INC NEWS - So why the different standard here?

[Deb Christie]

Why should we accept less than AAA rating?  I attended one meeting of the City Council when this deal was considered, and was not impressed with the deal, the company offering it, or the consultants to the City.  I was impressed by those on the council who expressed serious reservations about this deal, particularly Gene Brown and Diane Catotti.

I applaud Durham City and Mayor Bell for the cautious and conservative approach it is taking to this transaction.

Deborah Christie
  ----- Original Message ----- 
  From: Rev. Melvin Whitley 
  To: inc-list at durhaminc.org 
  Sent: Wednesday, February 22, 2006 12:18 PM
  Subject: INC NEWS - So why the different standard here?


  Last year after significant public debate, the Durham City Council voted to move forward with a refinancing proposal to save $8 million. Yet last week we learned that the administration has yet to implement the transaction in the more than 10 months since its approval. The refinancing is similar to transactions used successfully by virtually every major city in North Carolina and even the State.  

  The following important facts need to be brought to your attention: 

  ·         Durham County unanimously approved this transaction without rancor and has saved more than $800,000 already.  

  ·         If the transaction had been executed when approved, the City would have already realized more than $700,000 in debt savings.

  ·         City staff strongly recommended the refinancing back in April.

  ·         Standard & Poor’s rating agency provided a report to the City saying that the   transaction had “above average” economic viability.

  ·         City administrators have rejected the deal because the bank performing the refinancing for the City is rated “AA” and not rated “AAA”  

  ·         No other North Carolina issuer has made this requirement and all of the similar refinancing done in the state (including  refinancing done by AAA rated Charlotte, Mecklenburg County and the State itself) have been with “A” or “AA” rated banks 

  ·        For, example, Bank of America, Wachovia, Citigroup, and Morgan Stanley have all done similar refinancing in NC, and each of them is “AA” rated.

  ·         The City’s own written policy is for banks to be rated “AA” for this type of deal 

  This refinancing could prevent the loss or reduction in important City services and reduce pressure to raise taxes. The State’s financial regulators approved the deal. The City’s expert financial advisor says it's safe, the finance staff has recommended the swap - now it's time for the Administration and Council to stop playing politics and finally finish this transaction. Please support the efforts to move this transaction forward by contacting your City Council member and voicing your opinion. So why the hold-up? 

  Your Servant
  Rev. Melvin Whitley
  2614 Harvard Ave
  Durham NC  27703
  (919) 596-9691 - Home
  (919) 308-2844 - Cell
  tellmelvin at nc.rr.com 


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