BILL NUMBER:S4938

TITLE OF BILL:
An act
to amend the city of Newburgh fiscal recovery act, in relation to
extending the final authorized date of issuance of deficit bonds and
notes by such city

PURPOSE:
The purpose of this bill is to provide that the City of Newburgh (the
"City") may provide interim financing to liquidate its projected
deficits over a five year period by issuing bond anticipation notes
until such liquidation is permanently financed by the issuance of
bonds on or before August 30, 2015.

SUMMARY OF PROVISIONS:
This bill, which would be effective immediately upon enactment, would
amend Section 5 of Chapter 223 of the Laws of 2010 in order to
provide that the City is authorized to issue bonds on or before
August 30, 2015, rather than December 31, 2011, for the purpose of
liquidating certain deficits. This change in date would permit the
City to finance such deficits on an interim basis through the
issuance of bond anticipation notes maturing no later than August 30,
2015 which is the fifth anniversary of the first borrowing for such
purpose, in accordance with applicable provisions of the Local
Finance Law.
              

EXISTING LAW:
Chapter 223 of the Laws of 2010 authorized the City to issue bonds
on or before December 31, 2011, in an aggregate principal amount not
to exceed fifteen million dollars ($15,000,000) (exclusive of the
costs and expenses incidental to the issuance of the bonds authorized
to be issued by such chapter) for the specific object or purpose of
liquidating actual deficits in the City's general fund, special
revenue fund, and capital projects fund existing at the close of the
City's 2010 fiscal year. In anticipation of the issuance of such
bonds, bond anticipation notes are authorized to be issued, however
such notes have to mature no later than December 31, 2011.

JUSTIFICATION:
The City's financial advisor has advised that the cost of financing
liquidation of such deficits can be minimized if the City can issue
bond anticipation notes during the first five year period starting
with the initial bon"owing on August 30, 2010, since interest rates on
such notes are significantly less than bonds. The total savings to
the City if bond anticipation notes can be issued in 2012, rather
than bonds, is currently estimated to be approximately $200,000 for
the 2012 fiscal year.

The City issued $12,000,000 bond anticipation notes on August 30, 2010
to provide interim financing pursuant to Chapter 233 of the Laws of
2010. Once the City's audited financial statements for the 2010
fiscal year are complete, the City will submit its required report on
the deficits together with such financial statements to the State
Comptroller so he can verify the amount of such deficits. It may be
necessary to borrow up to $3,000,000 in addition to the previous


$12,000,000 to finance the entire authorized amount, therefore any
achievable savings on interim financing will help the City finance
such deficits in the most cost-effective manner.

LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately.