitation, the board of education of the city school district of the
city of Yonkers.
Notwithstanding the foregoing, the board, by order made on its own
motion or on application of a covered organization may specifically
exempt the organization from inclusion as a covered organization after a
finding by the board that an exemption does not materially affect the
ability of the city to adopt and maintain a budget pursuant to the
provisions of this act; provided that at the time of and during the
period of the exemption there is supplied to the board, an annual audit
by an independent certified public accounting firm (or by a public
accountant licensed by the state of New York to conduct such audits) of
the organization's financial statements performed in accordance with
generally accepted auditing standards and a report thereon by the
auditor which includes an opinion that the audited financial statements
have been prepared in accordance with generally accepted accounting
principles and any other information as the auditor deems appropriate;
provided further however, that the board may terminate the exemption
after a determination that the circumstances upon which the exemption
was granted are no longer applicable.
In no event however, shall the term "covered organization" mean or
include any governmental agency which is (i) a state public authority as
defined in section two hundred one of the civil service law, or (ii) a
governmental agency, authority, commission or instrumentality created by
compact or agreement between the state of New York and another state or
states, or (iii) a subsidiary corporation of an agency described in (i)
or (ii) hereof.
7. "Emergency period" means the period of time from the effective date
of this act until the date when the board determines that (a) the
operating and capital funds of the city shall have been in balance for
three fiscal years in accordance with the accounting methods prescribed
for the city's budget by the state comptroller pursuant to section
thirty-six of the general municipal law, (b) the amount of all loans
made by the state to the city to fund the operating deficit incurred by
the city in its fiscal year ending June thirtieth, nineteen hundred
eighty-four or any fiscal year thereafter has been repaid in full, and
(c) the city has presented a financial plan that projects operating and
capital fund balance for the four years covered by such plan in
accordance with the accounting methods prescribed for the city's budget
by the state comptroller pursuant to section thirty-six of the general
municipal law.
8. "Financial plan" means the financial plan of the city and the
covered organizations to be developed pursuant to section nine of this
act, as from time to time modified.
9. "Fund" means the emergency financial control board fund for the
city of Yonkers established pursuant to subdivision one of section ten
of this act.
10. "Revenues" mean all taxes, federal and state aid, rents, fees,
charges, payments, all proceeds from borrowings and other income and
receipts paid or payable to or for the account of the city or any of the
covered organizations, subject to the requirements imposed by the
special fiscal act.
11. "Special fiscal act" means the special local finance and budget
act of the city of Yonkers, as enacted by chapter four hundred
eighty-eight of the laws of nineteen hundred seventy-six.
12. "Mayor" means the mayor of the city of Yonkers.
§ 3. Legislative declaration of financial emergency. The legislature
hereby finds and declares that a state of financial emergency exists
within the city of Yonkers.
§ 4. General rights and prohibitions. 1. Neither the city nor any
covered organization shall borrow or expend any moneys, or in any way,
directly or indirectly, expressly or implicitly engage its credit during
the emergency period except in compliance with the provisions of this
act and the special fiscal act.
2. Nothing contained in this act shall limit the right of the city or
any covered organization to comply with the provisions of any existing
contract with or for the benefit of the holders of any bonds or notes of
the city or such covered organization or with the provisions of the
special fiscal act.
3. Nothing contained in this act shall be construed to impair the
right of employees to organize or to bargain collectively.
§ 5. Power of city or covered organization to determine the
expenditure of available funds. Nothing contained in this act shall be
construed to limit the power of the city or a covered organization to
determine, from time to time, within available funds for the city or for
such covered organization, the purposes for which expenditures are to be
made by the city or such covered organization and the amounts of such
expenditures, consistent with the aggregate expenditures then permitted
under the financial plan for the city or such covered organization.
§ 6. New York state emergency financial control board for the city of
Yonkers; created. There is hereby created the New York state emergency
financial control board for the city of Yonkers. The board shall be a
governmental agency and instrumentality of the state and it shall have
such powers and functions as are set forth in this act.
