New York city's debt service costs for fiscal 1992 could be $27 million lower than projected because the closing date of an upcoming bond issue is now set for early January, the city comptroller said in a report released last week.
The Dinkins administration has projected $2.542 billion in debt service costs for fiscal 1992. But city Comptroller Elizabeth Holtzman said debt service costs would be $2.515 billion.
The city moved the closing date of a $1 billion bond sale, slated for pricing on Dec. 18, to Jan. 7. This would move the first $33 million coupon payment from June to July, the first month of fiscal 1993.
The savings would be lowered to $27 million because of a technical accounting measure requiring the city to take $7 million of fiscal 1992 property tax collections for debt service and use them for fiscal 1991, an official with the city comptroller's office said.
When the city's fiscal 1992 plan was presented, the Dinkins's administration said it could achieve $304 million debt service savings.
However, when Mayor David N. Dinkins presented a modified financial plan for fiscal 1992 on Nov. 6, the city said it would fall short by $60 million.
This is because the city's revised financial plan for fiscal 1992 takes into account that it will not be able to use $40 million of savings by capitalizing bond interest payments since the city comptroller will not approve such a financing. In addition, a $1 billion refunding and defeasance of credit-enhanced debt will save $13 million less than projected in fiscal 1992, while variable-rate financing will be $7 million less than estimated.
In the revised plan, the city says it could still make the $304 million debt service savings because it found another way to fill the $60 million hole.
This could be achieved because debt service costs were offset by $42 million in savings due to reduced borrowing costs, $5 million in savings was earned from a taxable bond refunding, and $13 million is expected to be saved from the proposed sale of city housing.
