All the budget-cutting talk and fretting about Amherst's deficit apparently doesn't bother Wall Street investors in municipal bonds, town officials learned this week.
Town Board members were congratulating themselves because the recent sale of a $7.5 million municipal bond demonstrated there are plenty of lenders willing to do business with the town.
"If something's working, everybody take a bow," quipped town Comptroller Frank Belliotti.
An unprecedented 18 banks and capital investors showed up for the sale at a New York bonding house, officials were told. Terms of the sale mean Amherst will pay about 3.5 percent in interest for the one-year bond.
"Evidently, there are plenty of people out there willing to invest in Amherst," said Michael Neumeister, Amherst's financial adviser.
Neumeister, who briefed town officials at Monday's Town Board meeting, said the competition for Amherst's business is directly related to its overall bond rating, Aa3, which is the highest in Western New York and is shared only by Cheektowaga.
The purpose of the $7.5 million bond offering is to fund Amherst's first payment for the cleanup of debris left by the October snowstorm. Last week, the town handed a check for $8.3 million to the contractor in charge of the cleanup, DRC Emergency Services of Alabama.
The entire cleanup is expected to cost more than $16 million, but the bills will be paid by federal and state emergency funds.
Belliotti said the response to the bond sale shows the town is at the top of the list for investors in municipal bonds.
"It means their choices weren't good except for us," he said.
The sale also gives the town a new arguing point when it meets with financial analysts who assign credit ratings to municipalities.
Some Amherst officials breathed a bit easier after Neumeister's report, because advisers have been warning the town to avoid raiding surplus funds when they balance the budget.
Belliotti said bond rating experts would like to see the town maintain surpluses equaling 15 to 20 percent of the annual budget. But Amherst has continued to eat into its surplus funds in recent years.
Another factor helping maintain the town's rating is a healthy and growing tax base, Belliotti said.
Amherst pays about $6 million to $7 million in borrowing costs for its annual debt of about $67 million, he said.
Neumeister also briefed town officials on plans to save the town about $1.5 million by refinancing some of Amherst's debt.