NYC-WTC_000195490

NYC 9/11 Public Portal Document

and, where possible, should be required to collateralize their obligations if their ratings are down­ udent and graded below the double-A rating category. • the City should seek to diversify its counterparties. • products should be favored which have well-established and liquid markets to facilitate termination n variable of the contract where desirable or necessary. i !0 percent lority and, 7, INVESTMENT OF BOND PROCEEDS AND OF DEBT SERVICE FUNDS: The City and its financing Authorities will invest bond proceeds and monies set aside to pay debt service subject to written investment guidelines or statutory or bond indenture criteria. All Investments including investments of open market securities for escrows on advance refundings will be obtained by competitive 5 than $2 bidding where possible. fftciently 'e. In the case of the Water Authority and TFA, the Boards of those respective authorities have formally ndrging” adopted Investment Guidelines. TSASC and the Jay StreetDevelopment Corporation investments are pursuant position to their respective bond indentures. Proceeds of City GO bonds and notes qre invested by the City Comptroller firm has pursuant to formal investment guidelines approved by the Comptroller. The State Comptroller invests City ket, ends property taxes set aside to pay debt service on City GO bonds and on City revenue and tax anticipation notes J pursuant to statutory guidelines. f \ dptimal i^ure the B? I! providers of advice and other services relating to the investment of proceeds of bonds and of assets of the City’s pension systems must be precluded from making political contributions to City elected officials or candidates ied in a for, elected office, a prohibition similar to existing prohibitions on political contributions by underwriters to Writer’s candidates for City offices. pel, the uitable. the City and its financing authorities do not engage in leveraged investment transactions of the type which resulted in the bankruptcy in Orange County, California. The City’s consistent policy of requiring shniq^e competitive bidding for escrows on advance refundings kept City financings from any shadow of suspicion ids and during the investigations of “yield burning” over the'past five years. , ' bdsare S retail S. PAY-^S~YOU-GO-CAPITAL: The City's conservative practice ofpayingfor assets with lives ofthree andfour years out ofthe ope rating budget rather than borrowing to pay for such assets amounts to a significant $150-to-$200 Million pay-as-you-go policy. T^is amount should contine to be presented separately as Pay-Go in the City budget and debt reports. Mayor’s hw: Most local governments across the country borrow for at least a large portion of assets with lives of three 1. years or longer. The fact that New York City pays for assets with lives under five years out of the operating d case i budget is a significant and conservative budgeting and debt management practice which deserves greater ample attention by the public, the rating agencies and investors. ibility Ifools As a matter of principle and policy, the average life of the financing sources of the City's capital program |ients should be long and roughly match the long average life of the assets being financed. This ensures to the intergenerational equity arhong the taxpayers using bond financed assets over the approximate twenty-year I feuld average life of those assets. For this reason, pay-as-you-go-capital, paid only by today’s taxpayers, should appropriately be.limited in amount.

ion). gher

113

NYC-WTC_000195610