N.Y. Comp. Codes R. & Regs. tit. 9 § 1646-3.2

Current through Register Vol. 46, No. 25, June 18, 2024

Section 1646-3.2 - Certificate of purposes

(a) General. The Certificate of Purposes (form DH-216) is a printed form supplied by the division and consists of three sheets. A specimen certificate of purposes is shown as Exhibit 3, 4 and 5 of Appendix S-11. The certificate of purposes supports the housing loan voucher and purports to show in accordance with the uniform classification of accounts, how the funds which are to be borrowed will be used by the local agency in the development of the project. The certificate of purposes, in addition, recapitulates how the funds previously borrowed were to be used, relates the breakdown of the anticipated uses of the previous and current borrowings to the most recent approved development cost budget (sheets 1 and 2) summarizes the development costs incurred and disbursed (sheet 2) and reconciles the latter to the development fund bank balances (sheet 3). Approval and payment of a requisition does not, however, constitute prior approval as to the disbursement of funds for the particular items set forth in the certificate of purposes, nor does it permit the disbursement of funds, in any manner except as provided by law and the contract for State aid.

(b) Instructions for the preparation of certificate of purposes. Detailed instructions for the preparation of the certificate of purposes will be found on sheet 3 of the certificate of purposes (Exhibit 5, Appendix S-11). Supplementary instructions follow:

(1) Account classification (column 1, sheets 1 and 2). Local agencies shall not include items and amounts on the untitled lines without first furnishing the division with a complete description of the nature of such items and receiving advice as to the approved classification.

(2) Requirements for the period of the requisition (column 3, sheets 1 and 2).

(i) The period of the requisition refers to the future period (in most cases, six months, but never in excess of one year) during which it is anticipated that the loan funds which are to be borrowed will be used. Where the loan funds are to be borrowed from sources other than the State, the period of the requisition must be the same as the term of the temporary loan note to be issued and the closing date of the period will be the date of maturity of the temporary loan note to be issued. Ordinarily, the term of a temporary loan note is six months. In some cases the term may be extended to one year with the prior approval of the division.

(ii) The amounts entered in column 3 should be to the nearest dollar, the cents being omitted, and the grand total of column 3 should be to the nearest $1,000.

(iii) A worksheet justifying the amounts to be entered in column 3 is shown as Exhibit 6 of Appendix S-11. The exhibit is not complete, but it indicates the recommended approach to preparing a certificate of purposes. The use of this worksheet will not only facilitate the preparation of the certificate of purposes but copies thereof filed with the certificate of purposes will also greatly facilitate the processing of the latter. The starting point for the preparation of the worksheet should be the Analysis of Expenditures--Budget Control Statement, form DH-213, of the most recent date. In preparing the specimen worksheet (Exhibit 6, Appendix S-11) in support of the specimen certificate of purposes (Exhibit 3, 4 and 5, Appendix S-11) the following facts, as reflected in the certificate of purposes, were assumed:

(a) Closing date of requisition previously filed. February 1, 1956. This date coincides with the maturity date of the current temporary loan note and it is presumed that funds will be required to refinance the maturing temporary loan notes and to meet the anticipated requirements of the period of the requisition being prepared.

(b) Period of this requisition. Six months ending August 1, 1956.

(c) Date of preparation of the requisition. December 10, 1955. This date, it should be noted, would permit the requisition papers to be filed with the division six weeks before February 1, 1956, the date the funds to meet the anticipated requirements for the period of the requisition will be borrowed.

(d) Date of most recent form DH-213. November 30, 1955. The costs incurred for the various classifications are taken from column 5 of form DH-213 (see Exhibits 24 and 25 of Appendix S-11).

(iv) A study of the specimen worksheet (Exhibit 6, Appendix S-11) will show that column 3 will reflect anticipated requirements for the period of the requisition after they have been adjusted for over- and under-estimates of requirements in previous requisitions. See also subdivision (d) of this section.

(3) Total requirements (column 5, sheets 1 and 2).

(i) As noted above, the date to be inserted at the head of this column refers to the closing date of the period during which, it is anticipated, that the funds to be borrowed will be used. If the funds are to be borrowed from sources other than the State, the closing date of the period will be the date of maturity of the temporary loan note to be issued.

