The Houma courier. (Houma, La.) 1878-1939, 1917-10-27
RECIiINING THE SWAMP
Financing Drainage Districts
S'unds Usually Obtained by lssu-
Ing iiUndS.

10 III upon edCh tldtl VI "i'
included within a drainage district
its proportionate share of costs. the
drainage laws provide for a disin-
terested board to determined the
benefits which will accrue to each
tract from the construction OF the
improvements. After affordin,5 the
landowners an opportunity to be
/ heard the assessments arr amended,
if the court deems amendments nee
essary, and confirmed. These con
firmed assessments form the basis
for levying taxes. AS sOoG as the
lcost of constructing the improve
, n,erts is determined. the distri2- 81
feels levy sufficient taxes to r.eet
these costs.
Taxes to pay Off Bonds
Within a cer,a'c time the land
owners Fay pay these taxes. All
taxes remaining unpaid aftar ne ct
piration Of this tine are paid usual
ly in a series of annual instruments,
the last payments being deferred
anywhere from ten to twenty years.
AS it is necessary 20 to have money
to proceed with construction, bonds
are issued to cover unpaid taxes.
These bonds are Of the serial type.
bear interest payable semiannually,
and are arranged SO hat a number
equal in amount to the taxes collect
ed each year are paid off. AS these
bonds draw interest, landowners
who fail to pay their taxes within
the %prescibed time have their axe
pay the interest on the outstanding
bonds. As the final installment OF
taxes can not be paid off until the
last series of bonds mature, land
owners have found it cheaper in
some sections to borrow money on
short terms and pay their drainage
taxes within the prescribed time.
Safeguard the Issuance Of Bonds
When it is proposed to issue bonds
an effort should be made to secure
as Vide competition as possible.
This can be accomplished by adver-
Using in financial papers and by cor
responding with responsible institu-
tions handling drainage bonds. TN
dor no oiro,r ,, cfo j., chn,1l rorn
tiations be limited to one house.
Agreements for the bonds should
number of houses have been con-
suited. The high cost of negotia-
ting with one house only is shown
by a district in which the improve
ments did not cost more than SIS
600. The bond house insisted the
bond issue should be $1OS 900. This
meant interest on an unnecessarily
large amount. Further. the pro-
ceeds OF the bonds were to remain
with the purchasing house until
used, subject to be drawn upon by
the district not to exceed $4,000
per month. No interest was paid
the district for these funds. but in
the meantime the bonds were draw-
Ing 8 per cent interest which the dis
trlct had to pay. AS the bonds were
sold eight months before construc-
ton work was commenced, the bond
house had the use Of the whole is
sue, $10S,0O0, for that time without
paying a cent for it. Added to This
the district had to pay the cost of
printing the bonds and the fee of m.
attorney employed by the bond
house to pass on the legality of tho
bonds.
When bonds are sold the proceeds
should be deposited with an institu-
ton which will pay interest for the
use of the money. An indemnity
bond Of a responsible guaranty
should be required. Through lack
y S1A| oioAS lhio INT, the 1pD9rf-
ment has been informed that one
district which deposited 100000
with a bank lost s3oo,OOo; another
district lost 100000, and another
100000.
Avoid Injustice to Landowners
When bonds are issued, if the
first installment of principal does
not fall due until several years after
the date of issue, the landowners
should be required to pay taxes suf-
ficient to meet interest only. N
some districts, bonds having the
first installmeut Of principal falling
due three years from date of issue
and the last ten years are issued.
but the landowners are required to
pay not only interest during the
first three years, but also one-tenth