New York City officials continue to haggle over the composition of the city's underwriting syndicates, but officials close to the matter say an agreement is near.

The selection of the city's underwriting teams is made by officials in the administration of Mayor Rudolph Giuliani and those working for city Comptroller Alan Hevesi.

At the moment, city sources say both sides have reached agreement on several major issues concerning the city's bond selling teams, including the size of the city's general obligation bond and water authority syndicates. City sources say four firms will serve as senior managers on the GO team.

It is unclear how many firms will serve as senior managers on the city's water authority syndicate, but sources say the city wants to appoint two firms.

City sources also say both sides are nearing agreement on the thorny issue of selecting firms to serve as financial adviser for the city's GO syndicate.

Late yesterday, sources in City Hall said budget director Abraham Lackman was close to making his final recommendations on underwriters to Giuliani, and that a joint announcement would be made today.

Despite reaching agreement on these key issues, officials in City Hall and those in the comptroller's office remain at odds over the composition of various co-management underwriting brackets in the GO and water authority syndicates.

Co-management positions offer firms a less lucrative role in the city underwriting process. Under former Mayor David Dinkins and former city Comptroller Elizabeth Holtzman, the city maintained one large underwriting bracket for co-managers in addition to a senior management team.

This year, however, the city is attempting to establish different classes of co-managers, and at the moment, officials representing Giuliani and Hevesi are debating the structure of these underwriting classes.

"We are not arguing about any specific firm," said first deputy comptroller Michael Geffrard. "The discussions concern the structure of the [co-manager] group." Geffrard would not elaborate.

Wall Street sources, however, say the debate does concern which firms will serve in the various co-management roles. These sources say that the mayor's staff and Hevesi's staff are debating which woman- or minority-owned firms will serve in the co-management categories.

Geffrard would not comment on the matter. Budget director Lackman, who is representing Giuliani in the negotiations, did not return telephone calls.

Last week, The Bond Buyer reported that City Hall and the comptroller's office tentatively agreed on the use of four firms to serve in its GO syndicate: Merrill Lynch & Co., J.P. Morgan Securities Inc., Prudential Securities Inc., and Goldman, Sachs & Co.

The Bond Buyer also reported that PaineWebber Inc. and Morgan Stanley & Co. would serve as senior managers for the water authority team. Smith Barney Inc., a senior manager in the water authority syndicate under Dinkins and Holtzman, may not be reappointed as a senior manager for the agency, sources said.

City sources said yesterday, however, that neither Giuliani nor Hevesi has made a final decision, and aides' recommendations could change. In addition, firms that held senior underwriting positions in the past, including Lehman Brothers; Bear, Stearns & Co.; and Smith Barney, continue to pressure city officials for their appointment.

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