School bonds sold behind closed doors
A critique of the school board’s decision to bypass public competition in the sale of district bonds, potentially costing taxpayers.
The school board of this district yesterday sold to N. W. Harris Co., of Chicago, $63,500 of twenty-year bonds at par, the interest rate to be 4 1/2 per cent. A district as wealthy as this should have been able to get a lower rate of interest than that. County bonds and some of the city bonds are drawing only 4 per cent interest, and at Pomeroy recently water bonds were sold to Harris Co. at an interest rate of 3 7/8 per cent. There was only one bidder for the bonds of this school district, which was probably due to the fact that the board gave notice of the sale in no newspaper except the morning paper with its meager circulation. There is little doubt that the board could have got better terms from the state, which under a law passed at the last session of the legislature is authorized to buy municipal and school district bonds.
“There was only one bidder for the bonds of this school district, which was probably due to the fact that the board gave notice of the sale in no newspaper.”
The management of public debt and the requirement for competitive bidding on government contracts are ongoing issues that balance efficiency with democratic oversight.
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