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"In reference to the Water Department, in-the matter of reduction of the wa-
<br />ter rate minimum to consumers, and a reduction in the amount of the deposit, which is now
<br />$5.00, which matters have been referred to me, I respectfully submit this report.
<br /> I direct your attention to the consistent shrinkage in surplus and cash bal-
<br />ances for the past four years, as shown by the following figures, taken from.the respective
<br />audits of those years:
<br />
<br />SUBPLU~
<br />
<br />As of Dec. 3 st, 1931
<br /> " " ", 1932
<br /> " " " ", 1933
<br /> " " " ", 193~
<br />
<br />$ 70,619.75
<br /> 3,67o. 9
<br />
<br />These figures show a shrinkage in s,mrplus between Dec. 31st, 1931 and Dec. 31st, 1934 of
<br />$26,9 9.26.
<br /> CASH BALANCES
<br />
<br />As of Dec. 31~t, 1931
<br /> " " " , 1932 92'692'27
<br /> " " " " 1933 28,~32~62
<br />
<br />The item of $92,692.27, as of Dec. 31st, 1931, included $20,000.00 received from the Virginia
<br />Eleetric& Power Comp~uy on the.electrification of the Suffolk plant. Making allowance for
<br />this, the figures show a shrinkage in cash, for four years o~ $63,235.80, representing an
<br />average annual shrinkage of $15,808.95. While the cash balance of Dee. 31st, 1934 was
<br />$9,45~.47, at the~same time, consumers' deposits amounted to $13,275.00. In the year 193~,
<br />receipts were $~25,656.05 and disbursements were $3~,732.20, leaving a cash deficit for the
<br />year, of $19,076.15.
<br />
<br /> The sum of $2S,718.53, paid to the ~ederal Government in 1934, will be elimi-
<br />nated in 1935. Estimating the cash b~lance at the end of 1935, by usln~ the 1934 figures, de-
<br />ducting the $19,076.15 deficit from the $28,71~.53 heretofore paid the Government, indicates
<br />a cash balance at the end of 1935, of
<br />
<br />OPERATING RESULTS FOR 1935
<br />
<br />(By Superintendent DaviS)
<br />
<br /> "The estimated Water Department earnings over estimated expense for the year
<br />amounts to about $38,000.00 which is only a reasonable annual surplus, having in mind that
<br />the revenue may not meet expectations, that there are units in the water works system for~y-
<br />seven years old, which may, and probably will require replacement or extensive repairs, and
<br />that additional mains required each year should be paid for out of current revenue."
<br />
<br />NATIONAL BOARD OF FIRE UNDERWRITERS.
<br />
<br /> .Report No. ~69 of the National Board of F~re Underwriters, July, 1935, con-
<br />rains these comments:
<br />
<br />year,
<br />
<br /> "Considerable sections are supplied by 2 inch pipes and
<br />lack adequate fire protection." "Hydrant spacing is wide."
<br /> "Fire flow tests made in March, 1935, with 65 pounds sta-
<br />tlon pressure and the stand pipe closed, but otherwise under
<br />normal operating conditions, indicate that quantities (of water)
<br />available in the principal mercantile district are inadequate.~
<br />
<br /> Amortization of the $25,000.00 bond issue of 1934 will require $1000.00 p~
<br />beginning in 1938 and continuing for twenty-five years, to be paid from earnings.
<br />
<br />SINKING FUND.
<br />
<br /> In 6rder to make the 10% reduction in water rates, which reduction beoame
<br />effective in 1933, a~uual payments to the Sinking ~und werereduced from $46,000.00 to $33,500.
<br />At the same time, ~th~ Manager's report to the Counci~ stated:
<br />
<br /> "These reductions will reduce the income of the Water
<br />Department ~oproximately $34,000.00 per year. This wili ab-
<br />sorb all of the present surplus of the Water Department and
<br />the recommended reductions in payments to the Sinking Fund.
<br />The a~nual payments of $27,351.00, plus 5% interest to the
<br />United States Government, for property purchased several
<br />years ago~ will be completed next year (193~) which will make
<br />this amount avaiIable afte~ 1934, for improvements to the
<br />property or in any way desired."
<br />
<br /> In this connection, on July 21st, 1933~ Thompson, Wood & Hoffman, New York
<br />Bond Attorneys, advised the City Manager that they could not recommend an annual payment of
<br />less thegn $33,500.00, assuming that the ~dud would continue to earn 4% per annum. They again
<br />pointed out that a large portion of the Sinking ~und was represented by cash held in local
<br />banks, and desired to know the amount'paid by the ba~ks on such deposits, which information
<br />was desired to e~able them to arrive at the correct earning power of the Stnking Fund.
<br />
<br />
<br />
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