Huntington Saves in Tax Anticipation Note Sale
The still struggling economy and the solid fiscal condition of the Huntington School District combined to produce impressive savings of more than $550,000 in this month's sale of $27 million in tax anticipation notes. The sale will close on September 28.
The low bidder for the entire issue was Morgan Stanley. Net interest costs are set at .243346 percent. Five other firms 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 $49,095, according to David H. Grackin, the district's assistant superintendent for finance and management services.
The district had budgeted $600,000 for TAN interest costs. The higher figure was used during the budget development process 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," Superintendent James W. Polansky said.
"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 displayed pride in exercising a conservative budgeting strategy to protect residents from unexpected tax increases. Ultimately, the TAN savings can be used to hold down taxes.
"This will have a significantly positive impact on our fund balance," Mr. Polansky said.