(ii) If funds are to be borrowed from sources other than the State, the total requirements must include provision for interest on the temporary loan note(s) to be issued, at an assumed rate which should be not less than the current market rate. The provision for the interest on the temporary loan note(s) should be reflected in a footnote to the total requirements for account 1420.1, Interest Expense, as indicated on the specimen sheet 1 of the certificate of purposes (Exhibit 3 of Appendix S-11) and is included in the amount of the advance loan note to be issued to the State, but not in the amount of the temporary loan note(s). The provision for the interest therefore represents the difference between the amount of the advance loan note and the amount of the temporary loan note(s), as indicated at the foot of sheet 2 of the specimen certificate of purposes (Exhibit 4 of Appendix S-11). It is important that the total requirements and the provision for interest be expressed in even thousands of dollars so that the advance loan and temporary loan notes are likewise in even thousands of dollars.

(4) Summary (sheet 2). Columns 3, 4 and 5 of the summary on sheet 2 merely recapitulate the breakdown of the requirements on sheet 1 and need no further explanation. The source of the information for columns 6 and 7 of the summary is the Analysis of Expenditures--Budget Control Statement, form DH-213, of the most recent date, which date should be inserted in the headings of each column. The figures to be inserted in column 7, development costs incurred, are taken from column 5 of form DH-213. The individual items in column 7 are adjusted for development cost accruals and payables, as listed in schedule B of form DH-213, to yield the figures to be inserted in column 6, amounts disbursed for development costs. The total of column 6 should then be carried forward to column (e) of sheet 3 of the certificate of purposes.

(5) Other disbursements (line [h], sheet 3). This item represents the net of disbursements of development funds not charged to development costs (investments, prepaid insurance, etc.) and of amounts, other than loan funds, deposited in the development fund but not credited to development costs (deposits on plans and specifications, etc.) The source of the information required for this item is schedule A of form DH-213. A study of Exhibit 7 of Appendix S-11, worksheet for 'other disbursements', certificate of purposes together with the specimen of form DH-213 (Exhibits 24 and 25 of Appendix S-11) will indicate the procedure to be followed.

(c) Special instruction for first requisition of loan funds. The first requisition of loan funds should include sufficient funds to permit reimbursement for such costs, if any, incurred prior to the date of the contract for State aid as have been or may be approved by the commissioner. The certificate of depositary on sheet 3 will not be necessary, nor will it be necessary to fill in column 4 of sheets 1 and 2 or columns 4 and 6 of the summary on sheet 2. All other information must be furnished.

(d) Overruns on amounts approved on certificates of purposes. The following procedure is established in reference to disbursements of amounts approved by the division on certificates of purposes.

(1) Overruns not in excess of 20 per cent of approved amounts. Approval is hereby given for disbursement of loan funds, in excess of up to 20 per cent of the approved amount requested on a certificate of purposes for any item, other than a restricted item (see § 1646-2.3, subd. [b]), provided that:

(i) Total costs incurred for any development cost subaccount classification or group of development cost accounts by reason of such disbursement shall not exceed the limitations imposed by subdivision (b) of section 1646-2.3 on overruns on development cost budget amounts unless such overrun has had the prior written approval of the division.

(ii) Funds for such excess disbursements are available from other unobligated balances in other subaccount classifications as shown in the certificate of purposes.

(2) As explained in paragraph (2) of subdivision (b), supra,adjustments for over- and under-estimates of requirements in an approved certificate of purposes will be reflected in column 3 of the certificate of purposes filed with the next requisition of loan funds. The foregoing approval does not apply to amounts approved on certificate of purposes for restricted items nor does it constitute approval of the disbursement of funds in any manner than as provided by law, the contract for State aid, and the division's manuals of procedure [FN*].

(3) Other overruns. Should the local agency require amounts in excess of the 20 per cent limitation above, or in excess of the amounts approved for restricted items, or for items for which no funds have been requisitioned and have excess funds available in other subaccount classifications which have not been obligated, the local agency shall request the division, in writing, to authorize the overruns, furnishing complete details with respect to the purpose of the expenditure and the necessity of the overrun on the amount approved on the certificate of purposes. The adjustments for the over- and under-estimate of requirements for such items are likewise reflected in column 3 of the certificate of purposes filed with the next requisition.

[FN*] See Subchapter C of this Chapter.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 1646-3.2