Oyster Bay, New York, will have a court-appointed monitor reviewing bond disclosures for three years under a new contract approved by the town board Tuesday as part of last year’s Securities and Exchange Commission settlement.
The Oyster Bay board passed a three-year deal with Washington, D.C.-based Ankura Consulting Group LLC and agreed to provide the firm with access to its records.
The move came a day before Moody’s Investors Service upgraded Oyster Bay bonds one notch to Baa2 from Baa3 on Wednesday due in part to a successful resolution of most of the town’s legal challenges.
The municipal finance consultant for bond disclosures was required under an SEC settlement
The SEC
Ankura senior managing director Marc-Philip Ferzan will be disclosure monitor under the new contract following a Jan. 27 order by U.S. District Judge Joan M. Azrack to hire him as independent consultant. Ferzan was among three candidates that Oyster Bay’s outside attorney, Jonathen E. Pickhardt, submitted to Judge Azrack last October.
The Oct. 31 letter Pickhardt submitted said that Ferzan has “significant public finance experience” and previously helped resolve an SEC investigation while working with the New Jersey Attorney General’s office involving the state’s bond disclosures. Pickhardt said Ferzan would likely be assisted by Ankura CEO Kevin Lavin, a former emergency manager for Atlantic City when the New Jersey gambling hub was on the brink of default.
Oyster Bay Town Supervisor John Saladino and Ferzan did not immediately respond for comment on the Ankura appointment. Ferzan declined to comment.
Under the settlement with the SEC, Ankura's appointment sets a 120-day deadline for the firm to issue a report recommending improvements to the town’s bond disclosures. The town has 60 days to adopt the independent consultant’s recommendations or propose alternatives, according to the settlement.
Ferzan’s involvement with Oyster Bay occurs amid an improved financial picture for the Long Island municipality, which is New York State’s fourth largest township with a population of around 300,000. Moody’s credited Oyster Bay in its Wednesday report with implementing financial improvements such as cost cutting and “substantial” tax increases along with eliminating the need for annual cash-flow borrowing. The town’s new Moody’s rating, which is two notches above junk territory, was also assigned a positive outlook.
“Although much work remains to make the town's overall credit profile more consistent with its strong tax base, much has already been accomplished, including resolution of the most critical litigation,” Moody’s analyst Douglas Goldmacher wrote. “The positive outlook reflects Moody's expectations that Oyster Bay's finances are on track to continue improving and will reach a level commensurate with a higher rating."
Oyster Bay will utilize the elevated Moody’s rating for an upcoming sale of $161 million in bond anticipation notes to address various capital projects.
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