USA > Massachusetts > Middlesex County > Lincoln > Town Report on Lincoln 1898-1902 > Part 34
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(Tax Payer vs. Consumer) It should be borne in mind that the tax payer and the consumer are not necessarily identical.
The enabling act of 1872 contemplates in Section 7 that the water takers are the ones who will really in the long run pay the principal and interest as well as the operation, the rates or charges for water being fixed accordingly. The additional act of 1897 contemplates the same.
As stated above it seems that in Lincoln, the town, and not the water works, has paid practically all that has been paid - say forty odd thousand dollars - for the construction and extension of the works, also large sums for interest.
There seems to us to be but one argument in favor of the water department in its administration, accounts, burdens and benefits, being merged into those of the town. That is, convenience and directness; but this convenience and directness work an injustice as the benefit derived from a system of water works is largely a special benefit, i. e. a particular benefit to certain individuals and certain property. The betterment laws provide that special benefits in street, sewer and park matters may be charged to those specially benefitted, and so a municipality furnishing light or water to a limited number of its citizens should collect on the same basis from any individual or class, for any special benefit, while the whole political corporate body should pay for the general benefits.
It seems so us peculiar that the Legislature has not fixed a limit to what a town or city may or must pay towards a water works or lighting plant established and operated by it for the benefit of a portion of its citizens, although the prin- ciple is well established by many Legislative Acts, setting apart portions of towns as water districts and there is a partial parallel to it in the Metropolitan Water Act and there
140
is almost an exact parallel in the Sewer Act of 1892, pro- viding that no city or town may pay more than two-thirds nor less than one-fourth of the cost of its sewerage system out of the tax levy, doubtless on the theory that while water and sewers are a general benefit to a limited extent, they are a special benefit to those specifically using them, and the latter class should pay by special charge for the privilege they enjoy. So protection from fire, water for public buildings, drinking fountains, etc., are a general benefit, which the town receiving as a whole, should pay for at a fair price, then the water takers should pay the remainder. In theory the town lends its credit in such a matter to the water takers (taken collectively) similarly as the State lends its credit to the Metropolitan district for park, water and sewer purposes. This argument may lose its direct force in a compactly built place where everyone takes, and is obliged to take, water, but not in Lincoln where a relatively small portion of the property enjoys its full benefits.
Again, the method of raising money by tax levy for ordinary town purposes is based principally on valuation, while both the expense and benefits of a water works system is largely according to population.
Again, it is admittedly a fair, comfortable and convenient way to pay for a public utility of perennial benefit by an annual rental, system : - Witness the many efforts to plan an annual sewerage rental system on a parallel with the water rate idea.
Again, if the expense and all accounts of such a public utility as a water works system is not kept separately and accurately, there will be no basis on which to estimate what the rates to the takers should be, when they may be properly reduced, etc.
The true theory of meeting expenses of a water works system would seem to be plainly put in a "nut shell" as fol- lows, viz. : The town to pay annually to the water depart- ment for water and fire protection ; then the annual rates to consumers must be enough, and need be no more than
141
enough, to pay all expense of operation, all interest due on cost of construction, and to pay to a sinking fund an amount which will liquidate the debt when it becomes due or pay notes as they become due, so that the whole plant will be paid for in not over thirty years.
While a town may and should collect as above laid out, it has no moral right to make money out of its citizens by charging more than enough to pay its maintenance require- ments an; more than it would have a right to charge the whole cost of a sewer, plus a profit, to parties specially benefitted.
It seems to us fairly clear that while it may be hard as a matter of engineering and book-keeping, to fix the water rates of a city or town to exactness according to the above advanced theory, yet in the abstract it is perfectly simple, namely the amount to be paid by all the takers collectively is the cost, the town itself being reckoned as one taker to the extent to which it uses the water or is specifically bene- fitted.
FUTURE PROSPECTS.
