Salt Lake Telegram | 1933-03-07 | Page 9 | Cities with Overcrowded Bond Issues May Borrow, Hart Holds

Cities With Oycrcrowdcd Bond Issues May Borrow, Hart Holds ' There' la a possibility that Utah towns and cities may still borrow from th Reconstruction Finance corporation corpora-tion self-liquidating funds, provided ihey hav bonding power to vote the necesssry bonds and then segregate their water revenue taxes for payment pay-ment on the bond Issues, according to an announcement made Tuesdsy by R. A. Hsrt, industrisl secretary of the chsmber of commerce. Despite the supreme court decision In the Ogden test case, where the court ruled sgsinst tha city's plan to borrow t4S.U0 from the R. F. C. for a modern water system, getting forth that tha proposed tosn would increase tha municipality's indebtedness indebted-ness beychd the aggregate allowed by the stata constitution, the stete G rejects committee still believe, there i a way out, according to Mr. Hart. Letters were written Tuesdsy by tha stata projects committee, informing inform-ing some 100 towns and cities thst they may still obtain R. F. C. aelt- liquidating funds despite tha action of the supreme court in tha Ogden test rase. "Many of these towns ire known 'to hsve a bonding balance," Mr. Hart ssid, "snd also are known to need improvement in their water systems, sreordtng to a survey mad by the tate projects committee. "Even Ogden could borrow the $240,000, or the balance between the firesent bonded indebtedness and tha imit, and construct one-third of the new water system as a self-liquidating project Mr. Hart ssid. The city of Verne) received 131.000 by voting a bond issue and thenpost-ed thenpost-ed the bonds with the R. F. C. for collateral, Mr. Hart explained. They were then given permission to segregate segre-gate water revenue and redeem the bond, from funds derived from this source. it is th hop ef th stat projects committee thst other eltie, which are in position to do go will tak Sim-iilar Sim-iilar action, Mr, Hart said.