Maui and Honolulu officials defended the use of negotiated bond sales yesterday.

Bill Brennan, spokesman for the City and County of Honolulu, wrote in an e-mailed response that negotiated sales provide the city with more flexibility to time sales during better interest-rate markets and avoid selling during bad market swings.

Brennan also said the city saves money by not hiring a financial adviser typically needed to assist with competitive bid bond sales.

"If negotiated bond issues are squandering taxpayer resources, then why are so many issuers using that method? Is everyone getting a bad deal?" Brennan asked.

He also said there are restrictions on donations and gifts that underwriters are allowed to give to an issuer. "It is not as if the issuer is electing to sell its bonds by the negotiated method because of some other benefit other than interest rates and professional services," Brennan wrote.

Kalbert Young, director of finance for Maui County, wrote in an e-mail that "over 80 percent of municipal bonds are now sold through the negotiated process. I believe the increased use of this process over time is due specifically to the advantages of the process over auction."

"While we trust our underwriters to provide guidance and quotes on the bond rates, the County also does its own due diligence to ensure that our interests are fair," Young wrote.

State officials weren't immediately available for comment.