§ 3058. Conditions on extension of benefits to the city. The
corporation shall, at the time of any exchange of the corporation's
bonds and notes for obligations of the city pursuant to subdivision two
of section three thousand fifty-five of this title or any payment of
funds of the corporation to the city or of any purchase from the city of
its obligations pursuant to section three thousand fifty-seven of this
title, require the city to agree to observe and perform the conditions
set forth below in this section, with such limitations as to the
implementation of such conditions as the corporation may, subject to any
contract with bondholders or noteholders, then approve; provided,
however, that no such specific limitations shall be so substantial as to
effectively constitute a waiver of any such conditions. Any such
conditions may thereafter, in the discretion of the corporation, subject
to any contract with bondholders or noteholders, be further limited.
Such conditions shall cease to apply when all notes and bonds have been
repaid or when the corporation has accumulated in its bond reserve funds
or otherwise an amount equal to the principal of all outstanding notes
and bonds and interest accrued thereon. The city shall have the right at
any time to pay the corporation an amount which, when added to the bond
reserve funds, shall equal the principal of all outstanding notes and
bonds and interest accrued thereon and redemption premium if any. If the
city makes such payment at a time when the corporation has outstanding
notes or bonds that are not then callable, the city shall agree to pay
the corporation on demand an amount equal to the amount, if any, by
which the amount of interest on such notes or bonds shall exceed the
corporation's income from the investment of its funds. Subject to the
foregoing, the conditions that the corporation shall require the city to
observe and perform shall be as follows:

1. The city shall deliver a certificate, executed by the chief
executive officer in form prescribed by the corporation, (a)
representing that the city is in compliance with the conditions
described below in this section as the corporation may specify, (b)
undertaking to comply with any of such specified conditions as the
corporation may then require, and (c) stating that all local legislative
and executive action then required to permit such compliance by the city
has been taken. The corporation may require the delivery with such
certificate of an opinion of the city's corporation counsel that all
such legislative and executive action has been taken.

2. For the fiscal year ending December thirty-first, nineteen hundred
ninety-six, and for each fiscal year thereafter, the city's budgets
shall be prepared in accordance with the provisions of chapter seven
hundred twenty-one of the laws of nineteen hundred ninety-four, as
amended from time to time.

3. Each fiscal year the city shall take such action as may be
necessary to enable an independent certified public accounting firm
selected and retained by the city at its cost to perform an annual audit
and to furnish to the corporation an annual report upon the financial
statements of the city. Each such report shall be prepared in accordance
with the generally accepted accounting principles. The city shall make
available for inspection and copying all books, records, work papers and
other data and material as required by the independent certified public
accounting firm conducting such audit and the city shall make its
officers and employees available to and shall cooperate with such
auditors so as to permit such annual audit to be completed and the
report issued to the city and to the corporation within one hundred
twenty days after the close of the fiscal year. Such report shall be
made available to the public promptly thereafter.

4. Beginning with the fiscal year ending December thirty-first,
nineteen hundred ninety-six and for each fiscal year thereafter, the
city shall deliver its proposed budgets to the corporation. Delivery to
the corporation shall be made concurrently with the initial submission
of the proposed budgets to the city council, but in any event not later
than fifty days prior to the beginning of such fiscal year or such other
date as the corporation may approve upon the request of the city. The
proposed budgets submitted to the corporation shall be prepared in
accordance with the accounting methods referred to in subdivision three
of this section. Such budgets shall be identical to the proposed budgets
submitted to the city council. The proposed budgets delivered to the
corporation shall be accompanied by (i) a statement setting forth in
detail the assumptions of income and expense used in preparation, and
(ii) a certificate of the chief executive officer stating that such
assumptions are reasonable and that operation within the budgets is
feasible. Subject to and in accordance with the provisions of chapter
seven hundred twenty-one of the laws of nineteen hundred ninety-four, as
the same may be amended from time to time, the city shall in every
fiscal year adopt and maintain budgets in which the total of all revenue
items equals or exceeds the total of all expenditure items.

5. If after the adoption of the budgets for any fiscal year, any
increase therein, or an increase in total expenditures shall be
proposed, the chief executive officer shall cause such proposal to be
submitted to the corporation concurrently with its submission to the
city council, together with a statement of the source of current
revenues or other identifiable and currently available funds required
for the payment of such additional amounts.

6. Commencing at such time as the corporation may specify, but not
later than February first, nineteen hundred ninety-six, the city budget
director shall deliver to the corporation, not less than thirty days
before each fiscal quarter (except, within thirty days after the
commencement of the first fiscal quarter), an expenditure plan to
implement the city budgets for such fiscal quarter and within amounts
based on current income or other identifiable and currently available
funds. The city budget director shall deliver to the corporation within
thirty days after the end of each such fiscal quarter covered by an
expenditure plan, an operations report reflecting results of city
operations for such fiscal quarter and whether the city has operated
within the related expenditure plan. Each expenditure plan and
operations report shall be in such form as the corporation may specify
and shall be certified by the city budget director and shall detail and
report upon action taken by the city to maintain balanced budgets.

7. The city shall comply in all material respects with the expenditure
limitations in its budgets as adopted or modified in accordance with
subdivisions four and five of this section, and with chapter seven
hundred twenty-one of the laws of nineteen hundred ninety-four, as the
same may from time to time be amended.