NYC Bonds

New York Water to Hold Annual Investor Conference
The New York City Municipal Water Finance Authority will hold its Annual Investor Conference on October 18 at the Newtown Creek Education Center and Wastewater Resource Recovery Facility in Brooklyn. The conference will celebrate its 25th year next month.

Quarterly Cash Report Released

The Comptroller’s Office released New York City’s Quarterly Cash Report for the fourth quarter of Fiscal Year 2019. At the same time, the Comptroller’s Office released the City’s Cash Balance Projection, which looks ahead to the end of the calendar year. Historical data is available going back to 2002 and 2011, respectively.

NYC Bond History – Market Keeps Sinking Fund Afloat

Fees levied on Fulton Market and other sources provided the necessary revenue to repay holders of the City’s earliest bonds.
(“Fulton Market” by William J. Bennett, ca. 1828 from the New York Public Library)

In 1813, New York City Comptroller Thomas R. Mercein established the City’s first sinking fund to pay debt service, shortly after New York City issued the country’s first recorded municipal bonds in 1812. The sinking fund set aside revenues from specific sources to pay debt service, rather than relying on general City revenues (with a promise to bondholders to levy additional taxes, if necessary). As obvious as this accounting may seem today, it was uncommon at the time to pledge specific revenues for debt repayment.

The sinking fund relied on revenue from the commutation of water lot rents and quit-rents, license fees for pawnbrokers and coaches, market rents and fees, and a quarter of the proceeds from City real estate sales. Comptroller Mercein established the sinking fund to maintain the City’s credit, “because emergencies may happen, which will require new loans.” This eclectic combination of revenues would have been insufficient to pay debt service by 1826, were it not for the construction of Fulton Market a few years before that date, which dramatically increased market rents and stabilized the sinking fund. (The Finances of New York City (1898), by Edward Dana Durand, pp. 33-36)

(“Fulton Street Fish Market, Manhattan” by Berenice Abbott, 1936, from the New York Public Library)

Looking Ahead

New York City plans to sell $850 million of tax-exempt General Obligation bonds via negotiated sale on Thursday, October 3, with a priority order period for individual investors on October 1 and 2. The City also plans to sell $130 million of taxable General Obligation bonds via competitive sale on October 3 and $100 million of NYC Adjustable Rate Remarketed Obligations (“ARROs”) via negotiated sale on October 21. Read the full announcement.

As always, we appreciate your interest in New York City bonds.

Marj Henning
Deputy Comptroller for Public Finance