Investment strategy leads council agenda Rates differential is key to deal

December 21, 1992|By James M. Coram | James M. Coram,Staff Writer

The County Council will be asked to affirm a $60 million financial deal tonight, pursuing an investment strategy that in the past two years has produced between $200,000 and $400,000 for the county's general fund.

A bill authorizing the complicated financial transaction is one of 20 pieces of legislation to be discussed at tonight's 8 o'clock public hearing in the county office building.

If the deal goes as planned, the county would borrow $60 million at low interest rates for up to two years, invest the borrowed money at a higher rate during that period, and pocket the difference.

The transaction begins with the county selling $60 million in so-called bond anticipation notes through a Baltimore investment firm.

The notes have rates that vary from week to week. Holders of the notes can demand payment in full at any time after giving seven days' notice.

It is up to the investment firm to keep marketing the notes so that the rates remain low and payment is not demanded.

The notes are backed by a letter of credit that the county has with the United Bank of Switzerland.

Before being asked to approve the sale of the bond anticipation notes tonight, the council will be asked to approve the sale of the bonds themselves.

Money from the bonds will be used to pay for capital projects.

The council will vote on the bond requests after the public hearing. It will vote Jan. 4 on all other legislation considered tonight.

Among the other items on tonight's hearing agenda are two resolutions calling for the county to receive the St. Mary's Cemetery property in Turf Valley Overlook from the developer in exchange for lots elsewhere.

The resolutions designate the 3.2-acre Ellicott City property as open space to be cared for by a group of residents called the Friends of St. Mary's Cemetery and Preservation Society.

The council will also conduct confirmation hearings tonight on five people nominated to serve or continue service on various boards and commissions:

David Brown to the Plumbing Advisory Board, Margaret Browning to the Commission on Disability Issues, Michael Deets to the Public Transportation Board, William E. Eakle to the Personnel Board, and Evelyn L. Tanner to the Board of Appeals.

All but Mr. Deets have served previously.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.