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University Place’s woes make Wall Street Journal

Post by John Henrikson / The News Tribune on Dec. 30, 2011 at 9:52 am with 3 Comments »
December 30, 2011 4:05 pm

A story on the Wall Street Journal’s website this morning highlights University Place as a poster child for municipal financial meltdowns nationwide.

Long a model American community with high-performing schools, beautiful parks and rising real estate values, this city of 31,000 on the Puget Sound has lately turned into a reluctant showcase for the downgrading of America.

It was in the midst of building a new downtown virtually from scratch when the financial crisis set in three years ago, leaving the city with a big debt and little of the new tax revenue it expected by now.

So, University Place cut its work force by 30% to save money. With growing unemployment, some residents lost their homes. Then, earlier this month, the coup de grace: Moody’s Investors Service cut the credit rating on the city’s debt and assigned it a “negative outlook.”

The story goes on to detail the city’s woes with the stalled Town Center project, and city government’s public relations efforts.

In University Place, city leaders earlier this year campaigned on television and online to counter concerns that the city was going broke. From shopping centers to public meetings, people were asking about public finances, showing a heightened awareness of municipal issues as some cities around the country were contemplating defaulting on debt and filing for bankruptcy protection.

“We had to work hard to explain that we are going to be OK,” says Mr. (Steve) Sugg, the city manager. The city, he notes, has a balanced budget with conservative estimates of future revenue that are not dependent on growth in real estate taxes or land sales. The city is in no danger of defaulting, he says.

Leave a comment Comments → 3
  1. tcolegrove says:

    What a shame. The vision of a city of grandeaur, built on a house of cards…

  2. PerryMason22 says:

    A scenario replicating itself all over the country. The City of Tacoma, after denying it’s financial insolvency throughout the fiscal crisis, has suddenly surprised its citizens with the “We’re Broke” mantra. Many other cities continue to hide this fact, but 2012 will show a steep increase in the number of city’s and counties filing for bankruptcy.

  3. whitman411 says:

    It’s strange that people with means (council members) somehow can’t figure out that entities need to balance their budgets the same way they balance their household budgets. That’s what consensus does. And consensus is what town politics is all about.

    “Consensus is the death of reason.” — whitman 2011

    “To me, consensus seems to be the process of abandoning all beliefs, principles, values and policies. So it is something in which no one believes and to which no one objects.” — M. Thatcher 1981

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