(Financial Problem) While we do not see that the water works or the town can be justified on any business basis for merging their income and outgo, yet there are some general benefits not easily measured, and perhaps not very tangible, from which probably Lincoln has, like any other town, benefitted because of the existence of its water works for the past twenty-seven years.
Among these may be mentioned better health on account of a good water supply, better fire protection, decrease in insurance rates, increased prosperity to business where the water supply has been much needed, general increase in attractiveness as a residential town and a certain "moral" effect that attends all betterment of conditions. While the town should pay what is right for water used and for hydrant service, we do not see that it should subsidize the -water works because of these general benefits which per-
142
haps are fully offset by the town's paternal goodness in lend- ing its credit to the water works. Certainly in the case of Lincoln the town has much more than paid for all general benefits in its payments of principal and interest which, if estimated with interest to date on any reasonable basis, is, we believe, more than the water works can ever reimburse to the town.
Whether or not Lincoln was wise in instituting water works in 1874, she certainly needs them now, and can afford them, and they will pay their way in future on the basis of the present debt, if the relation between annual revenue and maintenance is kept at the parity they should be.
We are further of the opinion that the water works might safely assume a debt equal to the present value of the phy- sical plant given above, which would place them at this time in the position of a municipal plant which had just been acquired at the fair valuation of the physical plant of a private company.
To assume such a debt as this would doubtless prevent the water rates being reduced for a long time to come, and a faith in the payment of the debt within thirty years would also compel a faith in a larger annual appropriation for hydrant service from the town, and the general and peren- nial prosperity of the water works including probably the non-failure of the Sandy Pond supply and the continued mar- ket for water furnished, by the Boston & Maine Railroad.
While there are some things in relation to administration which might be changed somewhat, yet we consider the principal problem a financial one. The financial problem touches the matter of the arrears due the town (theoreti- cally at least), the present debt, and the refunding of at least a portion of it, interest, keeping accounts correctly as to relation between construction and maintenance, future extensions, economy of administration, payments for hydrant service and water rates.
(Source of Supply) We do not care at this time to ex- press any very exact opinion on the quantity of supply to
143
be obtained from Sandy Pond in the future. According to Mr. Wheeler's report to the Concord Water Commissioners and the reports of the State Board of Health, both above referred to, ive do not see that both Concord and Lincoln can hope to get their whole supplies from that source for the indefinite future. If the quantity used in both towns could be kept down to a more reasonable amount per capita, there would be no rea- son for immediate anxiety. But we do not see that Lincoln (from a purely selfish point of view) has any cause for anxiety, as her rights in the pond are prior to those of Con- cord. For the exclusive use of Lincoln the quantity should be sufficient for an indefinite time.
The quality should, with reasonable precautions, remain good.
It will be well to bear in mind that the mere fact that Sandy Pond exists within the confines of the Town of Lin- coln is no small blessing, no doubt saving the Town of Lincoln large expenditures in past and future for the ob- taining of a good water supply.
(The Physical Plant) The pumping station, with its pump, boilers, etc., is in first-class shape and good for a great many years without material repairs, as they are prac- tically new. The same may be said of the pumping main to reservoir and a majority of the pipe and hydrants.
On the whole, the water works plant is in good condition.
(Extensions) Extensions are usually wise from every point of view that it is wise to build water works and often greatly increase the revenue from the sale of water.
We are of the opinion that the extensions made since 1890 in Lincoln are the factor that makes it possible for the works to be practically self supporting today. There is a by-law of the Town requiring that all extensions shall pay at least five per cent annually of their original cost.
In the Town Report for the year 1898 the Water Commis- sioners report the cost of ten extensions amounting to $23,- 546.35, and the water rates from each, amounting all told in that year to $1,692.62. The rates from nine out of the ten
144
extensions pay above the required five per cent and the whole ten average about seven per cent annual return on the expenditure. This is enough to pay not only a fair rate of interest on cost of construction, but also a reasonable sum towards the cost of construction which will pay the whole cost in a proper length of time. It is wise to make exten- sions where the water rates received in the first instance will be five per cent or more on the cost, as the revenue received increases with the building of each new house and the in- stallation of each additional hydrant.
