Omaha daily bee., 1899-01-12
TO help OUT SINKING FUND
City Treasurer Explains Necessity Of Nine
Mill Levy.
REQUIRED TO MEET INTEREST ON BONDS
Contention that the Plan Will Place
the Funds in n Condition that
All Obligations May BE
Paid Promptly.

City Treasurer Edwards has requested the
city council to set aside about 8 mills for
che sinking fund In the 1899 levy, which
Is soon to be made up. He estimates
chat It will require this to place the fund
on a cash basis, which will save the city
annually several thousands OF dollars In in
ferest. There is considerable question
whether the council will look at the PROPOSE
Zion In the same light as does the city treas
Orer, even though the latter backs himself
up with figures. In last years levy the
sinking fund got but 1926 mills.
According to the statement OF the city
treasurer. the bonded Indebtedness Of the
city at the present time, the principal and
Interest Of which the sinking fund is in
tended to meet, amounts to $3.36 100. Dur
ing the coming year there will be added to
this 5000 900 more-the $4,000 sewer and
$4,000 paving bonds voted at the last cleo.
Zion. The interest on the bonded indebted
ness with which the city was
burdened on the first Of the
year amounts to 1856, 1877 annually.
Interest amounting to $4,000 a year will be
added to this by the 500, 900 bonds that are
to be issued, making the total interest that
must be met during the year $17o.127.
Carrying an Overlap.
But this year must also carry a consid-
cradle overlap In the sinking fund. On
January 1 $50, 431 OF the $780, 1877 interest
that had accrued during 1897 could not be
paid out OF the treasury for lack OF funds.
The required money had to be raised by
issuing registered warrants to the amount,
which bear z per cent interest. Since then
$4.740.59 OF these warrants have been taken
up,i leaving outstanding $45, 690.41 in in
Serest-bearing warrants against the fund.
Besides this. 1t is estimated that this
amount Of outstanding warrants will be
largely Increased during the next four
months, since the 1899 tax will not become
due until May 1. During these months
the following amounts OF interest will
fall due: February, $12,s75; March. $14, 900;
April, $11, 6S7. 50-a total of $3S, 562. 80. 1t Is
estimated that the tax payments for this
same length Of time will not amount to
more than $4,000. Therefore, to satisfy the
remainder Of the interest that will become
due. $25, 1925 0 in warrants will have to be
floated. Consequently when the 1899 levy
falls due on May / there will be outstanding
81 .252. 81 against the fund in warrants bear
ing interest at the rate Of Z per cent.
Therefore, the city treasurer points out
that II the city wants the sinking fund to
be even with the world on January 1, 1900,
1t must provide the means for taking up the
= thob WI uuiAh6 lhO yCaly
Sic. 127; the overlap Of $45, 690.41 from 1897
in the shape Of warrants, and the difference
between the Z per cent interest that the
outstanding warrants Of 81, 252.91 will
draw to May 1, and the 5 per cent interest
that, the regular interest coupons which
they suppfanted drew. The total will be
in the vicinity Of 1925 900, or about the
equal Of the proceeds from a 9 mills levy,
according to the figures OF the city treas
urer.
Edwards Explains 1t.
''The only economical way in which the
city, can handle this sinking fund ia. to put
Il on a cash basis" declares City Treasurer
Edwards. ut is losing about 2 per cent Of
the amount Of the outstanding warrants an
nually-that 10, the difference be-
tween the Z per cent that 1t must
pay on these warrants and the s per cent
that the bonded debt draws And the situa-
tion is becoming worse annually. because
at the end Of each year the warrants stand
ing against the sinking fund increase IN
amount.
This is caused by the fact that the coun-
Gil makes the levy on the wrong theory. 1t
goes on the basis that the entire tax levy
will be collected annually. II this were true,
there would be no deficit in the fund, as the
amount levied would be sufficient to care for
all interests that accrues. AS a matter Of
fact, but rs per cent Of the levy is collected
any year and the consequence Is that rs per
cent of the matured interest must be paid
through the medium of outstanding war
rants. A portion Of the rs per cent unpaid
tax Is collected In after years. but there Is
always q part never collected and this
forms a deficit. which grows larger year
after year."