The Office of the City Controller today turns a new page in its bid for a paperless office. The City conducted its first sale of $160 million in Tax Revenue Anticipation Notes over the Internet using MuniAuction, a municipal bond auction site created by a coalition of former financial advisors and investment bankers. The sale was managed by city's Finance Working Group, which includes members of the Controller's staff and the administration.

       According to Jim Moncur, Director of Investment and Debt Management for the City Controller, this method of selling the City's bonds introduces elements competition, transparency, and speed that were not present in the sealed bid format previously used by the City.

       The auction system allows buyers to bid against each other on an electronic platform, which includes competition. The bidding process is observable by the issuer, which ensures the integrety of the auction, and can reveal information as to the market's reception of the issue. The use of the internet greatly speeds up the selling process. A bidder can wait until just before the deadline, submit their bid, and know almost immediately if they have won the auction. This reduces the need for a bidder to add a cushion to their price to protect against adverse market moves while the issuer determines who won. The result of all of these factors should be better prices for the City's bonds and lower costs to the taxpayers.

       Use of the internet to sell bonds has other appealing advantages. Printing and mailing of the offering documents, which typically run more than 100 pages, has traditionally been a costly and time consuming process. With these documents "online" there are no printing costs. Several firms which expressed interest in the City's bonds just one and two days before the sale were able to download offering documents within minutes of their inquiry. "I believe the City had more participation than it otherwise would have if the offering documents were not available on the internet", Moncur said. "The result is wider distribution of the City's bonds, which again encourages better prices and lower costs."

       Controller Garcia expressed satisfaction with the innovation. "As one of the largest issuers of municipal bonds in the country, the Office of the City Controller is committed to participating in new technology that serves the best intrests of our constituants. This is another terrific example of performance government in action.