The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1900-09-10
FLAWS IN CITY BONDS
Ordinances Passed Contrary to
Authority From Taxpayers.
ERRORS IN DATA GIVEN
W. P. O'MEARA STILL OFFERS
$4Oo HIGHER PREMIUM.

Unfailing indications point to the
necessit-- of the city council going over
all the iminaries to the floating of
the S250.Ot - worth of water improve
ment bonds. Intending bidders for
the issue of bonds and others who have
/ given the subject some consideration
I declare that the whole proceeding,
/ from the time the taxpayers with their
votes granted the council authority to
create this additional debt, is a series
of glazing blunders. for which. appar-
I emily. there is no excuse. To correct
! the errors made will doubtless defer
the sale of the bonds and result in
| some expense.
/ It is well known that the call for the
special election to vote authority for
issuing the bonds stated that the bonds
/ would be payable at the end of twenty
years. but optional for redemption in
/ ten years. Closely following the cleo
] ton of July Is the city council passed
( an ordinance providing for. the issue
and sale of the bonds and fixing Aug.
] 20 as the date of issue. Shortly after
another ordinance was passed confirm
ing the prior action and making Sept.
L the date of issue. But in this Ordi-
nance as in the one before it the form
! OF the bonds is made to read that they
are payable in twenty years without
the option of redemption in ten years
by an issue floating at a lower rate OF
interest.
This is not the form of bond the
taxpayers gave authority to issue and
in the opinion of legal minds this pro-
ceeding is so contrary to requirements
as TO vitiate the issue and make the
bonds unstable.
Misinformation Given Out.
In the absence of a booklet giving
full data of the city's financial condi-
ton and of the proceedings up to the
time bids for the bonds were called
for. it was most difficult. agents of
eastern bond buyers have declared, TO
get any of the desired data from the
offices of the city recorder and the city
auditor. What created an otherwise
unWarranted bad impression in the
minds of the bond buyers was the fact
I that no two statements from the city
offices or from members of the coun-
ell agreed.
1t develops that one agent from the
/ east became so disguised with the
manner of giving out information and
misinfOrmation relative TO the impend-
ing bond sale that he refused to bid.
1t is said that he declined to be p-a-
Gated with the excuse that this was
the first time Mayor ThOmDSOnS ad-
ministration had opportunity to sell
CITY bonds. but that with the expert
ence gained, the Solons would so about
it differently next year, when old IS
sues of bonds to the amount of 100000
, are to be refunded with new issues at
lower interest rate.
Mr.. o'Meara's High Bid
But Notwithstanding these flaws,
which. however. can be cured at the
! expense of time and money, w P.
! O'Meara. the local representative of
! Shepard & Co, the New York bond
/ brokers. stands ready to take the city's
u xr--,N TO- hon Dc . rarsG inv IF
higher than the mayor and the coun-
ell committee on finance have agreed
to sell to Rollins & Sons of Boston on
their second or amended sealed bid.
Responding TO a query from The
Herald yesterday Mr. O'Meara stated
that but for the bona fide bid Dut IN
by him for his principals the pool
formed by the six bond men first on
the ground would not have been brOk-
en- and the city would have been at
! the mercy of the syndicate which
sought to beat down the price. He will
appeal TO the council Tuesday evening
! to have his amended bid considered
along with the last proposal of Rollins
G Sons agent, which offered a premium
/ of s.. 166 and accrued interest. In do
ing so Mr.. O'Meara saws ne believes
/ he viii be asking only for the same
! cOnSiderate treatment that was ac-
/ corded the agent of the firm whose bid
/ has been accented by the mayor and
/ the finance committee, subject, how
1 ever, to the councils approval
Open Bidding Favored.
In Mr.. OMeara's estimation the
/ citv'S bond deal has drifted into an
auction, and he favors the plan Of per-
hitting the bidders to orally amend
! their proposals in the presence of each
/ other. for by so doing he is certain
that the municipality will get a larger
premium still for the bonds.
With reference to the claim that
/ Rollins & Sons agent was permitted
/ to amend his last bid before accept
| ance. Councilman Robertson, chairman
F. of the finance committee. declares, and
/ his statement is verified by his col
/ leagues. that the same privilege was
accorded to MIR. O'Meara. but that
| gentleman was unDrepared to make
! higher offer than his then only COM
petitOr bid. Naturally the high bid
was accepted and the deal declared
closed.
Councilman Robertson. il is stated
( is pTimed to give those who are re-
| sDOnsible for 'balling uD" the bond
| ordinance an imitation of an aneered
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