March 15, 1994
GENERAL NEW YORK MUNICIPAL
MONEY MARKET FUND
SUPPLEMENT TO PROSPECTUS
DATED MARCH 15, 1994
The following information supplements and should be read in
conjunction with the section of the Fund's Prospectus entitled "Management
of the Fund."
The Fund's manager, The Dreyfus Corporation ("Dreyfus"), has entered
into an Agreement and Plan of Merger (the "Merger Agreement") providing
for the merger of Dreyfus with a subsidiary of Mellon Bank Corporation
("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in mid-1994, but could occur significantly later.
As a result of regulatory requirements and the terms of the Merger
Agreement, Dreyfus will seek various approvals from the Fund's board and
shareholders before completion of the merger. Shareholder approval will
be solicited by a proxy statement.
--------------
The following information supplements and should be read in
conjunction with the section of the Fund's Prospectus entitled "Yield
Information."
From time to time advertising materials for the Fund also may
refer to Value Line Mutual Fund Survey company ratings and related
analyses supporting the rating.
574/stkr021694
NOTE: * Omitted since answer is negative or inapplicable
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PROSPECTUS MARCH 15, 1994
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
- -------------------------------------------------------------------------------
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN
AS A MONEY MARKET MUTUAL FUND. ITS GOAL IS TO MAXIMIZE CURRENT
INCOME EXEMPT FROM FEDERAL, NEW YORK STATE AND NEW YORK CITY
INCOME TAXES TO THE EXTENT CONSISTENT WITH THE PRESERVATION OF
CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT
CHARGE OR PENALTY IMPOSED BY THE FUND. THE FUND PROVIDES FREE
REDEMPTION CHECKS, WHICH YOU CAN USE IN AMOUNTS OF $500 OR MORE
FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME ON THE AMOUNT
OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES BY
TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
THE FUND BEARS CERTAIN COSTS PURSUANT TO A PLAN ADOPTED IN
ACCORDANCE WITH RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF
1940.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
----------------
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED MARCH 15, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 666.
----------------
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. THE FUND'S SHARES INVOLVE
CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE FUND'S YIELD FLUCTUATES AND IS NOT GUARANTEED.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES................... 2
CONDENSED FINANCIAL INFORMATION.................. 2
YIELD INFORMATION................................ 3
DESCRIPTION OF THE FUND.......................... 3
MANAGEMENT OF THE FUND........................... 8
HOW TO BUY FUND SHARES........................... 9
SHAREHOLDER SERVICES............................. 11
HOW TO REDEEM FUND SHARES........................ 13
SERVICE PLAN..................................... 16
SHAREHOLDER SERVICES PLAN........................ 17
DIVIDENDS, DISTRIBUTIONS AND TAXES............... 17
GENERAL INFORMATION.............................. 18
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees................................................ .50%
12b-1 Fees..................................................... .00%
Shareholder Services Fees...................................... .07%
Other Expenses................................................. .10%
Total Fund Operating Expenses.................................. .67%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
You would pay the following
expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption
at the end of each time period: $7 $21 $37 $83
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
- -------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding the
various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. Long-term investors could pay more in 12b-1 fees than the
economic equivalent of paying a front-end sales charge. The information in
the foregoing table does not reflect any fee waivers or expense
reimbursement arrangements that may be in effect. Certain Service
Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares,"
"Service Plan" and "Shareholder Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst & Young,
the Fund's independent auditors, whose report thereon appears in the
Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available
upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
beneficial interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
Year Ended November 30,
-------------------------------------------------------------------
1987(1) 1988 1989 1990 1991 1992 1993
------- ------- ------- ------- ------- ------- -------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year................... $1.0000 $ .9972 $ .9989 $ .9991 $ .9999 $ .9999 $1.0000
------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net................................ .0419 .0426 .0523 .0561 .0436 .0275 .0198
Net realized and unrealized gain (loss) on investments (.0028) .0017 .0002 .0008 --- .0001 --_
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS................. .0391 .0443 .0525 .0569 .0436 .0276 .0198
------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net................. (.0419) (.0426) (.0523) (.0561) (.0436) (.0275) (.0198)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of year $ .9972 $ .9989 $ .9991 $ .9999 $ .9999 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 4.28%(2) 4.34% 5.36% 5.76% 4.45% 2.78% 2.00%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. .11% .50% .75% -_ .09% .25% .32%
Ratio of net investment income to average net assets. 4.28% 4.22% 5.97% 5.58% 4.44% 2.99% 1.98%
Decrease reflected in above expense ratios due to
undertakings by The Dreyfus Corporation.......... .73% .27% .15% .66% .55% .38% .35%
Net Assets, end of year(000's Omitted)............... $54,782 $62,140 $49,335 $500,947 $586,933 $630,899 $612,441
- -------------------------
(1) From December 2, 1986 (commencement of operations) to November 30, 1987.
(2) Annualized.
</TABLE>
(2)
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income
generated by an investment in the Fund over a seven-day period (which
period will be stated in the advertisement). This income is then
annualized. That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The effective yield
is calculated similarly, but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The effective yield
will be slightly higher than the yield because of the compounding effect of
this assumed reinvestment. The Fund's yield and effective yield may
reflect absorbed expenses pursuant to any undertaking that may be in
effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield which,
after being taxed at a stated rate, would be equivalent to a stated yield or
effective yield calculated as described above.
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information
may not provide a basis for comparison with domestic bank deposits,
other investments which pay a fixed yield for a stated period of time, or
other investment companies which may use a different method of
computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitor, N. Palm Beach, Fla. 33408,
IBC/Donoghue's Money Fund Report, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's goal is to maximize current income
exempt from Federal, New York State and New York City income taxes to
the extent consistent with the preservation of capital and the
maintenance of liquidity. To accomplish this goal, the Fund invests
primarily in debt securities of the State of New York, its political
subdivisions, authorities and corporations, the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal, New York
State and New York City income taxes (collectively, "New York Municipal
Obligations"). To the extent acceptable New York Municipal Obligations are
at any time unavailable for investment by the Fund, the Fund will invest
temporarily in other debt securities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal, but not New
York State and New York City, income tax. The Fund's investment objective
cannot be changed without approval by the holders of a majority (as
defined in the Investment Company Act of 1940) of the Fund's outstanding
voting shares. There can be no assurance that the Fund's investment
objective will be achieved. Securities in which the Fund will invest may
not earn as high a level of current income as long-term or lower quality
securities which generally have less liquidity, greater market risk and
more fluctuation in market value.
MUNICIPAL OBLIGATIONS - Debt securities the interest from which is, in
the opinion of bond counsel to the issuer, exempt from Federal income tax
("Municipal Obligations") generally include debt obligations issued to
obtain funds for various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities. Municipal
Obligations are classified as general obligation bonds, revenue bonds and
notes. General obligation bonds are secured by the issuer's pledge of its
faith, credit and taxing power for the payment of principal and interest.
Revenue bonds are payable from the revenue derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise or other specific revenue source, but not from the general
taxing power. Tax exempt industrial development bonds, in most cases, are
revenue bonds that generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the corporate entity
on whose behalf they are issued. Notes are short-term instruments which
are obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase
agreements which are similar to installment purchase contracts for
property or equipment issued by municipalities. Municipal Obligations bear
fixed, floating or variable rates of interest.
(3)
MANAGEMENT POLICIES - It is a fundamental policy of the Fund that it will
invest at least 80% of the value of its net assets (except when
maintaining a temporary defensive position) in Municipal Obligations.
Under normal circumstances, at least 65% of the value of the Fund's net
assets will be invested in New York Municipal Obligations and the
remainder may be invested in securities that are not New York Municipal
Obligations and therefore may be subject to New York State and New York
City income taxes. See "Risk Factors-Investing in New York Municipal
Obligations" below, and "Dividends, Distributions and Taxes."
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost
method of valuing its securities pursuant to Rule 2a-7 under the
Investment Company Act of 1940, certain requirements of which are
summarized as follows. In accordance with Rule 2a-7, the Fund will
maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of 13 months or
less and invest only in U.S. dollar denominated securities determined in
accordance with procedures established by the Board of Trustees to
present minimal credit risks and which are rated in one of the two highest
rating categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating organization if
the instrument was rated only by one such organization) or, if unrated, are
of comparable quality as determined in accordance with procedures
established by the Board of Trustees. The nationally recognized statistical
rating organizations currently rating investments of the type the Fund
may purchase are Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's Corporation ("S&P") and Fitch Investors Service, Inc. ("Fitch") and
their rating criteria are described in Appendix B to the Fund's Statement
of Additional Information. For further information regarding the amortized
cost method of valuing securities, see "Determination of Net Asset Value"
in the Fund's Statement of Additional Information. There can be no
assurance that the Fund will be able to maintain a stable net asset value
of $1.00 per share.
The Fund may invest more than 25% of the value of its total assets in
Municipal Obligations which are related in such a way that an economic,
business or political development or change affecting one such security
also would affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of projects. As
a result, the Fund may be subject to greater risk as compared to a fund
that does not follow this practice.
From time to time, the Fund may invest more than 25% of the value of its
total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified
private activity bonds, as defined in the Internal Revenue Code of 1986, as
amended (the "Code"), issued after August 7, 1986, while exempt from
Federal income tax, is a preference item for purposes of the alternative
minimum tax. Where a regulated investment company receives such
interest, a proportionate share of any exempt-interest dividend paid by
the investment company may be treated as such a preference item to
shareholders. The Fund may invest without limitation in such Municipal
Obligations if The Dreyfus Corporation determines that their purchase is
consistent with the Fund's investment objective.
The Fund may purchase floating and variable rate demand notes and bonds,
which are tax exempt obligations ordinarily having stated maturities in
excess of 13 months, but which permit the holder to demand payment of
principal at any time or at specified intervals not exceeding 13 months, in
each case upon not more than 30 days' notice. Variable rate demand notes
include master demand notes which are obligations that permit the Fund
to invest fluctuating amounts, which may change daily without penalty,
pursuant to direct arrangements between the Fund, as lender, and the
borrower. The interest rates on these obligations fluctuate from time to
time. Frequently, such obligations are secured by letters of credit or other
credit support arrangements provided by banks. Use of letters of credit or
other credit support arrangements will not adversely affect the tax
exempt status of these obligations. Because these obligations are direct
lending arrangements between the lender and borrower, it is not
contemplated that such instruments will generally be traded, and
generally there is no established secondary market for these obligations,
although they are redeemable at face value.
(4)
Accordingly, where these
obligations are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the ability of the
borrower to pay principal and interest on demand. Each obligation
purchased by the Fund will meet the quality criteria established for the
purchase of Municipal Obligations. The Dreyfus Corporation, on behalf of
the Fund, will consider on an ongoing basis the creditworthiness of the
issuers of the floating and variable rate demand obligations in the Fund's
portfolio. The Fund will not invest more than 10% of the value of its net
assets in floating or variable rate demand obligations as to which the
Fund cannot exercise the demand feature on not more than seven days'
notice if there is no secondary market available for these obligations, and
in other securities that are not readily marketable. See "Certain
Fundamental Policies" below.
The Fund may purchase from financial institutions participation interests
in Municipal Obligations (such as industrial development bonds and
municipal lease/purchase agreements). A participation interest gives the
Fund an undivided interest in the Municipal Obligation in the proportion
that the Fund's participation interest bears to the total principal amount
of the Municipal Obligation. These instruments may have fixed, floating or
variable rates of interest, with remaining maturities of 13 months or
less. If the participation interest is unrated, or has been given a rating
below that which otherwise is permissible for purchase by the Fund, it
will be backed by an irrevocable letter of credit or guarantee of a bank
that the Board of Trustees has determined meets the prescribed quality
standards for banks set forth below, or the payment obligation otherwise
will be collateralized by U.S. Government securities. For certain
participation interests, the Fund will have the right to demand payment,
on not more than seven days' notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued interest.
As to these instruments, the Fund intends to exercise its right to demand
payment only upon a default under the terms of the Municipal Obligation,
as needed to provide liquidity to meet redemptions, or to maintain or
improve the quality of its investment portfolio. The Fund will not invest
more than 10% of the value of its net assets in participation interests
that do not have this demand feature, and in other securities that are not
readily marketable. See "Certain Fundamental Policies" below.
The Fund may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial arrangement)
having a relatively long maturity and bearing interest at a fixed rate
substantially higher than prevailing short-term tax exempt rates, that has
been coupled with the agreement of a third party, such as a bank, broker-
dealer or other financial institution, pursuant to which such institution
grants the security holders the option, at periodic intervals, to tender
their securities to the institution and receive the face value thereof. As
consideration for providing the option, the financial institution receives
periodic fees equal to the difference between the Municipal Obligation's
fixed coupon rate and the rate, as determined by a remarketing or similar
agent at or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on the date of
such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the
Fund, will consider on an ongoing basis the creditworthiness of the issuer
of the underlying Municipal Obligation, of any custodian and of the third
party provider of the tender option. In certain instances and for certain
tender option bonds, the option may be terminable in the event of a default
in payment of principal or interest on the underlying Municipal Obligations
and for other reasons. The Fund will not invest more than 10% of the value
of its net assets in securities that are not readily marketable, which
could include tender option bonds as to which it cannot exercise the
tender feature on not more than seven days' notice if there is no secondary
market available for these obligations. See "Certain Fundamental
Policies" below.
The Fund may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment, the Fund
obligates a broker, dealer or bank to repurchase, at the Fund's option,
specified securities at a specified price and, in this respect, stand-by
commitments are comparable to put options. The exercise of a stand-by
commitment, therefore, is subject to the ability of the seller to make
payment on demand. The Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. The Fund may pay for stand-by
commit-
(5)
ments if such action is deemed necessary, thus increasing to a
degree the cost of the underlying Municipal Obligation and similarly
decreasing such security's yield to investors.
From time to time, on a temporary basis other than for temporary
defensive purposes (but not to exceed 20% of the value of the Fund's net
assets) or for temporary defensive purposes, the Fund may invest in
taxable short-term investments ("Taxable Investments") consisting of:
notes of issuers having, at the time of purchase, a quality rating within
the two highest grades of Moody's, S&P or Fitch; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper rated
not lower than P-2 by Moody's, A-2 by S&P or F-2 by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic
banks, with assets of one billion dollars or more; time deposits; bankers'
acceptances and other short-term bank obligations; and repurchase
agreements in respect of any of the foregoing. Dividends paid by the Fund
that are attributable to income earned by the Fund from Taxable
Investments will be taxable to investors. See "Dividends, Distributions
and Taxes." Except for temporary defensive purposes, at no time will more
than 20% of the value of the Fund's net assets be invested in Taxable
Investments. If the Fund purchases Taxable Investments, it will value
them using the amortized cost method and comply with the provisions of
Rule 2a-7 relating to purchases of taxable instruments. When the Fund has
adopted a temporary defensive position, including when acceptable New
York Municipal Obligations are unavailable for investment by the Fund, in
excess of 35% of the Fund's net assets may be invested in securities that
are not exempt from New York State and New York City income taxes.
Under normal market conditions, the Fund anticipates that not more than
5% of the value of its total assets will be invested in any one category of
Taxable Investments. Taxable Investments are more fully described in the
Statement of Additional Information to which reference hereby is made.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money from
banks, but only for temporary or emergency (not leveraging) purposes in an
amount up to 10% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less liabilities
(not including the amount borrowed) at the time the borrowing is made.
While borrowings exceed 5% of the Fund's total assets, the Fund will not
make any additional investments; (ii) pledge, hypothecate, mortgage or
otherwise encumber its assets, but only in an amount up to 10% of the
value of its total assets to secure borrowings for temporary or emergency
purposes; (iii) invest up to 25% of its total assets in the securities of
issuers in any industry, provided that there is no such limitation on
investments in Municipal Obligations and, for temporary defensive
purposes, in securities issued by domestic banks and obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities; (iv)
invest up to 10% of its net assets in repurchase agreements providing for
settlement in more than seven days after notice and in securities that are
not readily marketable (which securities could include participation
interests (including municipal lease/purchase agreements) that are not
subject to the demand feature described above and floating and variable
rate demand obligations as to which the Fund cannot exercise the related
demand feature described above and as to which there is no secondary
market); and (v) invest up to 10% of its total assets in time deposits
maturing from two business days through seven calendar days. This
paragraph describes fundamental policies that cannot be changed without
approval by the holders of a majority (as defined in the Investment
Company Act of 1940) of the Fund's outstanding voting shares. See
"Investment Objective and Management Policies-Investment Restrictions"
in the Statement of Additional Information.
