Los Angeles herald., 1909-01-03
SCHOOL BONDS AND THE
BONDED INDEBTEDNESS

lHeSe pOHuS upon the claim that the
bonded indebtedness Of Los Angeles has
already approached a dangerous fig
ure.
In view of this we think it well that
citizens should be accurately informed
as to the condition of the present
bonded Indebtedness Of the city, which,
in short, is as follows:
On the S1st day of December, 1908,
there was issued and outstanding bonds
of the city Of Los Angeles in the total
Of $685. 25.
OF this total the bonds issued for
the acquisition and improvement of the
present water system and on account
Of the Owens river aqueduct amount
to 6,41S, $50.
The total outstanding bonded issue of
the city for all purposes other than
water supply is $S.1s3,575.
In considering the bond issue of the
city and the burden which that issue
imposes upon taxpayers 1t would, of
course, be unfair to include as a burden
upon taxpayers q bond issue for which
the city has received and holds live
income-producing asset.
To ILLUSTRATES: The present bonded
Indebtedness Of the city issued for the
acquisition Of its water system is
S6,41S,850. as above stated.
In the year 1907 the water system Of
the city produced a net profit over and
above operating expenses of $s40, 629.17.
or more than 10 per cent on the total
amount Of the present water bond in
debtedness Of the city.
Just what the net earnings Of the
water system were for the year 1908
has not yet been ascertained, but 1t is
safe to say that the earnings are great
er than they were in 1907, in
asmuch as the population Of the city
and the consequent use of water were
larger.
Thus we see that the earnings Of the
municipal water plant not only take
care of the interest on the water bonds,
but produce for the city a net profit
in excess of that interest Of at least
one-half a million dollars. This profit,
we may say in passing, is not OBJ
tanned at the expense Of imposing ex-
cessive water rates upon the city's in
habitants, as is shown by a COMPARE
son Of the meter rates charged by the
water department Of the city of Los
Angeles and the water departments of
other cities. AS evidence Of this it may
be stated that the rate per 1000 gall
Ions on water furnished the citizens of
Los Angeles is little more than one
third the rate at which water is fur
nished the citizens of San Francisco
and Oakland by the private water COM
panies supplying those cities.
We see from the foregoing that the
live asset owned by the city and ac-
CURED by the issuance of its water
bonds not only carries those bonds, but
produces a net profit which would more
than pay the interest on the total bonded
Indebtedness of all kinds Of the city.
While the water bond indebtedness will
be largely increased in order to obtain
the sum necessary to complete the
Owens river aqueduct it is estimated
by competent experts in charge Of that
work that the income which the city
will derive from the new water supply
and from the electric power which can
and will be developed from the aque-
duct will make quite as good a showing
of net earnings as the water system of
the city does in its present form.
Excluding the $6,41S,S5O of water
bonds owed by the city, we have a total
outstanding bonded indebtedness of
So, 1855.
The last property assessment of the
city shows that the people Of the city
Of Los Angeles own property to the
value Of $246. 761, 575, subject to taxation
for the purpose of paying interest upon
this bonded Indebtedness.
In other words, the total bonded in
debtedness Of the city of Los Angeles,
excluding the water bonds, for which
1t owns a live asset, producing net earn
ings to the amount of double the inter
est upon those bonds, is less than IA per
cent Of the assessed value Of the prop
erty of the city.
We do not believe that there is an
other city Of its size in America which
can make such a favorable showing
upon it's bonded indebtedness as this.
Certainly the bonded Indebtedness OF
the city of Los Angeles is not suffi-
GENTLY burdensome to justify its citi-
zens in refusing to furnish adequate
and necessary facilities for the educa-
ton of their children