Council Proceedings: April 20, 1900: Part 1 of 2

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priation for the entire year-- they could not make budget come with in the estimated income by $21,000.00.

Let us look at the condition of the Treasury, March 21st, 1899, and March 21st, 1900.

On the former date there was cash in the Treasury amounting to $118,701.00 of which there was

General Fund, - - - - - - - - - 41,012.26 Special Fund, - - - - - - - - - - 3,427.33 Police Fund, - - - - - - - - - - - 5,836.15 Pound Fund, - - - - - - - - - - - 216.08 Cemetery Fund, - - - - - - - - - 195.41 School fuFund, - - - - - - - - - - 18,035.78 Available for Current Expenses - - - - - - - - - -$68,722.99

On the latter date there was cash in the Treasury amounting to $105,597.03 of which there was

General Fund, - - - - - - - - - - - -$34,838.59 Special Fund, - - - - - - - - - - - - - 1,704.98 Police Fund, - - - - - - - - - - - - - - 1,816.48 Pound Fund, - - - - - - - - - - - - - - 102.08 School Fund, - - - - - - - - - - - - - - 8,623.71 Available for Current Expenses, - - - - - - - - - - -$47,085.84 Showing that we are short - - - - - - - - - - - - - - - $21,637.15 of what we were this time last year.

My Our only hope of getting through this year without a deficit is in the collection of back taxes, and I charge the Finance Committee to use their best thought in the management of the finances and to see that all officers whose duty it is to collect these taxes, do their whole duty without partiality to any one.

_B_O_N_D_S

We have a bonded indebtedness of $2,119,000.00 of which $1,319,000.00 are City bonds and $650,000.00 is Water Works and mortgage bonds for which the credit of the City is pledged, and $150,000.00 is Water Works bonds assumed by the City on the purchase of the plant in 1885. The average rate of interest on these bonds is 5-5 7/10%.

The annual interest on our bonds is

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On City Bonds, - - - - - - - - - - - - - $71,200.00 On Water Works Bonds - - - - - - - -49,500.00 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $120,700.00

$200,000.00 of these bonds have been purchased with the sinking funds and no interest has been paid on them since their purchase and they now have passed t due coupons attached to them amounting to more than $50,000.00.

The practice pursued by the City Government heretofore in paying the interest on all hazards has resulted in a deficit in the Sinking Funds of some $200,000.00 besides the unpaid interest due on Sinking Fund bonds.

To meet the constitutional requirements in regard to our bonded debt and the provision of the bonds themselves requred by our official oaths, the City must annually levy within the fraction of $1.07 on the $100.00 valuation of property in the City. Our City Charter limits the annual tax levy to $1.50 on the $100.00 valuation of property in the City. Deducting the interest and Sinking Fund levys, leaves within a fraction of 43¢ on the $100.00 valuation with which to run our City Government, including our Public Schools, Police, Fire Department, Street Repairs and Repairs of City Property and all incidental and contingent expenses of the City. That it is impossible for the City to do this on 43¢ on the $100.00 valuation is evidenced by the fact that for years the City has been defaulting upon its sinking fund ha and has not had money enough with which to make the necessary repairs and improvements on the highways of the City. Municipal governments have but two ways of raising revenue. One is by taxation in its various forms, the other by borrowing upon bonds issued to a limited number under the Constitution and City Charters. Under our Charter we may issue bonds up to 6 5% of the amount of the total advalorum valuation of property in the City. The present bonded indebtedness of the City of Fort Worth is in round numbers, over $1,000,000.00 above the constitutional Charter limit, having been issued upon boom values of property in Fort Worth in years gone by.

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The City has now but one means of raising money and that is taxation in its various forms. The only possible exception to this would be by issuing, under legislative sanction, additional mortgage bonds, pledging the Water Works and Electric Light property, but as these bonds, under existing conditions, would be a second mortgage, I believe it would be impossible to float them. Therefore the credit of the City and the power of the City to raise money is based solely on its power of taxation.