§ 7. Administration of the board. 1. The membership of the board shall
be the secretary of state, the comptroller (pursuant to his authority to
supervise the accounts of any political subdivision of the state), the
mayor and four members appointed by the governor with the advice and
consent of the senate. Such appointed members shall serve at the
pleasure of the governor. The secretary of state shall be the chairman
of the board and he or his representative shall preside over all
meetings of the board. The board shall act by majority vote of the
entire board. The board shall maintain a record of its proceedings in
such form as it may determine, but such record shall indicate attendance
and all votes cast by each member. The secretary of state and
comptroller shall be entitled to designate a representative to attend,
in his place, meetings of the board and to vote or otherwise act in his
behalf. Written notice of such designation shall be furnished to the
board by the designating member prior to any meeting attended by his
representative. Any representative shall serve at the pleasure of the
designating member. No representative shall be authorized to delegate
any of his duties or functions to any other person. The temporary
president of the senate, speaker of the assembly, minority leader of the
senate and minority leader of the assembly shall each be entitled to
appoint a representative to the board, the county executive of the
county of Westchester shall be entitled to appoint a county official as
a representative to the board and the board shall be entitled to appoint
a representative to the board to represent the employees of the city of
Yonkers. Each such representative shall be entitled to receive notice of
and to attend all meetings of the board but shall not be entitled to
vote. Each representative shall serve at the pleasure of the appointing
official or body, shall be eligible for reappointment, and shall hold
office until his successor has been appointed.
2. Notwithstanding any inconsistent provisions of law, general,
special or local, no officer or employee of the state, or political
subdivision of the state, any governmental entity operating any public
school or college or other public agency or instrumentality or unit of
government which exercises governmental powers under the laws of the
state, shall forfeit his office or employment by reason of his
acceptance or appointment as a member, representative, officer, employee
or agent of the board nor shall service as such member, representative,
officer, employee or agent of the board be deemed incompatible or in
conflict with such office or employment.
3. The members of the board appointed by the governor and all
representatives designated by members of the board shall serve without
salary or per diem allowance but shall be entitled to reimbursement by
the city for actual and necessary expenses incurred in the performance
of official duties under this act, provided, however, that such members
and representatives are not, at the time such expenses are incurred,
public employees otherwise entitled to such reimbursement.
4. The board may delegate to one or more of its officers, employees or
agents, such powers and duties as the board may deem proper, except any
duties inconsistent with the duties and functions prescribed by any
other office or position any such person may hold.
§ 8. Functions of the board. 1. In carrying out the purposes of this
act, the board shall perform the following functions:
a. As set forth in section nine of this act, the board shall (i)
consult with the city and the covered organizations in the preparation
of the financial plan, and certify to the city the revenue estimates
approved therein, (ii) prescribe the form of the financial plan and the
supporting information required in connection therewith, and (iii)
exercise the rights of approval, disapproval and modification with
respect to the financial plan, including but not limited to the revenue
estimates contained therein.
b. As set forth in section ten of this act, the board shall establish
and adopt procedures with respect to the deposit of revenues of the city
and the covered organizations in the fund and the disbursement of moneys
from the fund.
c. The board shall, from time to time and to the extent it deems
necessary or desirable in order to accomplish the purposes of this act,
(i) review the operations, management, efficiency and productivity of
such city operations and of such covered organizations or portions
thereof as the board may determine, and make reports thereon; (ii) audit
compliance with the financial plan in such areas as the board may
determine; (iii) recommend to the city and the covered organizations
such measures relating to their operations, management, efficiency and
productivity as it deems appropriate to reduce costs and improve
services so as to advance the purposes of this act; and (iv) obtain
information on the financial condition and needs of the city and the
covered organizations. Nothing herein shall diminish the powers of the
comptroller otherwise provided by law and the board may request the
assistance of the comptroller in the performance of the above functions.
d. The board shall (i) receive from the city and the covered
organizations and from the comptroller, and review, such financial
statements and projections, budgetary data and information, and
management reports and materials as the board deems necessary or
desirable to accomplish the purposes of this act, and (ii) inspect, copy
and audit such books and records of the city and the covered
organizations as the board deems necessary or desirable to accomplish
the purposes of this act.
