REASONABLE BOND PERIODS FOR WATER WORKS CONSTRUCTION

REASONABLE BOND PERIODS FOR WATER WORKS CONSTRUCTION

Subject Discussed at December Meeting of the New England Water Works Association – Water Works as Separate Department-Good Attendance

MORE than one hundred members of the New England Water Works Association met in Boston, Mass., on — December 12, at the Boston City Club The executive committee met as usual at headquarters in Tremont Temple at 11 o’clock. The luncheon at the Boston City Club was at 1 P. M., and was served prior to the regular meeting.

In spite of the inclement weather a spirited meeting was enjoyed as well as an excellent dinner interspersed with lively singing. The meeting was opened by President Frank A. Barbour.

Most of the attendance comprised managers and superintendents of water plants and consulting engineers, who were vitally interested in the topics for discussion. At the annual convention held in New Bedford in September, it was voted to take up the matter of bond periods for municipal construction with tbe Massachussetts legislative commission and it was hoped that the members would be present to take part in the discussion of this important problem.

Reasonable Bond Periods for Construction

However, the commission were not able to be present, so the subject was handled most expertly by Past President Charles W. Sherman, in a paper entitled “Reasonable Bond Periods for Water Works Construction.” A summary of the interesting facts brought out by Mr. Sherman were as follows:

1—The average life of a typical water works plant in this country is about 50 years, it is rarely less than this in individual cases, and may run to 60 years or even longer for some plants.

2—Careful records show that in the depreciation of a number of water works plants of considerable age, the total accrued depreciation of the physical plant of such works is about 20 per cent, of the cost. Records of depreciation suffered by the plant still in service, modified by a suitable allowance for plant abandoned, confirm this as a reasonable figure for nearly all cases.

5—The corresponding average age for works of 50 years life is 20 years, leaving 30 years average remaining life. If the average useful life were 60 years instead of 50 the average age would be 27 years and the remaining life 33 years.

Thirty years is a fair estimate of the remaining life of any water works plant in normal condition. And therefore a proper term for which water works bonds should be run.

4—If the works suffered a depreciation of 20 per cent, there is a residual value of 80 per cent, of cost of the physical plant. Water works bonds therefore may be issued up to 80 per cent, of the cost of the works.

5—M unicipally owned water works should be self supporting, and their financing should be on the same basis as that of a private corporation.

6—The present Massachusetts law which limits bonds for the extension of municipally owned water works to a term of five years is illogical and burdensome, and should be repealed.

7—Special legislation for particular cases, made necessary by the existence by requiring of the five years limit, is undesirable from every point of view.

8—Suitable control over municipal bonds for water works purposes can be exercised by requiring the approval of the public utilities commissioners in exactly the same way as for bonds of a private water company; and misuse of water revenues can be avoided by legislation limiting their uses to water works purposes.

Discussion of the Paper

In the discussion that followed it was brought out that practically every member was in favor with the amending of the laws. Remarks were made by Messers Waddell, of the Massachussetts Accounting Department, Henry G. Wells, former state senator, now of the public utilities commission, Past President Sherman, Mr. Winsor and Reeves Newsom, of Lynn, Mass.

Mr. Waddell Stated that he didn’t think it was the right thing to pass too many bills down to “posterity” to pay, that the plan of “Pay-as-you-go” was a good rule to follow and a sound principle. That if towns and cities could borrow funds to lay mains on terms of 15 or 20 years it would relieve the state legislature of many special bills. He pointed out the fact that few private plants would extend mains where no immediate returns would be forthcoming, but that in many instances state or municipal departments would do so, even at the risk of no quick returns on the money invested.

Mr. Sherman remarked that borrowing was the only way to meet the demands of emergency, ami that short term bonds do not help on large sums.

Mr. Wells, of the public utilities department, was an interesting speaker, presenting the question from the commission’s viewpoint, and brought much laughter with his humorous remarks.

Water Works Should Be a Separate Department

After the discussion of this paper the assembly listened with great interest to Mr. A. R. Hathaway, water registrar, O! Springfield, Mass., whose subject of “An Ideal by One ot the Idealists was handled in a most interesting and instructive manner. He compared the waiter works of former days with the present day need of greater power, larger mains, which today were necessary for manufacturing, tire departments and the usual consumption. He called attention to the fact the municipal waiter department should be conducted as a separate administrative entity and should be entirely separated from the general city government. He read extracts from letters from many experts showing the decided advantage of keeping the water works as a separate department and of the necessity of efficient handling of the various departments under one head, that of a high type expert. He dwelt on the ideal condition that should and would prevail where the departments were operated independently of each other and where politics would not be allowed to interfere with the operation. In concluding he cited many ideal conditions brought about by the plans suggested and closed by saying that his “Ideal” was to see every water works utility which is owned and operated by a town or city ot Massachussetts entirely removed from local political influence and control, and placed under the control and regulation of a proper form of non partisan state public utility commission composed of men chosen because of their fitness and special training.