RISK FACTORS
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS - You should consider
carefully the special risks inherent in investing in New York Municipal
Obligations. These risks result from the financial condition of New York
State, certain of its public bodies and municipalities, and New York City.
Beginning in early 1975, New York State, New York City and other State
entities faced serious financial difficulties which jeopardized the credit
standing and impaired the borrowing abilities of such entities and
contributed to high interest rates on, and lower market prices for, debt
obligations issued by them. A recurrence of such financial difficulties or a
failure of certain financial recovery programs could result in defaults or
declines in the market values of various New York Municipal Obligations in
which each Fund may invest. If there should be a default or other financial
crisis relating to New York State, New York City, a State or City agency,
or a State municipality, the market
(6)
value and marketability of outstanding
New York Municipal Obligations in a Fund's portfolio and the interest
income to the Fund could be adversely affected. Moreover, the significant
slowdown in the New York regional economy in the early 1990s added
substantial uncertainty to estimates of the State's tax revenues, which,
in part, caused the State to overestimate its General Fund tax receipts in
the 1992 fiscal year by $575 million. The 1992 fiscal year was the fourth
consecutive year in which the State incurred a cash-basis operating
deficit in the General Fund and issued deficit notes. The State's 1992-93
fiscal year was characterized by national and regional economies that
performed better than projected. After reflecting a 1992-1993 year-end
deposit to the State's refund reserve account of $671 million, reported
1992-1993 General Fund receipts were $45 million higher than originally
projected in April 1992. If not for that year-end transaction, which had
the effect of reducing 1992-1993 receipts by $671 million and making
those receipts available in 1993-94, General Fund receipts would have
been $716 million higher than originally projected. There can be no
assurance that New York will not face substantial potential budget gaps in
future years. In 1990, S&P and Moody's lowered their ratings of the
State's general obligation debt from AA_ to A and from A1 to A,
respectively, and short-term notes, from SP-1+ to SP-1 and from MIG-l to
MIG-2, respectively. In January 1992, Moody's lowered from A to Baal the
ratings on certain appropriation-backed debt of New York State and its
agencies. New York State's general obligation, state guaranteed and New
York State Local Government Assistance Corporation bonds continue to be
rated A by Moody's. In addition, in January 1992, S&P lowered from A to A_
the ratings of New York State general obligation bonds and stated that it
continued to assess the ratings outlook as negative. S&P also lowered its
ratings of various agency debt, state moral obligations, contractual
obligations, lease purchase obligations and state guarantees. In February
1991, Moody's lowered its rating on New York City's general obligation
bonds from A to Baal. The rating changes reflected the rating agencies'
concerns about the financial condition of New York State and City, the
heavy debt load of the State and City, and economic uncertainties in the
region. You should obtain and review a copy of the Statement of Additional
Information which more fully sets forth these and other risk factors
attendant to an investment in each of the Funds.
OTHER INVESTMENT CONSIDERATIONS - Even though interest-bearing
securities are investments which promise a stable stream of income, the
prices of such securities are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price fluctuations.
The value of fixed-income securities also may be affected by changes in
the credit rating or financial condition of the issuing entities.
New issues of Municipal Obligations usually are offered on a when-issued
basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate
that will be received on the Municipal Obligations are fixed at the time
the Fund enters into the commitment. The Fund will make commitments to
purchase such Municipal Obligations only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable, although any gain realized on
such sale would be taxable. The Fund will not accrue income in respect of
a when-issued security prior to its stated delivery date. No additional
when-issued commitments will be made if more than 20% of the value of
the Fund's net assets would be so committed.
Municipal Obligations purchased on a when-issued basis and the securities
held in the Fund's portfolio are subject to changes in value (both generally
changing in the same way, i.e., appreciating when interest rates decline
and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Municipal Obligations purchased
on a when-issued basis may expose the Fund to risk because they may
experience such fluctuations prior to their actual delivery. Purchasing
Municipal Obligations on a when-issued basis can involve the additional
risk that the yield available in the market when the delivery takes place
actually may be higher than that obtained in the transaction itself. A
segregated account of the Fund consisting of cash, cash equivalents or U.S.
Government securities or other high quality liquid debt securities at least
equal at all times to the amount of the when-issued commitments will be
established and maintained at the Fund's custodian bank. Purchasing
Municipal Obligations on a when-issued basis when the Fund is fully or
almost fully invested may result in greater poten-
(7)
tial fluctuation in the
value of the Fund's net assets and its net asset value per share.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years
unless money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for
the leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund
and thus reduce available yield. Shareholders should consult their tax
advisers concerning the effect of these provisions on an investment in the
Fund. Proposals that may restrict or eliminate the income tax exemption
for interest on Municipal Obligations may be introduced in the future. If
any such proposal were enacted that would reduce the availability of
Municipal Obligations for investment by the Fund so as to adversely affect
Fund shareholders, the Fund would reevaluate its investment objective and
policies and submit possible changes in the Fund's structure to
shareholders for their consideration. If legislation were enacted that
would treat a type of Municipal Obligation as taxable, the Fund would treat
such security as a permissible Taxable Investment within the applicable
limits set forth herein.
The Fund's classification as a "non-diversified" investment company
means that the proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment Company Act
of 1940. A "diversified" investment company is required by the
Investment Company Act of 1940 generally to invest, with respect to 75%
of its total assets, not more than 5% of such assets in the securities of a
single issuer. However, the Fund intends to conduct its operations so as to
qualify as a "regulated investment company" for purposes of the Code,
which requires that, at the end of each quarter of its taxable year, (i) at
least 50% of the market value of the Fund's total assets be invested in
cash, U.S. Government securities, the securities of other regulated
investment companies and other securities, with such other securities of
any one issuer limited for the purposes of this calculation to an amount
not greater than 5% of the value of the Fund's total assets, and (ii) not
more than 25% of the value of its total assets be invested in the
securities of any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies). Since a relatively
high percentage of the Fund's assets may be invested in the obligations of
a limited number of issuers, the Fund's portfolio securities may be more
susceptible to any single economic, political or regulatory occurrence
than the portfolio securities of a diversified investment company.
Investment decisions for the Fund are made independently from those of
other investment companies advised by The Dreyfus Corporation. However,
if such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time
as the Fund, available investments or opportunities for sales will be
allocated equitably to each investment company. In some cases, this
procedure may adversely affect the size of the position obtained for or
disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New York
10166, was formed in 1947 and serves as the Fund's investment adviser.
As of February 28, 1994, The Dreyfus Corporation managed or
administered approximately $77 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall management
of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law.
Under the terms of the Management Agreement, the Fund has agreed to pay
The Dreyfus Corporation a monthly fee at the annual rate of .50 of 1% of
the value of the Fund's average daily net assets. From time to
(8)
time, The Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case
may be. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume. For the fiscal year ended
November 30, 1993, the Fund paid The Dreyfus Corporation a management
fee at the effective annual rate of .15 of 1% of the value of the Fund's
average daily net assets pursuant to various undertakings in effect.
The Fund bears certain costs of distributing Fund shares in accordance
with a plan (the "Service Plan") adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. See "Annual Fund Operating Expenses"
and "Service Plan."
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
You can purchase Fund shares through Dreyfus Service Corporation or
certain financial institutions (which may include banks), securities
dealers ("Selected Dealers") and other industry professionals
(collectively, "Service Agents") that have entered into service
agreements with Dreyfus Service Corporation. Share certificates are
issued only upon your written request. No certificates are issued for
fractional shares. It is not recommended that the Fund be used as a vehicle
for Keogh, IRA or other qualified plans. The Fund reserves the right to
reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client of
a Service Agent which has made an aggregate minimum initial purchase
for its customers of $2,500. Subsequent investments must be at least
$100. The initial investment must be accompanied by the Fund's Account
Application. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries, directors of The
Dreyfus Corporation, Board members of a fund advised by The Dreyfus
Corporation, including members of the Fund's Board, or the spouse or
minor child of any of the foregoing, the minimum initial investment is
$1,000. For full-time or part-time employees of The Dreyfus Corporation
or any of its affiliates or subsidiaries who elect to have a portion of their
pay directly deposited into their Fund account, the minimum initial
investment is $50. The Fund reserves the right to vary further the initial
and subsequent investment minimum requirements at any time.
You may purchase Fund shares by check or wire, or through the Dreyfus
TeleTransfer Privilege described below. Checks should be made payable to
"The Dreyfus Family of Funds." Payments to open new accounts which are
mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account
Application. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed and sent to
The Dreyfus Family of Funds, P.O. Box 105, Newark, New Jersey 07101-
0105. Neither initial nor subsequent investments should be made by third
party check. Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information."
Wire payments may be made if your bank account is in a commercial bank
that is a member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900052171/General
New York Municipal Money Market Fund, for purchase of Fund shares in your
name. The wire must include your Fund account number (for new accounts,
your Taxpayer Identification Number ("TIN") should be included instead),
(9)
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check
used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of funds
from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in
this Prospectus, and, to the extent permitted by applicable regulatory
authority, may charge their clients direct fees for Servicing (as defined
under "Service Plan"). These fees would be in addition to any amounts
which might be received under the Fund's Service Plan. Each Service Agent
has agreed to transmit to its clients a schedule of such fees. You should
consult your Service Agent in this regard.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks within the Federal Reserve System which are held on
deposit at a Federal Reserve Bank) are received by the Transfer Agent. If
you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one business day of receipt of a
bank wire and within two business days of receipt of a check drawn on a
member bank of the Federal Reserve System. Checks drawn on banks which
are not members of the Federal Reserve System may take considerably
longer to convert into Federal Funds. Prior to receipt of Federal Funds,
your money will not be invested.
The Fund's net asset value per share is determined as of 12:00 Noon, New
York time, on each day the New York Stock Exchange is open for business.
Net asset value per share is computed by dividing the value of the Fund's
net assets (i.e., the value of its assets less liabilities) by the total
number of shares outstanding. See "Determination of Net Asset Value" in
the Fund's Statement of Additional Information.
If your payments are received in or converted into Federal Funds by 12:00
Noon, New York time, on a business day, you will receive the dividend
declared that day. If your payments are received in or converted into
Federal Funds after 12:00 Noon, New York time, you will begin to accrue
dividends on the following business day.
Qualified institutions may telephone orders for purchase of Fund shares.
These orders will become effective at the price determined at 12:00 Noon,
New York time, and the shares purchased will receive the dividend on Fund
shares declared on that day if the telephone order is placed by 12:00 Noon,
New York time, and Federal Funds are received by 4:00 p.m., New York time,
on that day.
Federal regulations require that you provide a certified TIN upon opening
or reopening an account. See "Dividends, Distributions and Taxes" and the
Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
(10)
If you have selected the Dreyfus TELETRANSFER Privilege, you may request
a Dreyfus TELETRANSFER purchase of Fund shares by telephoning 1-800-
221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents
may impose certain conditions on their clients which are different from
those described in this Prospectus. You should consult your Service Agent
in this regard. In addition, use of the privileges noted below may require
that the proper forms and information be filed with and processed by the
Transfer Agent.
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for shares of the Fund, shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. If you desire to
use this Privilege, you should consult your Service Agent or Dreyfus
Service Corporation to determine if it is available and whether any
conditions are imposed on its use.
To use this Privilege, you must give exchange instructions to the Transfer
Agent in writing, by wire or by telephone. If you previously have
established the Telephone Exchange Privilege, you may telephone exchange
instructions by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Fund Shares -
Procedures." Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained from Dreyfus Service
Corporation. Except in the case of Personal Retirement Plans, the shares
being exchanged must have a current value of at least $500; furthermore,
when establishing a new account by exchange, the shares being exchanged
must have a value of at least the minimum initial investment required for
the fund into which the exchange is being made. Telephone exchanges may
be made only if the appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on file
with the Transfer Agent. Upon an exchange into a new account, the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Exchange Privilege, Check Redemption Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TELETRANSFER Privilege, and the dividend/capital gain distribution option
(except for the Dreyfus Dividend Sweep Privilege) selected by the
investor.
Shares will be exchanged at the next determined net asset value; however,
a sales load may be charged with respect to exchanges into funds sold
with a sales load. If you are exchanging into a fund that charges a sales
load, you may qualify for share prices which do not include the sales load
or which reflect a reduced sales load, if the shares of the fund from which
you are exchanging were: (a) purchased with a sales load, (b) acquired by a
previous exchange from shares purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to
the foregoing categories of shares. To qualify, at the time of your
exchange you must notify the Transfer Agent or your Service Agent must
notify Dreyfus Service Corporation. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No
fees currently are charged shareholders directly in connection with
exchanges, although the Fund reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal fee in accordance
with rules promulgated by the Securities and Exchange Commission. The
Fund reserves the right to reject any exchange request in whole or in part.
The Exchange Privilege may be modified or terminated at any time upon
notice to shareholders.
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege
enables you to invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares of other funds
in the Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can
(11)
be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then-current
net asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder Services" in
the Statement of Additional Information. The right to exercise this
Privilege may be modified or cancelled by the Fund or the Transfer Agent.
You may modify or cancel your exercise of this Privilege at any time by
writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The exchange of shares
of one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain or loss.
For more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this Privilege, or to
obtain a Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER - Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund
shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will
be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may cancel your
participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, and the notification will
be effective three business days following receipt. The Fund may modify
or terminate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE - Dreyfus Government
Direct Deposit Privilege enables you to purchase Fund shares (minimum of
$100 and maximum of $50,000 per transaction) by having Federal salary,
Social Security, or certain veterans', military or other payments from the
Federal government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in Dreyfus
Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in the Privilege. The appropriate form may be obtained
from Dreyfus Service Corporation. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time
to terminate your participation by notifying in writing the appropriate
Federal agency. Further, the Fund may terminate your participation upon
30 days' notice to you.
DREYFUS DIVIDEND SWEEP PRIVILEGE - Dreyfus Dividend Sweep Privilege
enables you to invest automatically dividends or dividends and capital
gain distributions, if any, paid by the Fund in shares of another fund in the
Dreyfus Family of Funds of which you are a shareholder. Shares of the
other fund will be purchased at the then-current net asset value; however,
a sales load may be charged with respect to investments in shares of a
fund sold with a sales load. If you are investing in a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load. If you are investing in a fund
that charges a contingent deferred sales charge, the shares purchased will
be subject on redemption to the contingent deferred sales charge, if any,
applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. For more information concerning
this Privilege and the funds in the Dreyfus Family of Funds eligible to
participate in this Privilege, or to request a Dividend Options Form, please
call toll free 1-800-645-6561. You may cancel this Privilege by mailing
written notification to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. To select a new fund after
cancellation, you must submit a new authorization form. Enrollment in or
cancellation of this Privilege is effective three business days following
receipt. This Privilege is available only for existing accounts and may not
be used to open new accounts. Minimum subsequent investments do not
apply. The Fund may modify or terminate
(12)
this Privilege at any time or
charge a service fee. No such fee currently is contemplated.
DREYFUS PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits
you to purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your employer's direct
deposit program, you may have part or all of your paycheck transferred to
your existing Dreyfus account electronically through the Automated
Clearing House system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse
side of the form and return it to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may change the
amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not Dreyfus Service Corporation, The Dreyfus Corporation, the
Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently is
contemplated.
QUARTERLY DISTRIBUTION PLAN - The Quarterly Distribution Plan permits
you to receive quarterly payments from the Fund consisting of proceeds
from the redemption of shares purchased for your account through the
automatic reinvestment of dividends declared on your account during the
preceding calendar quarter. You may open a Quarterly Distribution Plan by
submitting a request to the Transfer Agent. The Plan may be ended at any
time by you, the Fund or the Transfer Agent. Shares for which certificates
have been issued must be presented before redemption under the Plan.
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for the Automatic Withdrawal Plan can be obtained
from Dreyfus Service Corporation. There is a service charge of 50 cents for
each withdrawal check. The Automatic Withdrawal Plan may be ended at
any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value.
