Posted on: Friday, October 25, 2002

EDITORIAL
'Staggering numbers' should restrain council

Shocked and chagrined are words that describe the City Council's reaction to news that the Harris administration now wants to borrow up to $250 million this year.

The administration had stated earlier (in writing) that it planned to borrow just $100 million. That was back in May, during a searing budget debate that might well have ended differently had council members had an inkling of the much higher debt — and attendant debt service — numbers.

Councilman John Henry Felix noted that if the city continues to borrow at the higher rate, annual debt service would more than quadruple in 25 years.

The city responded that it doesn't intend to sustain that rate.

There appears to be no suggestion that the administration dissembled back in May, in order to make its budget numbers — which even then appeared much too extravagant to four of the nine council members — more palatable. But we agree with Councilman Duke Bainum's sentiment, if not his language, when he reacted: "If you're telling me that the city did not know that it was going to ask for $150 million more in bonds, then we are in bad-ass shape and it scares the hell out of me."

The city makes the point that now is a good time to borrow more, while interest rates are down. It makes sense to use some of the money to retire bonds issued when rates were higher.

But even if the city is ultimately persuasive of the wisdom of borrowing more, there's no rush. Indications are that the Federal Reserve Board won't raise interest rates in November, and may even cut them once again.

That means there's no need for the lame-duck council to break a sweat over this issue. Save it for the new council, which will have to deal with the policy implications for the next four years..