The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-07-16
ON WATER PLANT DEAL
CONCLUSIONS OF CITY ATTORNEY
AND THE CONTROLLERS FIGURES.
John w. Hill, of Cincinnati, Chosen as
Expert to Examine Condition
of the Property.

City Controller Johnson and City Attorney
Kern yesterday reported to Mayor Taggart
and the Board of Public Works the conclu-
sions they had reached after examinations
of the financial and legal phases of the
Hord plan for the sale of the water works
to the city. Mr.. Johnson says in his report:
81 have examined the proposition of M.
Hord, relating to the purchase of the stock
Of the Indianapolis Water Company by the
city. Taking for granted the revenues and
expenses of the company as therein set
forth, not having had an opportunity to ex-
anime its books, l find the figures set out
by Mr.. Hord to be correct. You will also
find statements herewith, which / have pre-
pared for the information of the board,
showing the number of fire hydrants and
fountains each year from 1891 to July /, 1898,
and also showing the cost to the city for fire
MIGRANTS and fountain rentals, If continued
at the present rate of annual increase dur
ing the period named in Mr.. Hords propo-
stion.
Il also submit statement, based upon
the plan proposed, Of semi-annual payments
of interest and principal, instead of annual
payments, by which you will observe the
period req required to pay out would be bd
twenty-three and one-half years, and result
ing in a saving of $305,417"
The controllers report further shows the
improvements on the plant during the
twenty-five years would cost $685., 500 The
average annual increase in the number of
Providing the increase continued at the same
rate during the twenty-five years, the city
would have to pay $S505,0O0 for water rent
ais alone.
The report of Mr. Kern is as follows:
''You have requested me to investigate
and report as to the legal right of the city
to proceed with the purchase of the plant
of the Indianapolis Water Company, in ac-
cordance with the proposition of William b.
Hord, herewith inclosed and in response
to your request, / beg to state that l have
carefully examined the proposition of Mr..
Hord and the plan outlined by him for the
contamination of the transfer, and am Of
the opinion that the city may legally become
the owner OF the entire capital stock Of the
water company, and become the owner of
the plant in the manner proposed.
You will observe that the bonded indebt-
edness is to be secured by a mortgage on
the water works, to be in no sense a liza bill
ity or obligation of the city, and to be paid
only out of the revenues of the water COM
pany. The ordinance adopted for the con-
summation of the transaction should care
fully guard against the citys assuming or
undertaking to pay any part of this IN
debtedness but should provide explicitly
that the same should be charged only on
the revenues as earned and the plant it
self
II feel quite sure that the contract and or
dinance can be so drawn that the city will
be able to acquire this property without any
violation of the letter or spirit of the cOnsti-
tutional provision concerning the indebted
ness of municipalities 1t occurs to me that
the owners Of the plant and tie holders of
the bonds are interested at least equally
with the city in guarding against any ille-
gal or unwarranted action in the premises,
and in avoiding all legal complications"