ECONOMIC SUEVEYS OF COUNTY HIGHWAY IMPROVEMENT. 3 



S745,702. That the method of fmancing the Poad improvement 

 chosen by Dallas County is not as economical as might have been 

 selected is indicated by the fact that an e(jaal amomit of bonds at 

 the same rate of interest, if issued under the deferred serial bond 

 method, with the first bonds payable 6 years from the date of issuance 

 and an equal amount payable each year thereafter for 24 years, 

 would cost the county at the end of the 30 years $665,000, or a 

 difference, as compared with the sinking-fund method, of $80,702. 

 If 4 per cent could be realized on the sinking fund instead of 3 per 

 cent, the saving for the deferred serial plan over the sinking-fund 

 plan would still be $47,216. 



In the case of Manatee County, Fla., the bond issues aggregate 

 $250,000 and run 30 years at 5 per cent. As in this case the sinking 

 fund also yields 5 per cent interest, the method of bonding is reason- 

 ably economical on the present basis. It is doubtful, however, if the 

 sinking fund will continue to bring such an unusual return, and as 

 soon as a lesser rate of interest is obtained or any of the sinking fund 

 is not promptly invested, the sinking-fund method wiU become 

 more costly than the serial method which might have been adopted. 



Lee County, Va., adopted the deferred serial method, and had its 

 bonds run from the fifth year to the twenty-sixth year. This is the 

 only one among the entire eight which appears to have adopted the 

 most prudent and economical method of handling the bond issue. 



In Wise County the $960,000 of 5 per cent bonds were issued for 

 30 years, with a 20-year redemption clause. Assuming that the 

 bonds are retired the twenty-fifth year on the sinking-fund plan, 

 with interest on sinking fund bearing 3 per cent, the total outlay 

 would be $1,858,269. If Wise County had adopted the serial method 

 with its serial payments beginning with the sixth year and ending 

 the twenty-fiith year, the total cost would be $1,704,000, a saving 

 for the serial plan over the sinking-fund plan of $154, 269. If 4 per 

 cent could be realized on the sinking fund, the saving would still be 

 $72,288. 



Dinwiddie County, Va., issued $105,000 of 5 and 6 per cent bonds, 

 payable in 30 years, but the bonds are callable after 20 years. 

 Assuming that they will be retired at the end of 25 years on the sink- 

 ing-fund plan, with interest on sinking fund at 4 per cent, the total 

 cost would be $218,031, whereas if they had adopted the 6-25 year 

 serial method the cost would be $201,100, or a difference of $16,931. 



Franklin County, N. Y., is operating at a disadvantage, as its fh-st 

 serial payment is not made until the tenth year. This county also 

 has followed the rather dangerous method of extending its date of 

 payment over a long period of years, with the result that the 

 indebtedness long outlives the estimated life of the improvements 



