The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1908-09-26


each one of which Is used by engineers
in appTaisinC values of water works.
In examining the books of the water
company, il is found that while the
gross income of the company has in
creased somewhat during the past six
years. there has been but little differ
ence in the net revenue, that of 1903
being less than 1902 and nearly the
same as 1901. which may be the re-
suit of the epidemic of yellow fever
during 1908. But the net revenue of
1904 was less by S1.102-3i than it was
in 1903 so that il is ! matter OF fact
that the present revenue equals, or al
most equals. the company's present IA
Ciftics for doing business. and TO in
crease same means large expenditure
OF money for bettCTmCntS and additions
as heTeinbefOrc stated
In determinEing the cost of repro
duciuE the present plant, the present
high price of materials and labor has
been carefully considered and used,
and. in determining the depreciation
the writer has exercised the UtmOS!
care. each particular item of the plant
being considered by itself. and the
time in which it was installed. with its
future probable efficient life. and he
| believes his determinations conserva-
tive.
In order to determine the value OF
the plant TO the city, if purchased at
! the valuation fixed in this report, the
writer has computed the valuation
based upon this valuation plus the
| cost of putting the plant in a proper
condition to meet the present require
ments for fire protection and based
upon interest charges Of IL per cent
/ on 80 year bonds. with sinking fund
| Of ( II per cent. to retire bonds.
II might be said here that the pres
: ent water company has never created
! a sinking fund from its net earnings.
although its bonds fall due in 1915.
ten years hence. This fact alone de
! CTeases the value of the plant very
materially to the seller, because at
the present rate of business it would
| be impossible for the company TO re-
| tire -sthese bonds when they become
/ due. except by the creation of a new
debt, which it would not be possible
| TO create if the city should build its
own plant
Valuation of Plant
Value based upon cost of reproduc-
ing works. less depreciation. plus
going value" and franchise value.
| Cost of reproducing works. SI91 .56S g.
! Depreciation of plant ... 35.77O.51
ug SiCdA value VI pbGul LOO. 1901 1
| Going value --.... 16.S9494
| Franchise value ... 14S20.OO
Total value upon this basis. S7,513.O5
Value based upon capital
ling net revenue, based
upon net earnings of 1903,
1904. 1905 and 1906 Cap
iJal based on 6 per cent.
interest and so year bonds
and IL per cent. sink
ing fund for same
period .-----------....S 212,S19.24
| Value based on income per
tap. capital based on
per cent. interest on 80
year bonds and 4 II per
cent, sinking fund for
! same period ..... 1S3, 323. 81
Divided by three ...... $50, Sos. 81
Total value of plant e. 194551.S7
| Value of works when puT-
| chased by city.
| Total value Of works, as {
| above named s194.551S7
/ Cost necessary to supply
| ample fire protection to
present plant .-...... 45.6S6.9O
$240.23S71
Annual consumption per
l. 900 gallons ........... dS9. 270.OO
| Annual gross revenue at
1914 per 1000 gallons,
based on the years 1904
and 1905 ..-..-..-...... 34.SSzO6
| Operating expenses, same
| years. Sc per cent. - 19,50732
| Earnings over operating
expenses 1890. $1,000. 15.379.74
| Fixed charges. 41-2 per
cent on S24O.2S8.77 1O.S1O74
Sinking fund, 4 II per cent.