e. All contracts entered into by the city or any covered organization
must be consistent with the provisions of this act and must comply with
the requirements of the financial plan as approved by the board. With
respect to all contracts or other obligations to be entered into by the
city or any covered organization after May first, nineteen hundred
eighty-four, requiring the payment of funds or the incurring of costs by
the city or any covered organization:
(i) Within twenty days from May 2, 1984, the city manager shall
present to the board proposed regulations respecting the categories and
types of contracts and other obligations required to be reviewed by the
board pursuant to this subdivision. Within thirty days from May 2, 1984,
the board shall approve or modify and approve such proposed regulations
or promulgate its own in the event that such proposed regulations are
not submitted to it within the twenty days as provided for herein. Such
regulation may thereafter be modified by the board from time to time on
not less than thirty days notice to the city manager on or before
December 31, 1991 and thereafter to the mayor and the city manager, or
mayor, respectively, may from time to time propose modifications to the
board. Unless expressly disapproved or modified by the board within
thirty days from the date of submission by the city manager or mayor,
any such proposed regulations or modifications shall be deemed approved
by the board;
(ii) Prior to entering into any contract or other obligation subject
to review of the board under its regulations, the city or any covered
organization shall submit a copy of such contract or other obligation to
the board accompanied by an analysis of the projected costs of such
contract or other obligation and a certification that performance
thereof will be in accordance with the financial plan, all in such form
and with such additional information as the board may prescribe. The
board shall promptly review the terms of such contract or other
obligation and the supporting information in order to determine
compliance with the financial plan;
(iii) The board shall, by order, disapprove any contract or other
obligation reviewed by it only after enactment of a resolution
determining that, in its judgment, the performance of such contract or
other obligation would be inconsistent with the financial plan, and upon
such order the city or covered organization shall not enter into such
contract or other obligation;
(iv) If the board approves the terms of a reviewed contract or other
obligation, the city or covered organization may enter into such
contract or other obligation upon the terms submitted to the board.
Failure of the board to notify the city or covered organization within
thirty days (or such additional time, not exceeding thirty days, as the
board shall have notified the city or covered organization that it
requires to complete its review and analysis) after submission to it of
a contract or other obligation that such contract or other obligation
has been disapproved shall be deemed to constitute board approval
thereof.
f. The board shall review the terms of each proposed long-term and
short-term borrowing by the city and any covered organization to be
effected during the emergency period after May first, nineteen hundred
eighty-four, and no such borrowing shall be made unless it complies with
the provisions of the special fiscal act and is approved by the board.
The board shall consult and coordinate with the comptroller with respect
to the borrowings of the city and any covered organization and shall
receive reports from the comptroller on his review of borrowings by the
city. No covered organization shall be prohibited from issuing bonds or
notes to pay outstanding bonds or notes.
g. The board shall receive quarterly reports from the comptroller
setting forth the debt service requirements on all bonds and notes of
the city and covered organizations for the following quarter.
h. The board shall issue, to the appropriate official of the city and
the covered organization, such orders as it deems necessary to
accomplish the purposes of this act, including but not limited to,
timely and satisfactory implementation of an approved financial plan.
Any order so issued shall be binding upon the official to whom it was
issued and failure to comply with such order shall subject the official
to the penalties described in section twelve of this act.
i. The board shall coordinate with the comptroller with respect to the
performance of its review and monitoring of the revenues and
expenditures of the city and covered organizations.
2. In carrying out its functions under this act, including making its
determination whether to approve or disapprove a financial plan or
financial plan modification of the city, the board shall ensure
compliance by the city with the requirements imposed by the special
fiscal act, and all the requirements of such act shall apply to a
financial plan of the city. Nothing contained in this act shall be
construed to amend, repeal, be inconsistent with, less stringent or less
restrictive than the special fiscal act. If any inconsistencies or
conflicts between this act and the special fiscal act shall result from
the operations of the board or otherwise, the provisions of the special
fiscal act shall control as provided in subdivision (F) of section
fourteen of the special fiscal act.