If it can be seen in the near future that extensions to other sections than those already supplied with water will pay any fair remuneration within a reasonable time, it ap- pears to us that it will be pre-eminently fair to grant such extensions as may be desired for the reason that it will serve as an equalizing financial process. About thirty-five per cent of the people of Lincoln who have helped pay the Water Works debts have never yet enjoyet the benefits of a public water supply, and it is right that the minority should fare as well as the majority, at least in the long run.
RECOMMENDATIONS.
We recommend, first, that a connection be made with six- inch pipe from the present end of the pipe near Baker's Bridge to the end of the present pipe on the Higginson Road, this primarily on account of the fact that now the whole southerly section of the Town is supplied through one cement lined pipe.
Second, - That at no distant day another pump be in- stalled at the pumping station.
Third,- That a " telltale line " be put up from the reser- voir to the pumping station to indicate height of water without a visit to the reservoir.
Fourth,- That in the future new piping be generally not less than six inches rather than four inches on account of fire service.
145
Fifth,- That extensions of piping system be made as fast as is consistent with the desire of would-be takers and a sound business policy.
Sixth,- That the Town do not pay for extensions or any construction out of the annual tax levy, but that they be paid for by money to be borrowed, to be paid in time as a part of the water works debt by the net profits of the water works or perhaps out of the annual revenue.
Seventh,- That operating expenses be kept at as low a figure as is possible with good administration.
Eighth, -- That the books be kept so that all items will be carefully separated as between cost of construction and maintenance, and conscientiously charged to one or the other as they rightfully belong.
Ninth, -- That the books and records be so kept that a re- port can and will be made annually to the Town in the form recommended by the New England Water Works Associa- tion. A copy of the report can then readily be sent to that Association. We enclose a blank for such a report.
Tenth, -- That your committee carefully consider the matter of the Sandy Pond supply and the apparent waste of water, the refunding of the debt, the revision of the water rates, the installation of an all meter system and an increase in the payment by the Town for hydrant service.
We desire to express through your committee our appre- ciation of the uniform courtesy of the Town officials of Lin- coln shown us in giving us much information and answering many questions.
Respectfully submitted,
WHITMAN & HOWARD,
CIVIL ENGINEERS.
146
Financial Report.
BOSTON, Dec. 26, 1901.
Charles Francis Adams, Esq.,
Dear Sir : -
Agreeably to your request, I have made an investigation of the financial condition of the Lincoln Water Works as related to the Town .of Lincoln and submit the following report : -
The expenditures for construction began in 1874, in which year almost $27,000 was spent, and continued until 1877 with some small expenditures for maintenance, at which latter date the Town turned the works over to the water takers for a period of ten years, the water takers to pay the cost of maintenance in return for the use of the water service.
Beginning again in 1887 the Town assumed the expense and has continued to the present.
The initial expenses were defrayed from the proceeds of the sale of $30,000 worth of six per cent bonds, on which the Town paid the interest, even during the period when the works were turned over to the water-takers, and the item of interest, together with the excess of expenditure over the amount of the proceeds of the sale of bonds has been met from the general tax levy.
Herewith you will find a table of expenditures and receipts showing the amount spent for construction in the entire period to October 1, 1901, to be $107,655.96
for maintenance to October 1, 1901, 29,897.84
" interest " December 31, 1901, 46,285.88
Total, $183,839.68
and the total net receipts for water rates
to February 1, 1901,
40,655.17
showing a net cost as per the books of
$143,184.51
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It should be stated here that it is almost impossible for a stranger to determine with any accuracy whether certain charges belonged to construction or to maintenance, and for such measure of success as has been attained in this respect, I am indebted to the courtesy of Mr. C. S. Wheeler, who gave me the benefit of his intimate knowledge of this work. A simple way of obviating any difficulty in determining the proper classification of expenses will be suggested later in this report.
