Troy, N.Y., which only two years ago sold its city hall to help plug a budget deficit, is planning yet another deficit bond issue. This time, officials say, the city will rely on more conventional financing methods, hoping to erase Troy's reputation as a municipality that cuts corners rather than budgets.
In 1992, the city gained notoriety in the municipal market by selling un-rated lease revenue bonds to help pay down a deficit of about $3 million. The $35 million deal, underwritten by Prudential Securities, involved the sale to an industrial development agency of city property, including the city hall. The city then leased back the property from the agency, which financed the transaction with the bond sale.