3. a. Notwithstanding the provisions or limitations of any law,
general, special or local, including the charter of the city of Yonkers,
an impasse panel, arbitrator, collective bargaining board, fact finding
or similar type of panel, body or individual which is authorized to
recommend or award an increase in wages or fringe benefits to any
employee of the city or covered organization shall, in addition to
considering any standard or factor required to be considered by
applicable law, also take into consideration and accord substantial
weight to the financial ability of the city or covered organization to
pay the cost of such increase in wages or fringe benefits.
b. Any determination pursuant to article eight of the labor law or any
agreement or stipulation entered into in lieu thereof which provides for
an increase in wages or fringe benefits of any employee of the city or
covered organization shall, in addition to considering any standard or
factor required to be considered by applicable law, also take into
consideration and accord substantial weight to the financial ability of
the city or covered organization to pay the cost of such increase in
wages or fringe benefits.
c. Any party to a proceeding before a panel, body or individual as
described in paragraph a or b of this subdivision may commence a special
proceeding in the appellate division, second department, supreme court,
state of New York, to review the determination as to the city or covered
organization's financial ability to pay. Such proceeding shall be
commenced not later than thirty days after the final determination has
been made by the panel, body or individual. Such proceeding shall have
preference over all other cases in such appellate division, other than
cases relating to the election law.
d. The court shall make a de novo review of the record solely for the
purpose of determining whether an award of an increase in wages or
fringe benefits was within the city's or covered organization's
financial ability to pay. The court's findings as to such issue shall be
based upon a preponderance of all the evidence set forth in the record.
Unless the parties stipulate otherwise, arguments or submission shall be
had within fifteen days after commencement of the special proceeding and
the court shall render its decision within fifteen days thereafter. All
questions, other than the question relating to the determination, shall
be reviewed by the appellate division in the same proceeding in the
manner provided by article seventy-five or seventy-eight of the civil
practice law and rules as may be appropriate, notwithstanding that the
issue would otherwise have been cognizable in the first instance before
a special or trial term of the supreme court. If an appeal shall
otherwise lie from such determination of the appellate division to the
court of appeals, notice of such appeal shall be filed within thirty
days after the entry of the final order or judgment of the appellate
division if such appeal is of right or within ten days after entry of an
order granting leave to appeal, and such appeal shall have preference
over all other appeals other than appeals relating to the election law.
e. At any stage of any proceeding under paragraph a, b or c hereof or
any appeal from an order or judgment therefrom the board may intervene
as a party on the issue of the financial ability of the city or covered
organization to pay the cost of an increase in wages or fringe benefits.
f. For the purposes of this subdivision, financial ability to pay
shall mean the financial ability of the city or covered organization to
pay the cost of any increase in wages or fringe benefits without
requiring an increase in the level of city taxes as approved in the
financial plan of the city in effect at the time of the commencement of
a proceeding under paragraph a or b hereof.
§ 9. Development of the financial plan. 1. Pursuant to the procedures
contained in subdivision two of this section, each year the city shall
develop, and may from time to time modify, with the approval of the
board, a four year financial plan covering the city and the covered
organizations. Each such financial plan and financial plan modification
shall conform to the requirements of subdivision three of this section
and shall (a) provide that the operating and capital funds of the city
will be balanced in accordance with the accounting system and procedures
prescribed by the comptroller pursuant to section thirty-six of the
general municipal law, and (b) comply with the requirements of the
special fiscal act.
2. The financial plan shall be developed and approved, and may from
time to time be modified, with the approval of the board, in accordance
with the following procedures:
a. Commencing with the city's fiscal year beginning July first,
nineteen hundred eighty-four, and not later than fifty days prior to the
beginning of such fiscal year and each fiscal year thereafter, or such
other date as the board may approve at the request of the city, the city
shall prepare and submit a financial plan to the board covering the four
year period beginning with such fiscal year. On such dates, the mayor
shall also submit to the board the city's proposed operating and capital
budgets for the ensuing fiscal year and a certificate of the mayor
stating that such budgets are consistent with the financial plan
submitted therewith, that the budgets conform in all respects to the
requirements of the special fiscal act, and that operation within the
budgets is feasible.