EXPENDITURES AND RECEIPTS. LINCOLN WATER WORKS.
Date
Constr'tion. Maint'ce
Interest
Total
Receipts
Rates and Ref'ds
Total
1874
26926 85
26926 85
1875
4731 40
628 77
1800 00
7160 17
285 81
285 81
1876
1758 93
137 50
1800 00
2696 43
1877
370 29
1800 00
2170 29
1878
1800 00
1800 00
39 50
6 00
33 50
1879
299 50
1800 00
2099 50
68 63
68 63
1880
1800 00
1800 00
6 00
1881
1800 00
1800 00
21 00
1882
384 86
1800 00
2184 86
1883
1800 00
1800 00
1884
1800 00
1800 00
20
1885
1800 00
1800 00
35 00
1886
1800 00
1800 00
35 00
1887
524 71
1800 00
2324 71
819 00
49 00
653 00
1888
856 77
1800 00
2656 77
782. 75
49 00
733 75
1889
822 20
250 50
1800 00
2872 70
874 74
49 00
825 74
1890
2071 40
960 09
1800 00
4831 49
862 60
49 00
813 60
1891
1124 92
1800 00
2924 92
964 49
49 (
915 49
1892
1205 68
931 43
1800 00
3937 11
1126 20
60 00
1066 20
1893
1295 96
1246 77
1800 00
4342 73
2458 14
2458 14
1894
11630 14
1942 04
1566 60
15138 78
2783 04
2783 04
1895
6204 17
3019 98
1151 78
10375 93
4043 06
4043 06
1896
2144 05
3427 23
1160 00
6731 28
4291 80
4291 80
1897
9844 39
3416 22
1320 00
14580 61
4528 72
4528 72
1898
6050 11
2218 18
1480 00
9748 29
5155 58
5155 58
1899
6718 22
2705 37
1440 00
10863 59
5630 46
5630 46
1900
18438 77
2987 43
1802 50
23228 70
6368 65
6368 65
1901
7443 40
2835 57
2165 00
12443 97
107655 96 29897 84 46285 88
183839 68
41083 17 428 00
40655 17
Your attention is directed to the fact that the receipts in the table above referred to do not include the income for 1901 : this was not obtainable, as the bills were not sent out and no estimate was made of the probable amount,
148
It will be noticed that at no time up to the year 1898 was the income sufficiently large to meet the fixed charge for maintenance and interest, and during the entire period the in- come barely meets the expenditure for interest alone, assum- ing the present year's income to be the same as that of last year, leaving little or nothing to defray the expense of maintenance.
As stated above, the net ' book' cost of the works to the town is $143,184.51, but this does not represent the true cost as the item of interest is not included. It is found to be the practice in determining the cost of such works under such conditions as are present here, the failure of the works to pay fixed charges, to assess compound interest on the cost of construction and maintenance annually, making the allowance for income as it appears.
On this basis of calculation the items on which the interest is to be charged are :---
Construction $107,655.96
Maintenance 29,897.84
and the item on which interest is to be allowed is Income
40,655.17
In order to simplify the computation of the interest, an average date for the expenditures was fixed as August I and for the income as February I, as it was found that interest on receipts was generally mentioned in the reports.
Applying the item of interest, the account of the Water Works with the Town of Lincoln appears as follows :-
Construction . $107,655.96
Maintenance
29,897.84
Interest on above, compounded an- nually
163,263.38 ยท
Income
$40,655.17
Interest on above, compounded annually . 14,170.98
. Balance forward .
245,991.03
$300,817, 18 $300,817. 18
Net cost of Water Works to Town of Lincoln, $245,991.03
149
CLASSIFICATION OF EXPENSES.