The Fund imposes no charges when shares are redeemed directly through
Dreyfus Service Corporation. Service Agents may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request.
The value of the shares redeemed may be more or less than their original
cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR REDEMPTION WILL BE
EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER,
WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE
FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION
PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR
A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH
REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR
SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE,
(13)
DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has received
your Account Application.
The Fund reserves the right to redeem your account at its option upon not
less than 30 days' written notice if your account's net asset value is $500
or less and remains so during the notice period.
PROCEDURES - You may redeem shares by using the regular redemption
procedure through the Transfer Agent, using the Check Redemption
Privilege, through the Wire Redemption Privilege, through the Telephone
Redemption Privilege or through the Dreyfus TELETRANSFER Privilege.
Other redemption procedures may be in effect for clients of certain
Service Agents. The Fund makes available to certain large institutions the
ability to issue redemption instructions through compatible computer
facilities.
You may redeem or exchange Fund shares by telephone if you have checked
the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select a
telephone redemption or exchange privilege, you authorize the Transfer
Agent to act on telephone instructions from any person representing
himself or herself to be you, or a representative of your Service Agent,
and reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund or the
Transfer Agent may be liable for any losses due to unauthorized or
fraudulent instructions. Neither the Fund nor the Transfer Agent will be
liable for following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these other redemption procedures may result in your redemption request
being processed at a later time than it would have been if telephone
redemption had been used.
REGULAR REDEMPTION - Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption
requests may be delivered in person only to a Dreyfus Financial Center.
THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP"), and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed
under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member bank
of the Federal Reserve System in accordance with a written signature-
guaranteed request.
CHECK REDEMPTION PRIVILEGE - You may request on the Account
Application, Shareholder Services Form or by later written request that
the Fund provide Redemption Checks drawn on the Fund's account.
Redemption Checks may be made payable to the order of any person in the
amount of $500 or more. Redemption Checks should not be used to close
your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your
request or if the Transfer Agent cannot honor the Redemption Check due to
insufficient funds or other valid reason. You should date your Redemption
Checks with the current date when you write them. Please do not postdate
your Redemption Checks. If you do, the Transfer Agent will honor, upon
presentment, even if presented before the date of the check, all postdated
Redemption Checks which are dated within six months of presentment for
payment, if
(14)
they are otherwise in good order. Shares for which
certificates have been issued may not be redeemed by Redemption Check.
This Privilege may be modified or terminated at any time by the Fund or
the Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE - You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank
if your bank is not a member. To establish the Wire Redemption Privilege,
you must check the appropriate box and supply the necessary information
on the Fund's Account Application or file a Shareholder Services Form
with the Transfer Agent. You may direct that redemption proceeds be paid
by check (maximum $150,000 per day) made out to the owners of record
and mailed to your address. Redemption proceeds of less than $1,000 will
be paid automatically by check. Holders of jointly registered Fund or bank
accounts may have redemption proceeds of only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by
calling 1-800-221-4060 or, if you are calling from overseas, call 1-401-
455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit
the amount involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares for which certificates
have been issued are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE - You may redeem Fund shares
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The redemption
proceeds will be paid by check and mailed to your address. You may
telephone redemption instructions by calling 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. The Fund reserves the
right to refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount involved or
the number of telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund.
Shares for which certificates have been issued are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares
(minimum $500 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between your Fund account and the
bank account designated in one of these documents. Only such an account
maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. Redemption proceeds will be
on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account only up to $250,000 within any 30-day period. The Fund reserves
the right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount involved
or the number of such requests. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders.
No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may request
a Dreyfus TELETRANSFER redemption of Fund shares by telephoning 1-
800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares issued in certificate form are not eligible for this Privilege.
REDEMPTION THROUGH A SELECTED DEALER - If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that it
is received by the Transfer Agent prior to 12:00 Noon, New York time, on a
business day, the proceeds of the redemption ordinarily will be
transmitted in Federal Funds on the same day and the shares will not
receive the dividend declared on that day. If a redemption request is
received by the Transfer Agent after 12:00 Noon, New York time, the
shares will receive the dividend declared on that day and the proceeds of
redemption ordinarily will be transmitted in Federal Funds on the next
business day. It is the responsibility of the Selected
(15)
Dealer to transmit a
request so that it is received in a timely manner. The proceeds of the
redemption are credited to your account with the Selected Dealer.
SERVICE PLAN
Under the Service Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays directly for the costs of
preparing and printing prospectuses and statements of additional
information used for regulatory purposes and for distribution to existing
shareholders. The Fund also bears (a) the costs of preparing, and printing
and distributing prospectuses and statements of additional information
used for other purposes and (b) the costs associated with implementing
and operating the Service Plan (such as costs of printing and mailing
service agreements), the aggregate of such amounts not to exceed in any
fiscal year of the Fund the greater of $100,000 or .005 of 1% of the value
of the Fund's average daily net assets for such fiscal year.
Pursuant to the Service Plan, Dreyfus Service Corporation has entered into
service agreements with certain Service Agents who are paid by The
Dreyfus Corporation for administration, for servicing Fund shareholders
who are also their clients and/or for distribution. Dreyfus Service
Corporation determines the amounts to be paid to Service Agents. Service
Agents receive such fees in respect of the average daily value of the
Fund's shares owned by shareholders for whom the Service Agent performs
Servicing (as defined below) or for whom the Service Agent is the dealer
or holder of record. The Dreyfus Corporation and Dreyfus Service
Corporation also pay the expenses of advertising Fund shares. These costs
and fees are paid by The Dreyfus Corporation, directly or, to the extent
first paid by Dreyfus Service Corporation, indirectly, out of its
management fee, its past profits or any other source available to it, and,
to the extent paid out of its management fee, may be deemed indirectly to
be borne by the Fund. The Service Plan, as it relates to the expenses being
paid for Servicing and advertising, was adopted solely for defensive
purposes in the event payments by The Dreyfus Corporation out of its fee
could be construed to constitute indirect payments by the Fund for
distribution. Each item for which a payment may be made under the
Service Plan may constitute an expense of distributing Fund shares as the
Securities and Exchange Commission construes such term under Rule 12b-1.
The cost to the Fund under the Service Plan will not exceed the aggregate
amount of The Dreyfus Corporation's management fee and the amounts paid
for prospectuses and statements of additional information and for
implementing and operating the Service Plan.
Servicing may include, among other things, one or more of the following:
answering client inquiries regarding the Fund; assisting clients in
changing dividend options, account designations and addresses; performing
subaccounting; establishing and maintaining shareholder accounts and
records; processing purchase and redemption transactions; investing
client cash account balances automatically in Fund shares; providing
periodic statements showing a client's account balance and integrating
such statements with those of other transactions and balances in the
client's other accounts serviced by the Service Agent; arranging for bank
wires; and such other services as the Fund may request, to the extent the
Service Agent is permitted by applicable statute, rule or regulation.
The Glass-Steagall Act and other applicable laws prohibit Federally
chartered or supervised banks from engaging in certain aspects of the
business of issuing, underwriting, selling and/or distributing securities.
Accordingly, banks will be engaged to act as Service Agents only to
perform administrative and shareholder servicing functions. While the
matter is not free from doubt, the Fund's Board of Trustees believes that
such laws should not preclude a bank from acting as a Service Agent.
However, judicial or administrative decisions or interpretations of such
laws, as well as changes in either Federal or state statutes or regulations
relating to the permissible activities of banks or their subsidiaries or
affiliates, could prevent a bank from continuing to perform all or a part of
its Servicing activities. If a bank were prohibited from so acting, its
shareholder clients would be permitted to remain Fund shareholders and
alternative means for continuing the Servicing of such shareholders would
be sought. In such event, changes in the operation of the Fund might occur
and shareholders serviced by such bank might no longer be able to avail
themselves of any automatic investment or other ser-
(16)
vices then being
provided by such bank. The Fund does not expect that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses Dreyfus Service Corporation an amount not to exceed an
annual rate of .25 of 1% of the value of the Fund's average daily net assets
for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. At no time, however, will the amount
paid under the Shareholder Services Plan, together with amounts
otherwise paid by the Fund under its Service Plan as a "service fee"
pursuant to Article III, Section 26 of the NASD Rules of Fair Practice,
exceed the maximum amount permitted by the NASD to be paid as a service
fee. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services related
to the maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income on
each day the New York Stock Exchange is open for business. Dividends
usually are paid on the last calendar day of each month and are
automatically reinvested in additional Fund shares at net asset value or,
at your option, paid in cash. The Fund's earnings for Saturdays, Sundays
and holidays are declared as dividends on the preceding business day. If
you redeem all shares in your account at any time during the month, all
dividends to which you are entitled will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but the Fund may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the Investment Company Act of 1940. The Fund will
not make distributions from net realized securities gains unless capital
loss carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares at net asset value. All expenses are accrued daily and deducted
before declaration of dividends to investors.
Except for dividends from Taxable Investments, the Fund anticipates that
substantially all dividends paid by the Fund will not be subject to Federal,
New York State and New York City personal income taxes. To the extent
that you are obligated to pay state or local taxes outside of New York
State and New York City, dividends earned by an investment in the Fund
may represent taxable income. Dividends derived from Taxable
Investments, together with distributions from any net realized short-
term securities gains and all or a portion of any gains from the sale or
other disposition of certain market discount bonds, paid by the Fund are
subject to Federal income tax as ordinary income whether received in cash
or reinvested. No dividend paid by the Fund will qualify for the dividends
received deduction allowable to certain U.S. corporations. Distributions
from net realized long-term securities gains of the Fund generally are
taxable as long-term capital gains for Federal income tax purposes if you
are a citizen or resident of the United States. The Code provides that the
net capital gain of an individual generally will not be subject to Federal
income tax at a rate in excess of 28%. Under the Code, interest on
indebtedness incurred or continued to purchase or carry Fund shares which
is deemed to relate to exempt-interest dividends is not deductible.
Although all or a substantial portion of the dividends paid by the Fund
may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private
activity bonds, the interest from which may be (i) a preference item for
purposes of the alternative minimum tax, (ii) a component of the
"adjusted current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the extent to
which a shareholder's Social Security benefits are taxable. If the Fund
purchases such securities, the portion of the Fund's dividends related
thereto will not necessarily be tax exempt to an investor who is subject
to the alternative minimum tax and/or tax on Social Security benefits and
may cause an
(17)
investor to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year. These statements set
forth the dollar amount of income exempt from Federal tax and the dollar
amount, if any, subject to Federal tax. These dollar amounts will vary
depending on the size and length of time of your investment in the Fund. If
the Fund pays dividends derived from taxable income, it intends to
designate as taxable the same percentage of the day's dividend as the
actual taxable income earned on that day bears to total income earned on
that day. Thus, the percentage of the dividend designated as taxable, if
any, may vary from day to day.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to
backup withholding as a result of a failure to properly report taxable
dividend or interest income on a Federal income tax return. Furthermore,
the IRS may notify the Fund to institute backup withholding if the IRS
determines a shareholder's TIN is incorrect or if a shareholder has failed
to properly report taxable dividend and interest income on a Federal
income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the fiscal
year ended November 30, 1993 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification
is in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund
is subject to a non-deductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable investment income and capital
gains, if any.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust under the
laws of the Commonwealth of Massachusetts pursuant to an Agreement
and Declaration of Trust (the "Trust Agreement") dated September 19,
1986, and commenced operations on December 2, 1986. On January 29,
1990, the Fund's name was changed from General New York Tax Exempt
Money Market Fund to General New York Municipal Money Market Fund. The
Fund is authorized to issue an unlimited number of shares of beneficial
interest, par value $.001 per share. Each share has one vote.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or executed
by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations, a possibility which management
believes is remote. Upon payment of any liability incurred by the Fund, the
shareholder paying such liability will be entitled to reimbursement from
the general assets of the Fund. The Trustees intend to conduct the
operations of the Fund in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund. As
discussed under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may
(18)
have the right to call a meeting of shareholders for the purpose of voting
to remove Trustees.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing to
the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-
0144, or by calling toll free 1-800-645-6561. In New York City, call 1-
718-895-1206, on Long Island call 794-5254.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY
PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
(19)
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 15, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of General New York Municipal Money Market Fund (the "Fund"), dated March
15, 1994, as it may be revised from time to time. To obtain a copy of the
Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5254
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . B-8
Management Agreement . . . . . . . . . . . . . . . . . . B-12
Purchase of Fund Shares. . . . . . . . . . . . . . . . . B-13
Service Plan . . . . . . . . . . . . . . . . . . . . . . B-14
Shareholder Services Plan. . . . . . . . . . . . . . . . B-15
Redemption of Fund Shares. . . . . . . . . . . . . . . . B-16
Shareholder Services . . . . . . . . . . . . . . . . . . B-18
Determination of Net Asset Value . . . . . . . . . . . . B-20
Dividends, Distributions and Taxes . . . . . . . . . . . B-21
Yield Information. . . . . . . . . . . . . . . . . . . . B-21
Portfolio Transactions . . . . . . . . . . . . . . . . . B-22
Information About the Fund . . . . . . . . . . . . . . . B-23
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . B-23
Appendix A . . . . . . . . . . . . . . . . . . . . . . . B-25
Appendix B . . . . . . . . . . . . . . . . . . . . . . . B-39
Financial Statements . . . . . . . . . . . . . . . . . . B-43
Report of Independent Auditors . . . . . . . . . . . . . B-51
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended November 30, 1993,
computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
<S> <S> <S> <C>
Fitch Investors Moody's Investors Standard & Poor's
Service, Inc. Service, Inc. Corporation Percentage of
("Fitch") or ("Moody's") or ("S&P") Value
F-1+/F-1 VMIG1/MIG1, SP-1+/SP-1,
P-1 A-1+/A-1 88.0%
AAA/AA Aaa/Aa AAA/AA 5.8
Not Rated Not Rated Not Rated 6.2
100.0%
======
</TABLE>
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, industrial, port or parking facilities, air or water
pollution control facilities and certain local facilities for water supply,
gas, electricity or sewage or solid waste disposal; the interest paid on
such obligations may be exempt from Federal income tax, although current
tax laws place substantial limitations on the size of such issues. Such
obligations are considered to be Municipal Obligations if the interest paid
thereon qualifies as exempt from Federal income tax in the opinion of bond
counsel to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending rate,
such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, including fees paid under the Fund's Service Plan, will have the
effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the
event of foreclosure might prove difficult. The Fund will seek to minimize
these risks by investing only in those lease obligations that (1) are rated
in one of the two highest categories for debt obligations by at least two
nationally recognized statistical rating organizations (or one rating
organization if the lease obligation was rated only by one such
organization) or (2) if unrated, are purchased principally from the issuer
or domestic banks or other responsible third parties, in each case only if
the seller shall have entered into an agreement with the Fund providing
that the seller or other responsible third party will either remarket or
repurchase the lease obligation within a short period after demand by the
Fund. The staff of the Securities and Exchange Commission currently
considers certain lease obligations to be illiquid. Accordingly, not more
than 10% of the value of the Fund's net assets will be invested in lease
obligations that are illiquid and in other securities that are not readily
marketable. See "Investment Restriction No. 6" below.
The Fund will not purchase tender option bonds unless (a) the demand
feature applicable thereto is exercisable by the Fund within 13 months of
the date of such purchase upon no more than 30 days' notice and thereafter
is exercisable by the Fund no less frequently than annually upon no more
than 30 days' notice and (b) at the time of such purchase, the Manager
reasonably expects (i) based upon its assessment of current and historical
interest rate trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal Obligations at
the time of the next tender fee adjustment and (ii) that the circumstances
which might entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender opportunity.
At the time of each tender opportunity, the Fund will exercise the tender
option with respect to any tender option bonds unless the Manager
reasonably expects, (x) based upon its assessment of current and historical
interest rate trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal Obligations at
the time of the next tender fee adjustment, and (y) that the circumstances
which might entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender opportunity.
