The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-01-09
President Flannery of Com-
pany Suggests They Might
Agree on Arbitration
CITES VAL u Alto S
City Commission Follows This
BY Asking A. of c. Direc-
tors to Sit In

the commission meeting last night.
Mr.. Flannery cited the valuations.
of various engineers, said it was
manifestly impossible to accept tn.
figure, added that he assumed the
city wished to pay fair and reason
able price for the plant, and that If
they could not agree perhaps some
suggested.
The city commission followed this
by adopting resolution asking the
board of directors of the Association
of Commerce to sit with the commits
sion as committee to aid in solving
the water problem.
The letter of Mr. Flannery fol.
lows: ..
''7~ st. Paul, Mimi.
Dec. 80, 1922.
Myron II. Atkinson,
City Auditor,
B smarck, N. Oak.
Dear SIR
Your favor of the 10th instant,
addressed to me, notifying me that
the Board of Commiss oners of the
City of Bismarck, had adopted a
resolution offering the sum Of Two
Hundred and Sixty-five Thousand
($265, 100000 Dollars for the fran
chise and Water Works System of
the Bismarck Water Supply Conn
pany, is received. have carefnlty
considered the same and in reply
thereto, the capital investment OF
the Bismarck Water Supply Com
pany is as follows:
$350,0O0.00 in Bonds.
$3.50, 100000 in Capital Stock.
In addition to this, there IS the
cost of the litigation VIII; ;ch, as l
understand, is to be spread over
series Of" years. l do not know
upon what basis the City Commits
sioners arrive at, the sum of $685.
100000. The Company has had differ
ent engineers estimate the value Of
the r plant and their estimates were
as follows:
J. H. Prior ............ 1856, ,046.0O
j. H. Kelsey ............. 591 ,68l00
w. N. Jones ........... 529,75O.OO
The Engineer for the Railroad
Com missioners, Mr.. Arvid Reuterdahl
made the valuat on 6,S65.OO. The
Railroad Commission, after hearing
all of the evidence, made the valua-
ton 1921 100000.
The above valuat: ons, as I under
stand, were the valuation as Of June
25th, 1919.
At the hearing before the Rail-
road Commission in May, 1922, the
Company's Eng neer, Mr.. J. H. Kel-
seyj made the valuation $529,O47.00.
That was the reproduction cost, not
including overhead cost, going value
and working cap tai.
gineer, E. H. Morris made the val
uation $449,293.00, which did not
include going value or working cap
ita1. If these had been included the
valuation would have approximated
that Of Mr.. Kelsey.
In view Of the foregoing estimates
of value, it is impossible for me
to understand the offer of s265, 100000
for the plant. II. the City of Bis
marck desires to purchase the fran
ch'se and entire plant Of the Bis
marck Water Supply Company, at
fair and reasonable value, feel.
reasonably cextain that the Water
Supply Company will enter into ne
gotiat ons with them for the sale
thereof and will do everything it
reasonably can to enable the City to
get title to the property without un-
necessary delay, but IN transaction
of that magnitude it seems to me
the fair and just way is to open
negot ations between the City and
the Water Supply Company, to see
if it is possible for them to agree
upon the value of the plant. If they
are unable to agree as to it's value,
then perhaps some form Of arbitra-
trat on may be agreed upon to deter
mine the value.
I assume the City of Bismarck,
through its commissioners want to
purchase the. Water Works and pay
the owners the fair and reasonable
value for their property, and-upon
this assumption / desire to assure,
tVU anu tuC commissioners tudt j.
will do everything which I reason
ably can to. enable them to consul
mate the deal.
Very truly yours, as
BISMARCK WATER SUPPLY co.
BY Geo. p. Flannery, Pres.
Resolution of Commission
The resolution Of the comm ssion,
introduced by Mr.. Larson, follows:
Whereas, the Board Of City Com
,missioners Of the City Of Bismarck,
did on December 1s, 1922, make an
offer in writing to the Bismarck Wa
ter Supply Company In the sum. OF
$263, 10000, Nor the purchase Of the
franchise and all real and personal
property used and useful by said
company in its water utility business
in the City Of Bismarck, and now
owned by it, and
Continued on Page Three.)