The Public Authorities Control Board
The Public Authorities Control Board was created in 1976 in response to the growing amount of public authority debt in New York and the concern that the state might become liable for financially imprudent “moral obligation” bonds issued by some authorities. To address these issues, the PACB was given the authority to review the issuance of debt for projects undertaken by 11 of the State’s largest public authorities (the Environmental Facilities Corporation, the Housing Finance Agency, the Medical Care Facilities Finance Agency, the Dormitory Authority, the Urban Development Corporation, the Job Development Authority, the Battery Park City Authority, the Project Finance Agency, the State of New York Mortgage Agency, the New York Energy Research and Development Authority, the Long Island Power Authority, the Albany Convention Center Authority, the State of New York Municipal Bond Bank Agency, and the North Country Power Authority).
Financing arrangements subject to PACB review are frequently intended to benefit local governments, but they can also include funding for private interests. To receive approval for a project, the PACB must be satisfied that there are sufficient funds and/or revenue streams to pay the debt service, but its review powers are strictly limited to fiscal considerations and it does not have the authority to consider environmental impacts or other aspects of a project.
The PACB regularly issues public resolutions that authorize the issuance of considerable amounts of debt. These resolutions, however, tend to be somewhat barebones, and in the interests of transparency it has been suggested that the PACB should provide more details regarding its analysis of projects’ fiscal soundness. It will be interesting to see how the PACB responds.
Examples of recent PACB resolutions include a resolution approving financing for five UDC projects, a resolution approving $175 million in bonds being issued by the State of New York Mortgage Agency, and a resolution approving the UDC’s IBM headquarters project.
For additional background on the PACB, see the 1976 legislation establishing the board, the 1983 legislation (with bill jacket) that amended the original act, and sections 50 and 51 of the Public Authorities Law, where those laws are presently codified.
While the PACB usually doesn’t make headlines, it has received some press over the last few years for its role in approving/disapproving the UDC’s Moynihan Station and Atlantic Yards projects. The First Department also weighed in on the extent of the PACB’s authority to review projects in one of the Atlantic Yards cases, Matter of Develop Don’t Destroy (Brooklyn) v. Urban Dev. Corporation, 2009 N.Y. Slip Op. 1395.