The Fund will exercise the tender feature with respect to tender option
bonds, or otherwise dispose of its tender option bonds, prior to the time
the tender option is scheduled to expire pursuant to the terms of the
agreement under which the tender option is granted. The Fund otherwise
will comply with the provisions of Rule 2a-7 in connection with the
purchase of tender option bonds, including, without limitation, the
requisite determination by the Board of Trustees that the tender option
bonds in question meet the quality standards described in Rule 2a-7, which,
in the case of a tender option bond subject to a conditional demand
feature, would include a determination that the security has received both
the required short-term and long-term quality rating or is determined to be
of comparable quality. In the event of a default of the Municipal
Obligation underlying a tender option bond, or the termination of the
tender option agreement, the Fund would look to the maturity date of the
underlying security for purposes of compliance with Rule 2a-7 and, if its
remaining maturity was greater than thirteen months, the Fund would sell
the security as soon as would be practical. The Fund will purchase tender
option bonds only when it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not adversely
affect the tax exempt status of the underlying Municipal Obligations and
that payment of any tender fees will not have the effect of creating
taxable income for the Fund. Based on the tender option bond agreement,
the Fund expects to be able to value the tender option bond at par;
however, the value of the instrument will be monitored to assure that it is
valued at fair value.
Ratings of Municipal Obligations. If, subsequent to its purchase by
the Fund, (a) an issue of rated Municipal Obligations ceases to be rated in
the highest rating category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such
organization) or the Fund's Board determines that it is no longer of
comparable quality or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly whether
such security presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the Fund and its
shareholders; provided that the reassessment required by clause (b) is not
required if the portfolio security is disposed of or matures within five
business days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, the Fund will attempt to use
comparable ratings as standards for its investments in accordance with the
stated investment policies contained in the Fund's Prospectus and this
Statement of Additional Information. The ratings of Moody's, S&P or Fitch
represent their opinions as to the quality of the Municipal Obligations
which they undertake to rate. It should be emphasized, however, that
ratings are relative and subjective and are not absolute standards of
quality. Although these ratings may be an initial criterion for selection
of portfolio investments, the Manager also will evaluate these securities
and the creditworthiness of the issuers of such securities.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and instru-
mentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks, by
the right of the issuer to borrow from the U.S. Treasury; others, such as
those issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates
of interest. Interest may fluctuate based on generally recognized
reference rates or the relationship of rates. While the U.S. Government
provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so,
since it is not so obligated by law. The Fund will invest in such
securities only when it is satisfied that the credit risk with respect to
the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally
are limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian or
sub-custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into repur-
chase agreements only with domestic banks with total assets in excess of
one billion dollars or primary government securities dealers reporting to
the Federal Reserve Bank of New York, with respect to securities of the
type in which the Fund may invest, and will require that additional
securities be deposited with it if the value of the securities purchased
should decrease below resale price. The Manager will monitor on an ongoing
basis the value of the collateral to assure that it always equals or
exceeds the repurchase price. Certain costs may be incurred by the Fund in
connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited. The Fund will consider on an ongoing basis the creditworthiness
of the institutions with which it enters into repurchase agreements.
Investing in New York Municipal Obligations. Each investor should
consider carefully the special risks inherent in the investment in New York
Municipal Obligations by each Fund. These risks result from the financial
condition of New York State and certain of its public bodies and
municipalities, including New York City. Beginning in early 1975, New York
State, New York City and other State entities faced serious financial
difficulties which jeopardized the credit standing and impaired the
borrowing abilities of such entities and contributed to high interest rates
on, and lower market prices for, debt obligations issued by them. A
recurrence of such financial difficulties or a failure of certain financial
recovery programs could result in defaults or declines in the market values
of various New York Municipal Obligations in which the Fund may invest. If
there should be a default or other financial crisis relating to New York
State, New York City, a State or City agency, or a State municipality, the
market value and marketability of outstanding New York Municipal
Obligations in the Fund's portfolio and the interest income to the Fund
could be adversely affected. Moreover, the significant slowdown in the New
York regional economy in the early 1990s added substantial uncertainty to
estimates of the State's tax revenues, which, in part, caused the State to
overestimate its General Fund tax receipts in the 1992 fiscal year by $575
million. The 1992 fiscal year was the fourth consecutive year in which the
State incurred a cash-basis operating deficit in the General Fund and
issued deficit notes. The State's 1992-93 fiscal year was characterized by
national and regional economies that performed better than projected.
After reflecting a 1992-93 year-end deposit to the State's refund reserve
account of $671 million, reported 1992-93 General Fund receipts were $45
million higher than originally projected in April 1992. If not for that
year-end transaction, which had the effect of reducing 1992-93 receipts by
$671 million and making those receipts available in 1993-94, General Fund
receipts would have been $716 million higher than originally projected.
There can be no assurance that New York will not face substantial potential
budget gaps in future years. In 1990, S&P and Moody's lowered their
ratings of the State's general obligation debt from AA- to A and from A1 to
A, respectively, and short-term notes from SP-1+ to SP-1 and from MIG-1 to
MIG-2, respectively. In January 1992, Moody's lowered from A to Baa1 the
ratings on certain appropriation-backed debt of New York State and its
agencies. New York State's general obligation, state guaranteed and New
York State Local Government Assistance Corporation bonds continue to be
rated A by Moody's. In addition, in January 1992, S&P lowered from A to A-
the ratings of New York State general obligation bonds and stated that it
continues to assess the ratings outlook as negative. S&P also lowered its
ratings of various agency debt, state moral obligations, contractual
obligations, lease purchase obligations and state guarantees. In February
1991, Moody's lowered its rating on New York City's general obligation
bonds from A to Baa1. The rating changes reflected the rating agencies'
concerns about the financial condition of New York State and City, the
heavy debt load of the State and City, and economic uncertainties in the
region. Investors should review "Appendix A" which more fully sets forth
these and other risk factors.
Investment Restrictions. The Fund has adopted the following
restrictions as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of the Fund's outstanding
voting shares. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 10% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the value of the
Fund's total assets, the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its total assets, but only to
secure borrowings for temporary or emergency purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
6. Purchase securities subject to restrictions on disposition under
the Securities Act of 1933 (so called "restricted securities"). The Fund
may not enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are not readily
marketable (which securities could include participation interests that are
not subject to the demand feature described in the Fund's Prospectus and
floating and variable rate demand notes as to which the Fund cannot
exercise the demand feature described in the Fund's Prospectus on less than
seven days' notice), if, in the aggregate, more than 10% of its net assets
would be so invested. The Fund may not invest in time deposits maturing in
more than seven days, and time deposits maturing from two business days
through seven calendar days may not exceed 10% of the Fund's total assets.
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
8. Make loans to others except through the purchase of qualified
debt obligations and the entry into repurchase agreements referred to above
and in the Fund's Prospectus.
9. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, securities issued by domestic banks and obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
10. Invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
For purposes of Investment Restriction No. 9, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry."
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Trustee who is deemed to be an "interested person"
of the Fund (as defined in the Act) is indicated by an asterisk.
Trustees and Officers of the Fund
CLIFFORD L. ALEXANDER, JR., Trustee. President of Alexander & Associates,
Inc., a management consulting firm. From 1977 to 1981, Mr. Alexander
served as Secretary of the Army and Chairman of the Board of the
Panama Canal Company, and from 1975 to 1977, he was a member of the
ashington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Alexander. He is a director of American Home Products Corp., The Dun
& Bradstreet Corporation, Equitable Resources, Inc., a producer and
distributor of natural gas and crude petroleum, MCI Communications
Corporation and Mutual of America Life Insurance Company. His address
is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Trustee. Professor of Law, New York University School of
Law. Professor Davis has been a member of the New York University law
faculty since 1983. Prior to that time, she served for three years as
a judge in the courts of New York State; was engaged for eight years
in the practice of law, working in both corporate and non-profit
sectors; and served for two years as a criminal justice administrator
in the government of the City of New York. She writes and teaches in
the fields of evidence, constitutional theory, family law, social
sciences and the law, legal process and professional methodology and
training. Her address is c/o New York University School of Law, 249
Sullivan Street, New York, New York 10011.
ERNEST KAFKA, Trustee. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. For more
than the past five years, Dr. Kafka has held numerous administrative
positions and has published many articles on subjects in the field of
psychoanalysis. His address is 23 East 92nd Street, New York, New
York 10028.
SAUL B. KLAMAN, Trustee. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to
financial institutions. Dr. Klaman was President of the National
Association of Mutual Savings Banks until November 1983, President of
the National Council of Savings Institutions until June 1985, Vice
Chairman of Golembe Associates and BEI Golembe, Inc. until 1989 and
Chairman Emeritus of BEI Golembe, Inc. until November 1992. He also
served as an Economist to the Board of Governors of the Federal
Reserve System and on several Presidential Commissions and has held
numerous consulting and advisory positions in the fields of economics
and housing finance. His address is 431-B Dedham Street, The Gables,
Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Trustee. President of Lincoln Center for the Performing
Arts, Inc. Mr. Leventhal was as Deputy Mayor for Operations of New
York City from September 1979 to March 1984, and Commissioner of the
Department of Housing Preservation and Development of New York City
from February 1978 to September 1979. Mr. Leventhal was an associate
and then a member of the New York law firm of Poletti Freidin Prashker
Feldman and Gartner from 1974 to 1978. He was Commissioner of Rent
and Housing Maintenance for New York City from 1972 to 1973. His
address is 70 Lincoln Center Plaza, New York, New York 10023-6583.
*RICHARD J. MOYNIHAN, Trustee, President and Investment Officer. An
employee of the Manager and an officer, director or trustee of other
investment companies advised or administered by the Manager. His
address is 200 Park Avenue, New York, New York 10166.
For so long as the Fund's plans described in the sections captioned
"Service Plan" and "Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
The Trustees, with the exception of Mr. Leventhal and Ms. Davis, were
elected at a meeting of shareholders held on May 4, 1988. Mr. Leventhal
and Ms. Davis were elected by the Board of Trustees on July 19, 1989 and
July 25, 1990, respectively. Ordinarily, no further meetings of
shareholders will be held for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding office have
been elected by shareholders at which time the Trustees then in office will
call a shareholders' meeting for the election of Trustees. Under the Act,
shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Trustee through a declaration in writing or
by vote cast in person or by proxy at a meeting called for that purpose.
Under the Fund's Agreement and Declaration of Trust, the Trustees are
required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any such Trustee when requested in writing to do
so by the shareholders of record of not less that 10% of the Fund's
outstanding shares.
Each of the "non-interested" Trustees is also a trustee of General
California Municipal Money Market Fund, Premier California Municipal Bond
Fund, Premier Insured Municipal Bond Fund, Premier GNMA Fund, Premier
Municipal Bond Fund, Premier New York Municipal Bond Fund and Premier State
Municipal Bond Fund, and a director of Dreyfus Appreciation Fund, Inc.,
General California Municipal Bond Fund, Inc., General Government Securities
Money Market Fund, Inc., General Money Market Fund, Inc., General Municipal
Bond Fund, Inc., General Municipal Money Market Fund, Inc., General New
York Municipal Bond Fund, Inc. and Premier Growth Fund, Inc. Mr. Alexander
is also a director of The Dreyfus Socially Responsible Growth Fund, Inc.
and The Dreyfus Third Century Fund, Inc.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $18,941 for the fiscal year ended November 30,
1993 for such Trustees as a group.
Officers of the Fund Not Listed Above
A. PAUL DISDIER, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
KAREN M. HAND, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
STEPHEN C. KRIS, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
JILL C. SHAFFRO, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President-Mutual Fund
Accounting of the Manager and an officer of other investment companies
advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
PAUL T. MOLLOY, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other
investment companies advised or administered by the Manager.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and an officer of other investment companies
advised or administered by the Manager.
ROBERT R. MULLERY, Assistant Secretary. Assistant General Counsel of the
Manager and an officer of other investment companies advised and
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on March 4, 1994.
The following persons also are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive Officer;
Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S.
DiMartino, President, Chief Operating Officer and a director; Alan M.
Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Elie M. Genadry, Vice President-Institutional Sales; Peter A.
Santoriello, Vice President; Robert H. Schmidt, Vice President; Kirk V.
Stumpp, Vice President-New Product Development; Philip L. Toia, Vice
President; John J. Pyburn and Katherine C. Wickham, Assistant Vice
Presidents; Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E.
Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B. Truman,
directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") with the Fund dated October 15, 1986, which is
subject to annual approval by (i) the Fund's Board of Trustees or (ii) vote
of a majority (as defined in the Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance also is approved
by a majority of the Trustees who are not "interested persons" (as defined
in the Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Agreement was
approved by shareholders at a meeting held on May 4, 1988 and was last
approved by the Fund's Board of Trustees, including a majority of the
Trustees who are not "interested persons" of any party to the Agreement, at
a meeting held on September 27, 1993. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Trustees or by vote of
the holders of a majority of the Fund's shares, or, on not less than 90
days' notice, by the Manager. The Agreement will terminate automatically
in the event of its assignment (as defined in the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Trustees. The Manager is responsible for investment decisions and
provides the Fund with Investment Officers who are authorized by the Board
of Trustees to execute purchases and sales of securities. The Fund's
Investment Officers are A. Paul Disdier, Karen M. Hand, Stephen C. Kris,
Richard J. Moynihan, Jill C. Shaffro, L. Lawrence Troutman, Samuel J.
Weinstock and Monica S. Wieboldt. The Manager also maintains a research
department with a professional staff of portfolio managers and securities
analysts who provide research services for the Fund as well as for other
funds advised by the Manager. All purchases and sales are reported for the
Trustees' review at the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of independent
pricing services, costs of maintaining the Fund's existence, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and meetings, costs
of preparing and printing prospectuses and statements of additional
information, and any extraordinary expenses. The Fund also bears certain
expenses in accordance with written plans. See "Service Plan" and
"Shareholder Services Plan."
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services. The
Manager also may make such advertising and promotional expenditures, using
its own resources, as it from time to time deems appropriate.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. No management fee was paid
by the Fund for the fiscal year ended November 30, 1991 pursuant to an
undertaking by the Manager in effect during such year. For the fiscal
years ended November 30, 1992 and 1993, the management fees payable
amounted to $2,962,454 and $2,951,496, respectively, which amounts were
reduced by $2,248,982 and $2,066,047, respectively, pursuant to
undertakings in effect, resulting in net fees paid to the Manager of
$713,472 in fiscal 1992 and $885,449 in fiscal 1993.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed 1 1/2% of the value of the Fund's average net assets for the fiscal
year, the Fund may deduct from the payment to be made to the Manager under
the Agreement, or the Manager will bear, such excess expense. Such
deduction or payment, if any, will be estimated daily, and reconciled and
effected or paid, as the case may be, on a monthly basis. No such
deduction or payment was required for the fiscal year ended November 30,
1993.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund
may attempt to notify the investor upon receipt of checks drawn on banks
that are not members of the Federal Reserve System as to the possible delay
in conversion into Federal Funds and may attempt to arrange for a better
means of transmitting the money. If the investor is a customer of a
Selected Dealer (as defined below) and his order to purchase Fund shares is
paid for other than in Federal Funds, the Selected Dealer, acting on behalf
of its customer, will complete the conversion into, or itself advance,
Federal Funds generally on the business day following receipt of the
customer order. The order is effective only when so converted and received
by the Transfer Agent. An order for the purchase of Fund shares placed by
an investor with sufficient Federal Funds or a cash balance in his
brokerage account with a Selected Dealer will become effective on the day
that the order, including Federal Funds, is received by the Transfer Agent.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time, on
any business day that the Transfer Agent and the New York Stock Exchange
are open. Such purchases will be credited to the shareholder's Fund
account on the next bank business day. To qualify to use the Dreyfus
TeleTransfer Privilege, the initial payment for purchase of Fund shares
must be drawn on, and redemption proceeds paid to, the same bank and
account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to
be wired to an account at any other bank, the request must be in writing
and signature-guaranteed. See "Redemption of Fund Shares-Dreyfus
TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
SERVICE PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan."
Rule 12b-1 (the "Rule"), adopted by the Securities and Exchange
Commission under the Act, provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a
plan adopted in accordance with the Rule. Because some or all of the fees
paid by the Manager for advertising or marketing the Fund's shares and the
fees paid to certain securities dealers ("Selected Dealers"), financial
institutions and other financial industry professionals (collectively,
"Service Agents") in some cases could be deemed to be payment of
distribution expenses, the Fund's Board of Trustees has adopted such a plan
(the "Plan"). The Fund's Board of Trustees believes that there is a
reasonable likelihood that the Plan will benefit the Fund and its
shareholders. In some states, certain financial institutions effecting
transactions in Fund shares may be required to register as dealers pursuant
to state law.
