* § 8. Development of the financial plan. 1. Pursuant to the
procedures contained in subdivision three of this section, each year the
city shall develop, and may from time to time modify, with the approval
of the board during a control period, a four year financial plan
covering the city and the covered organizations.

Each such financial plan and financial plan modification shall comply
with the requirements of subdivision four of this section and shall,
except as otherwise provided pursuant to subdivision two-a of this
section, conform to the following standards:

a. For its fiscal years ending June thirtieth, nineteen hundred
seventy-nine through June thirtieth, nineteen hundred eighty-one, the
city's budget covering all expenditures other than capital items shall
be prepared and balanced so that the results thereof would not show a
deficit when reported in accordance with the accounting principles set
forth in the state comptroller's uniform system of accounts for
municipalities, as the same may be modified by the comptroller, in
consultation with the city comptroller, for application to the city;
subject to the provision of subdivision four of section three thousand
thirty-eight of the public authorities law with respect to contributions
by the city or other public employer to any retirement system or pension
fund and subject to the provision of paragraph (c) of subdivision five
of section three thousand thirty-eight of the public authorities law
with respect to expense items included in the capital budget of the
city. For the fiscal year ending June thirtieth, nineteen hundred
eighty-two, and for each fiscal year thereafter, the city's budget
covering all expenditures other than capital items shall be prepared and
balanced so that the results thereof would not show a deficit when
reported in accordance with generally accepted accounting principles and
would permit comparison of the budget with the report of actual
financial results prepared in accordance with generally accepted
accounting principles. With respect to financial plans that include the
fiscal years ending June thirtieth, nineteen hundred seventy-nine
through June thirtieth, nineteen hundred eighty-one, the city's budget
covering all expenditures other than capital items shall be prepared in
accordance with generally accepted accounting principles and there shall
be substantial progress in each such fiscal year towards achieving a
city budget covering all expenditures other than capital items the
results of which would not show a deficit when reported in accordance
with generally accepted accounting principles. The city shall eliminate
expense items from its capital budget not later than the commencement of
the fiscal year ending June thirtieth, nineteen hundred eighty-two. For
the fiscal year ending June thirtieth, nineteen hundred eighty-nine, and
for each fiscal year thereafter, the budgets covering all expenditures
other than capital items of each of the covered organizations shall be
prepared and balanced so that the results thereof would not show a
deficit when reported in accordance with generally accepted accounting
principles; and for each fiscal year prior thereto, there shall be
substantial progress towards such goal. Notwithstanding the foregoing
and the provisions of any general or special state law or local law to
the contrary, including but not limited to the New York city charter:
(i) all costs that would be capital costs in accordance with generally
accepted accounting principles, but for the application of governmental
accounting standards board statement number forty-nine, shall be deemed
to be capital costs for purposes of this act and any other provision of
state or local law, including but not limited to the New York city
charter, relevant to the treatment of such costs; and (ii) the
determination as to the existence of a deficit pursuant to this act and
any other provision of state or local law, including but not limited to
the New York city charter, shall be made without regard to changes in
restricted fund balances, as defined by the governmental accounting
standards board, where restrictions in relation to such fund balances
are imposed by state or federal law or regulation, or otherwise by
private or governmental parties other than the city of New York, and
without regard to funds held in the health stabilization fund, the
school crossing guards health insurance fund, any revenue stabilization
fund established pursuant to section fifteen hundred twenty-eight of the
New York city charter and the management benefits fund established by
the city of New York. Deposits into any such revenue stabilization fund
shall be deemed to be expenses of such city in the fiscal year in which
such deposits are made, and withdrawals from such fund shall be deemed
to be revenues of such city in the year in which such withdrawals are
made; provided however, that surpluses of such city, whether accumulated
from fiscal years ending prior to the effective date of the chapter of
the laws of two thousand twenty that amended this paragraph or existing
at the close of any fiscal year ending after such effective date, shall
be deposited into such revenue stabilization fund as soon as
practicable, and such deposits shall not be deemed expenses of the city
in the fiscal year in which such deposits are made.

b. The limitations on its outstanding short-term obligations required
by subdivision nine of section three thousand thirty-eight of the public
authorities law and by section nine-b of this act shall be observed at
all times, as each is amended from time to time.

c. Provision shall be made for the payment in full of the debt service
on all bonds and notes of the city and the covered organizations (other
than notes held by the municipal assistance corporation for the city of
New York to the extent that such corporation has evidenced its intention
not to present such notes for payment during the fiscal year in which
the determination is made provided that such notes were held by such
corporation on June thirtieth, nineteen hundred seventy-eight or were
issued in exchange for or in refunding or renewal of notes held by such
corporation on such date), for the adequate funding of programs of the
city and the covered organizations which are mandated by state or
federal law and for which obligations are going to be incurred during
the fiscal year and for payment of a guarantee fee or any other amounts
required by the United States of America or any agency or
instrumentality thereof in connection with the guarantee of the payment
of the principal of or interest on bonds or notes issued by the city.

