DALLAS -- Denver plans to sell a $122.7 million general obligation issue tomorrow that officials say will nearly exhaust its voter authorization and close out the city's era of mega-projects.
Wall Street analysis have affirmed the city's longstanding double-A rating on the issue, which will include $100 million of new money and $22.7 million of refunding bonds due from 1993 to 2007. The deal will be sold competitively.
City officials have said that because there are no pressing capital needs, they do not expect to seek a new voter authorization before Mayor Wellington Webb's first term ends in 1995.
Amy Doppelt, senior vice president at Fitch Investors Service, said city officials, "don't plan to go to voters for a few years because they don't need to." Fitch affirmed its AA rating on the issue last week.
Patricia Schwartzberg, Denver's manager of revenue, said, "This administration's view is that the big projects are over."
"The major needs at this point are going to be financing the operations of all those new projects," she added.
In the late 1980s, Denver embarked on its large capital spending program with GO and revenue bonds. The program included expanding the city's library system, building a new convention center, and constructing the nation's newest major airport.
Mrs. Schwartzberg said the focus now will be on operating those revenue projects and finding money in the city's $400.8 million budget to run new facilities. The expanded public library system will require $5 million a year alone.
The completion of Denver's GO capital bond program comes as the region is showing a strong rebound from the economic downturn in the mid-1980s and its impact on the city's largest revenue source, the sales tax.
Analysts say collections have been rising as much as 6% a year, but note that the city never showed much evidence of the downturn because it used numerous measures to balance its budgets in recent years.
"Economically, they have improved decidedly since then," said Todd Whitestone, managing director at Standard & Poor's Corp., which downgraded the city from AAA at the height of the downturn in 1987. "They've been able to balance the budget without much of the pain you're seeing in some other parts of the country now."
Besides growth in the sales tax, there are other encouraging signs.
"Because of the improved economic climate in Denver over the last two or three years, the assessed values are going up after they had [office] vacancy rates as high as 30%," said Ditmar Kopf, assistant vice president at Moody's Investors Service, which has rated the city Aa since and upgrade in 1946.
He said that even after the city's sale and a $41 million sale by the Denver Public Schools next month, the overlapping debt burden will still be moderate. The city's $521.3 million in outstanding GO debt has an average 15-year payout.
The sale will nearly exhaust the city's voter authorization, leaving only $3.99 million that city officials expect to sell in their second mini-bond program beginning Oct. 9.
The city expects to sell zero coupon bonds with 10- and 15-year maturities that will be sold directly by the city to local residents in blocks of $1,000. Officials are expecting the same kind of strong response drawn by the first mini-bond program two years ago.
"It's a very popular program," said Mrs. Schwartzberg. "People like to invest in their government."
Denver had not been expected to issued debt this early, but moved up the sale partly because of favorable market conditions. Also, the sale was accelerated by a proposed constitutional amendment on the November ballot that could, if approved, complicate debt issuance.
The tax and spending limitation, devised by Colorado Springs landlord Doug Bruce, would require voter approval of virtually every kind of revenue or tax-backed debt sold in the state. While the GO bonds sold this week have already been approved by taxpayers, some feared that if the statewide amendment had been passed before the sale, the bonds might have had to be reauthorized.
Although such limitations have been rejected nine times since the 1960s, industry officials are worried the Bruce amendment could pass this year amid a voter backlash against government and because efforts to put a more moderate proposal on the ballot failed.
"It does appear they have pushed up their schedule a little," said Ms. Doppelt.
Investment bankers and analysts said that, as a safeguard, Colorado issuers appear to be trying to sell as much of their existing authorizations before the election as they can.
Of the $2.15 billion in debt sold so far in 1992 in the state, 58.4% of the issues have been new money. Nationally, slightly more than half of all issues sold are refundings, according to Securities Data Co.
Mr. Kopf of Moody's noted, "All over Colorado, issuers are getting their authorizations into the market before the election on the Bruce amendment."