New York City's lobbying effort for negotiated sales authority followed an inquiry by the staff of the New York State Senate Finance Committee into the city's negotiated sales practices.
Abraham M. Lackman, the committee's director of fiscal studies, recently said he asked city finance officials in a recent meeting to supply information comparing the cost of competitive sales versus negotiated sales of debt.
Mr. Lackman said that with interest rates low and city's credit improving, it could save taxpayer money by issuing its general obligation debt competitively, rather than through a negotiated sale.
And with the city choosing a new debt syndicate after its next bond sale, scheduled for October, Mr. Lackman said Wall Street firms would probably bid aggressively to win favor with city officials for syndicate manager slots on future negotiated deals.
At Mr. Lackman's request, officials from the city comptroller's office and the city's Office of Management and Budget are expected to provide the Senate finance staff with a study prepared by the city's financial adviser comparing the cost of negotiated sales with competitive sales.
As part of his inquiry, Mr. Lackman said he also asked the city to provide the staff with information about how much profit is made by each firm in the city's five-member co-senior manager bracket.
Mr. Lackman said he has yet to receive the information from the city.
But Steve Cohen, a spokesman for the comptroller's office, said the city's financial adviser, Public Resources Advisory Group, has completed a statistical analysis demonstrating "the cost efficiency of negotiated sale for certain issuers" like New York City. This study will soon be sent to Mr. Lackman, he added.
