Newspaper article Evansville Courier & Press (2007-Current)

Evansville Should Consider Bond Bank ; IN RESPONSE

Newspaper article Evansville Courier & Press (2007-Current)

Evansville Should Consider Bond Bank ; IN RESPONSE

Article excerpt

Recently, I wrote in this space about the Indiana Bond Bank. I wanted to alert the public and local officials in Southwestern Indiana about the benefits of using the Bond Bank, such as lower interest rates and lower professional fees and costs.

Before writing the article, I worked with the officials at the Bond Bank and the State Treasurer's office to make sure that my statements were correct.

Mayor Lloyd Winnecke's City Controller Russell Lloyd responded by stating that the city of Evansville had never used the Indiana Bond Bank because it was not attractive. Given the importance of public finance when many local governments, including the city of Evansville, are incurring large obligations, it's important to get the facts straight.

First, Lloyd stated that the Indiana Bond Bank ceased issuing "Moral Obligation" bonds in 2009. This appears to be completely wrong.

According to officials with the Indiana Bond Bank, the program is still in effect.

"Moral Obligation" bonds let local governments leverage the state's superior bond rating to achieve a lower interest rate (like having a parent co-sign a loan for a child).

As I discussed, this would allow Evansville to borrow at the Bond Bank's relatively high AA+ bond rating (a credit score for governments and corporations) rather than the lower A rating the city has recently received when issuing its own bonds.

Second, Lloyd wrote that the Indiana Bond Bank is intended for smaller entities like townships and water districts, implying that the city of Evansville would not qualify due to its larger size. This also appears to be completely wrong.

The Indiana Bond Bank was established to help all Indiana municipalities, regardless of size, benefit from lower interest rates, lower costs, and institutional expertise. …

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