b. Not more than forty-five days after submission of a financial plan
or more than thirty days after submission of a financial plan
modification, the board shall determine whether the financial plan or
financial plan modification is complete and complies with the provisions
of subdivision one of this section and shall approve or disapprove the
financial plan or financial plan modification in accordance with the
provisions of this section.
c. If the board determines that the financial plan or financial plan
modification is complete and complies with the standards set forth in
subdivision one of this section, the board shall approve the financial
plan or financial plan modification. Upon making such determination, the
board shall make a certification to the city setting forth revenue
estimates approved by the board in accordance with such determination.
d. The board shall disapprove, by resolution, the financial plan
proposed by the city if, in the judgment of the board, such plan:
(i) is incomplete;
(ii) fails to contain projections of revenues and expenditures that
are based on reasonable and appropriate assumptions and methods of
estimation;
(iii) fails to provide that operations of the city and the covered
organizations will be conducted within the cash resources available
according to the board's revenue estimates; or
(iv) fails to comply with the provisions of subdivision one of this
section.
e. In disapproving a financial plan or financial plan modification
proposed by the city, the board may direct that the aggregate
expenditures in any period be reduced to conform to the revenue
estimates certified by the board to achieve the objectives set forth in
subdivision one of this section.
f. In the event that the city shall, for any reason, fail to submit a
financial plan, as required pursuant to paragraph a of this subdivision,
or to adopt a financial plan approved by the board, or in the event that
the board has not, for any reason permitted under this act, approved a
financial plan submitted by the city, the board, after enactment of a
resolution so finding, shall formulate and adopt a financial plan to be
effective until the board approves a financial plan submitted by the
city. All budgets and operations of the city or a covered organization
shall be in conformance and compliance with the financial plan then in
effect.
g. After the initial adoption of the financial plan, the revenue
estimates certified by the board and the financial plan shall be
regularly reexamined by the board in consultation with the city and the
covered organizations and the city shall provide a modified financial
plan in such detail and within such time period as the board may
require. In the event of reductions in such revenue estimates, or in the
event the city or a covered organization shall expend funds at a rate
that would exceed the aggregate expenditure limitation for the city or
covered organization prior to the expiration of the fiscal year, the
city shall submit a financial plan modification to effect such
adjustments in revenue estimates and reductions in total expenditures as
may be necessary to conform to such revised revenue estimates or
aggregate expenditure limitations. If, within a time period specified by
the board, the city fails to make such modifications after reductions in
revenue estimates, or to provide a modified plan in detail and within
such time period required by the board, the board, after enactment of a
resolution so finding, may formulate and adopt such modifications to the
financial plan, such modifications to become effective on their
adoption.
h. The city may, from time to time, submit financial plan
modifications for review by the board. The board shall approve such
modifications unless, in the judgment of the board, such modifications
would constitute grounds for disapproval of a financial plan pursuant to
paragraph d of this subdivision.
3. The financial plan shall be in such form and shall contain such
information for each year during which the financial plan is in effect
as the board may specify, shall include the city and all the covered
organizations, and shall, in such detail as the board may from time to
time prescribe, include statements of all estimated revenues and of all
expenditures and cash flow projections of the city and each of the
covered organizations.
4. The financial plan shall, except to the extent waived by the board
with respect to any limited period, include any information which the
board may request to satisfy itself that (i) projected employment
levels, collective bargaining agreements and other action relating to
employee costs, capital construction and such other matters as the board
may specify, are consistent with the provisions made for such
obligations in the financial plan, (ii) the city and the covered
organizations are taking whatever action is necessary with respect to
programs mandated by state and federal law to ensure that expenditures
for such programs are limited to and covered by the expenditures stated
in the financial plan, and (iii) adequate reserves are provided to
maintain essential programs in the event revenues have been
overestimated or expenditures underestimated for any period.
5. For each financial plan and financial plan modification to be
prepared and submitted by the city to the board pursuant to the
provisions of this section, the covered organizations shall submit to
the city such information with respect to their projected expenditures,
revenues and cash flows for each year covered by such financial plan or
modification as the city shall determine. Notwithstanding any other
provision of law limiting the authority of the city with respect to any
covered organization, the city, in the preparation and submission of the
financial plan and modifications thereof, shall (except for debt service
or for other expenditures to the extent that such expenditures are
required by law) have the power to determine the aggregate expenditures
to be allocated to any covered organization in the financial plan and
any modifications thereto.
