§ 54.90 Issuance of bonds or notes with variable rates of interest. a.
Whenever in the judgment of the finance board the interest of a
municipality would be served thereby, the municipality may issue bonds
or notes, on or before July fifteenth, two thousand twenty-four, with
interest rates that vary in accordance with a formula or procedure and
are subject to a maximum rate of interest set forth or referred to in
the bonds or notes and may provide the holders thereof with such rights
to require the municipality or other persons to purchase such bonds or
notes or renewals thereof from the proceeds of the resale thereof or
otherwise from time to time prior to the final maturity of such bonds or
notes as the finance board may determine and the municipality may
resell, at any time prior to final maturity, any such bonds or notes
acquired as a result of the exercise of such rights; provided, however,
that at no time shall the total principal amount of bonds and notes
issued pursuant to this paragraph (other than bonds and notes bearing
interest at rates and for periods of time that are specified at
issuance) exceed ten percent of the limit prescribed by section 104.00
of this article.

Notwithstanding the foregoing, the holders of bonds or notes sold
pursuant to this paragraph shall not be provided with the right to
require the municipality or other persons to repurchase the bonds or
notes prior to the final maturity thereof unless the municipality has
entered into one or more letter of credit agreements or liquidity
facility agreements for the express purpose of such sale, which
agreements the municipality is hereby authorized to enter into, and
which shall require a financially responsible party or parties to the
agreement or agreements, as defined by section 2.00 of this chapter,
other than the municipality to purchase all or any portion of such bonds
or notes tendered by the holders thereof for repurchase prior to the
final maturity of such bonds or notes until such time as the right of
the holders of such bonds or notes to require repurchase of such bonds
or notes prior to the final maturity thereof shall cease.

Notwithstanding the foregoing, whenever in the judgment of the finance
board of the city of New York the interest of such city would be served
thereby, the city of New York may without further approval issue bonds
or notes, on or before July fifteenth, two thousand twenty-four, with
interest rates that vary in accordance with a formula or procedure and
are subject to a maximum rate of interest set forth or referred to in
the bonds or notes and may provide the holders thereof with such rights
to require the city or other persons to purchase such bonds or notes or
renewals thereof from the proceeds of the resale thereof or otherwise
from time to time prior to the final maturity of such bonds or notes as
the finance board of the city of New York may determine and the city may
resell, at any time prior to final maturity, any such bonds or notes
acquired as a result of the exercise of such rights; provided, however,
that at no time shall the total principal amount of bonds and notes
issued by the city of New York pursuant to this paragraph (other than
bonds and notes (1) bearing interest at rates and for periods of time
that are specified without reference to future events or contingencies,
or (2) described in section 136.00 of this article) exceed twenty-five
percent of the limit prescribed by section 104.00 of this article.

b. To facilitate the marketing of any issue of bonds and notes issued
pursuant to this section, such municipality may, notwithstanding any
limitation on private sale of bonds and notes provided by law, and
subject to rules promulgated by the state comptroller governing such
sales: (i) arrange for the underwriting of such bonds and notes at
private sale through negotiated agreement, compensation for such
underwriting to be provided by negotiated fee or by sale of such bonds
and notes to an underwriter at a price of less than the sum of par value
of, and accrued interest on, such obligations; or (ii) arrange for the
private sale of such bonds and notes through negotiated agreement,
compensation for such sale to be provided by negotiated fee, if
required. The cost of such underwriting or private placement shall be
deemed a preliminary cost for the purposes of section 11.00 of this
chapter.

c. The finance board of such municipality is hereby authorized and
empowered, in conformance with paragraphs c through g of section 168.00
of this chapter, to enter into such agreements as it deems reasonable
and appropriate to facilitate the issuance, sale, resale and repurchase
of such bonds and notes, including but not limited to agreements with
financially responsible third parties for the remarketing or repurchase
of such bonds and notes in accordance with terms and conditions
determined by such finance board, provided, however, that no such
agreement shall cause or have the effect of causing any annual principal
installment of an issue of serial bonds to be more than fifty per centum
in excess of the smallest prior installment unless the finance board has
determined to provide for substantially level or declining annual debt
service payments in accordance with paragraph d of section 21.00 of this
chapter, in which case no such agreement shall cause or have the effect
of causing any annual principal installment of an issue to vary from the
amounts determined by the finance board to be required to comply with
such paragraph at the time of issuance of the bonds or notes. The
finance board may, by resolution, delegate its power to contract
pursuant to this section to the chief fiscal officer, as defined in
section 2.00 of this chapter, of such public body in which event the
chief fiscal officer shall exercise such power until the finance board,
by resolution, shall elect to reassume the same. For purposes of this
section, the finance board of the city of New York shall mean the mayor
and the city comptroller.

d. 1. On or before July fifteenth, two thousand twenty-four the mayor
and comptroller of the city of New York may:

(i) enter into interest rate exchange or similar agreements with any
person under such terms and conditions as the mayor and comptroller may
determine, including provisions as to default or early termination and
indemnification by the city or any other party thereto for loss of
benefits as a result thereof;

(ii) procure insurance, letters of credit or other credit enhancement
with respect to such agreements;

(iii) provide security for the payment or performance of its
obligations with respect to agreements described in item (i) of this
subdivision from such sources and with the same effect as is authorized
by applicable law with respect to security for its bonds, notes or other
obligations, provided, however, that any payment or performance of
obligations with respect to agreements described in item (i) of this
subdivision in connection with debt obligations which carry the full
faith and credit of the city shall be subject to appropriation; and

(iv) modify, amend, or replace such agreements.

