N.Y. Comp. Codes R. & Regs. tit. 6, § 651.75 – Contracts.

(a) For the purpose of meeting the State responsibility as provided herein, with respect to the protection and promotion of the health of the inhabitants of the State by the provision of sewer systems, the commissioner, in the name of the State, may enter into contracts with municipalities having power to construct, operate and maintain sewer systems, and any such municipality may enter into a contract with the commissioner, concerning eligible projects.
(b) Any such contract may include such provisions as may be agreed upon by the parties thereto, and shall include, in substance, the following provisions:
1. (1) The cost of the eligible project as determined by the commissioner.
2. (2) The method by which the eligible project shall be financed.
3. (3) An agreement between the commissioner and the municipality to provide State aid to the municipality each year, during the progress of construction or following completion of construction as may be agreed upon by the parties. The time of payment will depend on the time payment of annual debt service by the municipality is due. This agreement shall be deemed executory to the extent of the monies available to the State and no liability on account thereof shall be incurred by the State beyond monies available for the purpose thereof.
4. (4) An agreement by the municipality
  1. (i) to proceed expeditiously with, and complete, the project in accordance with plans approved pursuant to section 1230, article 12 of the Public Health Law.
  2. (ii) to commence operation of the sewer system on completion of the project, and not to discontinue operation of the sewer system without the approval of the commissioner.
  3. (iii) to operate and maintain the sewer system in accordance with applicable provisions of article 12 of the Public Health Law, the State sanitary code and rules and regulations of the commissioner.
  4. (iv) to apply for and make reasonable efforts to secure Federal assistance for the project.
  5. (v) to secure the approval of the commissioner before applying for Federal assistance, in order to maximize the amounts of such assistance received or to be received for all projects in New York State.
  6. (vi) to provide for the payment of the municipality's share of the cost of the project, or annual debt service.
  7. (vii) to execute a contract or agreement with the owner of the sewage treatment plant, if other than the municipality itself, to accept sewage from the sewage collection system aided under the rules and regulations, set forth herein, and,
  8. (viii) to promulgate a municipal sewer use ordinance acceptable to the commissioner.
(c) A provision that, in the event that Federal assistance which was not included in the calculation of the capital cost becomes available to the municipality, the amount of the State payment shall be recalculated by deducting the amount of such Federal assistance from the eligible capital cost, and adjustment shall be made either
1. (1) by the municipality paying to the State the amount by which the State payments actually made exceed the State payments determined by the recalculation, or
2. (2) by deducting the excess paid from subsequent payments to be made by the State.
(d) The contract will be executed only after permanent financing for the project has been arranged.
(e) All contracts entered into pursuant to section 1263-d, Public Health Law, shall be subject to approval by the State Comptroller, and by the Attorney General as to form.