County bond sale a success

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By Jennifer Garcia

The financial market has seen its share of ups and downs and still continues to be unpredictable. The dip on Wall Street recently has left America wondering if things will ever get better and has affected people across the nation; and Los Alamos is no exception. Los Alamos County's Chief Financial Officer, Steven Lynne was in council chambers on Sept. 23 to discuss the pending bond sale that the county was planning on having. At that meeting, Lynne and the county councilors discussed whether or not the sale should be held, or whether it should be postponed. It was decided that the sale should be held and was done so on Sept. 30, with great success.

Lynne was back in council chambers on Oct. 2 for the special session, where he sought approval from council on the bond purchase agreement. After a vote, council passed the motion 6-0.

According to county documents, council approved Bond Ordinance 529 on Sept. 12, 2006, which states that council adopted Ordinance No. 529 and directed staff to return to council for approval of the expected sale term and approval of an undated CIP with specifics before any bond sale. After that action, voters approved the ordinance at a special election held on Jan. 30, 2007.

The Fiscal Year 2009 adopted budget includes the proceeds from the sale of these bonds as a significant funding source for the county's Capital Improvement Plan. On Sept. 23, 2008 the county approved the estimated bond sale terms and updated CIP for the purpose of proceeding with the bond sale.

Lynne thanked county staff and the underwriters who helped with the bond sale for their support. "With the markets falling apart, we were faced with a difficult decision, whether to proceed or wait," Lynne said. "The bond market kept getting worse. Based upon advice from the underwriters, a decision to sell the bonds, the sooner the better, was made," he continued. "This market isn't going to return to normal anytime soon. We did pretty well given the circumstances." Lynne said that the interest expense is higher than they expected. "Debt service is $6,942,000. We ended up with less than that," he said. He also said the bond have been rated "A1" by Moody's and "AA+" by S&P.

Underwriters Kevin Powers of RBC Capital Markets and Peter Franklin were also present at the Oct. 2 meeting. Powers reported on the specifics of the sale to council and commended Lynne for job well done. "Steve did a good job of summing up major decisions. This is one of the rare deals that made it to the market in the last two weeks and the only one in New Mexico with this rating." Powers said that the sale was customized to take the fullest advantage of what was available in the market.

Council Chair Hall thanked Lynne, Powers and Franklin for their help. "The fact that they (the bonds) were all gone by noon says something about the job you did," Hall said.