2. For the purposes of this paragraph:

(i) "Interest rate exchange or similar agreement" shall mean a written
contract entered into in connection with the issuance of city debt, or
in connection with such city debt already outstanding, with a
counterparty to provide for an exchange of payments based upon fixed
and/or variable interest rates, and shall be for exchanges in currency
of the United States of America only.

(ii) "Excluded agreements" shall mean the total notional amount of
interest rate exchange or similar agreements entered into for the
purpose of reducing or eliminating a situation of risk or exposure under
an existing interest rate exchange or similar agreement, including, but
not limited to a counterparty downgrade, default, or other actual or
potential economic loss.

(iii) Interest rate exchange; limitations. Any interest rate exchange
or similar agreements entered into pursuant to item (i) of subdivision
one of this paragraph shall be subject to the following limitations:

(A) the counterparty thereto shall have credit ratings from at least
one nationally recognized statistical rating agency that is within the
two highest investment grade categories and ratings which are obtained
from any other nationally recognized statistical rating agencies shall
also be within the three highest investment grade categories, or the
payment obligations of the counterparty shall be unconditionally
guaranteed by an entity with such credit ratings;

(B) the written contract shall require that should the rating: (I) of
the counterparty, if its payment obligations are not unconditionally
guaranteed by another entity, or (II) of the entity unconditionally
guaranteeing its payment obligations, if so secured, fall below the
rating required by clause (A) of this item, that the obligations of such
counterparty shall be fully and continuously collateralized by direct
obligations of, or obligations the principal and interest on which are
guaranteed by, the United States of America, or any agency thereof with
a net market value of at least one hundred two percent of the net market
value of the contract to the authorized issuer and such collateral shall
be deposited with the authorized issuer or an agent thereof;

(C) the total notional amount of all interest rate exchange or similar
agreements shall not exceed an amount equal to twenty-five percent of
the limit prescribed by section 104.00 of this chapter; provided,
however, that such total notional amount shall not include any excluded
agreements;

(D) no interest rate exchange or similar agreement shall have a
maturity exceeding the maturity of related city debt; and

(E) each interest rate exchange or similar agreement shall be subject
to an independent finding that its terms and conditions reflect a fair
market value of such agreement as of the date of its execution,
regardless of whether such agreement was solicited on a competitive or
negotiated basis.

3. (i) Prior to authorizing the approval of any contract for interest
rate exchange or similar agreement pursuant to subdivision one of this
paragraph, the finance board of the city shall adopt guidelines for the
use of interest rate exchange or similar agreements which shall include,
but not be limited to the following:

(A) the conditions under which such contracts can be entered into;

(B) the methods by which such contracts are to be solicited and
procured;

(C) the form and content such contracts shall take;

(D) the aspects of risk exposure associated with such contracts;

(E) standards and procedures for counterparty selection;

(F) standards for the procurement of credit enhancement, liquidity
facilities, or the setting aside of reserves in connection with such
contracts consistent with the limitations of section 168.00 of this
chapter;

(G) provisions for collateralization or other requirements for
securing the financial interest in such contracts;

(H) the long-term implications associated with entering into such
agreements, such as costs of borrowing, historical trends, use of
capacity for variable rate bonds and related credit enhancements, and
any potential impact on the future ability to call bonds, including
opportunities to refund related debt obligations, and similar
considerations;

(I) the methods to be used to reflect such contracts in the city's
financial statements;

(J) financial monitoring and periodic assessment of such contracts by
the city; and

(K) such other matters relating thereto as the finance board shall
deem necessary and proper.

(ii) The city shall issue a quarterly report to the director of the
budget, the chairs of the senate finance committee and the assembly ways
and means committee, and the state comptroller, on or before the
fifteenth day of each month following the end of each such quarter in
which it enters into or continues to be a party to a contract for
interest rate exchange or similar agreement, which shall list all such
contracts entered into pursuant to this section and shall include, but
not be limited to, the following information for each such contract, as
applicable:

(A) a description of the contract, including a summary of the terms
and conditions, rates, maturity, the estimated market value of each
agreement, and other provisions thereof and the method of procurement;

(B) any amounts which were required to be paid and received, and any
amounts which actually were paid and received thereunder;

(C) any credit enhancement, liquidity facility or reserves associated
therewith including an accounting of all costs and expenses incurred,
whether or not in conjunction with the procurement of credit enhancement
or liquidity facilities;

(D) a description of each counterparty;

(E) an assessment of the counterparty risk, termination risk, and
other risks associated therewith; and

(F) such report shall include a copy of the guidelines required by
item (i) of this subdivision in the quarter after they are adopted or
subsequently modified.