As it is of the utmost importance that the cost of running a plant should be correctly determined, the items of con- struction and maintenance should be clearly stated, and a simple way to do this is for the person in charge to whom bills for material or labor come for approval to endorse with his approval of the amount the purpose for which it was used, as for example: a bill for pipe might be endorsed " Extension of Service," in which case it would properly be charged to construction and the proper member of the Water Board, in approving the bill for payment, would re- quest the Treasurer to charge the amount to the appropria- tion for construction; or it might be endorsed "Repairs," in which case the member of the Board would request that it be charged to the appropriation for maintenance.
Without any information as to what use the material or labor was put to, it would be impossible to avoid confusion, as similar expenses could be incurred for both purposes.
Regarding a suggestion as to future book-keeping, I am strongly of the opinion that the simplest possible form capa- ble of giving the desired information and requiring no special training for its use will most nearly bring the best results, and, in line with this opinion, your criticism of the accom- panying rough draft of a page of a book is invited.
The headings of the different columns may be changed to suit the requirements, but I feel sure that with such changes in title as may be deemed best, and the carrying forward of the amounts to the end of the year, the information you require can be furnished without much effort.
Respectfully submitted,
WM. J. SMITH.
4 Liberty Square.
150
JULIUS E. EVELETH, Treasurer, in account with the BEMIS LECTURE FUND.
1901.
DR.
Jan. 1. Balance on Deposit at Boston Safe Deposit Trust Co. $246 69 Boston & Albany R. R. Co., div. 107, 108, 109, 110 175 00
Old Colony R. R. Co., 91, 92, 93, 94 . . . 140 00
N. Y., N. H. & H. R. R. Co., 85, 86, 87, 88 . .
40 00
66 66 Fitchburg R. R. Co., 2, 3, 4, 5
100 00
66 Boston & Prov. R. R. Corp.
51, 52, 53, 54 . 200 00
Boston & Lowell R. R. Corp. " 123, 124 .. 400 00
West End St. Railway Co., 6,7 .
132 00
66 Am. Tel. and Tel. Co., div., 33, 34, 35, 36, 37, 38
848 00
sale of rights . .
536 85
66 income of rights 322 00
66 Interest on Bank Balance
13 59
$2,653 63
1901.
CR.
Jan. 9. Boston Phil. Sextette, concert .
$100 00
23. Frank M. Chapman, lecture 75 00
Feb. 7. S. Parkes Cadman, lecture
25 00
" 18. Criterion Concert Co., concert
125 00
27. Bertha K. Baker, reading .
75 00
March 6. H. E. Northrup, lecture
75 00
April 17. F. H. Packard, lecture
50 00
June 27.
C. A. Eaton, concert
80 00
Aug. 5.
American Watch Company Band, concert
119 00
Oct.
9. Bell Ringers, etc., concert
100 00
24.
Geo. Riddle and B. J. Lang, readings, etc.
125 00
30. Jacob Riis, lecture
100 00
Nov. 10.
Z. F. Sweeney, lecture
65 00
27. Francis Labadie, lecture
75 00
Dec. 4. H. A. Clapp, lecture .
75 00
11. Boston Sextette Club, concert
120 00
18. T. W. Surette, lecture . 60 00
July 11. W. R. Driver, Treas., on account sub., 4 shares . 200 00
66 18. S. Parkes Cadman, lecture
50 00
20. G. H. Hathaway & Co., concert .
108 50
151
Oct.
30. Fred Magee, stereopticon R. H. Blodgett Company, printing 74 25
11 94
Geo. P. Cook, usher . 7 00
R. D. Donaldson, carpenter
12 00
F. M. Dempsey, teaming
7 50
H. A. Sherman, teaming
30 00
G. S. Webber, station agent
2 00
G. H. Champlin, tuning piano
3 80
H. A. Fenn Manager, rent of safe 10 00
Balance on deposit at Boston Safe & Trust Co. 692 64
$2,653 63
The Fund of $30,000 is invested as follows :
Boston & Lowell R. R. Corp., 50 shares, present value $240.00 each.