The Plan permits payments to Service Agents by the Manager, and the
Manager and the Distributor also will pay the expenses of advertising Fund
shares. These costs and fees will be paid by the Manager out of its
management fee, its past profits or any other source available to it, and,
to the extent paid out of the management fee may be deemed to be borne
indirectly by the Fund. The Plan also permits the Fund to pay the costs of
preparing, printing and distributing prospectuses and statements of
additional information and of implementing and operating the Plan.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that it may not
be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without shareholder approval and that
other material amendments of the Plan must be approved by the Board of
Trustees, and by the Trustees who are not "interested persons" (as defined
in the Act) of the Fund or the Manager and have no direct or indirect
financial interest in the operation of the Plan or in the related service
agreements, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan and the related service agreements
are subject to annual approval by such vote of the Trustees cast in person
at a meeting called for the purpose of voting on the Plan. The Plan was so
approved at a meeting held on September 27, 1993. Shareholders approved
the Plan at a meeting of shareholders held on May 4, 1988. The Plan is
terminable at any time by vote of a majority of the Trustees who are not
"interested persons" and have no direct or indirect financial interest in
the operation of the Plan or in any of the related service agreements or by
vote of a majority of the Fund's shares. Any service agreement is
terminable without penalty, at any time, by such vote of the Trustees or,
upon not more than 60 days' written notice to the Service Agent, by vote of
the holders of a majority of the Fund's shares, or, upon 15 days' notice,
by the Distributor. Each service agreement will terminate automatically in
the event of its assignment (as defined in the Act).
Under the Plan, during the fiscal year ended November 30, 1993,
$14,751 was charged to the Fund, wholly attributable to the costs of
preparing, printing and distributing prospectuses and statements of
additional information.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services Plan."
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses the Distributor for certain allocated expenses of providing
personal services and/or maintaining shareholder accounts. The services
provided may include personal services relating to shareholder accounts,
such as answering shareholder inquiries regarding the Fund and providing
reports and other information, and services related to the maintenance of
shareholder accounts.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Trustees for their review. In addition, the
Shareholder Services Plan provides that material amendments of the
Shareholder Services Plan must be approved by the Board of Trustees, and by
the Trustees who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the operation
of the Shareholder Services Plan by vote cast in person at a meeting called
for the purpose of considering such amendments. The Shareholder Services
Plan is subject to annual approval by such vote of the Trustees cast in
person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan is terminable at any time by
vote of a majority of the Trustees who are not "interested persons" and
have no direct or indirect financial interest in the operation of the
Shareholder Services Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only to
the registered owner(s) of the account and only to the address of record.
The Account Application or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of shares in the
investor's account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check will be
returned to the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although election of
this Privilege creates only a shareholder-transfer agent relationship with
the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, an investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Ordinarily, the
Fund will initiate payment for shares redeemed pursuant to this Privilege
on the same business day if the Transfer Agent receives the redemption
request in proper form prior to 12:00 Noon, New York time, on such day;
otherwise the Fund will initiate payment on the next business day.
Redemption proceeds will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account
Application or Shareholder Services Form. Redemption proceeds, if wired,
must be in the amount of $1,000 or more and will be wired to the investor's
account at the bank of record designated in the investor's file at the
Transfer Agent, if the investor's bank is a member of the Federal Reserve
System, or to a correspondent bank if the investor's bank is not a member.
Fees ordinarily are imposed by such bank and usually are borne by the
investor. Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the funds to the
investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Share Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected Dreyfus TeleTransfer Privilege, any request for a
Dreyfus TeleTransfer transaction will be effected through the Automated
Clearing House ("ACH") system unless more prompt transmittal specifically
is requested. Redemption proceeds will be on deposit in the investor's
account at an ACH member bank ordinarily two business days after receipt of
the redemption request. See "Purchase of Fund Shares-Dreyfus TeleTransfer
Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets in case of an emergency or any
time a cash distribution would impair the liquidity of the Fund to the
detriment of the existing shareholder. In such event, the securities would
be valued in the same manner as the Fund's portfolio is valued. If the
recipient sold such securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. Shares of other funds purchased by exchange will
be purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the applicable sales
load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales load,
and additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold with a
sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable to the
Offered Shares exceeds the maximum sales load that could have been imposed
in connection with the Purchased Shares (at the time the Purchased Shares
were acquired), without giving effect to any reduced loads, the difference
will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To use this Privilege, an investor or an investor's Service Agent
acting on the investor's behalf must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. Telephone exchanges
may be made only if the appropriate "YES" box has been checked on the
Account Application or a separate signed Shareholder Services Form is on
file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on telephonic, telegraphic or written
exchange instructions from any person representing himself or herself to be
the investor or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange permits an
investor to purchase, in exchange for shares of the Fund, shares of another
fund in the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Exchange Privilege." Enrollment in
or modification or cancellation of this Privilege is effective three
business days following notification by the investor. An investor will be
notified if his account falls below the amount designated to be exchanged
under this Privilege. In this case, an investor's account will fall to
zero unless additional investments are made in excess of the designated
amount prior to the next Auto-Exchange transaction. Shares held under IRA
and other retirement plans are eligible for this Privilege. Exchanges of
IRA shares may be made between IRA accounts and from regular accounts to
IRA accounts, but not from IRA accounts to regular accounts. With respect
to all other retirement accounts, exchanges may be made only among those
accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.
Dreyfus Dividend Sweep Privilege. Dreyfus Dividend Sweep Privilege
allows investors to invest on the payment date their dividends or dividends
and capital gain distributions, if any, from the Fund in shares of another
fund in the Dreyfus Family of Funds of which the investor is a shareholder.
Shares of other funds purchased pursuant to this Privilege will be
purchased on the basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that are
offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales load
(referred to herein as "Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum sales load charged by
the fund from which dividends or distributions are being swept, without
giving effect to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales charge
("CDSC") and the applicable CDSC, if any, will be imposed upon redemption
of such shares.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. An Automatic Withdrawal Plan may be established by completing
the appropriate application available from the Distributor. There is a
service charge of $.50 for each withdrawal check. Automatic Withdrawal may
be terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost, which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Trustees has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of sales and redemptions at $1.00. Such procedures include
review of the Fund's portfolio holdings by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether the Fund's net
asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market
quotations and market equivalents used in such review are obtained from an
independent pricing service (the "Service") approved by the Board of
Trustees. The Service values the Fund's investments based on methods which
include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications of values from
dealers; and general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to determine
valuations.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Trustees. If such
deviation exceeds 1/2 of 1%, the Board of Trustees promptly will consider
what action, if any, will be initiated. In the event the Board of Trustees
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, it has agreed
to take such corrective action as it regards as necessary and appropriate,
including: selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or establishing a net asset value per
share by using available market quotations or market equivalents.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the disposition of certain market discount bonds will be
treated as ordinary income under Section 1276 of the Internal Revenue Code
of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended November 30, 1993, the Fund's yield was
2.01% and effective yield was 2.03%. These yields reflect the absorption
of certain expenses by the Manager and the waiver of a portion of the
management fee, without which the Fund's seven-day yield and effective
yield for the period ended November 30, 1993 would have been 1.66% and
1.67%, respectively. See "Management of the Fund" in the Prospectus.
Yield is computed in accordance with a standardized method which involves
determining the net change in the value of a hypothetical pre-existing Fund
account having a balance of one share at the beginning of a seven calendar
day period for which yield is to be quoted, dividing the net change by the
value of the account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying the base
period return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with dividends declared
on the original share and any such additional shares and fees that may be
charged to shareholder accounts, in proportion to the length of the base
period and the Fund's average account size, but does not include realized
gains and losses or unrealized appreciation and depreciation. Effective
yield is computed by adding 1 to the base period return (calculated as
described above), raising that sum to a power equal to 365 divided by 7,
and subtracting 1 from the result.
Based upon a combined 1993 Federal, New York State and New York City
effective tax rate of 47.05%, and a yield of 2.01% for the seven-day period
ended November 30, 1993, after giving effect to the Federal deduction for
New York City taxes, the Fund's tax equivalent yield for this period was
3.80%. Without the expense absorption and management fee waiver then in
effect, the Fund's seven-day tax equivalent for the period ended
November 30, 1993 would have been 3.14%. Tax equivalent yield is computed
by dividing that portion of the current yield (calculated as described
above) which is tax exempt by 1 minus a stated tax rate and adding the
quotient to that portion, if any, of the yield of the Fund that is not tax
exempt.
The tax equivalent yield noted above represents the application of the
highest Federal, New York State and New York City marginal personal income
tax rates in effect. For Federal income tax purposes, a 39.60% tax rate
has been used. For New York State and New York City personal income tax
purposes, a 7.85% tax rate has been used. The tax equivalent figure,
however, does not include the potential effect of any local (including, but
not limited to, county, district or city (aside from taxes imposed upon
residents of the City of New York)) taxes, if any, including applicable
surcharges. In addition, there may be pending legislation which could
affect such stated tax rates or yield. Each investor should consult its
tax adviser, and consider all factual circumstances and applicable tax
laws, in order to ascertain the relevant tax equivalent yield.
Yields will fluctuate and are not necessarily representative of future
results. Each investor should remember that yield is a function of the
type and quality of the instruments in the portfolio, portfolio maturity
and operating expenses. An investor's principal in the Fund is not
guaranteed. See "Determination of Net Asset Value" for a discussion of the
manner in which the Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent yields
or charts in its advertising. These hypothetical yields or charts will be
used for illustrative purposes only and not as representative of the Fund's
past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, including those relating to or arising from actual or proposed tax
legislation. From time to time, advertising materials for the Fund may
also refer to statistical or other information concerning trends relating
to investment companies, as compiled by industry associations such as the
Investment Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily
are purchased directly from the issuer or from an underwriter; other
purchases and sales usually are placed with those dealers from whom it
appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases and
sales, although the price paid usually includes an undisclosed compensation
to the dealer acting as agent. The prices paid to underwriters of
newly-issued securities usually include a concession paid by the issuer
to the underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's Investment
Officers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal rights as to
dividends and in liquidation. Shares have no pre-emptive, subscription or
conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of beneficial interest being sold pursuant to the Fund's Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX A
RISK FACTORS--INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
The financial condition of New York State (the "State") and certain of
its public bodies (the "Agencies") and municipalities, particularly New
York City (the "City"), could affect the market values and marketability of
New York Municipal Obligations which may be held by the Fund. The
following information constitutes only a brief summary, does not purport to
be a complete description, and is based on information drawn from official
statements relating to securities offerings of the State, the City and the
Municipal Assistance Corporation for the City of New York ("MAC") available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to
believe that such information is not correct in all material respects.
A national recession commenced in mid-1990. The downturn continued
through the remainder of the 1990-91 fiscal year, and was followed by a
period of weak economic growth during the remainder of the 1991 calendar
year. For the calendar year 1992, the national economy continued to
recover, although at a rate below all post-war recoveries. The recession
was more severe in the State than in other parts of the nation, owing to a
significant retrenchment in the financial services industry, cutbacks in
defense spending, and an overbuilt real estate market.
The State's 1992-93 fiscal year was characterized by national and
regional economies that performed better than projected. National gross
domestic product, State personal income, and employment and unemployment in
the State are estimated to have performed better than originally projected
in April 1992.
The States 1993-94 budget (the "1993-94 State Financial Plan") is
based on an economic projection that the State will perform more poorly
than the nation as a whole. Although real gross domestic product grew
modestly during calendar year 1992 and is expected to show increased growth
in calendar year 1993, preliminary data indicate that the State's economy,
as measured by employment, began to grow during the first part of calendar
year 1993. Many uncertainties exist in forecasts of both the national and
State economies, including consumer attitudes toward spending, Federal
financial and monetary policies, the availability of credit and the
condition of the world economy, which could have an adverse effect on the
State. There can be no assurance that the State economy will not
experience worse-than-predicted results in the 1993-94 fiscal year, with
corresponding material and adverse effects on the State's projections of
receipts and disbursements.
The Governor released the recommended Executive Budget for the 1993-94
fiscal year on January 19, 1993 and amended it on February 18, 1993. The
recommended 1993-94 State Financial Plan projected a balanced General Fund.
General Fund receipts and transfers from other funds were projected at
$31.556 billion, including $184 million expected to be carried over from
the 1993-94 fiscal year. Disbursements and transfer to other funds were
projected at $31.489 billion, not including a $67 million repayment to the
State's Tax Stabilization Reserve Fund.
The 1993-94 State Financial Plan projects General Fund receipts and
transfers from other funds at $32.367 billion and disbursements and
transfer to other funds at $32.300 billion. Excess receipts of $67 million
will be used for a required repayment to the State's Tax Stabilization
Reserve Fund. In comparison to the recommended 1993-94 Executive Budget,
the 1993-94 State budget, as enacted, reflects increases in both receipts
and disbursements in the General Fund of $811 million.
The $811 million increase in projected receipts reflects (i) an
increase of $487 million, from $184 million to $671 million, in the
positive year-end margin at March 31, 1993, which resulted primarily from
improving economic conditions and higher-than-expected tax collections,
(ii) an increase of $269 million in projected receipts, $211 million
resulting from the improved 1992-93 results and the expectation of an
improving economy and the balance from improved auditing and enforcement
measures and other miscellaneous items, (iii) additional payments of $200
million from the Federal government to reimburse the State for the cost of
providing indigent medical care, and (iv) the payment of an additional $50
million of personal income tax refunds in the 1992-93 fiscal year which
would otherwise have been paid in fiscal year 1993-94; offset by (v) $195
million of revenue-raising recommendations in the Executive Budget that
were not enacted and thus are not included in the 1993-94 State Financial
Plan.
The $811 million increase in projected disbursements reflects (i) an
increase of $252 million in projected school-aid payments, after applying
projected receipts from the State Lottery allocated to school aid, (ii) an
increase of $194 million in projected payments for Medicaid assistance and
other social service programs, (iii) additional spending on the judiciary
($56 million) and criminal justice ($48 million), (iv) a net increase in
projected disbursements for all other programs and purposes, including
mental hygiene and capital projects, of $161 million, after reflecting
certain re-estimates in spending, and (v) the transfer of $100 million to a
newly-established contingency reserve.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant
disparity between tax revenues projected from a lower recurring receipts
base and the spending required to maintain State programs at current
levels. To address any potential budgetary imbalance, the State may need
to take significant actions to align recurring receipts and disbursements
in future fiscal years.
On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P changed its ratings on all of the State's outstanding
general obligation bonds from AA- to A and from A to A-, respectively.
Ratings reflect only the respective views of such organizations, and their
concerns about the financial condition of New York State and City, the debt
load of the State and City and any economic uncertainties about the region.
There is no assurance that a particular rating will continue for any given
period of time or that any such rating will not be revised downward or
withdrawn entirely if, in the judgment of the agency originally
establishing the rating, circumstances so warrant.
(1) The State, Agencies and Other Municipalities. During the mid-
1970s, some of the Agencies and municipalities (in particular, the City)
faced extraordinary financial difficulties, which affected the State's own
financial condition. These events, including a default on short-term notes
issued by the New York State Urban Development Corporation ("UDC") in
February 1975, which default was cured shortly thereafter, and a
continuation of the financial difficulties of the City, created substantial
investor resistance to securities issued by the State and by some of its
municipalities and Agencies. For a time, in late 1975 and early 1976,
these difficulties resulted in a virtual closing of public credit markets
for State and many State related securities.
In response to the financial problems confronting it, the State
developed and implemented programs for its 1977 fiscal year that included
the adoption of a balanced budget on a cash basis (a deficit of $92 million
that actually resulted was financed by issuing notes that were paid during
the first quarter of the State's 1978 fiscal year). In addition,
legislation was enacted limiting the occurrence of additional so-called
"moral obligation" and certain other Agency debt, which legislation does
not, however, apply to MAC debt.
