Los Angeles herald., 1910-11-11
CITY SACRIFICES
$4,000 TO RUSH
AQUEDUCT WORK
Bond Premiums Are Given Up to
Raise Money, Hasten Project
and Make Big Saving
$2,270,0OO CONTRACT MADE
Council Believes New Plan viii
Bring Water Here Months
Ahead of Estimate

Sacrificing $4,000 in premiums to
the greater good of the earlier COM
pletion of the aqueduct and the conse-
Quent saving of hundreds of thou
sands of dollars, the city council yes
terday approved a report of the adj
visory committee and agreed to sell to
the New York bond syndicate $2,270,OO0
worth of aqueduct bonds.
OF this amount $1,250,000 is to be
expended for steel pipe for the siphons.
William Mulholland estimates 1t will
take nearly year to get this steel,
but the board of public works wants
to know that the money will be avail
able when the pipe is delivered. The
additional $1,020,00O is to be used to
accelerate the work of constructing the
aQueduct, and this money, with what
is on hand and In the sinking fund and
due the aqueduct department from the
water department, will provide for an
expenditure of more than $360000
month for the next six months, accord
ing to a statement made to the coun-
ell yesterday by Gen. A. r. Chaffee.
The bonds are to be sold at par and
interest, and an option is given the
syndicate to take up all the remaining
bonds, which amount to about $6,000,000,
at par and interest without premium.
This means that new contract with
the syndicate is to be executed and
II6 CITY Will lOSC pOSguOu III liiO PiN-
miums it would have received under
the former contract.
BIG GAIN WILL BE MADE
Stoddard Jess, a member of the ad-
visory committee, presented figures to
the council yesterday to show that the
$62, 900 loss was a mere bagatelle in
comparison to the gain that would ac-
crue by finishing the work earlier than
was contemplated. He showed that
through stopping expenses the $4,000
would be wiped out If the aqueduct was
completed fifteen days sooner than an
ticipated, while William Mulholland
stated that the increased accaR8ration
made possible by the addition& money
would finish the aqueduct at least five
months sooner than the first estimate
OF 1913
Not only will the expense Of con-
structing the aqueduct cease much
sooner, but the water will be available
for sale that much sooner, and will
produce an income.
In addition to conceding the premium
of one-half of one per cent to the
syndicate the contract provides that
the sinking fund for the retirement OF
the aQueduct bonds can be invested
only in aqueduct securities, instead OF
any municipal bonds the council might
elect, as the state law provides, and 1t
Heretofore the dates on which the
syndicate was expected to exercise it's
option were February l and August 1.
By the new contract they are changed
to April 1 and October l.
Councilman Betkoush objected to
the terms of the contract He did not
want to tie the councils hands on the
investment of the sinking fund, nor did
he wish to sacrifice the $4,000
premiums. But other members of the
council were unanimous In their sup
port Of the measure.
CONTRACT is OFFERED
Every move made by the advisory
committee in getting the money from
the syndicate is carefully set forth in
a detailed statement made to the coun-
Gil yesterday by w. ]. Washburn,
chairman of the committee.
The terms of the contract are con-
tanned in a telegram from Kountze
Bros, the bond buyers, read to the
council yesterday and which follow:
Syndicate willing to concede to
citys terms, understanding there is no
objection to investment of funds ac-
cruing to sinking fund after syndicate
exercises last option, which terms we
understand to be as follows:
Syndicate will now take $1,020,000
bonds and agree to take, on date upon
or earlier, at syndicate's option, 81 1885,
900, syndicate to have option April /,
1911, So, 1924, 900, and to have option Oc
tober 1, 1911, $2,960,4OO or so much
thereof as shall be necessary to COM
plete aqueduct. Any option to be eX-
ercisable prior to option date, in whole
or in part, without obligation to exer-
else balance of option. If options on
bonds remaining on the April first and
October first options are exercised on
those dates, syndicate is not to .be
obligated to take up the amount on
which options are exercised at
greater rate than $4,000 a month.
after syndicate obligates itself on
October 1. 1911, option. all funds now in
sinking fund and aceruing thereto till
November 1, 1911, shall be invested in
aqueduct bonds if syndicate so elects,
upon which syndicate shall have option,
all or any part, at any time on or be-
fore February 1, 1913. All above prices
will be par and interest. Syndicate
also to have option on the $S5O,000
bonds at 100k and interest now in
sinking fund on all or any part at any
time on or before February 1, 1913
"KOUNTZE BROS"