Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1911-07-13
Water Works Questions and Answer.


from one of our subscribers PROFOUND
ing certain questions as to the pend
ing proposal to vote water bonds. AS
evidence of good faith the writer says
he is sending the same communication
to all the newspapers, although he
doubtless knew he would get diver
gent answers, as tho Water board and
the Water board organs have stead
fastly persisted in a policy of misrep-
resentation and suppression OF the
true facts.
I. The original water works fran
chise gave the city an option to pur-
chase by the appraiser plan, without
paying for any franchise value, at the
end of a twenty-year period. The
water company has always commended
that the franchise runs indefinitely
subject only to this option and a stip-
ulated right OF the city to regulate
rates and make new hydrant rental
contract after twenty-five years. The
city was conceded the right at any
time TO take the plant by condemna-
ton proceedings.
II. When we voted the $500, 900
water bonds in 1909 the Water board
issued over it's members signatures
an appeal giving reasons why they
should be voted, among them the fol-
lowing:
A IL 4. a
now that the Water board may be In posi-
ton to make immediate compromise OF the
litigation. II this is possible
g. We do not intend to, nor will We pay
the amount of the award Css,26s,OOo) unless
compelled to do so by the decree Of the
supreme court, where the matter is now
pending.
IL II the bonds are voted the Judgment
can be paid by the proceeds of the bonds.
Despite this promise, no attempt to
compromise was made before the ad-
verse decision of the supreme court.
Naturally, the. water company saw
nothing to compromise after 1t had a
valid judgment for 6,263,295.49.
III. The Water board says 1t will
not issue the 100000 bonds voted
in 1900 nor the S6,5O0,OOO bonds
voted in 1909 If another $S,25O, 600
bonds are voted in 1911, but the pres
emit proposition does not specifically
rescind the previous bond issues. A
new Water board would not be bound
by the personal pledges of present
Water board members.
Nv. We have already expressed our
opinion that voting $S,25O,0OO water
bonds now is Just as much putting
cart before the horse as was voting
$6,50O,000 water bonds two years ago,
because we are still waiting for the
decree informing US just how much
We will have to pay. The ostensible
eagerness of the Water boarders to
have the bonds voted in order to start
improvements before they have pos
session of the plant strikes us as in
sincere, because the water company
has had standing offer for nearly
Ave years to build the needed main on
mere agreement for reimbursement.
v. The decree of Judge Sanborn,re
Quires the city to pay s6,268,2s5.49
and interest at per cent from the
date Of the appraisal, first deducting
the net earnings of the water COM
pany. 1t is from this order that the
city has appealed, which appeal is still
pending. II the city wins, it will have
to pay no interest at all, and the
$6,600,000 bonds already voted, IL
marketable, would be ample to pay
the bill. If the city loses, it will pre-.
sumably require upward of $1,000, 900
to settle, as there are also judgments
and accruing interest for hydrant rem
tails aggregating $500, 900. The
board says 1t wants the extra million
for betterments and extensions.
vi. II We vote ss,26O,OOO water
bonds and use the proceeds as out
lined, the water plant, which we were
told could be purchased for $4,000
600, will cost US $S,250.00O. That is
to say, the plant win have to earn in
terest. depreciation and sinking fund
charges on sS.25O,OOO instead of on
100000. This more than doubling
of the interest and sinking fund
charge will have to be taken into ac-
count in connection with all the vari-
Gus arguments heretofore used with
reference to reduction of water rates.
profits Of operation, free hydrant rem
tails and possible need to make up
losses by taxes.
VII. Member Charles r. Sherman
Of the Water board in public inter
view two weeks ago declared that the
failure to vote the ss.25O,o bonds
would not have any effect in hasten
ing or retarding the actual possession
Of the plant by the city," which waits
the outcome of pending litigation.