One of the craziest, most transformative years ever in state and local government finance will end with a whimper this week.

Municipalities are slated to sell just $74.1 million of bonds this week, according to data from The Bond Buyer and Ipreo LLC, after having floated $611.7 million last week.

The biggest deal on the docket is a $20.8 million offering from Nelson County School District Financing Corp. in Kentucky.

Competitive bidding will determine whether the bonds are sold as tax-exempt securities or as taxable debt through the Build America Bonds program. The district's financial adviser is Ross Sinclaire.

The Nelson County School District operates nine public schools with about 4,700 students.

The district's superintendent, Janice O. Lantz, said the proceeds will be used to build a new high school to ease overcrowding at Nelson County High School.

The bonds, which passed by public referendum on the second try, qualify for matching funds from the state, Lantz said. The district derives more than 70% of its revenue from state aid.

The district had about $31.3 million in outstanding debt as of its latest annual report. With $36.4 million in net assets, the district last year spent 2.4% of its revenue paying interest on its debt.

The next-biggest competitive deal on the slate is an $18.9 million sale from Ithaca, N.Y. Roughly $11.3 million of the deal is tax-exempt and the rest is taxable. The bonds are rated A1 by Moody's Investors Service.

The tax-exempt portion carries maturities ranging from 2011 to 2027, while the taxable portion has bonds maturing as late as 2034.

The proceeds of the tax-exempt portion will be used to refund bond anticipation notes issued for a pastiche of purposes, from repairing a bridge to buying software to renovating an ice skating rink.

Proceeds from the taxable batch will be used to refund notes issued to build a parking garage.

Ithaca, population 31,000, had about $70 million in outstanding debt as of its latest financial report at the end of 2007.

Another deal on the calendar is a $17 million public improvement bond offering from Chautauqua County, N.Y.

About $10.7 million of the proceeds will be used to build a landfill facility that converts methane into electricity, according to county finance director Darin Schulz.

The remainder will be used to purchase two helicopters for transporting patients to hospitals, and construct a science building at Jamestown Community College.

The county had issued a $10 million bond anticipation note prior to this sale.

With a population of 133,800, Chautauqua consists of 44 municipalities, including the cities of Jamestown and Dunkirk. The county is rated A-plus by Standard & Poor's.

Fiscal Advisors & Marketing is financial adviser. The maturities range from 2011 to 2030, with bigger principals in later maturities. This deal will raise the county's debt burden to $57.2 million. The county has $251.2 million in net assets, and well under 1% of its revenue is used to pay interest on debt.

The light activity this week comes as municipals close out a strong year. Municipals have returned 12.1% to investors this year, based on the S&P National AMT-Free Municipal Bond Index. Municipalities have sold more than $400 billion in debt this year for just the third time ever, according to Thomson Reuters.

In a research report, Chris Mier and Ivan Gulich of Loop Capital figured issuance this year will end up around $415 billion. They predict issuance next year will reach $435 billion, which would break 2007's record of $430 billion.

The prediction is based on historical relationships between municipal bond volume and such factors as economic growth, borrowing costs, and state and local government revenue.

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