BOSTON -- The Massachusetts Water Resources Authority plans tomorrow to sell $150 million of revenue bonds in the agency's firstever competitively bid issue.

Authority officials said Friday they consider the transaction a test of whether competitive bidding can work on the agency's financings.

"Depending on how this sale goes will really determine how many competitive financings we will pursue," said Barbara Gottschalk, chief financial officer at the authority.

"We want to establish a record of diversified methods of selling bonds."

Gottschalk also said that the authority has started to investigate the use of a commercial paper program.

One Boston-based banker said there will probably be eight or nine separate syndicates bidding for the bonds.

The offering has been qualified for bond insurance by the Municipal Bond Investors Assurance Corp., but several sources said it was unclear whether the issue would be insured or not.

"It's going to be a fascinating part of this transaction," said Robert A.. Lamb, president of Lamont Financial Services Corp., the co-financial adviser on the deal. "It's only going to be worth the cost of insurance if it can be demonstrated that it will lower the true interest cost."

Lamb said that lower municipal supply has forced insurers to bid more aggressively for business, which may make the transaction economically feasible for insurance.

Lamont is serving as co-financial adviser with Philadelphia-based P.G. Corbin & Co., a woman-owned firm.

The authority is requiring that the 1995, 1996, and 1997 maturities be fixed at $2 million, $2.075 million, and $2.15 million, respectively, in order to avoid raising water and sewer rates more than expected during the next three years, according to several sources.

The authority, which is rated single-A by Standard & Poor's Corp., Moody's Investors Service, and Fitch Investors Service, has been issuing bonds for its projects since 1989. In the mid-1980s, the authority was charged with financing the cleanup of the Boston Harbor and the construction of the Deer Island sewage treatment plant.

The projects are funded by the sale of revenue bonds secured by the rates the authority charges for water and sewer services in 61 communities in the state.

At one point, estimates for the MWRA's projects exceeded $7 billion. But since many of the authority's financings have been sold in a bull market, rates have been significantly lower. Also, cost revisions, especially from the combined sewage overflow system, have decreased costs by more than $1 billion.

In the authority's first official statement, issued in 1990, the MWRA predicted that by 1995, revenues from rates would generate $564 million. But in the most recent statement, rates only represent $304 million in revenues.

Cost reductions, increased state aid, and more conservative estimating techniques account for the lower revenue estimates.

Last year the state was rocked by several protests about water and sewer rates in the state. At one protest, many residents burned their MWRA rate cards. This year, authority officials announced there would be no rate increase. The authority is expected, however, to raise rates by 18% in 1996, 20% in 1997, 21% in 1998, and 12% in 1999.

If this holds true, then the cumulative effect would be a 92% increase in water and sewer rates between 1995 and 1999, according to a Black & Veatch report commissioned by the MWRA.

The authority is scheduled to issue $550 million of bonds during this fiscal year, $282 million in fiscal 1996, $460 million in 1997, $467 million in 1998, and $487 million in 1999, according to MWRA estimates.

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