Enacts the "City of Dunkirk Revenue Anticipation Note Refinancing Act"; makes an appropriation therefor

◆ The sponsor's argument

Why Andrew Gounardes says this is needed

Without financial assistance from the State, the city of Dunkirk is likely unable to meet its obligation to repay a $12.7 million principal revenue anticipation note, which has a due date of July 24, 2025. A potential default may have significant negative financial implications for the City as well as the taxpayers of New York State. This bill would impose a seven and half (7.5) percent rate of annual interest on the amount of the loan utilized. This matches the rate most recently received by the City in the credit markets when it issued last year the revenue anticipation in question - effectively continuing the existing debt until the deficit financing authorization can be accessed. For local governments previously experiencing severe financial difficul- ty, the State Legislature has implemented various oversight and relief mechanisms, including authorizing deficit financing and control boards. Part DD of Chapter 56 of the Laws of 2024 authorized the city of Dunkirk to issue deficit financing bonds with a term of 15 years for accumulated deficits through 2025 totaling up to $18.5 million. However, the City is presently unable to issue such bonds to repay the Revenue Anticipation Note in question. This loan would serve a similar purpose until the City is able to so issue. Section nine of part A of this bill provides that the City shall comply with the oversight requirements set forth in the Dunkirk Fiscal Recovery Act as long as the State loan is outstanding. These requirements include many which may be similar to those required by a control board: *Preparation and reporting to State parties by the City treasurer, with- in thirty days of each quarter end, of quarterly summaries of budget variances and trial balances prepared in accordance with the uniform system of accounts prescribed by the State Comptroller, accompanied by recommendations from the City fiscal affairs officer setting forth any remedial action necessary (section seven); *Budget review and recommendations by the State Comptroller, including the requirement that the City Council shall review and make adjustments to the proposed budget consistent with any recommendations made by the. State Comptroller (section eight); *Preparation and submission to State parties by the City fiscal affairs officer of a three-year multiyear financial plan containing, at a mini- mum, projected employment levels, projected annual expenditures for personal service, fringe benefits, non-personal services and debt service, appropriate reserve fund amounts, estimated annual revenues including projection of property tax rates, the value of the taxable real property and resulting tax levy, annual growth in sales tax and non-property tax revenues, and the proposed use of one-time revenue sources. The financial plan also must identify actions necessary to achieve and maintain long-term fiscal stability, including, but not limited to, improved management practices, initiatives to minimize or reduce operating expenses, and potential shared services agreements with other municipalities (section nine); *Notification to and comment by the State Comptroller prior to the issu- ance of any further debt issuance or installment purchase contract, with such comments to include recommendations regarding the affordability to the City (section ten). Control boards have been authorized for the counties of Nassau and Erie, and the cities of Buffalo and New York. First and foremost, implementing a control board would not avert a likely default in July 2025, which is the impetus of this legislation. A control board would not be estab- lished in time and would not have a mechanism for repaying the revenue anticipation note in question. Also, each municipality with a control board is significantly larger in population and budget size than the city of Dunkirk, important elements for the feasibility of maintaining a board quorum (a board typically has seven members to ensure compliance with public authorities law

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.