Documentary History of American Water-works

Introduction Historical Background Chronology Geography Biography Technology Ownership and Financing General Bibliography
North Central States
Illinois Litchfield

Litchfield, Illinois

Litchfield was incorporated as a city in 1859.

The city build a Holly water works system that began service on September 10, 1874 using a, steam-driven Holly Quadruplex pumping engine.

The Litchfield Water Supply Company was incorporated in May 1891 and leased the water works from the city..  Their water quantity and quality was poor, and after some litigation and voter approval to build new works, the city agreed to pay $45,212 for the company's system..

The city could not borrow enough money to build the new system, and local residents incorporated the Citizens Water Works, Inc. on February 24, 1924 to build and finance the needed water system.  The city was shocked, shocked to discover in 1935 that the company was not tax exempt, and the city bought the company in 1936 for "approximately $305,891.04."

Water is provided by the city of Litchfield.


References
1880 Buchanan v. Litchfield, 102 US 278, November 22, 1880, United States Supreme Court.

1882 Litchfield, Engineering News, 9:131 (April 22, 1882)

1882 History of Bond and Montgomery Counties, Illinois, by William Henry Perrin
Pages 286-287:  Litchfield. The frequent recurring fires, and the extent of the losses, gave emphasis to a desire for protection from further losses of a similar character. Protection was better and cheaper than insurance. There was forced or hurried eagerness to meet this general demand. Various schemes were considered. The cost of providing cisterns and a fire engine was computed, and the annual outlay of the system was found to be 10 per cent on the cost of a different system which would afford greater protection, and in addition produce a revenue from its value to shops, mills and households. In 1873, the car works brought water here by railroad. Best & Sparks paid $1,000 to teams to draw water four miles to their mill. The desirability of a water supply was not questioned, and there was a unanimous desire to fling a strong dike across Long Branch, a mile south of the city, and from the capacious reservoir thus created, send water into the heart of the town, under conditions which would meet our varied requirements.
The sort of works demanded was in substance the Holly system, or the system of direct pressure on the mains equal to the maintenance of a column of water 400 feet high, and through 100 feet of hose would project a stream upward of 100 feet into the air. Estimates of the cost of such a system were made to include only the dike, the mains and the pumping machinery, and this estimate was promulgated as a fair statement by experts of the cost of the waterworks. We make no excuse for the error in simple multiplication, which affected the cost of the dike 100 per cent. We have no comment on the suppression in the exhibit submitted to the citizens of numerous expensive items of cost, which, in the aggregate, were truly formidable. The facts speak for themselves. A few citizens knew the water-works could not be built within $25,000 of the explained estimates, and their voices were overruled and they reduced to silence. They would, at the proper hour, have appealed to the courts to prohibit the issue of bonds by alleging a want of power to legalize them. They could not be blind to the mendacity or want of rudimentary capacity to make simple calculations on the part of those who held that it was none of the tax payers' business how they run things. Again, it was a matter of law against expediency, as if it can be expedient to do wrong.
People are easily deceived when they want to be deceived. There was no uncertainty as to the value of water-works, none as to the ability of the city to build them, but there was a broad, explicit prohibition of law against going into debt beyond 5 per cent of the last assessed valuation of property, and our municipal debt was at that time within $12,000 of that limit. But the debt was in great part nominal, and not virtual. Since the completion of the Wabash road, in aid of which the debt was created, the assessed valuation of property had increased $800,000, and by the Railroad Aid Law, the State taxes on that amount were appropriated to paying the debt. This tax met annual interest, and left an excess of several thousand dollars as a sinking fund which would quite extinguish the principal at maturity. It was this law which alone induced the city to issue $50,000 in bonds to secure the road. The bonds were against the city, but the State agreed to pay them. This debt then was treated as virtually canceled, and taking this view, and listening to the vehement assurances of men in power that the water works completed could not cost more than $42,000, or by adopting the higher plan, $55,000, and there was no intention of doing this, the citizens in various ways expressed their enthusiastic approval of the project at an extreme cost of $45,000.
This was the plan approved by the community, under the knowledge that the operation of the Railroad Aid Law released them from liability for the bonds granted to a railroad.
True, in letter, they were bound; but in fact, the debt was to be paid not at their charges. But when, after expending nearly $20,000 on the ground alike and facing walls, the authorities ordered the preparation of bonds for $50,000 additional, framed so as to give full effect to the legal inhibition against their issue, and so as to give the city ground to content their payment, because issued in violation of law; and the omission in the recital which was to do this was passed over in silence the thing became too flagrant. Yet at home complaints came too late. Nothing could be done to stop the authorities, and soon there was a wide suspicion that private objects were sought under guise of zeal for public ends. The works were completed by contract, and as well and economically as the public is usually served by contractors. The work was done when labor and material were one-fourth dearer than two or three years later, when by comparison with the reduced prices, men, having their own aggrandizement only in view, bellowed about the town vague accusations of fraud and veritable peculation.
Not one of these fellows could be induced to make and stand to a single specific charge. They proved their statement by numberless repetitions a sort of evidence better for a certain class than positive proof.
The works cost $77,000 against the $45,000 they were to have been built for. But they stand, and have not in eight years failed in their duty for an hour. They are worth all they cost, and more, and the clamor about them which had no higher origin than a personal difference about matters disconnected with public affairs, would have died away had it not been kept alive by the city's repudiation of her bonds. Noisy advocates for the works refused to pay taxes to meet any part of the indebtedness, and the Council, by resolution, refused the payment of interest. Suit was instituted, and in the court of last resort a decision was obtained that the issue of the bonds was illegal. The vast majority of the citizens desire their payment, and the decision defeats their wishes.
This narrative of our shame had not been written or been true, had not the opinion crept into officers that their delegated powers were a franchise to be exercised according to their caprice. They forgot their representative position, and spurned conference or opinions from a tax payer. They never forgot self, and no offense was so great as the assertion that the people had any rights not vested in them.

