DALLAS -- For years, Debra Forte was content to pay a financial adviser to crunch numbers and take care of allthe details of issuing her city's bonds.

But when she was still finance director in McKinney, Tex., Ms. Forte got the idea that the North Texas city could save money by doing many tasks -- including writing the official statement -- it was then paying First Southwest Co. of Dallas to do.

"We wanted to pay our consultants on an hourly basis," she recalled recently. "It was king of an unbundling of city services."

Since moved to nearby Euless, Tex., as finance director, Ms. Forte hopes that her new staff can soon begin the same money-saving technique.

She is far from alone.

In fact, Ms. Forte, president of the Texas Government Finance Officers Association, is at the vanguard of what appears to be a growing do-it-yourself trend among increasingly sophisticated small and mid-size issuers.

The push among issuers to trim issuing costs -- often by doing many tasks in-house -- has been spurred largely by three factors: tighter budgets, the evolution of desktop computers, and increasingly professional local finance offiers.

"I think clearly that issuers are more savvy, more aware," said J. B. Kurish, director of the research arm of the Government Finance Officers Association. "As time goes on, they get more expertise."

The most compelling reason that local officials are considering doing more bond work in-house is their own bottom line. Tighter city budgets have prompted more issuers to look for ways to cut costs, even the fees usually paid from bond proceeds and invisible to the general fund.

Things are so tight, officials say, that trimming just $10,000 from the cost of a bond issue helps when it comes time to balance the budgets.

"Debt can either cost you a lot of money or save you a lot of money," said Erin Hagey, treasurer of Carollton, Tex., which started paring its advisory contract in 1988. "A lot of things we're doing are not hard things. Everyone should do a cost-benefit analysis."

Shaving the FA's Bottom Line

For Carrollton, a Dallas suburb of 86,116 people, the change of policy meant stricter controls on how -- and how much -- it would pay its financial adviser, Rauscher Pierce Refsnes Inc.

While the city staff does more of the pre-sale work itself, it still relies on its adviser for analysis it cannot yet do. For instance, Rauscher Pierce can quickly determine how a particular debt structure will impact the city's tax rate.

"We are being a lot more efficient -- time-wise and money-wise," said Ms. Hagey.

Now, the city pays an hourly fee that is capped at $20,000 a year, which looks cheap when split up among two or more issues.

Last year, Carrollton's self-help arrangement resulted in an estimated net savings of $29,000 on the two deals it sold, officials said.

Such a fee is a fraction of what Texas cities traditionally pay to a financial adviser under arrangements that require flat, annual fees, plus a percentage of any bonds sold.

Ms. Hagey found that unacceptable, adding: "We wanted to tie what we were paying them with the work they were actually doing."

Even though the arrangement means less money for the firm, Rauscher Pierce does not see the trend as a threat to its advisory business.

"We encourage it for certain levels of government," said Vince Matrone, senior vice president and manager of public finance in Dallas. "Not every account can do that ... but as their staffs become more sophisticated, our trend has been to meet their needs.

"I think it's a win-win situation," he added.

Mr. Matrone insists that losing the fees generated by drafting offering documents or preparing to meet with rating agencies is offset by putting the firm's investment bankers to work on other tasks.

"It doesn't affect the botton line, not in the final analysis," Mr. Matrone said. "Where we had professionals with a master's [degree] doing work, they could use a clerk or professional administrative people."

Not everyone in the financial advisory business shares his view. Others privately see the trend of do-it-yourselfers as a threat to the advisory business that has been the life blood of Texas-based firms.

"You might be able to do a lot of things without a financial adviser and hire one only for something such as information on the market," said a senior banker at one Texas firm, who declined to be identified. "But for how long are firms going to be able to provide services under that kind of financial arrangement. What long-term incentive is there?"

Not For Everyone

Indeed, Texas issuers have long relied on their financial advisers. Last year, 83% of the $11.2 billion in bonds sold in Texas were done with a financial adviser, compared with 64% of all deals done outside the state, accoring to Securities Data Co./Bond Buyer.

But the do-it-yourself route is not for everyone.

"We had an idea here once that we were going to put the information on a MacIntosh [computer] and produce our own official statement," said Judson Bailiff, finance director for the city of Fort Worth. "Even though we have a larger staff, we started looking at it over time. It didn't work."

Besides, he said, the city uses its advisers at First Southwest Co. so often that the hourly fees proposed by smaller issuers would have cost too much for Forth Worth.

"We probably use our financial adviser on more of the deals that we don't do, than we sell," he said. "Very seldom does a day go by that I don't talk to them."

Even those who practice the art of do-it-yourself bond work agree that it is not for everyone and should not be rushed into by those who might benefit. The keys, they say, is to develop on-staff expertise and to expect the savings to grow over time -- after the initial cost of getting started is underwritten.

It took three years for McKinney, a city of 20,000 in north Texas, to finally start doing many tasks it had always paid a financial adviser for.

"We felt we were saving money by doing it," said Ms. Forte. "You save more money over time."

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