New York City 'officials apparently have scaled back a controversial plan to build and repair courthouses through bond sales.
Rating agency executives say that city budget officials have scheduled to sell only $67 million in bonds between fiscal 1995 and 1998 to pay for the courthouse rebuilding plan.
City budget officials could not be reached for comment.
Rating agency officials said the city had initially planned to sell hundreds of millions of dollars more in bonds during the next four years to comply with a 1987 state law that requires the construction of 17 court buildings and the rehabilitation of 15 others. According to an official statement for an August bond sale, the city had planned to issue $211 million in court bonds between 1995 and 1998.
Last year, the city announced that it would sell $2.3 billion of bonds during the next 10 years to comply with the state mandate.
Officials from the state's office of courts administration, which is in charge of carrying out the mandate, did not return telephone calls for comment.
As part of its courthouse financing plan, the city will make debt service payments on the bonds, but it will not sell the debt. Instead, the city will enter into a lease agreement with the state Dormitory Authority, which will issue the bonds. The lease agreement helps the city diversify its debt load by selling bonds under a different name.
In December of last year, the city launched the court program's bonding with a $400 million Dormitory Authority bond sale. The transaction came after years of delay by the city, which said it could not afford the program's cost.
Apparently, city officials are balking once again. Bond raters at Moody's Investors Service say they received a debtissuance schedule from the city office of management and budget as part of the Moody's analysis of Wednesday's $1.3 billion general obligation bond sale.
Moody's executives said the schedule called for no courthouse bonds to be sold until fiscal 1998, when the city will issue $67 million. Raters at Moody's said they had expected to see more courthouse bonds on the schedule.
Thomas A. Devane, the Dormitory Authority's executive director, said the city had planned to issue courthouse bonds through the authority sometime before the end of the state's fiscal year, or March 31, but that the two sides have not discussed the matter for some time.
Devane said he has no knowledge of a city plan to reduce its courthouse bond sales, but said the schedule submitted to Moody's may be linked to a plan by the administration of New York City Mayor Rudolph Giuliani to reduce the city's capital program by postponing capital spending.
