Relates to EFC financing and the town of Cairo

BILL NUMBER:S6910

Title of bill

An act to legalize, validate, ratify and confirm certain actions taken by the town of Cairo, Greene county, New York, with respect to obligations heretofore issued, and authorizing the issuance of obligations of said town with respect thereto

Purpose or general idea of bill

This legislation is intended to provide legislative relief by validating and ratifying the Town of Cairo's actions with respect to a bond anticipation note and renewals thereof, notwithstanding the fact that the Town did not make a principal payment in 2011 or 2012, as required by Section 23.00 of the local finance law.

Summary of specific provisions

Section one outlines the history of the bond resolutions adopted by the Town of Cairo, a bond anticipation note and renewal thereof, and a prior principal payment made on such note in 2010 by the Town, issued to finance the construction of certain improvements to their sewer plant and sewer system.

Section two provides that such notes are validated, ratified and confirmed.

Section three provides that the bond shall be issued in all other respects, in accordance with provisions of the Local Finance Law.

Section four provides standard protections so that if a court invalidates any part of this act, it does not invalidate the entire act.

Section five provides for an immediate effective date.

Justification

The Town of Cairo adopted its bond resolutions authorizing the aggregate issuance of $2,915,000 obligations under the Local Finance Law in anticipation of financing the cost of improvements to its wastewater treatment plant and system.

Pursuant to such bond resolutions, the Town of Cairo issued a bond anticipation note on December 24, 2008 in the principal amount of $750,000.00, renewed such note on December 24, 2009 and December 23, 2010, and made a principal payment of $29,285 on said bond anticipation note on December 24, 2010 and also obtained short term financing through the New York State Environmental Facilities Corporation (EFC) on September 29, 2011 in the maximum aggregate amount of $2,885,715.00, which refinanced the outstanding principal balance of said bond anticipation note of $720,715.

Section 23.00 of Local Finance Law requires an initial principal payment to be made within two years from the original issuance date of the bond anticipation note of December 24, 2008 and additional principal payments to be made prior to the termination of each twelve months' period succeeding the initial principal payment.

While the Town made a principal payment in 2013, the Town did not make the required principal payments in 2011 and 2012 towards the note held by EFC that refinanced the original bond anticipation note in accordance with the provisions of Section 23.00.

Section 21.00 of the local finance law also requires that no annual installment of bonds on bond anticipation notes shall be more than fifty per centum of the smallest prior installment, except that the municipality may determine to provide for substantially level or declining annual debt service. This bill is needed to provide legislative relief by validating and ratifying the Town's actions with respect to timing and amount of the principal payments on the note. The legislation is needed in order to allow the Town to obtain permanent financing from EFC to refund the subject note.

Prior legislative history

New bill.

Fiscal implications for state and local governments

None to the State.

Effective date

This act shall take effect immediately.