d. All projections of revenues and expenditures contained in a
financial plan shall be based on reasonable and appropriate assumptions
and methods of estimation. All cash flow projections shall be based upon
reasonable and appropriate assumptions as to sources and uses of cash
(including but not limited to the timing thereof), and shall provide for
operations of the city and covered organizations to be conducted within
the cash resources so projected.

e. The city shall provide a general reserve for each fiscal year to
cover potential reductions in its projected revenues or increases in its
projected expenditures during each such fiscal year. The amount provided
for such general reserve shall be estimated by the city in accordance
with paragraph d of this subdivision, but in no event shall it be less
than one hundred million dollars at the beginning of any fiscal year.

f. For financial plans beginning with the fiscal year ending June
thirtieth, nineteen hundred eighty-three or any succeeding fiscal year,
the first fiscal year included in any financial plan shall make
provision for the repayment of any deficit incurred by the city during
the preceding fiscal year.

2. In developing the financial plan the city shall seek to achieve a
stabilized work force for the city and, to the extent a reduction in the
work force is required, primary recourse shall be had to the attrition
process to accomplish such reduction.

2-a. The city and the board shall confer concerning the projected
effect on the budgets of the city and the covered organizations of any
change in generally accepted accounting principles, or change in the
application of generally accepted accounting principles to the city and
the covered organizations, made after the effective date of this act. If
the board determines that immediate compliance with such change will
have a material effect on such budgets over a time period insufficient
to accommodate the effect without a substantial adverse impact on the
delivery of essential services, the board may authorize and approve a
method of phasing the requirements of such change into such budgets over
such reasonably expeditious time period as the board deems appropriate.

3. The financial plan shall be developed and, during a control period,
shall be approved, and may from time to time be modified, in accordance
with the following procedures:

a. The city shall, by June first, nineteen hundred seventy-eight,
prepare and submit a financial plan to the board covering the four year
period which begins with the fiscal year ending June thirtieth, nineteen
hundred seventy-nine. Thereafter, at least fifty days prior to the
beginning of each fiscal year or on such other date as the board may
approve upon the request of the city, the city shall prepare and submit
a financial plan to the board covering the four year period beginning
with such fiscal year. On such dates the mayor shall also submit to the
board the city's executive expense, revenue and capital budgets for the
ensuing fiscal year and a certificate of the mayor stating that such
budgets are consistent with the financial plan submitted therewith, that
projections contained in the budgets and financial plan are based upon
reasonable and appropriate assumptions and methods of estimation, and
that operation within the budgets is feasible.

b. (i) During a control period the board shall promptly review each
financial plan and financial plan modification submitted by the city.
Not more than forty-five days after submission of a financial plan or
more than thirty days after submission of a financial plan modification
the board shall determine whether the financial plan or financial plan
modification is complete and complies with the standards set forth in
subdivision one of this section and shall approve or disapprove the
financial plan or financial plan modification in accordance with the
provisions of this section. If the board determines that the financial
plan or financial plan modification is complete and complies with the
standards set forth in subdivision one of this section, the board shall
approve the financial plan or financial plan modification. Upon making
such determination the board shall make a certification to the city
setting forth revenue estimates approved by the board in accordance with
such determination.

(ii) At all times other than during a control period the board shall
promptly review each financial plan and financial plan modification
submitted by the city. If the board determines after such review that
the financial plan or financial plan modification submitted by the city
is not in accordance with the standards set forth in subdivision one of
this section, the board shall promptly so notify the city and may take
such other action under this act as it deems appropriate.

c. The board shall disapprove a financial plan or financial plan
modification if during a control period it determines that the financial
plan or financial plan modification is incomplete or fails to comply
with the provisions of subdivision one of this section. In disapproving
a financial plan or a financial plan modification the board may order
that one or more of the following actions be taken:

(i) expenditures or reserves to assure availability of amounts
required for debt service requirements on all bonds and notes of the
city and the covered organizations or expenditures required for adequate
funding of programs of the city and the covered organizations mandated
by state or federal law and for which obligations are going to be
incurred during the fiscal year, be increased to the levels required to
provide for their payment in full;

(ii) the revenue projections (or any item thereof) during any period
be adjusted to comply with the standards set forth in subdivision one of
this section; and

(iii) the aggregate expenditures projected for any period be reduced
to conform to revenue estimates certified by the board in order to
comply with the standards set forth in subdivision one of this section.

d. During a control period in the event that the city shall, for any
reason, fail to submit a financial plan prior to the beginning of a
fiscal year, as required by paragraph a of this subdivision, or in the
event that the board has not, for any reason permitted under this act,
approved a financial plan submitted by the city prior to the beginning
of a fiscal year, the board shall formulate and adopt a financial plan
to be effective until the board approves a financial plan submitted by
the city. Any financial plan so formulated by the board shall comply
with the standards set forth in subdivision one of this section. The
budgets and operations of the city and the covered organizations at all
times shall be in conformance and compliance with the financial plan
then in effect.

