A Financial Crossroads for Kennewick
Voters weigh the merits of refunding high-interest city warrants to avoid fiscal catastrophe.
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Next Tuesday, the voters of Kennewick are to be called upon to say whether this city is to follow the course which has reduced the town of Anacortes to dire financial straits or adopt the method of converting outstanding warrants into low-interest bonds. Kennewick has $23,000 in outstanding warrants bearing 8 percent interest. It is proposed to retire these by issuing bonds at 5 percent. This would save $575 a year in interest. While some argue this is just a scheme to clear debt so the council can borrow more, the current debt must be paid. If we refuse these bonds, how are we going to pay the city's obligations?
“Here is a striking object lesson of the end that awaits the town that drifts along from year to year under the increasing burden of a heavy interest-bearing warrant indebtedness.”
The fear of 'drifting' into bankruptcy and the debate over debt refinancing are perennial local governance issues. This editorial highlights a 1914 attempt at fiscal discipline that mirrors modern city bond elections.
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