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NYS Comptroller

THOMAS P. DiNAPOLI

The Academy for New York State's Local Officials

Protecting the Public’s Interest: A Tutorial on Local Government Ethics and Transparency in New York State

Module 1 - Conflict of Interest of Municipal Officers and Employees

Exceptions - Sales of Bonds and Notes

Article 18 provides an exception for the private sale of bonds or notes by a municipality to a bank or trust company in which a municipal officer or employee would otherwise have a prohibited interest, but the exception only applies if certain requirements are met. The requirements are slightly different for bonds than for notes.

Bonds: the exception applies if the sale will not result in the bank or trust company holding bonds purchased at private sale from the municipality in a principal amount totaling $100,000 or more.

Notes: the exception applies if:

  • At least two other banks or trust companies are unable or unwilling to buy notes at the same interest rate or a lower interest rate than the rate offered by the bank or trust company in which the municipal officer or employee has the interest
  • The sale will not cause the bank or trust company to purchase notes at private sale from the municipality, during the municipality’s current fiscal year, in a principal amount totaling $100,000 or more and
  • The sale will not result in the bank or trust company holding notes purchased at private sale from the municipality in a principal amount totaling $100,000 or more.

  Next: Exceptions - Pre-Existing Contracts