The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1909-12-21
BOARD Of WORKS
MAKES A REPORT
ON WATER WORKS
(American News Service)

cooperation of the Mayor and Com |
mon Council in the premises. which
was promptly granted. Mr.. Maury |
was employed at a compensation of $50
per day, for time actually and necessa-
rily employed in the investigation:
and an assistance civil engineer to do
more common technical work was fur |
nished by him at $40 per day: and the
firm of Edward A. Pratt & Co., of Pc
oria. Illinois, expert accountants, was
employed at SIS per day to go over the
water company's books and report as
to investments, profits, expenses. etc. |
The work was begun in September and
completed the middle of November and
cost the city all told about $1,9jO-a
sum larger than anybody expected, but
not more than the work was worth,
when the completeness of every phase
Of it, and high character and profess
sional reputation of Mr.. Maury and
his assistants are considered. This
board We're considerably surprised and
somewhat disappointed at some of the
conclusions of the report. viewing them
necessarily from the standpoint of the
non-expert or layman, yet a rather
careful study of the same convinces US
that for the most part, If not altogether
it represents the most modern and sci
entific method of dealing with the
facts found and the subjects considered.
The Investigation.
On the first conference with the con-
sulting engineer it was agreed that the
scope Of the investigation should cover
the following items:
JAILED inventory of the property
OF .,-i linds belonging to the water
company.
A valuation in detail of said property
based on the present cost of reproduc-
ing it. less the existing depreciation.
An examination of the physical con-
dition of the water works. with view
Of showing its degree of adequacy.
where it was deficient. and the neces-
sary recommendations for additions
and changes to give it the greatest eff
ficiency.
An examination of the water cOmpa-
ny's books, in order to show, first, the
cost of the water works up to date, and
second. the yearly receipts. expendi-
lures. and profits of the company.
The inventory made was complete.
covering real estate pump house. res
ervoir. wells and galleries. water rights
and rights of way the distribution sys-
tenn, covering the entire system OF
mains and service pipes. fire hydrants,
pumps, boilers and all other machine
ry. together with all pipes, fittings
and other personal property. down to
the smallest detail The inventory
covers fifty-five typewriter pages. be-
sides large number of maps and other
exhibits, covering as much more space
and was by far the most laborious por-
ton of the entire work.
Report on Valuation.
The valuation of all this property al
so involved as much labor and consid-
cradle research in order to insure accu-
rate present values of all this mass and
variety OF property. The report fixes
the total value of the water companys
property after allowance for deprecia-
ton. at S:laE. S92o.i. To this is added
Slo.oc0 for working capital. and S11o.
S.5Go for going value: making a
gross valuation at this time Of SIT.
71S3: The item of going value is
explained to represent the amount of
advantage going concern" of this
sort has over a new concern until the
latter secures a normal amount of bus
mess. In other words. it represents
the loss of profits exclusive of interest
on investment. which is counted part
of the actual value, which a new water
company. having no competition.
would sustain before reaching a nor
NAL value of business. While this
Board understands that going value
is now considered one OF the elements
of real value in a running business, to
be considered in case of sale of same
there is, in the present cast. another
important. II not vital. factor to be
considered. which in most cases does
not appear. This is the fact that
the contracts and franchise rights Of
the water company in this city will
expire In less than three years: and
that this city is under neither legal
nor moral obligation to that company
beyond that time. In other words.
when the water company made its first