What is required for notes that exceed $5 million?

The requirement for notes that exceed $5 million to be sold through a competitive public sale is grounded in promoting transparency and the most favorable financing terms for governmental entities. This approach ensures that a broad range of potential investors can submit bids, which encourages competition and can lead to lower interest costs for the municipality.

In a competitive public sale, the municipality announces its intention to sell the notes and invites underwriters to submit their bids, which allows for a fair evaluation of offers based on price and interest rates. This process mitigates the risk of favoritism or the possibility of not obtaining the best available market conditions, ultimately serving the community's financial interests more effectively.

The other options do not meet the required standards for such financial transactions. For instance, private negotiation processes typically minimize competitive bidding, leading to less favorable rates. A simple auction process might not provide the necessary structure and scrutiny required for larger financial instruments. Similarly, while gaining approval from the state governor may be necessary in some instances, it is not a standard requirement specifically tied to the issuance of notes over $5 million. The competitive public sale aligns with best practices in public finance, ensuring accountability and optimal financial performance.