New York Laws
Title 4 - Dormitory Authority
1689 - Board of Cooperative Educational Services School Facilities.

(1) pledging all or any part of the moneys, income or revenues of the
lessee or other personal property of the lessee, to secure payments
required under the terms of such lease;
(2) the setting aside of reserves and the creation of special funds
and the regulation and disposition thereof;
(3) the procedure, if any, by which the terms of such lease may be
amended, the amount of bonds the holders of which must consent thereto,
and the manner in which such consent may be given;
(4) vesting in a trustee or trustees such specified properties,
rights, powers and duties as shall be deemed necessary or desirable for
the security of the holders of the bonds of the authority issued for
such board of cooperative educational services school facilities;
(5) the obligations of the lessee with respect to the replacement,
reconstruction, maintenance, operations, repairs and insurance of such
board of cooperative educational services school facilities;
(6) defining the acts or omissions to act which shall constitute a
default in the obligations and duties of the lessee, and providing for
the rights and remedies of the authority and of its bondholders in the
event of such default;
(7) any other matters, of like or different character, which may be
deemed necessary or desirable for the security or protection of the
authority or the holders of its bonds.
3. Whenever the authority under the provisions of this section
undertakes to construct or otherwise provide a board of cooperative
educational services school facility and to lease the same to a board of
cooperative educational services, such lease shall be the general
obligation of the board and any successor thereto. Such lessee shall be
responsible for the direct costs of operation, maintenance, repair and
replacement of such board of cooperative educational services school
facility, and in addition shall be responsible for the over-all
supervision of each board of cooperative educational services school
facility, for the overhead and general administrative costs of the
lessee which are incurred because of such board of cooperative
educational services school facility and for the integration of the
operation of each such board of cooperative educational services school
facility into the lessee's educational program.
4. All the provisions of this title four not inconsistent with the
provisions of this section sixteen hundred eighty-nine shall be
applicable with respect to any bonds of the authority issued to obtain
funds for any purpose authorized under this section sixteen hundred
eighty-nine and with respect to the powers of the authority hereunder.
5. To obtain funds for the purposes of this section, the authority
shall have power from time to time to issue negotiable bonds or notes of
the authority. Unless the context shall clearly indicate otherwise
whenever the words "bond" or "bonds" are used in this section, such
words shall include a note or notes of the authority.
6. Any pledge of or other security interest in moneys, earnings,
income, revenues, accounts, contract rights, general intangibles or
other personal property made or created by the authority shall be valid,
binding and perfected from the time when such pledge or other security
interest attaches, without any physical delivery of the collateral or
further act. The lien of any such pledge or other security interest
shall be valid, binding and perfected as against all parties having
claims of any kind in tort, contract or otherwise against the authority
irrespective of whether or not such parties have notice thereof. No
instrument by which such a pledge or other security interest is created
nor any financing statement need be recorded or filed. This subdivision
shall apply notwithstanding the provisions of the uniform commercial
code.
7. Whenever the authority undertakes under the provisions of this
section to construct, acquire, reconstruct, rehabilitate and improve,

and furnish and equip or otherwise provide a board of cooperative
educational services school facility, each board of cooperative
educational services in connection with which such board of cooperative
educational services school facility is built is authorized to assign
and pledge to the authority a sufficient portion of any and all public
funds to be apportioned or otherwise to be made payable by the state of
New York to the board of cooperative educational services to cover the
payments required under the lease between the authority and the board of
cooperative educational services. All state and local officials
concerned are hereby authorized to apportion and pay all such funds so
assigned and pledged to the authority. Such assignment and pledge by any
board of cooperative educational services shall be irrevocable and shall
continue until the date on which the liabilities of the authority and
any such board of cooperative educational services school facilities
have been discharged and the bonds of the authority issued therefor have
been paid or such bonds have otherwise been discharged.
8. No board of cooperative educational services school facility shall
be constructed or otherwise provided by the authority under the
provisions of this section unless approved by the voters of the board of
cooperative educational services and unless any and all necessary
approvals of the commissioner of education under section four hundred
eight of the education law have been obtained.
9. Any payment required to be made by a board of cooperative
educational services to the authority shall be deemed an administrative
or capital expense within the meaning of section nineteen hundred fifty
of the education law.
10. a. The total amount payable annually to the authority by a board
shall be certified by the authority to the commissioner of education and
the authority shall annually prepare and certify to the commissioner of
education a statement of the total amount necessary to be paid by all
boards of cooperative educational services for the ensuing school year.
b. The commissioner of education shall include in the certificate
which he files with the state comptroller showing the amount of state
funds apportioned to the board of cooperative educational services a
statement showing the amount to be owed by the board to the authority
for the ensuing school year.
c. The comptroller shall deduct from any state funds to become due to
any such board of cooperative educational services an amount equal to
the amount required to be paid by such board to the authority as shown
by the certificate of the commissioner of education filed with the
comptroller as required by paragraph b of this subdivision.
d. The state of New York hereby covenants with the purchasers, holders
and owners from time to time of the bonds of the authority that it will
not repeal, revoke, rescind, modify or amend the provisions of this
subdivision ten so as to limit, impair or impede the rights and remedies
granted hereby or otherwise diminish the security pledged to such
purchasers, holders and owners or significantly impair the prospect of
payment of any such bond, nor shall any lien or charge on or pledge,
assignment, diversion, withholding, payment or other use of or deduction
from any state funds due or to become due or appropriated to or to be
appropriated to or to be apportioned and paid to any board of
cooperative educational services be created which is prior in time or
superior in right to the deduction required by paragraph c of this
subdivision; provided, however, that nothing herein contained shall be
deemed or construed as requiring the state to continue the payment of
the state aid or assistance to any board of cooperative educational
services or as limiting or prohibiting the state from repealing or
amending any law theretofore or hereafter enacted providing for the