Those Present at the Meeting

George A. Caldwell. George A, Caldwell Co., Lowell; Charles F. Glaum, Donaldson Iron Co., Boston; Percy P Smith supt and Leonard C. Parks, Concord; Thomas A. Prenar, supt.-treasr., lyast Greenwich. R. I.: J. H. Hayes, Hayes Pump & Maohlnery Co., Boston; Lawrence C. Hough, Pitometer Co., Boston: H J. Goodale mgr., w. w., Middleborough. Mass.; A. K Blackmer supt., Plymouth; John C. Chase, Derry. N H. Charles W Sherman, conslt. engr., Boston; Caleb M. Saville mgr and eh engr.. Hartford; S. H. Taylor, supt.. New Bedford; .J L,. Howard. ass’t ch. eiiRr., Boston; Klbert Wheeler, tre«sr., W company. Boston: A. R. IMckerman, supt.. Say le.sviUe, R I. HJdwln H Rogers, city engr.. Newton; William W. Albert, tissi engr Boston: Reeves J. Newsom, comsr., w. sup.. Lynn; E. J Titcomb, comsr., Rochdale, Mass.; Timothy Good, supt., Timothy Good. Jr., and John H. Good. Cambridge; Henry T. Gfdlev. supt’, Fairhaven, W. T. Page, Boston; George A. King, supt. and Arthur C. . King. C. E.. Taunton; David A. Heffernan. supt. Milton; Frederick I. Winslow, div. engr., Framingham: Charles I. Brown. Rensselaer Valve Co;., Northboro; George F. Merrill, supt., Greenfield; A. W. Con row. sales mgr.. Central Foundry Co. New York; Samuel Harrison, Worthington Pump & Machinery Corpn., Boston; John F. Lucey, supt., Somersworlh N. H.: George McKay. Jr., and George H. Pratt, Leadite Company. Philadelphia: F. L. Cole, supt., Andover; M Benjamin Worthington, P. & M. Corpn., Chicago; H. F. P. Wilkins mgr’ and John P. Goodwin, w. comsr.. Marblehead; J. Herman Smith Mersey Mfg. Co., Boston: H. M. King, supt. and A. R. Hathaway registrar, Springfield; Albert 1,. Sawyer, registrar, Haverhill R. .J. Thomas. Gamon Meter Co., Lowell; Rimer Harlow accountant, Plymouth; Rdward M. Shedd, Thomson Meter Co Boston; Raymond M. Simon, N. R. Rep,, R D Wood & Co Worcester; Frank K Winsor, oh. engr.. w. sup Is,aid. Provl deuce; H. R. Prescott, Kddy Valve Co., Worcester; H K. Reed, supl.. Bridgewater; R. P. Howard, Worthington Pump & Ms t-hinery Corpn.. Boston: A. H Tlllson. supervisor w work Northampton: W. H. McGarrey, Neptune Meier Co Boston H. W I>o«ttell, ass’t supt.. Winchester; J .J McNujty chap man Valve Mfg. Co., Boston; P. E:. Kelley, Lead-Hydro-Tile Co Boston; H. A. Hanscom, contractor, Boston; J S Lufkin Na l Iona I Meter Co., Boston; W. G Classon, supl Leominster I W. Bardom, engr.. Boston; George II. Small. Attleboro Mass Roger W. Rsty, ass’t. supl.. Danvers. Mass ; .Morrison Merrill supl. Wakefield; G. C. Northrop, Pittsburgh Meter Mfg Co’ Robert R. Ferguson. Hersey Manufacturing Co. Boston; .I C 1‘rhe. Jr, Gamon Meter Co.: Frank M Gunther, Dracut Mass Arthur R. Taylor, Ludlow Valve Mfg. Co., Boston: Frank A Marston, C. K., Boston; Rdward Otis and If. W. Jacobs Union Water Meter Co., Worcester; I). J Dwyer, Lend-Lined Iron Pipe Co. Wakefield; George M. Flint Boston; Bertram Brewer civil and sun. engr., Boston: John P. Wentworth, civil engr. Malden; Frank M. Bates. Boston: Rlehnrd 11, Fnls supl North Adams; R. D. Rhlredge, supt., Onset; William R. Rdwards supl I ’at arson, N. J.; J. M. Jones, supt, Bristol, R. I ; Henry A Symonds, engr., Boston, and J. 1,. Cushman, Medford.

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