Huntington Saves in Tax Anticipation Note Sale
The struggling economy and the fine fiscal condition of the Huntington School District combined to produce stunning savings of more than $713,000 in this month’s sale of $25 million in tax anticipation notes.
The low bidder for the entire issue was Jeffries & Company. Net interest costs are set at .457255 percent. JP Morgan Chase Securities, Inc., State Bank of Long Island, Janney Montgomery Scott LLC, Bridgehampton National Bank, Oppenheimer & Co., Inc. and Flushing Commercial Bank also submitted bids for all or part of the issue. The district retained New York Municipal Advisors Corp. as its fiscal advisor to oversee the process.
The district annually issues so-called TANs to fund operations while it waits to receive property tax revenues from the town. This year’s TAN sale will result in net interest expenses of $88,910.67, according to Huntington Assistant Superintendent David H. Grackin.
The district had budgeted $802,000 for TAN interest costs. The higher figure was utilized early last spring because district officials were concerned that a rise in interest rates could lead to dire fiscal consequences if sufficient funds weren’t allotted. Fortunately, those higher rates never materialized.
“The results were outstanding,” Mr. Grackin said of the TAN sale. The district’s “good credit standing” played a role in the low interest rate, he added. School Board members have long taken pride in exercising a conservative budgeting strategy to protect residents from unexpected tax increases.
A year earlier the district budgeted $1,050,000 for TAN interest but its net interest costs came in at 1.68 percent on a sale of $27 million, resulting in an expense of $344,929.64. At that time it was J.P. Morgan Securities that provided the district with the best rate on the multi-million dollar issue. The TAN savings were then used to hold down taxes in the current year’s budget
“These new interest savings will once again benefit all the property taxpayers in this community,” Superintendent John J. Finello said.
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