Track Record

The state treasurer fired a man who pledges to bring financial accountability to the Seattle monorail board. Should you care?

AS ONE OF TWO finalists for Seattle Popular Monorail Authority Board Position 9, Tim Kerr has pledged to be "the people's financial watchdog" for the $1.75 billion project. In campaign statements and in his appearances, he highlights his 26 years of experience working in public finance, including work as the state finance officer and deputy state treasurer. What he does not typically mention, unless someone else raises the subject, is that he was fired from the latter position in 1999, just shy of his retirement, over the handling of a state bond issue.

Even at the time, Kerr's firing was controversial and was met by puzzlement in Olympia, where he was well regarded. Gov. Gary Locke's chief of staff publicly raised questions as to whether the action was warranted. The state treasurer who fired Kerr, Michael J. Murphy, who still holds that office, will only say that Kerr "was fired for cause."

The trouble arose in the early 1990s, when Kerr was in charge of the state's bond sales. The state accidentally exceeded an IRS limit on tax-exempt bonds used for low- income housing, and because of the mistake, the people and institutions that bought this particular set of bonds were collecting interest payments from Washington tax-free, when they should have been paying federal taxes. According to state treasury spokesperson Bart Potter, the problem, in the eyes of Murphy, was not the mistake per se but that it was not brought to Murphy's attention soon enough when it was discovered a few years later.

KERR DOESN'T DISPUTE this version of events. He notes that he was working on two massive public-works projects at the timethe expansion of the Washington State Convention and Trade Center and construction of Seahawks Stadium. "I let myself be distracted by those, and I didn't keep my boss, the state treasurer, apprised of this compliance issue," he says. After Kerr was fired, the state made good on the lost federal taxes with a payment of $1.17 million.

Though Kerr's firing made headlines at the time, it has gone virtually unmentioned in the monorail campaign. Kerr's Nov. 4 opponent, former monorail attorney Cleve Stockmeyer, raised the subject at a Seattle Times editorial board before the primary, Kerr says. The Times ultimately endorsed Stockmeyer.

"These bonds represented the tiniest, tiniest fraction of all the financing I ever did during my 26 years of service," says Kerr. "And the people who know me and know my work, they knew the whole thing had been blown out of proportion. I still get calls from state agencies requesting my assistance on debt matters, so people still recognize me as someone who was doing good work." Kerr's expertise with the nitty-gritty, rather than the fluffier issues, is where he is putting his chips. As he wrote in his League of Women Voters questionnaire, it doesn't matter if the monorail project has public art and programs directing contracts to women- and minority-owned businesses "if it has not paid attention to interest-rate risk relative to its financing, to the difficulty of obtaining surety bonds to cover construction, or to delays and shortages in the monorail-vehicle industry."

Says Kerr: "I felt very badly for a lot of years about [the firing]. Part of what I'm trying to do with running for the monorail board is, you know, I don't want to be remembered for just that increment of my career. I'd like to take the things that I learned and the things that I accomplished and carry them up to a different level."

mfefer@seattleweekly.com

 
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