tag:blogger.com,1999:blog-33594888.post2726377222327984974..comments2023-10-30T06:13:34.382-04:00Comments on Supervisor Feiner: TOWN BD TO DISCUSS FINANCIAL ADVISORS RECOMMENDATION TO REFINANCE BONDS ON TUESDAY- SAVINGS COULD EXCEED $211,000Paul Feinerhttp://www.blogger.com/profile/17087805120754057844noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-33594888.post-25690539367223390392008-01-23T11:51:00.000-05:002008-01-23T11:51:00.000-05:00If bonds are bought in at prices above par (face v...If bonds are bought in at prices above par (face value), do the presumed savings reflect the future value of the money being paid out. For example, if the Town has to pay, say, $1100 for a $1000 bond (priced at $1100 because the higher interest yield can't be replaced), if the future value of this extra $100 (were it invested) being considered in the calculations?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-33594888.post-43689177957345799212008-01-22T10:06:00.000-05:002008-01-22T10:06:00.000-05:00Is there enough money remaining in A and B Fund Ba...Is there enough money remaining in A and B Fund Balances to retire high interest debt and not replace it. Does the Town earn more on excess Fund Balance than it pays out in debt?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-33594888.post-54673850109974973522008-01-22T09:43:00.000-05:002008-01-22T09:43:00.000-05:00The Federal Reserve has announced another rate cut...The Federal Reserve has announced another rate cut this morning. Time is NOT of the essence. Good to consider and evaluate, but there are other factors as well, like a financial plan for the year, including the capital budget. What does this latest rate cut mean for the 2008 budget? Obviously lower interest income, but how much. Combined with increased use of fund balances to give the appearance of "holding" down taxes, the Town will have lower investible funds.<BR/><BR/>With all due respect to the Town Board, there isn't one of them who can independently review and understand this issue. Let's get the analysis out.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-33594888.post-48759883291563513952008-01-21T18:04:00.000-05:002008-01-21T18:04:00.000-05:00Where does the Supervisor's information come from?...Where does the Supervisor's information come from? The numbers don't mesh.<BR/><BR/>Does the town have the right to redeem the bonds? Oftentimes bonds can only be redeemed according to a schedule agreed to when the bonds are issued.<BR/><BR/>Are there any costs involved in the redemption? And in the reissuance? What are they?<BR/><BR/>There are penty of other questions to be asked, and I don't think that the Supervisor knows the answers. Somebody prepared this announcement for him. Who? That person should be available for questions.<BR/><BR/>If what the Supervisor said is actually true, then we don't have to rush. Interest rates will be going down further (unless the entire credit market collapses, as may well be the case).<BR/><BR/>A little thought and a little care, please.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-33594888.post-52534005720392894712008-01-21T17:15:00.000-05:002008-01-21T17:15:00.000-05:00I'm not saying I completely understand what has be...I'm not saying I completely understand what has been written nor am I saying that the concept is completely alien to me either.<BR/><BR/>But there are obvious questions that this information does not address.<BR/><BR/>Before I question the cost of redeeming the outstanding debt, I have to ask how, per the illustration that shows the interest rates for 1996 as 4.87%, 1997 as 1.58%, 1999 as 2.89% and the statement that the average coupon, I assume on the debt amount shown, is 4.55%.<BR/><BR/>Whereas the cost of issuing NEW bonds is represented; whereas new issues may or may not be sold at a lower interest rate, what is missing is the cost, if any, of redeeming the outstanding debt.<BR/><BR/>Does the Town have the right to retire the exisiting debt at par or does it have to pay a premium?<BR/>I would assume that if prevailing interest offered is lower than older existing bonds were priced to yield, that the market value of these bonds is above par to produce a desired YTM. Why would anyone holding the Town's debt at a higher yield exchange them at par for new debt at a lower yield? If my supposition is true and the Town is obligated to pay the face value of the existing bond PLUS a premium, then I doubt that this makes any sense.<BR/><BR/>For this to work, the Town would have to be able to redeem bonds sold at par by paying par ($1000 redeemed for $1000). Second, what if the Town had sold bonds initially at a discount to par, say (not including transaction costs) each $1000 bond were sold at, say, $975 so that the yield to the buyer was not the stated interest rate but more enticing due to the discount. Early redemption of these bonds would mean that the Town is paying out, even at par, $1000 for an instrument sold for, say, $975. Again, this is not going to produce a savings to the Town.<BR/><BR/>What percentage of these existing issues under consideration are serial bonds and required to be redeemed in 2008?<BR/><BR/>Frankly, without further information, I am dubious that reducing the interest rate alone on the outstanding issues, is going to produce a meaningful savings after ALL transaction costs. However if the intent is really to extend the maturities and dodge the mandatory redemptions starting in 2008, then this is something that should be explained as well.<BR/><BR/>Finally, this is something that should be handled by the Town Comptroller and not rushed in the absence of one.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-33594888.post-84481883089855550312008-01-21T16:57:00.000-05:002008-01-21T16:57:00.000-05:00wHAT EVER YOU DO YOU HAD BETTER SEEK THE BEST PERS...wHAT EVER YOU DO YOU HAD BETTER SEEK THE BEST PERSON WITH GREAT KNOWLEDGE ABOUT REFINANCING.<BR/>DON'T PUT US IN A BIGGER HOLE.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-33594888.post-64545349730001618692008-01-21T15:46:00.000-05:002008-01-21T15:46:00.000-05:00For a town supervisor who said he's not an account...For a town supervisor who said he's not an accountant and should not be held responsible for the town's accounting failures, including, among other things, the town's failure to account properly for the WestHELP money, and the keeping of hundreds of thousands of dollars in such money off the town's books, how can taxpayers be expected to take seriously any of what's being reported in this blog entry?<BR/><BR/>In other words, if the town supervisor by his own admission is not responsible for this kind of financial decisionmaking, who on the town board is capable of assessing whether these recommendations make any financial sense?Anonymousnoreply@blogger.com