• Pension Obligation Bonds - Worked closely with Agency administration, legislative leadership, and the Office of Policy and Management on the development and passage of a pension obligation bond financing for the Teachers’ Retirement Fund (TRF). Public Act 07-186 authorizes the issuance of general obligation bonds sufficient to fund a $2 billion deposit into the TRF including a bond provision to commit the State to fully fund its actuarially required contribution to the TRF in each year that the bonds are outstanding. The program is designed to improve the funded status of the TRF at a savings to taxpayers

• New Money Bonds - Issued almost $1.4 billion of new money bonds to fund local school construction, state grants and projects, housing initiatives, economic development initiatives, and Clean Water Fund loans to municipalities.

• Refunding Bonds - Took advantage of continued low interest rates and issued $557.8 million in refunding bonds for the GO, UCONN 2000 and Clean Water Fund bond programs which will save $21.6 million over the life of the bonds.

• Defeasance of Deficit Bonds - Redeemed the remaining $146 million of Economic Recovery Notes issued to finance the State’s fiscal year 2002 and 2003 deficits. Calling the bonds nearly three years early with surplus funds saved taxpayers about $6.2 million in interest cost. Also prepared analysis and drafted new law authorizing the defeasance of the 2004 Rate Reduction Bonds in order to free up funding for the State’s Energy Efficiency Fund.

• Transportation Bonding - Continue to actively consult with the Office of Policy & Management, the Department of Transportation, the Legislature and the Transportation Strategy Board on options for funding transportation investments and the implementation of the major new bond authorizations approved in the 2006 and 2007 legislative sessions. Prepared and coordinated a major presentation to the Transportation Strategy Board on options for transportation funding including leveraging of federal funds, tolling highways, the uses of other federal funding programs and a comparison of financing structures used in other states.

• Planning for Transportation - Led planning meetings with officials from the Department of Transportation and the Office of Policy and Management on the State’s long-term capital expenditure and borrowing needs necessary to implement major new transportation investments in mass transit and highway infrastructure. Also assisted policymakers with financial analyses related to revenues of a new rail car surcharge and bonding options for new rail car purchases.

• Clean Water Fund Task Force - Joined key stakeholders as part of the Clean Water Fund Advisory Work Group organized to review the increasing demands on the Clean Water Fund program. Completed analysis of the funding capacity of the Clean Water Fund program which served as an integral part of a report to the State Legislature in February 2007. The results of this study impacted proposals for increased funding for the Clean Water Fund programs.

• Clean Water Fund Program - Several initiatives were noteworthy in the Clean Water Program including initiation of a new loan and grant project management accounting system, an EPA Water Quality Trading Award to Connecticut’s Nitrogen Credit Exchange Program for its exemplary water quality trading programs and policies, and several changes to the loan and grant agreements to reduce documentation needed from smaller entities and to comply with recent legislation.

• University of Connecticut - Worked closely with the University of Connecticut on a variety of finance issues including equipment and other leases, funding of the downtown Storrs project, expansion of the Stamford Campus, and financing options for a new John Dempsey Hospital. Conducted tax compliance session with key University and Health Center administrators.

• Connecticut State University System - Worked with the Connecticut State University System to draft a proposed legislation to establish a long-term funding source for its major capital improvement program through a $1 billion ten-year GO bond authorization.

• Municipal Pension Program - Participated in discussions and worked with the Legislature on the creation of a new program to assist municipalities with their pension liabilities. Enhancements suggested and incorporated into the program include OPM participation in the priority list and review process, mechanism for recovery of administrative costs, and requiring participating municipalities meet the requirements of the pension obligation bond statutes including the covenant to make current contributions to pension plans.

• Bradley International Airport - Throughout the year consulted with Bradley International Airport’s financing team members including professionals at DOT, bond counsel and financial advisors on issues relating to existing and new funding sources for Bradley’s Master Plan. This included an analysis of financing alternatives for a new parking garage to provide 3,500 new parking spaces including a consolidated rental car facility. Refunding alternatives of existing debt and options for the existing parking garage lease were investigated.

• Quasi-Public Agencies - Continued to coordinate with the State’s quasi-public and other agencies resulting in bonding for a new supportive housing program, defeasance of nursing homes bonds prior to default to preserve the State’s special capital reserve fund credit, and issuance of tax increment financing bonds by the Connecticut Development Authority for a retail development at Rentschler Field in East Hartford.

• Credit Rating Agencies - Active management of the State’s relationships with credit rating agencies. New initiatives this year include hosting rating agencies meetings at the UCONN Stamford campus, providing analysis and feedback on Moody’s new Credit Scorecard system, and earning the top Financial Management rating from Standard & Poor’s by emphasizing Connecticut’s strong governance and financial controls. Standard & Poor’s also upgraded the State’s STO bonds from AA- to AA during the year reflecting the credit strength of that program.

• Taxation Issue at the Supreme Court - Conducted market-specific and state-specific research on the potential implications of a court challenge to a common practice of states’ taxing interest on bonds issued by others states, but not those issued in state. Coordinated comments with OPM, the Department of Revenue Services, and the Attorney General’s Office which resulted in the State’s participation in amicus briefs before the Supreme Court through the National Association of Attorneys General and the National Association of State Treasurers.

• Requests For Proposals and Contracting Issues – Initiated program-wide requests for proposals for bond counsel, arbitrage rebate and verification agent services as well as the completion of the selection of financial advisory firms and co-managing underwriters. The Division participated in discussions on contract reform legislation and problems with the new campaign finance laws and contributed to the successful change in law which preserved the spirit of the campaign finance laws but through a workable implementation method.

2007 Division Performance

While the State’s fiscal situation continued on the third straight year of significant budget surpluses, the Division's participation continued to be critical on budget matters.

• The Division communicated throughout the year with the credit rating agencies and the investment community to provide updates regarding the State budget, the economy, and the delay in financial reporting associated with the implementation of the State’s new accounting system.

• The Division worked closely with the legislature on several important initiatives including a major pension obligation bonding proposal, options for funding additional transportation investment, municipal finance issues, the defeasance of the rate reduction bonds issued in 2004 to help fund a General Fund Budget deficit, various Clean Water Fund proposals, and active monitoring of other proposed legislation as it may impact the State’s debt programs.

• Continue to actively consult with the Office of Policy & Management, the Department of Transportation, the Legislature and the Transportation Strategy Board on options for funding transportation investments and the implementation of the major new bond authorizations approved in the 2006 and 2007 legislative session. Prepared and coordinated a major presentation to the Transportation Strategy Board on options for transportation funding including leveraging of federal funds, tolling highways, and the uses of other federal funding programs including a comparison of financing structures used in other states.

• Led planning meetings with officials from the Department of Transportation and the Office of Policy and Management on the State’s long-term capital expenditures and borrowing needs necessary to implement major new transportation investments in rail and highway infrastructure. Also assisted policymakers with financial analyses and evaluation of implications related to a proposed Rail Car surcharge and bonding options for Rail Car purchases.