Is the AGU headquarters bond issue really a boon?



In these somewhat difficult economic times and uncertain future, it is satisfying to know that AGU was able to secure a reasonable interest rate on its bond float to finance its new headquarters (see Eos, October 19, 1993). However, Burke's view that this interest rate leads to savings that can be applied to other AGU programs represents a limited view of this substantial financial commitment of AGU, in my opinion. For example, the borrowing of $11 million by issuing bonds at 5.98% interest rate represents an indebtedness to AGU over 30 years of nearly $20 million, or more than $600 ($20/year) for each of the 30,000 or so members (only approximately, since the issued bonds probably have varying interest rates and maturity periods). The yearly rate of this indebtedness is about the same as our present dues; will these have to be increased to pay for the new headquarters? I am also rather surprised to read that the AGU Council authorized an interest rate on the bonds up to 9', substantially higher than present bond interest rates.