§ 10. Establishment and application of emergency financial control
board fund for the city of Yonkers. 1. There is hereby established a
fund designated the emergency financial control board fund for the city
of Yonkers. Commencing on the effective date of the initial financial
plan approved by the board and for the duration of the emergency period,
all revenues received or to be received by the city or any covered
organization shall, unless exempted by order of the board or to the
extent otherwise required by the special fiscal act, be revenues of the
fund and shall be for the account of the city and the appropriate
covered organizations, but disbursement from the fund shall be made by
the board in accordance with the approved financial plan, except to the
extent otherwise required by the special fiscal act, expressly
prohibited by federal law or where such revenues are pledged to the
payment of any outstanding bonds, notes or other obligations of covered
organizations. Notwithstanding the foregoing, the board shall authorize
the city to make all disbursements of city revenues from the board fund,
which disbursements shall be made in accordance with the approved
financial plan; provided, that the board may withdraw such authorization
if it determines that (a) any disbursements made or to be made by the
city have not been or are likely not to be in compliance with the
approved financial plan, (b) the city has violated any other provisions
of this act or the special fiscal act, or (c) the city has violated an
agreement with any holder or guarantor of bonds or notes issued by the
city or a state financing agency. Commencing on the effective date of
the initial financial plan approved by the board, and for the duration
of the emergency period, all funds and accounts established or
thereafter established by the city of the covered organizations shall,
unless exempted by order of the board, thereafter be funds and accounts
of the fund except to the extent otherwise required by the special
fiscal act, expressly prohibited by federal law or to the extent
prohibited by covenants or agreements relating to any outstanding bonds,
notes or other obligations of covered organizations. All such accounts
of the board shall have such captions and entries as the board shall
determine to be necessary to credit the foregoing revenues and receipts
to the fund. The moneys of the fund shall not be deemed to be money of
the state or money under its control.
2. The deposit of revenues into the fund and the investment or deposit
of moneys therein shall be made in accordance with and pursuant to
procedures established by the board and the special fiscal act.
3. In order to assure compliance with the financial plan, the board
shall from time to time adopt procedures controlling the disbursement of
moneys from the fund.
4. If at any time the board determines that the amount then held in
the fund or the amount estimated by the board to be held in the fund is
or will be insufficient to meet the expenditures in the amounts and at
the times required by the financial plan, the board shall require
disbursements from the fund to be made in the following order or
priority unless otherwise required by law of the United States of
America: (i) the payment of amounts from the fund to comply with the
provisions of the special fiscal act, (ii) the payment of other
liabilities having statutory or contractual priority over remaining
liabilities of the city and the covered organizations whose moneys are
included in the fund, and (iii) the payment of other obligations on an
allocated basis as specified by the city for expenditures in accordance
with the financial plan provided that, in the event that the city fails
to so specify, the board may withhold payment of any of such other
obligations or may direct their payment pro rata.
5. The board shall cause to be performed such pre-audit and post-audit
reviews of the fund and disbursements therefrom as it may determine.
§ 11. Authorization for wage freeze. 1. Upon a finding by the board
that a wage freeze is essential to the adoption or maintenance of a city
budget that is in compliance with this act, the board, after enactment
of a resolution so finding, may declare a fiscal crisis. Upon making
such a declaration, the board shall be empowered to order that all
increases in salary or wages of employees of the city and employees of
covered organizations which will take effect after the date of the order
pursuant to collective bargaining agreements or other analogous
contracts, now in existence or hereafter entered into, requiring such
salary increases as of any date thereafter are suspended. Such order may
also provide that all increased payments for holiday and vacation
differentials, shift differentials, salary adjustments according to plan
and step-ups or increments for employees of the city and employees of
covered organizations which will take effect after the date of the order
pursuant to collective bargaining agreements or other analogous
contracts requiring such increased payments as of any date thereafter
are, in the same manner, suspended. For the purposes of computing the
pension base of retirement allowances, any suspended salary or wage
increases and any suspended other payments shall not be considered as
part of compensation or final compensation or of annual salary earned or
earnable. The suspensions authorized hereunder shall continue until one
year after the date of the order and, to the extent of any determination
of the board that a continuation of such suspensions, to a date
specified by the board, is necessary in order to achieve the objectives
of the financial plan, such suspensions shall be continued to the date
specified by such board, which date shall in no event be later than the
end of the emergency period, provided that such suspensions shall
terminate with respect to employees who have agreed to a deferral of
salary or wage increase upon the certification of the agreement by the
board pursuant to subdivision two of this section.
