HomeMy Public PortalAbout12-07-1934 56 Office of Special Council Committee
City of Richmond, Indiana,
Friday December 7th, 1934.
The Special Council Committee, 'Board of Public Works of the City
pf Richmond, Indiana, met in regular session at the office of said
Board, Friday December 7th, 1934, at 9 &clock A.M. All the members
- of said Board, -Messrs, Crabb, Schnieder and Williams being present
the following proceedings were had, to-wit :
The minutes of the preceeding meeting were read and approved.
- I/
' The following communication from City Attorney Shiveley, was
received, viz:
Special Committee of Council, acting Board of Works
of the City of Richmond, Indiana.
Gentlemen:
You referred to me• a proposed resolution by your Board
for the building of a sewage disposal plant and intercepting sewers
connected therewith, prepared by the firm of Matson, Ross,McCord &
Clifford of Indianapolis, Indiana, and also bond ordinance to be
•
submitted_ to the City Council in connection therewith, prepared by
said attorneys,. also forms for the preparation of minutes to be
entered by the City Clerk of your action and of the action of Coun-
cil, form of notice to taxpayers of the City of Richmond, form for
bond sale notice,and Clerks certificate of said proceedings,all
having been prepared by said attorneys.
My objections to the form of resolution and of the ordinance
are as follows :
(1) Inasmuch as this proceeding seems to be for
the construction of the work under the general statutes providing
for the construction of sewers, and not under the Act of 1932
pertaining to the construction of sewage disposal plants and in-
tercepting sewers,and inasmuch as the intercepting sewers will have .
to be constructed as a part of the improvement under said general
sewer law,and particularly under Section 10567 Burns Annotated
Indiana Statutes, 1926, ' I believe that in the bond ordinance there
should be a finding and declaration of the Common Council that it
is advisable that the intercepting sewers be constructed wholly
and be paid for wholly and entirely out of the general funds of
the city,and not by assessment. This seems to be required by said
Section 10567.
(2) In all of these various instruments and papers
above referred to, inciuding the resolutionand the bond ordinance to
be adopted by Council, no reference whatever is made to the inter-
cepting sewers0Section 2 of the bond ordinance provides that the
purpose of the issue of bonds is "to pay the cost of construction
of said sewage treatment works, including lands, rights of way,mater-
ials,personal property,attorneys fees, engineering costs,and all
other necessary and proper costs.H The Act of March 10,1927, (Bald-
win's Indiana Statutes 1934,Section 11716 provides that any city _
of this state my and is empowered to authorize the issuance of bonds
of the city, "for the purpose of providing funds for the payment of
the necessary expenses in the erection and construction of sewage
disposal plants, including rates, rights of way,materialss,personal
property,attorneys fees, engineering costs,and the cost of construct-
ing connecting or intercepting sewers that may be necessary to con-
nect the sewage. or drainage system of said city with the sewage
disposal plant or plants,and all other costs necessary and proper
to provide for and construct an adequate sewage disposal system for .
said city. " 7
Friday December 7th, 1934.
City Attorneys report on sewage, conted. 57
Evidently this is the statute under which the bond ordinance and your
resolution is prepared,and I deem it advisable that the language of
Seotion 2 of said 'pond ordinance and the fora of the bond showing the
purpose of the bond issue be amended to include the construction and
erection of all connecting and intercepting sewers which may be neces-
sary to connect the sewage and drainage system of the City of Richmond
with the sewage disposal plant. If there is no mention made of the con-
necting and intercepting sewers, I doubt whether or not they could be
considered as a part of the sewage treatment works mentioned in the
bond ordinance and resolution. Certainly the City of Richmond would not
want to issue bonds merely. for the purpose of constructing a sewage dis-
posal works without intercepting and connecting sewers' connecting the
same with the sewage plant and works.
(3 ) In examining the bond ordinance and the notice to taxpayers, I ob-
serve that the interest rate provided in the bonds is to be any rate of
interest not exceeding 24-%, to be determined by the amount of the bid
for the bonds. Now this simply means that these bonds could be adver-
tised and sold upon a 46interest basis if no better bid is received.
From the investigation which I -have made of existing bond interest rates
on direct obligations of cities and sanitary districts, it seems to be
that the City of Richmond ought not to be compelled to pay more than 4%_
interest for money. Of course the bid for these bonds might be at such
a .premium as to reduce the net -interest rate to less than 40, but on the
other hand, if the best bid happened to be par, and the stipulated rate
of interest is designated as 42%, then that is the rate which the city
would pay. By limiting the rate to 4%,bidders would be compelled to come
within that limitation,because -it is provided in the bond ordinance that
the bonds cannot be sold at less than par. In my opinion, the interest
rate should be stipulated at 4%® so that in any event the city would not
pay more than that rate,and,upon a favorable bid, might pay less, There.
is no doubt but that .there is considerable demand for bonds of this
kind throughout the country by responsible bond buyers, and I see no
reason why the City of Richmond should pay any more that it is absolutel
compelled to payato obtain this loan.
(4) I see no reason why the City of Richmond should pay anything for a
legal opinion as to the validity of these bonds. The suggestion in the
letter of attorneys is that the City represent to bond buyers that an
opinion will be furnished them by Matson,Ross,McCord & Clifford free of
charge. If bond buyers want to pay for such a charge, they should do so,
and if they see fit to take into consideration the payment of such fee
in their bid, that is their business and not the business of the City.
The engineer has assumed the obligation of presenting all proper forms,
and I see no reason why either he or the bidders should be relieved of
the obligation of paying attorneys fees.
Yours very- truly,
R. K. Shiveley, City Attorney.
On motion of dr. Williams, the report of City Attorney Shiveley, was
accepted, and proper amendments be made to resolution and ordinances
and submitted to council.
Claims in amount of $413.37 were allowed and ordered paid.
The Board then adjourned,
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Frrest. of Board
Attest : e,,V ,,,, 2
Clerk of Board