State Financial Results. During the fiscal years ended March 31,
1987, 1988, 1989 and 1990, the State experienced significant unanticipated
variations in the result of the State Financial Plan, particularly with
respect to revenue projections, which it believes resulted principally from
changes in taxpayer behavior caused by the Federal Tax Reform Act of 1986
(the "Tax Reform Act"). The Tax Reform Act substantially altered
definitions of income and deductions in the computation of taxable income
and substantially lowered tax rates used in the computation of Federal
taxes. In 1987, the State enacted legislation that conformed State law to
most of those definitional changes and also lowered tax rates. Those
changes "broadened" the income tax base through such devices as full
inclusion of capital gains, restrictions on certain losses and adjustments
to income. Those changes in the Federal tax law are expected to continue
to influence taxpayer behavior during the next several years. For State
personal income taxes, the net effect of those changes is to make estimates
and forecasts of adjusted gross income less reliable than they had been in
the past and to add substantial uncertainty to estimates of State tax
liability based on such estimates and forecasts. In large part because of
these uncertainties, the State's Financial Plan overestimated General Fund
tax receipts in the 1988-89, 1989-90 and 1990-91 fiscal years by $1.9
billion, $1.6 billion and $1.72 billion, respectively.
During its 1989-90, 1990-91 and 1991-92 fiscal years, the State
incurred cash-basis operating deficits in the General Fund of $775 million,
$1.081 billion and $575 million, respectively, prior to the issuance of
short-term tax and revenue anticipation notes ("TRANs"), owing to lower
than projected receipts.
For its 1992-93 fiscal year the State had a balanced budget on a cash
basis with a positive margin of $671 million in the General Fund that was
deposited in the refund reserve account.
After reflecting a 1992-93 year-end deposit to the refund reserve
account of $671 million, reported 1992-93 General Fund receipts were $45
million higher than originally projected in April 1992. If not for that
year-end transaction, which had the effect of reducing 1992-93 receipts by
$671 million and making those receipts available in 1993-94, General Fund
receipts would have been $716 million higher than originally projected.
The favorable performance was primarily attributable to personal
income tax collections that were more than $700 million higher than
originally projected (before reflecting the refund reserve transaction).
The withholding and estimated payment components of the personal income tax
exceeded original estimates by more than $800 million combined, reflecting
both stronger economic activity, particularly at year's end, and the tax-
induced one-time acceleration of income into 1992. Modest shortfalls were
experienced in other components of the income tax.
There were large, but largely offsetting, variances in other
categories. Significantly higher-than-projected business tax collections
and the receipt of unbudgeted payments from the Medical Malpractice
Insurance Association and the New York Racing Association approximately
offset the loss of an anticipated $200 million Federal reimbursement, the
loss of certain budgeted hospital differential revenue as a result of
unfavorable court decisions, and shortfalls in certain miscellaneous
revenue sources.
Disbursements and transfers to other funds totaled $30.829 billion, an
increase of $45 million above projections in April 1992. After adjusting
for the impact of a $150 million payment from the Medical Malpractice
Insurance Association to health insurers made pursuant to legislation
passed in January 1993, actual disbursements were $105 million lower than
projected. This reduction primarily reflected higher than anticipated
costs for educational programs, as offset by lower costs in virtually all
other categories of spending, including Medicaid, local health programs,
agency operations, fringe benefits, capital projects and debt service.
General Fund receipts and transfers from other funds increased from
$28.6 billion in the State's 1990-91 fiscal year to $30.4 billion in its
1991-92 fiscal year and to $31.4 billion in its 1992-93 fiscal year.
Similarly, disbursements and transfer to other funds increased from $28.9
billion in its 1990-91 fiscal year to $29.8 billion in its 1991-92 fiscal
year to $30.8 billion in its 1992-93 fiscal year.
Borrowings by the State in the public credit markets during the 1990-
91 and 1991-92 fiscal years totalled $6.0 billion and $5.3 billion,
respectively. Of these amounts, $4.1 billion and $3.9 billion,
respectively, were annual seasonal borrowings. In 1992-93, State
borrowings in the public credit markets totalled $3.3 billion, including
annual seasonal borrowings of $2.3 billion. The State issued $757.2
million of bonds and notes, exclusive of bonds issued to redeem bond
anticipation notes, during the 1992-93 fiscal year to finance capital
projects.
The principal operating fund of the State is the General Fund. It
receives all State income that is not required by law to be deposited in
another fund. General Fund receipts, excluding transfers from other funds,
totalled $28.818 billion in the State's 1991-92 fiscal year (before
repayment of $1.081 billion in deficit notes issued to close the State's
1990-91 fiscal year General Fund cash basis deficit and before issuance of
$531 million in deficit notes to close the 1991-92 fiscal year General Fund
cash basis operating deficit). General Fund receipts in the State's 1992-
93 fiscal year totalled $29.950 billion (before the repayment of $531
million in 1992 such deficit notes). General Fund receipts in the State's
1993-94 fiscal year are estimated in the 1993-94 State Financial Plan at
$30.765 billion. Taxes account for 96% of estimated 1993-94 General Fund
receipts, with the balance comprised of miscellaneous receipts. Excluding
transfers to other funds, total General Fund disbursements in the 1992
fiscal year were $28.058 billion, and $29.068 billion in the State's 1992-
93 fiscal year and are estimated to total $30.346 billion in the State's
1993-94 fiscal year.
The Special Revenue Funds account for State receipts from specific
sources that are legally restricted in use to specified purposes and
include all moneys received from the Federal government. Total receipts in
Special Revenue Funds are projected at $23.126 billion in the State's 1993-
94 fiscal year. Federal grants are projected to account for 78% of the
total projected receipts in Special Revenue Funds in the State's 1993-94
fiscal year.
Disbursements from Special Revenue Funds are projected to be $23.328
billion for the State's 1993-94 fiscal year. Grants to local governments
disbursed from this fund type are projected to account for 76% of
disbursements from this fund for the 1993-94 fiscal year.
The Capital Projects Funds are used to finance the acquisition and
construction of major capital facilities and to aid local government units
and Agencies in financing capital constructions. Federal grants for
capital projects, largely highway-related, are projected to account for 35%
of the $2.768 billion in total projected receipts in Capital Projects Funds
in the State's 1993-94 fiscal year. Total disbursements for capital
projects are projected to be $3.559 billion during the State's 1993-94
fiscal year. Of total disbursements from Capital Projects Funds,
approximately 54% is for various transportation purposes, including
highways and mass transportation facilities; 4% is for programs of the
Department of Correctional Services and other public protection activities;
16% is for health and mental hygiene facilities; 13% is for environmental
and recreational programs; 5% is for educational programs; and 5% is for
housing and economic development programs. The balance is for the
maintenance of State office facilities and various other capital programs.
The Debt Service Funds serve to fulfill State debt service on long-
term general obligation State debt and other State lease/purchase and
contractual obligation financing commitments. Total receipts in Debt
Service Funds are projected to reach $2.242 billion in the State's 1993-94
fiscal year. Total disbursements from Debt Service Funds for debt service,
lease/purchase and contractual obligation financing commitments are
projected to be $2.118 billion for the 1993-94 fiscal year.
The State issued $850 million in TRANs on May 4, 1993 to fund its day-
to-day operations and certain local assistance payments to its
municipalities and school districts. All of these TRANs matured on
December 31, 1993.
The State anticipates that its 1993-94 borrowings for capital purposes
will consist of approximately $316 million in general obligation bonds and
$140 million in new commercial paper issuances. In addition, the State
expects to issue $140 million of its general obligation bonds for the
purpose of redeeming outstanding bond anticipation notes. The Legislature
has authorized the issuance of up to $85 million in certificates of
participation for real property and equipment acquisitions during the
State's 1993-94 fiscal year. The projections of the State regarding its
borrowings for the 1993-94 fiscal year may change if actual receipts fall
short of State projections or if other circumstances require.
The Governor's 1993-94 Executive Budget contained an update to the
GAAP-basis 1992-93 State Financial Plan based on the cash-basis projections
in the 1992-93 State Financial Plan, as revised on January 19, 1993. The
update showed a General Fund operating surplus of $945 million. For all
governmental funds, the update reflected an overall operating surplus of
$1.287 billion. This included the General Fund operating surplus of $945
million and operating surpluses of $62 million in the Capital Projects Fund
and $295 million in Debt Service Funds, as offset, in part, by an operating
deficit of $15 million in the Special Revenue Funds.
The Governor's 1993-94 Executive Budget included a projection of the
GAAP-basis 1993-94 State Financial Plan. The projection showed a General
Fund operating surplus of $448 million. On February 18, 1993, the
projected General Fund operating surplus was reduced by $5 million to $443
million to reflect the changes made in the amendments to the 1993-94
Executive Budget. The projected GAAP results for the other governmental
fund types were not revised. For all governmental funds, a surplus of $592
million was projected, including the General Fund operating surplus of $443
million and operating surpluses of $196 million in the Capital Projects
Funds and $92 million in the Debt Service Funds, as partially offset by an
operating deficit of $139 million in the Special Revenue Funds.
The Governor's first quarterly update to the GAAP-basis 1993-94 State
Financial Plan, which is based on the cash basis 1993-94 State Financial
Plan, as revised on July 30, 1993, was released on September 1, 1993. The
update shows a General Fund operating surplus of $12 million. For all
governmental funds, the update reflects an overall surplus of $195 million,
including the General Fund operating surplus of $12 million and operating
surpluses of $43 million in Special Revenue Funds, $79 million in Capital
Projects Funds and $61 million in Debt Service Funds.
The State's financial position as shown in its Combined Balance Sheet
as of March 31, 1993 included an accumulated deficit in its combined
governmental funds of $681 million represented by liabilities of $12.864
billion and assets of $12.183 billion available to liquidate such
liabilities. The accumulated governmental fund type deficit, as of March
31, 1993, included a $2.551 billion accumulated General Fund deficit
consisting of a $4.616 billion accumulated deficit at April 1, 1992, offset
by the $2.065 billion operating surplus in the General Fund for the 1992-93
fiscal year, and a net accumulated surplus of $1.870 billion for all other
governmental funds.
The State's financial position as shown in its Combined Balance Sheet
as of March 31, 1992 included an accumulated deficit in its combined
governmental funds of $3.315 billion represented by liabilities of $14.166
billion and assets of $10.851 billion available to liquidate such
liabilities.
The use of New York Local Government Assistance Corporation ("LGAC")
bond proceeds to make payments to local governmental units, otherwise made
by the State, reduces the State's future liabilities. Therefore, the
projected 1993-94 General Fund GAAP-basis operating surplus reflected above
includes $575 million to reflect payment by LGAC to local governmental
units.
State Agencies. The fiscal stability of the State is related, at
least in part, to the fiscal stability of its localities and various of its
Agencies. Various Agencies have issued bonds secured, in part, by
non-binding statutory provisions for State appropriations to maintain
various debt service reserve funds established for such bonds (commonly
referred to as "moral obligation" provisions).
At September 30, 1992, there were 18 Agencies that had outstanding
debt of $100 million or more. The aggregate outstanding debt, including
refunding bonds, of these 18 Agencies, was $62.2 billion as of September
30, 1992, of which approximately $8.2 billion was moral obligation debt and
approximately $17.1 billion was financed under lease/purchase or
contractual-obligation financing arrangements. Debt service on the
outstanding Agency obligations normally is paid out of revenues generated
by the Agencies' projects or programs, but in recent years the State has
provided special financial assistance, in some cases on a recurring basis,
to certain Agencies for operating and other expenses and for debt service
pursuant to moral obligation indebtedness provisions or otherwise.
Additional assistance is expected to continue to be required in future
years.
Several Agencies have experienced financial difficulties in the past.
Certain Agencies continue to experience financial difficulties requiring
financial assistance from the State. Failure of the State to appropriate
necessary amounts or to take other action to permit certain Agencies to
meet their obligations could result in a default by one or more of such
Agencies. If a default were to occur, it would likely have a significant
effect on the marketability of obligations of the State and the Agencies.
These Agencies are discussed below.
The New York State Housing Finance Agency ("HFA") provides financing
for multifamily housing, State University construction, hospital and
nursing home development and other programs. In general, HFA depends upon
mortgagors in the housing programs it finances to generate sufficient funds
from rental income, subsidies and other payments to meet their respective
mortgage repayment obligations to HFA, which provide the principal source
of funds for the payment of debt service on HFA bonds, as well as to meet
operating and maintenance costs of the projects financed. From January 1,
1976 through March 31, 1987, the State was called upon to appropriate a
total of $162.8 million to make up deficiencies in the debt service reserve
funds of HFA pursuant to moral obligation provisions. The State has not
been called upon to make such payments since the 1986-87 fiscal year and no
payments are anticipated during the 1993-94 fiscal year.
UDC has experienced, and expects to continue to experience, financial
difficulties with the housing programs it had undertaken prior to 1975,
because a substantial number of these housing program mortgagors are unable
to make full payments on their mortgage loans. Through a subsidiary, UDC
is currently attempting to increase its rate of collection by accelerating
its program of foreclosures and by entering into settlement agreements.
UDC has been, and will remain, dependent upon the State for appropriations
to meet its operating expenses. The State also has appropriated money to
assist in the curing of a default by UDC on notes which did not contain the
State's moral obligation provision.
The Metropolitan Transportation Authority (the "MTA") oversees New
York City's subway and bus lines by its affiliates, the New York City
Transit Authority and the Manhattan and Bronx Surface Transit Operating
Authority (collectively, the "TA"). Through MTA's subsidiaries, the Long
Island Rail Road Company, the Metro-North Commuter Railroad Company and the
Metropolitan Suburban Bus Authority, the MTA operates certain commuter rail
and bus lines in the New York metropolitan area. In addition, the Staten
Island Rapid Transit Authority, an MTA subsidiary, operates a rapid transit
line on Staten Island. Through its affiliated agency, the Triborough
Bridge and Tunnel Authority (the "TBTA"), the MTA operates certain toll
bridges and tunnels. Because fare revenues are not sufficient to finance
the mass transit portion of these operations, the MTA has depended and will
continue to depend for operating support upon a system of State, local
government and TBTA support and, to the extent available, Federal operating
assistance, including loans, grants and operating subsidies.
The TA and the commuter railroads, which are on a calendar fiscal
year, ended 1992 with their budgets balanced on a cash basis. The TA had a
closing cash balance of approximately $25 million, and the commuter
railroads had a closing cash balance of approximately $237 million.
Over the past several years the State has enacted several
taxes--including a surcharge on the profits of banks, insurance
corporations and general business corporations doing business in the
12-county region (the "Metropolitan Transportation Region") served by the
MTA and a special .25% regional sales and use tax--that provide additional
revenues for mass transit purposes, including assistance to the MTA. The
surcharge, which expires in November 1995, yielded $507 million in calendar
year 1992, of which the MTA was entitled to receive approximately 90%, or
approximately $456 million.
For 1993, the TA had a closing cash balance of about $39 million. The
cash balance primarily reflected additional State and City aid of $164
million and improvements in farebox and subsidy revenues of approximately
$78 million, as well as savings from internal actions, the elimination of
contingency reserves and lower debt service.
A subway fire on December 28, 1990 and a subway derailment on August
28, 1991, each of which caused fatalities and many injuries, have given
rise to substantial claims for damages against both the TA and the City.
In 1981, the State Legislature authorized procedures for the adoption,
approval and amendment of a five-year plan for the capital program designed
to upgrade the performance of the MTA's transportation systems and to
supplement, replace and rehabilitate facilities and equipment, and also
granted certain additional bonding authorization therefor.
On April 5, 1993, the Legislature approved, and the Governor
subsequently signed into law, legislation authorizing a five-year $9.56
billion capital plan for the MTA for 1992-1996. The MTA has submitted a
1992-1996 Capital Program based on this legislation for the approval of the
MTA Capital Program Review Board (the "CPRB"), as State law requires. On
July 1, 1993, the CPRB indicated that it was withholding approval pending
the resolution of certain related issues. If approved, the 1992-1996
Capital Program would succeed two previous five-year capital programs of
the periods covering 1982-1986 and 1987-1991. The 1987-1991 Capital
Program totalled approximately $8.0 billion, including $6.2 billion for TA
capital projects.
The 1992-1996 Capital Program would supersede a one-year program
adopted in 1992. State budget legislation for the 1992-93 fiscal year had
required the MTA to submit a one-year capital program for 1992 instead of a
five-year program. The one-year program, which contained $1.635 billion of
projects for transit and commuter facilities combined, was approved by the
CPRB in May 1992, but the five-year program for 1992-1996, required to be
submitted subsequently by the MTA as an amendment to the one-year plan, was
disapproved without prejudice by the CPRB in December 1992.