2. This section shall not be applicable to employees of the city or
employees of a covered organization covered by a collective bargaining
agreement or an employee of the city or a covered organization not
covered by a collective bargaining agreement where the collective
bargaining representative or such unrepresented employee has agreed to a
deferment of salary or wage increase, by an instrument in writing which
has been certified by the board as being an acceptable and appropriate
contribution toward alleviating the fiscal crisis of the city. Any such
agreement to a deferment of salary or wage increase may provide that for
the purposes of computing the pension base of retirement allowances, any
deferred salary or wage increase may be considered as part of
compensation or final compensation or of annual salary earned or
earnable.
3. The board may, if it finds that the fiscal crisis has been
sufficiently alleviated or for any other appropriate reason, direct that
the suspensions of salary or wage increases or suspensions of other
increased payments or benefits shall, in whole or in part, be
terminated.
§ 12. Prohibitions; penalties. 1. During the emergency period (i) no
officer or employee of the city or of any of the covered organizations
shall make or authorize an obligation or other liability in excess of
the amount available therefor under the financial plan as then in
effect; (ii) no officer or employee of the city or of any of the covered
organizations shall involve the city or any of the covered organizations
in any contract or other obligation or liability for the payment of
money for any purpose required to be approved by the board unless such
contract has been so approved and unless such contract or obligation or
liability is in compliance with the financial plan as then in effect.
2. No officer or employee of the city or any of the covered
organizations shall take any action in violation of any valid order of
the board or shall fail or refuse to take any action required by any
such order or shall prepare, present or certify any information
(including any projections or estimates) or report for the board or any
of its agents that is false or misleading, or, upon learning that any
such information is false or misleading, shall fail promptly to advise
the board or its agents thereof.
3. In addition to any penalty or liability under any other law, any
officer or employee of the city or any of the covered organizations who
shall violate subdivision one or two of this section shall be subject to
appropriate administrative discipline, including, when circumstances
warrant, suspension from duty without pay or removal from office by
order of either the governor or the mayor; and any officer or employee
of the city or any of the covered organizations who shall knowingly and
willfully violate subdivision one or two of this section shall, upon
conviction, be guilty of a misdemeanor.
4. In the case of a violation of subdivision one or two of this
section by an officer or employee of the city or any of the covered
organizations, the mayor or the chief executive officer of such covered
organization shall immediately report to the board all pertinent facts
together with a statement of the action taken thereon.
§ 13. Indemnification. 1. The state shall save harmless and indemnify
members, officers and employees of and representatives to the board, all
of whom shall be deemed officers and employees of the state for purposes
of section seventeen of the public officers law, against any claim,
demand, suit, or judgment arising by reason of any act or omission to
act by such member, officer, employee or representative occurring in the
discharge of his duties and within the scope of his service on behalf of
such board including any claim, demand, suit or judgment based on
allegations that financial loss was sustained by any person in
connection with the acquisition, disposition or holding of securities or
other obligations. In the event of any such claim, demand, suit or
judgment, a member, officer or employee of or representative to the
board shall be saved harmless and indemnified, notwithstanding the
limitations of subdivision one of section seventeen of the public
officers law, unless such individual is found by a final judicial
determination not to have acted, in good faith, for a purpose which he
reasonably believed to be in the best interest of the board or not to
have had reasonable cause to believe that his conduct was lawful.
