City Hall's Risky Water Gamble
Tacoma officials are bypassing voter approval to fund a massive water expansion through high-interest debt that local bankers are only touching as a side deal.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
It appears now that the city will be able to sell its $250,000 of special water warrants to build the water system for the South Tacoma wells and Clover creek. But is it advisable? The city this week has just sold $300,000 of other securities for a premium of $15,450, bearing only 4.5 percent interest. Now, the council proposes to sell $250,000 more of securities for no premium and at 6 percent interest. It does not look like very good business. This whole water warrant scheme was an apparently ill-advised financial abortion. It was gotten up to do something the administration was afraid the people would not stand for if they had a chance to express themselves. When they came to do the job, they wanted $250,000, and contractors say this is too low. Local banks have been juggling with the proposition several weeks and finally, on agreement of the city to take the warrants back as collateral for deposits, the banks last night agreed to take the warrants, providing interest at 6 percent is paid. If this city can sell its bonds at 4.5 percent interest and get a big premium, why should it issue warrants to run the same length of time and pay 6 percent interest and get no premium? It seems to be an expensive thing for a city to have officials in power who will not trust the people, but who try to carry forward schemes they are afraid the voters would not stand for if submitted to them. It is such things as this that make the people demand the recall on public officials.
“It is such things as this that make the people demand the recall on public officials.”
Tacoma's long history of tension between administrative control and voter oversight finds a clear reflection in this 1909 fight over utility financing. Much like today's public debates over municipal debt and the expansion of the water infrastructure, the core issue was whether the public was being shut out of decisions that would impact their rates for decades.
From readers
No comments yet. If you know something about this story — a correction, a family memory, a source — it belongs here.