There can be no assurance that such governmental actions will be
taken, that sources currently identified will not be decreased or
eliminated, or that the 1992-1996 Capital Program will not be delayed or
reduced. If the MTA capital program is delayed or reduced because of
funding shortfalls or other factors, ridership and fare revenues may
decline, which could, among other things, impair the MTA's ability to meet
its operating expenses without additional State assistance.
The cities, towns, villages and school districts of the State are
political subdivisions of the State with the powers granted by the State
Constitution and statutes. As the sovereign, the State retains broad
powers and responsibilities with respect to the government, finances and
welfare of these political subdivisions, especially in education and social
services. In recent years the State has been called upon to provide added
financial assistance to certain localities.
Other Localities. Certain localities in addition to the City could
have financial problems leading to requests for additional State assistance
during the State's 1993-94 fiscal year and thereafter. The potential
impact on the State of such actions by localities is not included in the
projections of the State receipts and disbursements in the State's 1993-94
fiscal year.
Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1991, the total indebtedness of
all localities in the State was approximately $32.2 billion, of which $16.8
billion was debt of the City (excluding $6.7 billion in MAC debt). A small
portion (approximately $39.0 million) of this indebtedness represented
borrowing to finance budgetary deficits and was issued pursuant to enabling
State legislation. State law requires the Comptroller to review and make
recommendations concerning the budgets of those local government units
other than the City authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding.
Fifteen localities had outstanding indebtedness for deficit financing at
the close of their fiscal year ending in 1991.
In 1992, an unusually large number of local government units requested
authorization for deficit financing. According to the Comptroller, ten
local government units were authorized to issue deficit financing in the
aggregate amount of $131.1 million, including Nassau County for $65 million
in six-year deficit bonds and Suffolk County for $36 million in six-year
deficit bonds. Although the Comptroller has indicated that the level of
deficit financing requests is unprecedented, such developments are not
expected to have a material adverse effect on the financial condition of
the State.
Certain proposed Federal expenditure reductions would reduce, or in
some cases eliminate, Federal funding of some local programs and
accordingly might impose substantial increased expenditure requirements on
affected localities to increase local revenues to sustain those
expenditures. If the State, the City or any of the Agencies were to suffer
serious financial difficulties jeopardizing their respective access to the
public credit markets, the marketability of notes and bonds issued by
localities within the State could be adversely affected. Localities also
face anticipated and potential problems resulting from certain pending
litigation, judicial decisions and long-range economic trends. The
longer-range, potential problems of declining city population, increasing
expenditures and other economic trends could adversely affect localities
and require increasing State assistance in the future.
Because of significant fiscal difficulties experienced from time to
time by the City of Yonkers, a Financial Control Board was created by the
State in 1984 to oversee Yonkers' fiscal affairs. Future actions taken by
the Governor or the State Legislature to assist Yonkers in this crisis
could result in the allocation of State resources in amounts that cannot
yet be determined.
Certain litigation pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these litigations are those that
involve: (i) the validity and fairness of agreements and treaties by which
various Indian tribes transferred title to the State of approximately six
million acres of land in central New York; (ii) certain aspects of the
State's Medicaid rates and regulations, including reimbursements to
providers of mandatory and optional Medicaid services; (iii) contamination
in the Love Canal area of Niagara Falls; (iv) a challenge to the State's
practice of reimbursing certain Office of Mental Health patient-care
expenses with clients' Social Security benefits; (v) a challenge to the
methods by which the State reimburses localities for the administrative
costs of food stamp programs; (vi) a challenge to the State's possession
of certain funds taken pursuant to the State's Abandoned Property law;
(vii) alleged responsibility of State officials to assist in remedying
racial segregation in the City of Yonkers; (viii) an action, in which the
State is a third party defendant, for injunctive or other appropriate
relief, concerning liability for the maintenance of stone groins
constructed along certain areas of Long Island's shoreline; (ix) actions
challenging the constitutionality of legislation enacted during the 1990
legislative session which changed the actuarial funding methods for
determining contributions to State employee retirement systems; (x) an
action against State and City officials alleging that the present level of
shelter allowance for public assistance recipients is inadequate under
statutory standards to maintain proper housing; (xi) an action challenging
legislation enacted in 1990 which had the effect of deferring certain
employer contributions to the State Teachers' Retirement System and
reducing State aid to school districts by a like amount; (xii) a challenge
to the Laws of 1991 (described below in this Part); (xiii) a challenge to
the constitutionality of financing programs of the Metropolitan
Transportation Authority and the Thruway Authority authorized by Chapter 56
of the Laws of 1993 (described below in this Part); (xiv) challenges to the
delay by the State Department of Social Services in making two one-week
Medicaid payments to the service providers; (xv) challenges by commercial
insurers, employee welfare benefit plans, and health maintenance
organizations to provisions of Section 2807-c of the Public Health Law
which impose 13%, 11%, 9% surcharges on inpatient hospital bills and a bad
debt and charity care allowance on all hospital bills paid by such
entities; (xvi) challenges to the promulgation of the State's proposed
procedure to determine the eligibility for and nature of home care services
for Medicaid recipients; (xvii) a challenge to State implementation of a
program which reduces Medicaid benefits to certain home-relief recipients;
and (xviii) challenges to the rationality and retroactive application of
State regulations recalibrating nursing home Medicaid rates.
Adverse developments or decisions in such cases could affect the
ability of the State to maintain a balanced 1993-94 State Financial Plan.
(2) New York City. In the mid-1970s, the City had large accumulated
past deficits and until recently was not able to generate sufficient tax
and other ongoing revenues to cover expenses in each fiscal year. However,
the City's operating results for the fiscal year ending June 30, 1993 were
balanced in accordance with GAAP, the eleventh consecutive year in which
the City achieved balanced operating results in accordance with GAAP. The
City's ability to maintain balanced operating results in future years is
subject to numerous contingencies and future developments.
The City's economy, whose rate of growth slowed substantially over the
past three years, is currently in recession. During the 1990 and 1991
fiscal years, as a result of the slowing economy, the City has experienced
significant shortfalls in almost all of its major tax sources and increases
in social services costs, and has been required to take actions to close
substantial budget gaps in order to maintain balanced budgets in accordance
with the Financial Plan.
In 1975, the City became unable to market its securities and entered a
period of extraordinary financial difficulties. In response to this
crisis, the State created MAC to provide financing assistance to the City
and also enacted the New York State Financial Emergency Act for the City of
New York (the "Emergency Act") which, among other things, created the
Financial Control Board (the "Control Board") to oversee the City's
financial affairs and facilitate its return to the public credit markets.
The State also established the Office of the State Deputy Comptroller
("OSDC") to assist the Control Board in exercising its powers and
responsibilities. On June 30, 1986, the Control Board's powers of approval
over the City Financial Plan were suspended pursuant to the Emergency Act.
However, the Control Board, MAC and OSDC continue to exercise various
monitoring functions relating to the City's financial condition. The City
prepares and operates under a four-year financial plan which is submitted
annually to the Control Board for review and which the City periodically
updates.
The City's independently audited operating results for each of its
fiscal years from 1981 through 1993 show a General Fund surplus reported in
accordance with GAAP. The City has eliminated the cumulative deficit in
its net General Fund position. In addition, the City's financial
statements for the 1993 fiscal year received an unqualified opinion from
the City's independent auditors, the eleventh consecutive year the City has
received such an opinion.
In August 1993, the City adopted and submitted to the Control Board
for its review a four-year Financial Plan covering fiscal years 1994
through 1997 (the "Financial Plan"). The Financial Plan was based on the
City's fiscal year 1994 expense budget adopted June 14, 1993 as well as
certain changes incorporated subsequent to the budget adoption process. On
November 23, 1993, the City adopted and submitted to the Control Board for
its review a first-quarter modification to the Financial Plan (the
"November Modification") incorporating various re-estimates of revenues and
expenditures. For fiscal year 1994, the November Modification includes
additional resources stemming primarily from the City Comptroller's fiscal
year 1993 annual audit, savings from a reduction in prior years' accrued
expenditures, and higher State and Federal aid resulting from claims by the
City for reimbursement of various social services costs. These resources
were used to fund new needs in the November Modification including higher
costs in the uniformed agencies, at the Board of Education (the "BoE") and
for certain social services, the unlikelihood of the sale of the Off-Track
Betting Corporation (the "OTB"), and lower estimates of miscellaneous and
other revenues. After taking these adjustments into account, the November
Modification projects a balanced budget for fiscal year 1994, based upon
revenues of $31.585 billion. For fiscal years 1995, 1996 and 1997, the
November Modification projects budget gaps of $1.730 billion, $2.513
billion and $2.699 billion, respectively. These gaps are higher by about
$450 million in fiscal year 1995 and by about $700 million in each of
fiscal years 1996 and 1997 than in the Financial Plan, primarily on account
of the nonrecurring value of the fiscal year 1994 revenue adjustments, the
loss of certain one-time resources funding BoE fiscal year 1994 spending
needs, and the reclassification of anticipated State aid from the baseline
revenue estimates to the gap-closing program. To offset these larger gaps,
the November Modification relies on additional City, State and other
actions.
On December 1, 1993, a three-member panel appointed by the Mayor to
address City structural budget imbalance released a report setting forth
its findings and recommendations. In its report, the panel noted that
budget imbalance is likely to be greater than the City now projects by $255
million in fiscal year 1995, rising to nearly $1.5 billion in fiscal year
1997. The report provided a number of options that the City should
consider in addressing the structural balance issue such as severe cuts in
City-funded personnel levels, increases in residential property taxes and
the sales tax, and the imposition of bridge tolls and solid waste
collection fees. The report also noted that additional State actions will
be required in many instances to allow the City to cut its budget without
grave damage to basic services.
On December 21, 1993, OSDC issued a report reviewing the November
Modification. The report noted that while the outlook for fiscal year 1994
has improved since August, it will be necessary for the City to manage its
budget aggressively in order to stay on course for budget balance this
year. For fiscal years 1995 through 1997, the report expressed concern
that the gaps identified by the City in the November Modification are the
largest as a percentage of City-fund revenues that the City has faced at
this point in the fiscal year since budget balance in accordance with GAAP
was first achieved in fiscal year 1981.
On December 21, 1993, the staff of the Control Board issued its report
on the November Modification. The report states that the plan is now more
realistic in terms of the gaps it portrays and the solutions it offers.
However, the solutions are mostly limited to fiscal year 1994 while the gap
for fiscal year 1995 has been increased by $450 million. Beginning in
fiscal year 1995, budget gaps average over $2 billion annually. Therefore,
the staff recommends that prompt action to replace many current-year one-
shots with recurring savings is critical.
On February 2, 1994, the Mayor presented to the City Council and the
Control Board a mid-year modification to the Financial Plan (the "February
Modification"). The February Modification projects a balanced budget for
fiscal year 1994, based upon revenues of $31.735 billion, including a
general reserve of $81 million. For fiscal years 1995, 1996 and 1997, the
February Modification projects budget gaps of $2.261 billion, $3.167
billion and $3.253 billion, respectively, and assumes no wage and salary
increases beyond the expiration of current labor agreements which expire in
fiscal years 1995 and 1996. These gaps have grown since November by about
$530 million in fiscal year 1995, and $650 million and $550 million in
fiscal years 1996 and 1997, respectively, owing in large part to lower
estimates of real property tax revenues. To close the budget gap projected
for fiscal year 1995, the February Modification includes a gap-closing
program that consists of the following major elements: (i) an agency
program of $1.048 billion; (ii) fringe benefit and pension savings of $400
million; (iii) an intergovernmental aid package of $400 million; (iv) a
workforce reduction program of $144 million; and (v) the assumption of a
$234 million surplus roll from fiscal year 1994. Implementation of many of
the gap-closing initiatives requires the cooperation of the municipal labor
unions, the City Council and the State and Federal governments. The
February Modification also includes a tax reduction program, with most of
the financial impact affecting the later years of the Plan period.
The City requires certain amounts of financing for seasonal and
capital spending purposes. The City has issued $1.75 billion of notes for
seasonal financing purposes during the 1994 fiscal year. The City's
capital financing program projects long-term financing requirements of
approximately $16.6 billion for the City's fiscal years 1994 through 1997
for the construction and rehabilitation of the City's infrastructure and
other fixed assets. The major capital requirement include expenditures for
the City's water supply system, and waste disposal systems, roads, bridges,
mass transit, schools and housing. In addition, the City and the Municipal
Water Finance Authority have issued about $1.8 billion in refunding bonds
in the 1994 fiscal year.
(3) State Economic Trends. The City accounts for approximately 41%
of the State's population and personal income, and the City's financial
health affects the State in numerous ways. The State has long been one of
the wealthiest states in the nation. For decades, however, the State
economy has grown more slowly than that of the nation as a whole, resulting
in the gradual erosion of its relative economic affluence. The causes of
this relative decline are varied and complex, in many cases involving
national and international developments beyond the State's control. In
recent years, the State's economic position has improved in a manner
consistent with that of the Northeast as a whole.
Part of the reason for the long-term relative decline in the State's
economy has been attributed to the combined State and local tax burden,
which is among the highest in the United States. The burdens of State and
local taxation, in combination with many other causes of regional economic
dislocation, may have contributed to the decision of businesses and
individuals to relocate outside, or not locate within, the State. In 1987,
the State enacted a major personal income tax reduction and reform program
and also reduced the tax rate on corporation income. In addition, the
State has provided various tax incentives to encourage business relocation
and expansion. The State, however, in its 1989-90, 1990-91 and 1991-92
fiscal years substantially increased taxes and fees to help close projected
budget gaps in those years, and in 1990-91, 1991-92 and 1992-93 delayed and
restructured the remainder of the personal income tax reduction program
originally enacted in 1987. Under legislation proposed with the 1993-94
budget, the rules for calculating tax liability for the 1993 tax year will
be the same as those for the 1992 tax year (deferring for a fourth year a
previously scheduled tax reduction), and the tax reduction program will be
frozen at current rates. Also, in July 1991 State legislation was enacted
to phase out the benefit of graduated income tax tables for taxpayers with
adjusted gross income above $100,000.
APPENDIX B
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature of and provisions
of the obligation; and (3) protection afforded by, and relative position
of, the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 indicated that the
degree of safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities. Bonds in the Aa category which Moody's
believes possess the strongest investment attributes are designated by the
symbol Aa1.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issuers rated Prime-2 (P-2) have a
strong ability for repayment of senior short-term debt obligations.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term risk.
