Barbara Gottschalk, MWRA

Barbara Gottschalk used to be a computer programmer before she switched to public finance because she was tired of not being able to see the results of her work. Now as the chief financial officer of the Massachusetts Water Resources Authority, she said she has more fun because she gets to see the end product.

This year Gottschalk saw the end product of a $3.8 billion investment in a pipeline and treatment plant in Boston that carries treated sewage out into the bay. Now she says the authority will scale down its issuance to $170 million in April or May and $180 million in October.

The spring sale will be competitive, but the fall issue will be a variable-rate deal done by the MWRA's two senior managers, Goldman, Sachs & Co. and Bear, Stearns & Co. The authority issued its last request for proposals in 1999, and according to Gottschalk it might do another RFP next year.

Typically, the authority tries to do competitive deals for issuances under $200 million, but it also has to maintain a mix of 18% variable-rate debt, which are usually done on a negotiated basis. To ensure that rates are in line on her variable-rate deals, Gottschalk issued two series of variable-rate tranches to ensure that the different banks were trading in line with each other. Now she just keeps her eye on where the rates are on her eight outstanding deals.

When it comes to looking for underwriters, Gottschalk looks for bankers who can understand the MWRA's needs, offer advice, and watch the market. For example, the authority won't do a refund unless if can achieve a 4% present-value savings, and anyone coming to the authority with a refunding idea should sure they understand that target.

In the next few years the MWRA capital plan will wind down, with the debt issuances going back to under the $400 million or $500 million that they have been at for the past few years. By 2006, Gottschalk has committed to issuing only $100 million annually in today's dollars for the agency's capital needs. She said Gov. Paul A. Cellucci might add $1 million to his budget next year for issuing an RFP for bids to privatize the MWRA on the operational side.

"Our goal is to make the authority more efficient operationally. The big thing here is privatization, and we need to prove that we can keep up," Gottschalk said. "The financing side would never be privatized because we need the tax-exempt status."