Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1899-08-31

THROUGH THE CITY SOLlCIlOh.
WATER BOARD DEBT ELIMINA-
TED FROM THE PROPOSITION.
THE SOLICITOR INSTRUCTED
TO BLOCK OUT AN ORDINANCE
FOR SUBMISSION TO THE COM
MITTEE.
The special Council committee charg-
ed with the formulation of plan for
refunding the city debt met again last
evening with His Honor the Mayor and
the City Solicitor, and further long
discussion of preliminary matters en-
sued, the net result being the adoption
Of resolution instructing the Solicitor
to block out an ordinance for submits
sion to the Committee at a future meet
ing.
At the opening of the session Soiic-
itor Nesbitt read the following written
opinion, prepared by Mr.. w. H. Rus
sell, under a resolution adopted by the
body at the former meeting:-
The Opinion.
WHEELING, w. Va, August 30.
Mr.. Frank Nesbitt, City Solicitor, City.
Dear SRA careful examination OF the
constitutional and statutory provisions re-
lating to the issuing of bonds by the city
has brought US to the following conclus-
ions:
The bonds issued by the city cannot (any
of them) he made payabie in less than ten
years from their date.
The provision that the bonds shall not be
made payable less than ten years after
date cannot be evaded by providing that
the city may within the ten years redeem
all or any number of the bonds.
1t is not easy to discover sufficient rea-
son for the fixing by the Legislature of this
minimum period for the payment or re-
demption of bonds. There are obvious rea-
sons why a maximum period should be pro-
vided for and the law seems to be quite as
plain and unequivocal with respect to the
one as to the other Not only does the
eighth section of the act of 1928 declare
in plain words that the bonds shall be pay
able in not less than ten nor more than
thirty-four years after date but there are
also other provisions in the statute which
|
time shall elapse between the issue of
bonds and the payment or redemption of
any of them.
In the first section of the, act 1t is pro-
vided that the city shall not issue or sell
its bonds without at the same time provid-
ing for the collection of a direct annual tax
sufficient to. pay annually the interest on
the bonds and the principal within thirty
fA,,. n, 10 I
tax distributed equally over the number of
years which the bonds are to run and
therefore will necessarily accumulate into
a sinking fund during the years which will
elapse before any of the bonds shall be-
come payable. The Tenth section of the
act provides that the treasurer shall be
liable for the sinking fund and the money
levied for the sinking fund, and provides
that this money shall be kept invested in
a certain designated manner and used for
the payment of the bonded debt. Severe
penalties are imposed upon any officer who
may depart from the provisions of the act.
While the bonds cannot be made payable
in less than ten years and while a provision
for redeeming portions of them within that
period cannot lawfully be inserted in the
ordinance, yet the Legislature seems to have
had in mind that so much of the annual
tax as should exceed the interest on the
bonds, might perhaps be utilized yearly in
taking up a portion of the bonds for in
the tenth section of the act it is provided
that the money levied for the sinking fund
may be invested either in United States
bonds or in the bonds of the city as the
Council may direct. This investment may
be in any of the bonds of the city, and not
merely in those belonging to the issue for
which the particular tax may have been
issued. This provision is very inadequate
and unsatisfactory substitute for a provis-
ion that some of the bonds might be re-
deemed annually within ten years. An eff
fort to invest the annual tax in the bonds
of the city would subject the city to the
fluctuations of the market, for it could
only buy such of the bonds as the holder
might be willing to sell and at such prices
as the holders might be willing to take.
But it SENS to be the nearest approach
which the statute will permit to an annual
redemption of the bonds.
Yours truly,
HENRY NJ. RUSSELL.
A general discussion of the matters
touched upon by the above document
followed, and as a result it was agreed
that the city was limited to ten-thirty-
four bond. perhaps with a sinking fund
provision, to be derived from a special
tax to be levied in conformity with the
mandatory provisions of the legislative
act governing the issue OF municipal
bonds. AS a means of popularizing the
loan it was suggested that this fund
be used from year to year during the
first ten years in taking up other bonds
of the city falling due, to which the So
licitOr added that while this could be
done, the sinking fund would have to
be reimbursed for money SO expended,
that it might stand intact at the end of
ten years, when the first bonds of the
proposed loan became payable. In other
words, if sinking fund money was used
to take up an electric light or Main
street bridge bond falling due, within the
ten years, the city would have to repay
into the fund the sum so disbursed.
The city, it was pointed out, could also
take up bonds in the open market, by
nJrchasp during the FIRST ten wears if