For several years the City has, at the expense of its own necessities and the necessities of its citizens and sacred sinking fund of the constitution, been striving and struggling to maintain the price of its own securities in the open market. This has not redounded to the benefit of the City but to the holders of its bonds as indebtedness. Notwithstanding the decline in values of property and the decrease in revenues of the City, the interest charges have been the first to be provided and every other obligation, where possible, has been subordinated in order to pay the bonded interest. Fort Worth is paying 5, 6, and 7 per cent interest on its bonded debt, when the current rate of interest on municipal securities of cities the size of Fort Worth is from 3 to 4 per cent. There have been efforts made heretofore to refund the debt of Fort Worth which have been unsuccessful. Our own financial agents, Messrs Blair & Company, have refused to assist us in any way in refunding the City's debt when an investigation would show that it is impossible for Fort Worth to continue to pay the enormous rate of interest and do justice to our citizens as demanded, by carrying ou the obligations of our City Charter. crossed out sentence. In a recent letter by Judge Edward Gray to the City Council he states that some of our bondholders had intimated that they themselves would lend Fort Worth money to pay interest charges when they and he knew that under the law Fort Worth could not legally borrow the money and pay its interest charges, crossed out for the State Constitution and City Charter expressly states that no debt

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shall be created unless provision be made for its payment at the time it is created and as Fort Worth was at that time at the limit of its credit it could not legally borrow the money, and the loan would be made only to keep up the price of their own securities. There is not scarecely enough money appropriated in the current fiscal year for interest and sinking and funds to pay the interest alone, and before the year is done Fort Worth mustmay be compelled, if it follows its City Charter which I propose to see it do, so as far as lies in my power, make default upon its interest charges. To This end we are running and yet our financial agents, so called, refuse to aid us in refunding our debt. The time has come when Fort Worth cannot afford to subordinate every interest and violate its own charter to keep up the price of its securities for the benefit of its bondholders. I therefore recommend that the City Council separate the interest and sinking fund in the last annual levy and pay interest charges so far as they can out of what remains, if anything, in the interest fund. I further recommend that the City Council pass a resolution severing our relations with Mess. Blair & Company, demanding of them the names and addresses of all our bondholders in order that the City government may, if possible, open up direct communication with the bond holders of our securities. I am informed by the City Auditor that by close economy Fort Worth can carry its bonded indebtedness and comply with the Charter requirements, upon about a four per cent interest basis, and unless we can refund the debt along those lines, disaster will come alike to the citizens of the City and to the bond holders themselves.

WATER WORKS

The Water Works of the City has been a heavy expense to the tax payers of the City. The taxpayer pays taxes for interest on the bonds and then pays high water rents for poor water, and the average tax payer is unable to solve the problem of how the water works can crossed out word make money for the City when he sees a large slice of his tax levy is for interest on Water Works Mortgage Bonds.

It is true that the management of this Department has frequently made a showing of a net profit over operating expense and interest on bonds, but is done by charging the City with exorbitant prices for hy

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drant rentals and they do not account for the 5th Series of bonds issued for their benefit, nor do they compute any interest on the open account due the City of $157,010.30, nor is anything charged off on account of depreciation in tbe property of the department. These things taken into consideration will show a net loss for each and every year.

A report of this department for last year shows a loss, crossed out word after counting the $28,000.00 paid for hydrant rentals by the City, and the outlook for the future is not bright unless the City can get an adequate water supply. Year by year the water works is losing its best customers who are digging wells for their own consumption and this is a menace that threatens the receipts of the Water Works. If a private Company owned the Fort Worth Water Works they would unquestionably develop the Artesian water supply to such an extent, at least, that the loss of these patrons would cease. For the larger manufacturing concerns, the deep stratus of water could be utilized, but the first stratum which is the main supply of Fort Worth could be utilized by the Water Works for the public good in the City of Fort Worth. I do not see how Fort Worth is going to be able to build a dam sufficient for public needs without a bond issue and I very much doubt if a bond issue, mortgaging the Water Works can be sold upon the market under existing conditions, therefore for the present a least the City is thrown upon its resources of taxation from which to obtain money to secure a water supply.

There has been much discussion in the City in reference to the artesian supply of water under Fort Worth, and the digging of wells by patrons of the Water Works and the consequent loss of such patrons which has worked a very serious loss to the Water Works Department. It seems that private parties can get artesian water sufficient for their private consumption at any point they choose to dig a well and each, to a certain extent, cripples the revenues of this department.

The Secretary of the Water Works, in obedience to my instructions has gone over his books and informs me that the number of artesian wells in the City at present is 114. The amount of water rentals lost