Boston & Prov. R. R. Corp., 20
305.00
Boston & Albany R. R. Co., 20
66
262.00 66
Old Colony R. R. Co., 20 66
210.00
Fitchburg (pref.) R. R. Co., 20
66
143.00
N. Y., N. H. & H. R R. Co., 5
66
66
210.00
66
West End St. Ry. Co., pref., 33
Am. Tel. & Tel. Co., 46
159.00 66
Am. Tel. & Tel. Co., 4 shares on which 50% has been paid as per pay- ment to W. R. Driver, Treas.
Respectfully submitted,
JULIUS E. EVELETH, Treasurer.
I have examined the accounts of the Treasurer of the Bemis Lecture Fund and find the report correct. S RODMAN SNELLING, Auditor.
114.00
152
Sinking Fund Commissioners IN ACCOUNT WITH Town of Lincoln.
1901. DR.
Feb. 1. To cash on hand . $1,000 00 March 27. To cash received from Chas. S. Wheeler, Treasurer
2,989 20
Sept. 13. To interest allowed by National Bank of Common- wealth 13 26
1902.
Feb. 4. To cash received from Chas. S. Wheeler, Treasurer 960 00
6 6. To interest allowed by Shawmut National Bank . 30 90
$4,993 36
1902. CR.
Feb. 6. By cash in Shawmut National Bank $4,993 36
Respectfully submitted, C. LEE TODD, Treasurer.
I have examined the accounts of the Commissioner of the Sinking Funds and find them correct.
S. RODMAN SNELLING, Auditor ..
153.
Trust Fund Commissioners IN ACCOUNT WITH George G. Tarbell Legacy to the Lincoln Library.
1901. DR
Feb. 1. To dividends on 8 shares Boston & Lowell R. R. Co. $64 00 To dividends on 13 shares West End St. Ry. pref. 52 00
To interest Caroline A. Nye's note 50 00
To interest Chas. S. Smith's note . 60 00
$226 00
1902. CR.
Feb, 1. By cash paid John F. Farrar, Treasurer Lincoln Library $226 00
The Fund is invested as follows :
Eight shares Boston & Lowell R. R.
Thirteen shares West End Street Ry. Co., pref.
$1,000 note Caroline A. Nye (Feb. 4th, 1890, 5 years at 5%.) $1,500 note Chas. S. Smith on demand at 4%.
Respectfully submitted,
C. LEE TODD, Treasurer.
I have examined the accounts of the Treasurer of the Trust Funds and find them correct.
S. RODMAN SNELLING, Auditor.
154
Trust Fund Commissioners IN ACCOUNT WITH George Russell Legacy to the Lincoln Library.
1901.
DR.
Feb. 1. To cash on hand ..
$366 91
To dividends 7 shares Fitchburg R. R. Co., pref. 35 00
To interest allowed by Shawmut National Bank . 1 60
$403 51
1902. CR. .
Feb. 6. By cash in Shawmut National Bank $368 51
By cash paid John F. Farrar, Treasurer Lincoln Library 35 00
$403 51
The Fund is invested as follows :
Seven shares Fitchburg R. R. Co., pref.
Cash on deposit as above.
Respectfully submitted,
C. LEE TODD, Treasurer.
I have examined the accounts of the Treasurer of the Trust Funds and find them correct.
S. RODMAN SNELLING, Auditor.
7
ANNUAL REPORT
OF THE
SCHOOL COMMITTEE
OF THE
TOWN OF LINCOLN
FOR THE
SCHOOL YEAR 1901.
SCHOOL COMMITTEE.
JULIUS E. EVELETH, Chairman, EDWARD R. FARRAR, Secretary, 1904 GEORGE F. NEWTON, 66 1903
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