Factors affecting the liquidity of the borrower and short-term cyclical
elements are critical in short-term ratings, while other factors of major
importance in bond risk, long-term secular trends for example, may be less
important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operating performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond ratings
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS NOVEMBER 30, 1993
TAX EXEMPT INVESTMENTS-100.0% PRINCIPAL
AMOUNT VALUE
--------- -------
NEW YORK-94.3%
<S> <C> <C>
Babylon Industrial Development Agency, RRR, VRDN (Equity Babylon Project)
1.80% (LOC; Union Bank of Switzerland) (a,b)............................... $ 5,000,000 $ 5,000,000
Erie County:
RAN 3.30%, 8/5/94 (LOC; Mitsubishi Bank) (b)............................... 15,200,000 15,219,852
TAN 2.45%, 12/30/93 (LOC; Mitsubishi Bank) (b)............................. 7,150,000 7,150,000
Erie County Water Authority, Water Revenue, VRDN 2.15%, Series A
(Insured; AMBAC and Liquidity Facility; Industrial Bank of Japan) (a)...... 9,000,000 9,000,000
Fulton County Industrial Development Agency, Revenue, VRDN
(SLM Action Sports Project) 2.425% (LOC; Royal Bank of Canada) (a,b)....... 1,800,000 1,800,000
Half Hollow Hills Central School District, Huntington and Babylon, TAN
3%, 6/24/94................................................................ 13,000,000 13,042,746
Town of Islip Industrial Development Agency, IDR, VRDN
(Brentwood District Co.) 2.675% (LOC; Bankers Trust) (a,b)................. 3,000,000 3,000,000
Metropolitan Transport Authority, Commuter Facilities Revenue, VRDN
2.05% (LOC: Bank of Tokyo, Industrial Bank of Japan, Mitsubishi Bank,
Morgan Bank, National Westminster Bank and Sumitomo Bank) (a,b)............ 28,800,000 28,800,000
Monroe County, BAN:
2.75%, 12/17/93............................................................ 6,500,000 6,501,260
3%, 6/10/94................................................................ 5,000,000 5,011,465
City of New York:
RAN 3.50%, 6/30/94......................................................... 30,000,000 30,102,072
TAN 3.125%, Series A, 4/8/94............................................... 10,000,000 10,017,887
VRDN:
GO Notes:
1.90%, Series D (Insured; FGIC and Liquidity Facility; GE Capital) (a). 7,900,000 7,900,000
2%, Series A-4 (LOC; Chemical Bank) (a,b).............................. 9,100,000 9,100,000
2%, Series C-3 (LOC; Industrial Bank of Japan) (a,b)................... 4,300,000 4,300,000
2%, Series C-4 (LOC; Fuji Bank) (a,b).................................. 10,100,000 10,100,000
2%, Series C-5 (LOC; Sumitomo Bank) (a,b).............................. 16,100,000 16,100,000
2%, Series D (SBPA; Citibank) (a)...................................... 18,100,000 18,100,000
2%, Series E (LOC; Industrial Bank of Japan) (a,b)..................... 4,800,000 4,800,000
2.10%, Series A-7 (LOC; Morgan Guaranty Trust) (a,b)................... 8,100,000 8,100,000
2.15%, Series A-10 (LOC; Sumitomo Bank) (a,b).......................... 6,000,000 6,000,000
Trust Cultural Resource Revenue (Solomon R. Guggenheim) 1.85%, Series B
(LOC; Swiss Bank Corp.) (a,b).......................................... 9,750,000 9,750,000
New York City Housing Development Corp., Mortgage Revenue, VRDN
(Park Gate Tower) 2.20% (LOC; Citibank) (a,b).............................. 2,835,000 2,835,000
New York City Industrial Development Agency, VRDN:
Civil Facility Revenue (Children's Oncology Society)
2.20% (LOC; Barclays Bank) (a,b)....................................... 3,900,000 3,900,000
IDR:
2.20%, Series E (LOC; ABN-Amro Bank) (a,b)............................... 950,000 950,000
(Field Hotel Association JFK Project) 2.15% (LOC; Banque Indosuez) (a,b). 4,000,000 4,000,000
(Nobart-New York Inc. Project) 2.80% (LOC; Dai-Ichi Kangyo Bank) (a,b)... 2,900,000 2,900,000
New York City Municipal Water Finance Authority, Water and Sewer
Systems Revenue:
BAN 2.75%, Series A, 4/15/94............................................. 12,000,000 12,015,198
VRDN 1.85%, Series C (Insured; FGIC) (a)................................. 2,000,000 2,000,000
New York State:
CP 2.50%, 12/6/93 (Line of Credit; Daiwa Bank)............................. 9,000,000 9,000,000
TRAN 2.75%, 12/31/93....................................................... 20,000,000 20,009,272
New York State Dormitory Authority, Revenue, CP
(Sloan Kettering Memorial Hospital)
2.30%, Series 89A, 12/17/93 (LOC; Fuji Bank) (a,b)....................... 5,000,000 5,000,000
New York State Energy, Research and Development Authority:
PCR:
Bonds:
(Lilco Project)
2.50%, Series B, 3/1/94 (LOC; Deutsche Bank) (b)..................... 5,450,000 5,450,000
(New York State Electric and Gas):
2.90%, Series D, 12/1/93 (LOC; Union Bank of Switzerland) (b)........ 555,000 555,000
2.75%, Series 85A, 3/1/94 (LOC; Union Bank of Switzerland) (b)....... 7,000,000 7,000,000
2.50%, Series 85A, 3/15/94 (LOC; Morgan Guaranty Trust) (b).......... 8,000,000 8,000,000
2.85%, Series B, 10/15/94 (LOC; Union Bank of Switzerland) (b)....... 7,200,000 7,200,000
VRDN:
(Central Hudson Gas and Electric Project):
2.35%, Series B (LOC; Bankers Trust) (a,b)........................... 8,700,000 8,700,000
2.40%, Series A (LOC; Bankers Trust) (a,b)........................... 3,800,000 3,800,000
Electric Facilities Revenue (Lilco Project) 2.85%, Series B
(LOC; Toronto Dominion Bank) (a,b)................................... 8,000,000 8,000,000
(Niagara Mohawk Project):
2.20%, Series A (LOC; Morgan Guaranty Trust) (a,b)................... 41,000,000 41,000,000
2.20%, Series B (LOC; JP Morgan) (a,b)............................... 16,000,000 16,000,000
2.30%, Series C (LOC; Canadian Imperial Bank of Commerce) (a,b)...... 5,000,000 5,000,000
2.45%, Series A (LOC; Toronto Dominion Bank) (a,b)................... 21,200,000 21,200,000
New York State Housing Finance Agency, Revenue, VRDN
(Liberty View Apartment Housing Project) 2.20% (LOC; Chemical Bank) (a,b).. 10,850,000 10,850,000
New York State Job Development Authority, VRDN:
2.47%, Series A1 Thru A9 (LOC; Sumitomo Bank) (a,b)........................ 720,000 720,000
2.47%, Series C1 Thru C34 (LOC; Sumitomo Bank) (a,b)....................... 550,000 550,000
2.47%, Series D1 Thru D16 (LOC; Sumitomo Bank) (a,b)....................... 220,000 220,000
2.50%, Series E1 Thru E55 (LOC; Sumitomo Bank) (a,b)....................... 1,475,000 1,475,000
New York State Local Government Assistance Corp., VRDN 2%, Series 93A
(LOC: Credit Suisse, Swiss Bank Corp. and Union Bank of Switzerland) (a,b). 12,000,000 12,000,000
New York State Medical Care Facilities Finance Agency, Revenue, VRDN
(Pooled Equipment Loan Program) 2.15% (LOC; Chemical Bank) (a,b)........... 26,900,000 26,900,000
North Hempstead Solid Waste Management Authority, Solid Waste
Management Revenue VRDN 2% (LOC; National Westminster Bank) (a,b).......... 8,500,000 8,500,000
Onondaga County Industrial Development Agency, IDR, VRDN (Edgecomb Metals)
2.55% (LOC; Banque Nationale De Paris) (a,b)............................... 2,000,000 2,000,000
Port Authority of New York and New Jersey, Special Obigation Revenue, VRDN
2.20%, Series 3 (LOC; Deutsche Bank) (a,b)................................. 24,000,000 24,000,000
Rochester County, BAN 2.23%, 3/14/94......................................... 25,000,000 25,000,000
Rockland County, RAN 2.75%, 4/8/94........................................... 5,000,000 5,005,106
Rockland County Industrial Development Agency, IDR, VRDN (Wilton Foods)
2.40% (LOC; Bank of Tokyo) (a,b)........................................... 3,000,000 3,000,000
Suffolk County, TAN 3%, 9/15/94 (LOC; Chemical Bank) (b)..................... 20,000,000 20,023,008
Syracuse, BAN 3%, 6/17/94.................................................... 7,163,000 7,182,526
U.S. RELATED-5.7%
Commonwealth of Puerto Rico Government Development Bank, Refunding, VRDN
2.25% (LOC: Credit Suisse and Sumitomo Bank) (a,b)......................... 23,000,000 23,000,000
Commonwealth of Puerto Rico Highway and Transportation Authority,
Highway Revenue VRDN 2% (LOC: Landesbank Hessen, Swiss Bank Corp. and
United Bank of Switzerland) (a,b).......................................... 3,000,000 3,000,000
Puerto Rico Industrial Medical and Environmental Pollution Control
Facilities Financing Authority, Revenue Bonds
(Abbott Laboratories Project) 2.70%, Series A, 3/1/94...................... 8,250,000 8,250,000
------------
TOTAL INVESTMENTS
(cost $605,085,392)........................................................ $605,085,392
============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <S> <S> <S>
AMBAC American Municipal Bond Assurance Corporation PCR Pollution Control Revenue
BAN Bond Anticipation Notes RAN Revenue Anticipation Notes
CP Commercial Paper RRR Resource Recovery Revenue
FGIC Financial Guaranty Insurance Corporation SBPA Standby Bond Purchase Agreement
GO General Obligation TAN Tax Anticipation Notes
IDR Industrial Development Revenue TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
<TABLE>
<CAPTION>
FITCH (C) or MOODY'S or STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
<S> <S> <S> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 88.6%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 4.6
Not Rated (f) Not Rated (f) Not Rated (f) 6.8
------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is subject
to change, is based upon bank prime rates or
an index of market interest rates.
(b) Secured by letters of credit. At November 30, 1993, 68.1% of the
Fund's net assets are backed by letters of
credit issued by domestic banks, foreign banks and brokerage firms,
of which Chemical Bank provided letters of
credit to 10.9% of the Fund's net assets.
(c) Fitch currently provides creditworthiness information for a limited
amount of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial
paper by Moody's and Standard & Poor's,
respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond
ratings of the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Fund's Board
of Directors to be of comparable quality to those rated securities
in which the Fund may invest.
(g) At November 30, 1993, the Fund had $156,802,485 (25.6% of net
assets) invested in securities whose payment of
principal and interest is dependent upon revenues generated from
City of New York Municipal G.O. projects.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1993
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a)......................... $605,085,392
Cash.................................................................. 4,335,569
Interest receivable................................................... 3,179,949
Prepaid expenses...................................................... 82,311
------------
612,683,221
LIABILITIES:
Due to The Dreyfus Corporation........................................ $ 73,587
Accrued expenses...................................................... 168,755 242,342
------------ ------------
NET ASSETS $612,440,879
============
REPRESENTED BY:
Paid-in capital....................................................... $612,450,201
Accumulated net realized (loss) on investments........................ (9,322)
------------
NET ASSETS at value applicable to 612,450,201 shares outstanding
(unlimited number of $.001 par value shares of Beneficial
Interest authorized).................................................. $612,440,879
============
NET ASSET VALUE, offering and redemption price per share
($612,440,879 divide 612,450,201 shares)............................. $1.00
=====
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1993
INVESTMENT INCOME:
INTEREST INCOME....................................................... $ 13,559,117
EXPENSES:
Management fee-Note 2(a)............................................ 2,951,496
Shareholder servicing costs-Note 2(c)............................... 842,176
Custodian fees...................................................... 57,040
Professional fees................................................... 45,493
Prospectus and shareholders' reports-Note 2(b)...................... 32,848
Trustees' fees and expenses-Note 2(d)............................... 18,941
Registration fees................................................... 4,007
Miscellaneous....................................................... 1,629
----------
3,953,630
Less-reduction in management fee due to
undertaking-Note 2(a)............................................. 2,066,047
----------
TOTAL EXPENSES.................................................. 1,887,583
------------
INVESTMENT INCOME-NET........................................... 11,671,534
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 1(b)............................ $ 33,905
Net unrealized (depreciation) on investments.......................... (23,949)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 9,956
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................... $ 11,681,490
============
See notes to financial statements.
</TABLE>
General New York Municipal Money Market Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
November 30,
-----------------------------
1992 1993
------------ -----------
OPERATIONS:
<S> <C> <C>
Investment income--net....................................................... $ 16,247,789 $ 1,671,534
Net realized gain on investments............................................ 7,498 33,905
Net unrealized appreciation (depreciation) on investments for the year...... 23,949 (23,949)
------------ -------------
Net Increase In Net Assets Resulting From Operations...................... 16,279,236 11,681,490
------------ -------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net....................................................... (16,247,789) (11,671,534)
------------ -------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold............................................... 979,147,788 1,221,685,330
Dividends reinvested........................................................ 15,427,173 11,110,335
Cost of shares redeemed..................................................... (950,640,453) (1,251,263,666)
------------ -------------
Increase (Decrease) In Net Assets From Beneficial Interest Transactions... 43,934,508 (18,468,001)
------------ -------------
Total Increase (Decrease) In Net Assets................................. 43,965,955 (18,458,045)
Beginning of year........................................................... 586,932,969 630,898,924
------------ -------------
End of year................................................................. $630,898,924 $612,440,879
============ =============
See notes to financial statements.
</TABLE>
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Prospectus dated March 15, 1994.
See notes to financial statements.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. Dreyfus
Service Corporation ("Distributor") acts as the distributor of the
Fund's shares, which are sold to the public without a sales load. The
Distributor is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager").
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees to represent the
fair value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income,
adjusted for amortization of premiums and, when appropriate, discounts
on investments, is earned from settlement date and recognized on the
accrual basis. Realized gain and loss from securities transactions are
recorded on the identified cost basis.
The Fund follows an investment policy of investing primarily in
municipal obligations of one state. Economic changes affecting the state
and certain of its public bodies and municipalities may affect the
ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain are normally declared
and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the
Internal Revenue Code. To the extent that net realized capital gain can
be offset by capital loss carryovers, it is the policy of the Fund not
to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax
exempt dividends, by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of income and net realized
capital gain sufficient to relieve it from all, or substantially all,
Federal income taxes.
The Fund has an unused capital loss carryover of approximately $9,000
available for Federal income tax pur-poses to be applied against future
net securities profits, if any, realized subsequent to November 30,
1993. If not applied, the carryover expires in fiscal 1998.
At November 30, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .50 of 1% of the
average daily value of the Fund's net assets and is payable monthly. The
Agreement provides for an expense reimbursement from the Manager should
the Fund's aggregate expenses, exclusive of taxes, brokerage, interest
on borrowings and extraordinary expenses, exceed 11/2% of the average
value of the Fund's net assets for any full fiscal year. However, the
Manager has undertaken from December 1, 1992 to waive receipt of the
management fee payable to it by the Fund in excess of an annual rate of
.15 of 1% of the Fund's average daily net assets. The reduction in
management fee, pursuant to the undertaking, amounted to $2,066,047 for
the year ended November 30, 1993.
The Manager may modify the expense limitation percentages from time to
time, provided that the resulting expense reimbursement would not be
less than the amount required pursuant to the Agreement.
(B) The Fund has adopted a Service Plan, (the "Plan") pursuant to which
the Fund will bear the costs of preparing, printing and distributing
certain of the Fund's prospectuses and statements of additional
information and costs associated with implementing and operating the
Plan, not to exceed the greater of $100,000 or .005 of 1% of the Fund's
average daily net assets for any full fiscal year. During the year ended
November 30, 1993, the Fund was charged $14,751 pursuant to the Plan.
(C) Pursuant to the Fund's Shareholder Services Plan, the Fund
reimburses the distributor an amount not to exceed an annual rate of .25
of 1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts. During the year ended November 30, 1993, the Fund was charged
an aggregate of $433,771 pursuant to the Shareholder Services Plan.
(D) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each
trustee who is not an "affiliated person" receives an annual fee of
$2,500 and an attendance fee of $250 per meeting.
(E) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger providing for the merger of the Manager with a subsidiary of
Mellon Bank Corporation ("Mellon").
Upon closing of the merger, it is planned that the Manager will retain
its New York headquarters and will be a separate subsidiary within the
Mellon organization. It is expected that the Manager's management team
and mutual fund managers will remain in place, and the Dreyfus mutual
funds will be operated in the same manner as they are currently.
Following the merger, the Manager will be either a direct or indirect
subsidiary of Mellon, whose principal banking subsidiary is Mellon Bank,
N.A. Closing of this merger is subject to a number of contingencies,
including the receipt of certain regulatory approvals and the approvals
of the stockholders of the Manager and of Mellon. The merger is expected
to occur in mid-1994, but could occur significantly later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment Company Act
of 1940, and thus a termination of such Agreement, the Manager will seek
prior approval from the Fund's Board and shareholders.
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
GENERAL NEW YORK MUNICIPAL MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities of
General New York Municipal Money Market Fund, including the statement of
investments, as of November 30, 1993, and the related statement of
operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and financial
highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1993 by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of General New York Municipal Money Market Fund at
November 30, 1993, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the
indicated years, in conformity with generally accepted accounting
principles.
Ernst & Young Signature
New York, New York
January 3, 1994