payment or apportionment of state aid to a board of cooperative
educational services or the manner, time or amount thereof.
11. In the event that the amount paid to the authority pursuant to the
provisions of subdivision ten of this section is insufficient to meet
any payment required by the board of cooperative educational services to
the authority any such amount still due and owing shall be paid directly
to the authority by the board.
12. (a) After: (i) a proposition has been approved by the voters of a
board of cooperative educational services for the construction or
providing by the authority of a board of cooperative educational
services school facility or facilities and any and all necessary
approvals of the commissioner of education have been obtained, all as
provided by subdivision eight of this section; (ii) an agreement and a
lease have been executed by and between such board of cooperative
educational services and the dormitory authority relating to the
construction or otherwise providing of such board of cooperative
educational services school facility or facilities, the leasing thereof
by the dormitory authority to such board of cooperative educational
services and the financing thereof by the dormitory authority by the
issuance of its obligations; and (iii) the dormitory authority has
adopted its resolution authorizing obligations of the dormitory
authority for such purpose, the dormitory authority may determine to
provide that the validity of such agreement, lease, resolution of the
authority authorizing the issuance of obligations and the obligations
authorized and issued pursuant thereto may be contested only if:
1. Such agreement, lease, resolution and the obligations to be issued
pursuant to such resolution are authorized for a board of cooperative
educational services school facility or facilities for which the board
of cooperative educational services and the dormitory authority are not
authorized to execute an agreement and a lease or for which the
dormitory authority is not authorized to issue obligations, or
2. The provisions of law which should be complied with at the date of
the publication of the notice hereinafter provided for, are not
substantially complied with, and an action, suit or proceeding
contesting such validity is commenced within twenty days after the date
of such publication, or
3. Such obligations are authorized in violation of the provisions of
the constitution.
(b) If the dormitory authority shall determine to utilize the
provisions of this subdivision, the dormitory authority shall publish or
shall cause a notice to be published in the manner hereinafter provided,
which notice shall be in substantially the following form:
The (here insert the name of the board of cooperative educational
services) and the dormitory authority of the state of New York have
entered into an agreement dated as of the ----- day of -----, 19---, and
a lease dated as of the ----- day of -----, 19---, and the dormitory
authority has adopted a resolution on the ----- day of -----, 19---, and
the validity of such agreement, lease, resolution and the obligations
issued pursuant thereto may be hereafter contested only if such
agreement, lease, resolution and the obligations issued pursuant thereto
were authorized for a board of cooperative educational services school
facility or facilities for which such board of cooperative educational
services and the dormitory authority are not authorized to enter into an
agreement, lease and for which the dormitory authority is not authorized
to issue such obligations or if the provisions of law which should have
been complied with as of the date of publication of this notice were not
substantially complied with, and an action, suit or proceeding
contesting such validity is commenced within twenty days after the date

of publication of this notice, or such obligations were authorized in
violation of the provisions of the constitution.
By such agreement and lease such board of cooperative educational
services and the dormitory authority have agreed that the dormitory
authority shall provide the board of cooperative educational services
school facility or facilities described therein, that the dormitory
authority shall lease the same to such board of cooperative educational
services, which board of cooperative educational services shall pay
annual rentals as agreed upon in such lease sufficient to pay the
principal of and interest on the obligations of the authority issued to
finance such facility or facilities, the amounts required by such
resolution to establish and maintain the reserve funds, if any, required
by such resolution, any expenditures of the authority for insurance,
fees and expenses of auditing and fees and expenses of the trustee, all
as required by the resolution, all other expenditures reasonably and
necessarily incurred by the authority by reason of its ownership,
financing and leasing of the project and the annual administrative fee
payable to the authority. Such resolution authorizes an issue of $-----
obligations of the authority, which amount is equal to the sum of: (i)
the estimated cost of construction and equipment of such board of
cooperative educational services school facility or facilities after
first deducting federal grants-in-aid to be received; (ii) the amount
required by the authority, if any, to be paid to reserve funds created
by the resolution of the authority authorizing the bonds; and (iii) the
amounts required to make payments for legal, financing, administrative
and other costs and expenses of the authority in connection with such
board of cooperative educational services school facilities and the
financing thereof.
Executed counterparts of such agreement and lease and a certified copy
of the resolution of the dormitory authority authorizing such
obligations are on file in the office of the clerk of such board of
cooperative educational services at (here insert the address of the
office of such clerk) and at the office of the dormitory authority (here
insert the address of such office) and such documents may be inspected
at either of said offices during regular business hours.
DORMITORY AUTHORITY OF THE STATE OF
NEW YORK and (here insert the name of the
board of cooperative educational services)
(c) The notice described in subparagraph (b) of this subdivision shall
be published once in each of two newspapers, if there shall be two, or
in one newspaper, if there shall be but one, having general circulation
within the board of cooperative educational services, but if no
newspaper shall then have general circulation therein, such notice shall
be posted in at least twenty of the most public places in said board of
cooperative educational services.
(d) After the publication of such notice, the validity of the
obligations authorized thereby may be contested only if:
1. Such agreement, lease, resolution of the dormitory authority
authorizing the obligations, and the obligations of the dormitory
authority were authorized for a board of cooperative educational
services school facility or facilities for which such board of
cooperative educational services and the dormitory authority were not
authorized to execute an agreement and a lease or for which the
dormitory authority is not authorized to issue obligations, or
2. The provisions of law which should be complied with at the date of
publication of the notice hereinabove provided for, are not
substantially complied with, and an action, suit or proceeding

