The finance staff of the New York State Senate requested yesterday that New York City officials ask outside financial advisers to evaluate what savings, if any, the city will realize if it sells more of its debt through competitive bid rather than by negotiated sale.
This request came in the wake of a meeting yesterday afternoon between Abraham M. Lackman, the Senate's director of fiscal studies, and city finance officials. The meeting was held because the Senate failed to renew the city's authority to issue debt by negotiated sale, which the Assembly already passed. The city's negotiated borrowing authorization must be approve each year by state lawmakers.
Representing the city were Darcy Bradbury, the city's deputy comptroller for finance, and Mark Page, deputy director and general counsel for the city's Office of Management and Budget. Both were unavailable for comment late yesterday afternoon.
Mr. Lackman said city officials told him they would compare the cost of a negotiated sale against the cost of a competitively bid sale of city debt. The officials would refer to an evaluation supplied both by the city's financial advisers, Public Resources Advisory Group, and P.G. Corbin & Co., he said.
Officials from both firms were unavailable for comment.
"It was a productive meeting," Mr. Lackman said. "No guarantees were made. But when it was all over, they agreed to raise the issue with their financial advisers."
Many academic studies show that competitive debt sales are less costly than negotiated sales. But city officials, underwriters, and observers of the municipal market say large and complex issuers like the city must negotiate their debt sales, or face the possibility of a poorly bid deal.
When lawmakers ended their 1992 legislative session two weeks ago without approving the city's negotiated-sale powers, city officials launched an effort to convince lawmakers to sign off on the measure, which included meeting with Mr. Lackman.
The meeting, however, was also the product of other thinking, including Mr. Lackman's insistence over the past three years that the city should issue more competitively sold debt, Mr. Lackman said.
New York is the nation's largest issuer of debt, and it negotiates the lion's share of its bonds and notes through a Wall Street syndicate group. The city plans to sell $1 billion of debt in October through a syndicate led by Lehman Brothers.