Editorial: Careful with investment politics

An amendment before the Spokane City Council would prohibit the investment of city funds in fossil fuel companies.

Guess what? Washington law already prescribes the investing of public funds in anything but government securities, or mutual funds that invest in public securities.

If the council passes the amendment, absolutely nothing will change.

That’s fine by Council President Ben Stuckart, the amendment’s sponsor.

The council will be codifying the city’s position should the state restrictions ever be lifted, he says, adding, “It doesn’t cost us a dime.”

Given the plunge in oil prices, a dollar is more like it.

Specifically, the amendment will not allow city investment in companies that get more than one-quarter their revenue from selling fossil fuels, mining coal, or “oil-related activities,” however that might be defined. Holders of sizable fossil fuel reserves would be black-listed.

It’s tempting to dismiss this effort as just another council venture into social engineering. We have made our opinions clear on those efforts.

But the amendment is apiece with the Sustainability Action Plan adopted under previous mayor Mary Verner, and the 2015 sale of $200 million in “green bonds” that will finance the city’s efforts to keep stormwater runoff out of the Spokane River, and add another layer of treatment for sewage.

The city has made solid progress toward cleaning up the local environment in recent years. Symbolic gestures, however, can deflect attention from those real achievements, and redundant prohibitions on buying securities issued by petroleum corporations should not be allowed to do that here.

The hostility among too many to any initiative that invokes global warming, and international agreements generally, might have that result.

The amendment does something else more constructive: It reconstitutes the city investment committee, a body Stuckart says has been moribund, but which will review city investment, and report monthly to the council on investment activities.

Its investment decisions will not be subject to the council’s consent. City Chief Financial Officer Gavin Cooley will have fewer administrative responsibilities so he can focus on managing the city’s money, which he has done more than capably going back to the Verner administration.

Within the criteria set by Washington law, which limits cities to buying Treasury securities, and bonds and other debt instruments backed by taxes, utility fees or other revenues streams that guarantee local Washington jurisdictions will return the principal and interest, Cooley and the city have outperformed their peers.

Since the Federal Reserve adopted its low-interest strategy in response to the 2008 recession, the state policy has reduced returns on state and local government investments to near zero. But jurisdictions –the city and state among them – selling debt have made out splendidly.

It’s not climate change, just real results.