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County re-ups with bond consultants
Official questions the arrangement
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Forsyth County News
The Forsyth County commission’s recent decision to contract with a bond consulting firm, the same group it used last year, has raised some eyebrows given the ongoing financial crisis.

The services of Public Financial Management could cost the county anywhere from $16,500 to $75,000 over the next year, depending on the amount of bonds issued during that time frame.

The PFM group will provide ongoing financial support to the county as it issues new debt — part of the $100 million voter approved parks, recreation and green space bond — as well as in analyzing existing bond issues, such as refinancing.

The commission decided the matter in a 4-1 vote during an Oct. 15 work session. Commissioner Brian Tam voted against the measure.

“I don’t think it’s worth spending $75,000 on this,” Tam said earlier this week. “We get advice from the bonding companies at no fee. This is money we don’t need to be spending right now.”

Chief Financial Officer Bill Thomas disagrees. In an e-mail to the Forsyth County News, Thomas wrote that the services PFM can provide to the county are “simply not available in-house.”

Thomas noted that services of the group were used for the sale of bonds in November 2008. The group saved the county $414,500 through a reduced underwriting fee and re-marketing of certain long-term bonds.

“These savings are passed along to the taxpayer in the form of lower taxes,” he wrote.

Commissioner Jim Harrell, who voted to hire the firm, said he stands behind Thomas’ recommendations.

“The bottom line is, Bill made a case that they’ve saved the county money, and more than paid for themselves,” Harrell said this week.

According to Thomas, the practice of using a financial adviser is “very prevalent in other governments in the United States.”

He cited Cobb and DeKalb counties, as well as the city of Alpharetta, as governments that have used financial advisers for bond issues.

Prior to 2008, Forsyth County had not used a company to help with bond issues. In the past, underwriters such as local banks were used to prepare bond documentation and marketing.

According to Thomas, the Government Finance Officers Association, a national group that looks at government financial policies, does not recommend using a broker/dealer firm to serve as the financial adviser and then permit the firm to underwrite the bonds.

The county commission voted to hire PFM for the first time in April 2008, prior to a voter-approved $100 million general obligation bond issue.
The vote was 3-2, with Tam and then Commissioner Linda Ledbetter opposed.

In a letter that spring, Thomas encouraged the commission to select PFM, noting he had worked with the group before and recommended its services.