1885 Litchfield v. Ballou, 114 US 190, April 6, 1885, United States Supreme Court.

1886 Sanborn Fire Insurance Map from Litchfield, Montgomery County, Illinois. January 1886

1888 "Litchfield," from Manual of American Water Works, Volume 1.

1889 Christian Linck v. City of Litchfield, 31 Ill. App. 118, February 21, 1889, Illinois Appellate Court
The extension or maintenance of water mains in particular places, by municipal authorities, is discretionary with them.
There can be no recovery from a municipal corporation by a consumer of water, for expenses incurred by him in connecting with a public water main which is subsequently abandoned.

1890 "Litchfield," from Manual of American Water Works, Volume 2.

1891 "New Corporations," Daily Illinois State Register, May 20, 1891, Page 5.
Among the new articles of information filed yesterday with the secretary of state was that of the Litchfield Water Supply company, with a capital stock of $15,000.

1891 "Litchfield," from Manual of American Water Works, Volume 3.

1892 Sanborn Fire Insurance Map from Litchfield, Montgomery County, Illinois. February 1892

1897 Sanborn Fire Insurance Map from Litchfield, Montgomery County, Illinois. September 1897

1897 "Litchfield," from Manual of American Water Works, Volume 4.

1905 Sanborn Fire Insurance Map from Litchfield, Montgomery County, Illinois. November 1905

1910 Sanborn Fire Insurance Map from Litchfield, Montgomery County, Illinois. December 1910

1920 In the matter of the Petition of the Litchfield Water Supply Company relative to rates in Litchfield.  Illinois Public Utilities Commission, April 5, 1920
The record in this case shows that the city of Litchfield constructed a water utility and placed same in operation about 1875. Water was obtained from an artificial reservoir that was located a little over a mile south of the city at which place the pumping station was erected. This plant was operated by the municipality until about 1891 when it was leased to the Litchfield Water Supply Company, a private corporation, for a period of twenty years. This lease is in the form of an ordinance and provides that after the twenty year period it may be terminated at the end of any five years upon proper notice.
The Litchfield Water Supply Company, under the terms of the lease, was required to construct a pumping station on a stream known as Shoal Creek and connect the said pumping station with the city owned distribution system by pipes not less than eight inches in diameter. The record shows that the company constructed a dam on Shoal Creek some three miles east of the city of Litchfield, erected a pumping station at that point, installed the necessary pumping equipment, and laid a ten inch pipe from the pumping station to the then existing distribution system.
The Litchfield Water Supply Company was originally capitalized at twenty thousand dollars ($20,000) and issued four hundred shares of stock with a par value of fifty dollars ($50) each. The stock has changed hands from time to time and apparently each major change in the ownership of stock has been accomplished by a change in the management of the utility. The present operators took over the plant in August, 1917 and the record shows that three persons now own practically all of the stock in the company.
Under the present method of operation, which method has not changed apparently since the Litchfield Water Supply Company was formed, both pumping stations are operated continuously. The Shoal Creek pumping station, known as the East Plant, supplies about ninety per cent (90%) of the water required by the consumers in Litchfield, from April to December inclusive, and about forty per cent (40%) of the consumption during the other months of the year. There is now an abundant source of water supply in or around the city of Litchfield and the record shows that during the summer months the utility has difficulty in supplying the demands of its consumers. The reservoir owned by the city at the South Plant yields but little water in the summer and this supply is conserved for use in case of fire. The necessity of operating two steam pumping stations and pumping water against a relatively high head results in rather high operating expenses.
The Litchfield Water Supply Company supplies water service to about five hundred eighty consumers and fire protection service through ninety fire hydrants. The company owns about twenty-six thousand feet of transmission and distribution mains and operates in connection therewith some forty-five thousand feet of city owned mains. Under the terms of the lease by which the company operates this property, the city pays no fire hydrant rental and in turn levies no taxes on the company's property.

1922 "Litchfield to Operate its own Water Plant," Journal Gazette (Mattoon, Illinois), July 10, 1922, Page 6.

1923 "Solve Litchfield Water Question," Decatur Herald, June 22, 1923, Page 10.
Judge Jett Awards Supply Company $45,252 for holdings.

1935 Citizens Water Works v. Hughes, 262 Ill. 136, 199 N.E. 265, December 19, 1935, Illinois Supreme Court
Failure to pay annual franchise tax.

1935 Citizens Water Works, Inc., Petitioner, v. Commissioner of Internal Revenue, Respondent, 33 United States Board of Tax Appeals
Company is not exempt from Federal taxation.

1936 "Litchfield to Buy Own Water Works," Belleview News-Democrat, May 25, 1936, Page 1.
The city of Litchfield was authorized by the Illinois Commerce Commission to buy all of the property of the Citizens' Water Works, Inc., of Litchfield for the sum of approximately $305,891.04
The company has been serving Litchfield with water service since 19824, and under their contract the city has the right to purchase the plant under certain conditions.



 


2017 Morris A. Pierce