e. After the initial adoption by the city, or the approval by the
board during a control period, of a financial plan, projections of
revenues and expenditures and other estimates contained in the financial
plan shall be reexamined by the board at least quarterly in consultation
with the city and the covered organizations, and during a control period
the city shall prepare and submit to the board financial plan
modifications at such times, in such detail and within such time periods
as the board may require in order to modify the financial plan to
conform to the standards set forth in subdivision one of this section.
During a control period in the event the board determines that (i)
revenue estimates (or any item thereof) must be adjusted to ensure
compliance with the standards set forth in subdivision one of this
section, or (ii) that the city or a covered organization is expending
funds at a rate that would cause expenditures to exceed the aggregate
expenditure limitation for the city or covered organization provided for
in the financial plan then in effect, prior to the expiration of the
fiscal year, the city shall submit a financial plan modification to
effect such adjustments in revenue estimates and reductions in total
expenditures as may be necessary to conform to such standards or
aggregate expenditure limitations. If during a control period the city
fails to submit such modification after such determination as to
adjustments in revenue estimates or such determination as to rates of
expenditures, or to submit a financial plan modification in the detail
or within the time period specified by the board, or if such
modification is disapproved by the board as not conforming to the
standards set forth in subdivision one of this section, the board may
formulate and adopt such financial plan modification as it deems
appropriate to ensure that the financial plan continues to meet such
standards. Such modification shall become effective on its adoption.
Notwithstanding the provisions of this section, in the event the city
shall determine that, due to unforeseen events during a fiscal year,
compliance with the standards set forth in paragraph a of subdivision
one of this section would result in a material adverse impact upon the
delivery of essential services, the city shall notify the board of such
determination, together with such information, projections or analyses
relating thereto as the board may require, and shall submit a
modification to the financial plan reflecting such determination. During
a control period the board shall disapprove any such modification unless
it finds that (i) the city's determination is supported by information,
projections and analyses which the board deems substantially accurate in
all material respects and (ii) such events, in its judgment, warrant
such modification to the financial plan to avoid such adverse impact on
the delivery of essential services.

f. The city may, from time to time, submit financial plan
modifications for review by the board. During a control period the board
shall approve such modifications unless it determines that such
modifications would constitute grounds for disapproval of the financial
plan pursuant to paragraph c of this subdivision, or if applicable,
pursuant to paragraph e of this subdivision.

g. Anything contained in this act to the contrary notwithstanding,
during a control period the board may at any time disapprove or after
consultation with the city revise the revenue estimates (or any item
thereof) prepared by the city in connection with the preparation of a
financial plan or any modification thereto and determined by the board
not to be based on assumptions and methods of estimation which are
reasonable and appropriate under the circumstances and in view of the
objectives and purposes of the act. The board may after consultation
with the city determine the estimated revenues of the city and the
covered organizations provided, however, that any revenues estimated by
the board shall be based on reasonable and appropriate assumptions and
methods of estimation.

4. Each financial plan shall be in such form and shall contain such
information for each year during which the financial plan is in effect
as the board may specify, and shall, in such detail as the board may
from time to time prescribe, include projections of all revenues,
expenditures and cash flows (including but not limited to projected
capital expenditures and debt issuances) and a schedule of projected
capital commitments of the city and except in such instances as the
board may deem appropriate each of the covered organizations. In
addition, each financial plan and financial plan modification shall
include a statement of the significant assumptions and methods of
estimation used in arriving at the projections contained therein, set
forth in such form and in such detail as the board may from time to time
prescribe.

5. The city and the covered organizations shall promptly furnish the
board with any information which the board may request to satisfy itself
that (i) projected employment levels, collective bargaining agreements
and other action relating to employee costs, capital construction and
such other matters as the board may specify, are consistent with the
provisions made for such costs in the financial plan, (ii) the city and
the covered organizations are taking whatever action is necessary with
respect to programs mandated by state and federal law to ensure that
expenditures for such programs are limited to and covered by the
expenditures stated in the financial plan, and (iii) adequate reserves
are provided to maintain programs mandated by state and federal law and
for which obligations are going to be incurred in the fiscal year and
other essential programs in the event revenues have been overestimated
or expenditures underestimated for any period.

6. For each financial plan and financial plan modification to be
prepared and submitted by the city to the board pursuant to the
provisions of this section, the covered organizations shall submit to
the city such information with respect to their projected expenditures,
revenues, cash flows and a schedule of projected capital commitments for
each year covered by such financial plan or modification as the city
shall determine. Notwithstanding any other provision of law limiting the
authority of the city with respect to any covered organization, the
city, in the preparation and submission of the financial plan and
modifications thereof, shall (except for debt service or for other
expenditures to the extent that such expenditures are required by law)
have the power to determine the aggregate expenditures to be allocated
to any covered organization in the financial plan and any modifications
thereto.

* Terminates July 1, 2008 or ... see § 13