2. In connection with any such claim, demand, suit, or judgment, any
member, officer or employee of or representative to the board shall be
entitled to representation by private counsel of his choice in any civil
judicial proceeding whenever the attorney general determines based upon
his investigation and review of the facts and circumstances of the case
that representation by the attorney general would be inappropriate. The
attorney general shall notify the individual in writing of such
determination that the individual is entitled to be represented by
private counsel. The attorney general may require, as a condition to
payment of the fees and expenses of such representative, that
appropriate groups of such individuals be represented by the same
counsel. If the individual or groups of individuals is entitled to
representation by private counsel under the provisions of this section,
the attorney general shall so certify to the comptroller. Reasonable
attorneys fees and litigation expenses shall be paid by the state to
such private counsel from time to time during the pendency of the civil
action or proceeding, subject to certification that the individual is
entitled to representation under the terms and conditions of this
section by the chairman of the board, upon the audit and warrant of the
comptroller. The provisions of this subdivision shall be in addition to
and shall not supplant any indemnification or other benefits heretofore
or hereafter conferred upon members, officers, or employees of and
representatives to the board by section seventeen of the public officers
law, by action of the board or otherwise. The provisions of this
subdivision shall inure only to members, officers and employees of and
representatives to the board, shall not enlarge or diminish the rights
of any other party, and shall not impair, limit or modify the rights and
obligations of any insurer under any policy of insurance.
§ 14. Termination. Six months after the end of the emergency period,
the existence of the board and all other provisions of this act not
theretofore terminated shall terminate.
A former Yonkers mayor who served when the city was under the watchful eye of a financial control board says withthe current budget woes the board's return is possible.
Mayor Phil Amicone's three-year budget plan relies heavily on $200 million in new state aid for education. Currently, the city has alreadybeen forced to cut programs and staff in Yonkers schools due to a budget gap.
It's those budget troubles that have former Mayor Angelo Martinelli speculating about the possible return of a financial control board. In1974 and 1984, the city was under the watchful eye of a control board, but that all changed in 1998 when former mayor John Spencer took over.
But state Senator Nick Spano (R-Yonkers) says talk of a control board is premature. He says he would not be in favor of a control board. Assemblyman Mike Spano (R-Yonkers) agrees with his brother but says looking at the budget numbers for Yonkers, a control board is not out of the realm of possibilities.
UPDATE #3 - PRESS RELEASE: Yonkers Takes Albany’s Control Board to Court
YONKERS, NY – July 29, 2014 — The special counsel hired earlier this year by the
Yonkers City Council has filed a lawsuit challenging the Constitutionality of what local lawmakers say was a process to institute a virtual control board of city finances while providing little to no financial assistance. This new budget review process was passed in the 2014 New York State Budget in a section referred to as the Deficit Act.
“As we noted earlier this year,
Albany tried to give us a credit-card to borrow our way out of a deficit that was created in large part due to State under-funding, but attached strings that put the
State Comptrollerand Education Commissioner in charge of the
City budget,” Council President Liam J. McLaughlin said. “The Deficit Act is blatantly unconstitutional that was passed without the requisite home rule request from the City, and we expect it will be overturned by this lawsuit.”
The
Deficit Financing Act contained a stand-alone provision which States that over the next ten years, the State Comptroller and Education Commissioner shall make recommendations to the City budget which the City Council must then implement. This could mean that Albany can mandate the City to adopt or abolish certain programs, or even raise taxes.
“The same Albany bureaucrats who are responsible for the error that created this mess were given even more power and control over the City budget at the expense of the elected City Council members whose job it is to craft the budget,” Majority Leader John Larkin said. “We cannot allow this to go unchallenged.”
The lawsuit says that in order to legally adopt the Deficit Act, Albany lawmakers should have followed the provision of the State Constitution that requires what is known as a “home rule request.” This is in essence a provision requiring a vote of by a local government granting permission for Albany to act before State lawmakers can take action that is not of statewide concern that affects a local government’s affairs and property.
“Albany has put into place a new system where the State reviews, analyzes and enforces recommendations that must be incorporated into the final approved budget by the Council, and this is not just simple oversight by the Comptroller or the Commissioner of Education,” McLaughlin said. “It’s one thing when the comptroller makes recommendations; it’s a very different thing when people tell us that we have to do something while not providing the funds to support those programs. Mandating programs to the city of Yonkers is not the way to go.”
