NYC mayor, comptroller clash on TFA debt capacity hike
A proposal to raise the debt capacity of the New York City Transitional Finance Authority seems to have raised the ire of the city comptroller.
The proposal to raise the bonding limit by
A statement included in the POS said the administration of Mayor
City Comptroller
Before seeking an increase, Lander said, the city must first determine what needs can be addressed through the federal infrastructure bill, better assess the pandemic’s long-term impact on property values and the budget, and reform capital project management practices.
“It is premature for the mayor to seek a
The mayor’s office said uncertainty around the current economic landscape makes the proposal viable now.
“Telling Albany not to increase the city’s borrowing capacity is irresponsible, especially in light of uncertainty around COVID-19, and a slowing economy,” a
The comptroller countered there is time to decide on the best course of action.
“We simply do not have an urgent need to rush into this large increase,” Lander said. “We currently have sufficient borrowing capacity to cover our project capital investment needs for the next three years. Seeking legislative authorization for additional bonding capacity is neither necessary nor fiscally prudent at this moment.”
The comptroller’s office said the city’s
Current law says any TFA future tax secured bonds outstanding in an amount over
Citizens Budget Commission President
"These decisions should be made prudently, based on good fiscal analysis with every effort made to run government well," Rein said.
"The city has a high debt load and increasing the city's debt capacity should only be done with extreme caution — and it needs to be based on solid analysis and reforms in our capital planning and execution process," he said.
In a few years, the city will approach its debt cap and could potentially turn into a problem, Rein said.
"However, we're not hitting it right now and there is time to see both how the capital execution proceeds as well as to improve and reform our capital planning and execution processes.
"The cap is there for a reason — we need to make sure it's affordable," he said.
The NYC TFA was created by the state in 1997 as a public benefit corporation to provide an alternative to the city’s GO financing at a time when the city’s debt limit dropped sharply due to declining property values.
Next week, the TFA will offer about
The offering is comprised of
Book-running lead manager J.P. Morgan Securities is expected to price the tax-exempts on
The TFA expects to competitively sell around
BofA Securities, Citigroup (C), Jefferies,
Co-municipal advisors are PRAG and Frasca & Associates LLC. Co-bond counsel are
Since 2011, the TFA has sold more than
Outstanding TFA subordinated bonds are rated Aa1 by Moody’s Investors Service, and AAA by S&P Global Ratings and Fitch Ratings.