N.Y. Second Class Cities Law § 205

§ 205. Compromise of claims. The corporation counsel shall, whenever\nhe considers that the interests of the city will be subserved thereby,\nenter into an agreement in writing, subject to the approval of the board\nof estimate and apportionment, to compromise and settle any claim\nagainst the city, which agreement shall constitute a valid obligation\nagainst the city; and the amount therein provided to be paid shall, with\ninterest thereon from its date, be included in the next city tax budget\nand be collected and paid the same in all respects as a judgment against\nthe city. If, however, before the adoption of the city tax budget there\nshall be received by the city treasurer from any source any moneys not\notherwise appropriated, the amount in the agreement provided to be paid\nout of such moneys so received, so far as they will satisfy the same.\n