contesting such validity is commenced within twenty days after the date
of such publication, or
3. Such obligations are authorized in violation of the provisions of
the constitution.
(e) If an action, suit or proceeding contesting the validity of such
agreement, lease, resolution authorizing the obligations or the
obligations authorized thereby is commenced within twenty days from the
date of publication of such notice, the court in which such action, suit
or proceeding is commenced shall determine whether or not such
agreement, lease, resolution and obligations were authorized for a board
of cooperative educational services school facility or facilities for
which the board of cooperative educational services and the dormitory
authority were authorized to enter into an agreement and a lease and for
which the authority was authorized to issue obligations or the
provisions of law which should have been complied with were
substantially complied with. The court may determine that the provisions
of law which should have been complied with were substantially complied
with if:
1. The aggregate amount of obligations authorized does not exceed an
amount equal to the sum of; (i) the estimated cost of construction and
equipment of such a board of cooperative educational services school
facility or facilities after first deducting federal grants-in-aid to be
received; (ii) the amount, if any, required by the authority by the
resolution to be paid to reserve funds created by the resolution of the
authority authorizing the obligations; and (iii) the amounts estimated
by the authority to be required to make payments for legal, financing,
administrative and other costs and expenses of the authority in
connection with the providing of the facilities and the financing
thereof.
2. Such agreement and lease were executed after a proposition
authorizing the same had been submitted to and approved by a majority of
the duly qualified voters of such board of cooperative educational
services.
(f) Such determination of the court as described in subparagraph (e)
hereof may be arrived at notwithstanding any irregularity or failure to
observe a technicality in:
1. The form of such proposition approved by the duly qualified voters
of such board of cooperative educational services.
2. The notice of the meeting at which such proposition was submitted.
3. The time or manner of the publication of such notice.
4. The conduct of the meeting at which such proposition was adopted.
5. Like matters in such proceedings.
(g) If the dormitory authority shall have utilized the provisions of
this subdivision, the obligations of the authority issued pursuant to
the resolution authorizing the same shall contain a recital
substantially to the effect that the procedure for the validation of
such bonds set forth in this section have been complied with and such
recital shall bind the board of cooperative educational services and the
dormitory authority, and twenty days after such notice shall have been
published and after such obligations have been purchased in good faith
and for fair value by any person, the validity of such agreement, lease,
resolution and of the obligations issued pursuant to such resolution
shall not be questioned by such board of cooperative educational
services or by any taxpayer thereof in any court.
(h) If the dormitory authority and such board of cooperative
educational services shall deem it necessary to increase the amount of
obligations of the authority to be issued in connection with the
construction or providing of a board of cooperative educational services

school facility or facilities and shall have authorized the issuance of
such additional obligations by the execution of a supplemental agreement
and a supplemental lease between the dormitory authority and such board
of cooperative educational services and the authority has adopted a
supplemental resolution authorizing such additional obligations, the
provisions of this subdivision also shall be applicable to such
supplemental agreement, supplemental lease, supplemental resolution and
additional obligations authorized and issued pursuant thereto.
13. No authorization given by the voters of a board of cooperative
educational services prior to April first, nineteen hundred seventy-six
of a lease or other agreement with the authority in connection with the
provision of a board of cooperative educational services school facility
shall be held invalid by reason of any irregularity or failure to
observe a technicality in:
a. The form of such proposition approved by the duly qualified voters
of such board of cooperative educational services,
b. The notice of the meeting at which such proposition was submitted,
c. The time or manner of the publication of such notice,
d. The conduct of the meeting at which such proposition was adopted,
e. Like matters in such proceedings, in any action or proceeding
commenced more than two years after the date of approval by such voters
of the proposition authorizing such lease or other agreement. The
foregoing limitation shall not be construed as extending any limitation
period otherwise provided by law or authorizing any action or
proceeding.

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