The San Francisco call., 1896-04-15


League, was presented:
Having been employed by your executive
committee for the purpose OF ascertaining the
amount of money expended in the purchase,
construction and maintenance including re-
pairs and running expenses OF the city eiec-
tric light plant and the value OF the services
furnished and the net resultant cost, caIculat-
ed upon basis OF equitable comparison, with
instructions to make report at TINS time TO
this meeting, | now beg to present the results
OF my labors and Investigations. All such cal
culations must have basis, and have as
sumed as my basis that at the time the con-
tract was made to purchase from the Jenney
Electric Light Company the original plant as
established by them in 1886 the city paid
10000 spot cash for the same, this being
the initial investment. As matter of
fact part OF this sum was paid in cash and
part by the sale OF bonds, but this fact
cuts no figure in the business calculation. The
investment was $40, 900.
disregard entirely the sums paid to the said
Jenney company previous TO December l, 1851,
for electric light service under contract at the
rate OF $15 per month per lamp, because these
items were entirely disconnected from the pur-
chase by the city of the sale plant.
Taking, then, this $4,000 purchase price as
my starting point | have added the items OF
construction expenditure from time TO time,
carrying the account down to April l, 1896.
have also followed the cost OF maintenance,
covering repairs, salaries and all other items
OF running expenses from December l. 1887. 10
April l, 1896, just 100 months.
1t has been almost impossible to segregate
all items of construction from running ex-
peDses, because OF the manner OF recording the
quently made at times covering quite large
amounts under the general designation OF
supplies for electrlc-ligh works. This
might be for one or the other or both of these
accounts. l have done the best l could in the
limited time and with the facilities al COM
mand to separate these items, and believe that
closely TO the correct apportionment OF the
outlay. But you will quickly understand why
the absolute accuracy of this division or ap-
portionment of expenditure is not of great i'm
portanee as factor in producing the final
result.
The variation If any there be, VIII be found
in placing too much to construction account
and somewhat less 10 the repairs expense ac-
count, but the difference will not be material.
In producing the final result which give you
l worked by years, taking the original cost of
terest, then adding one years construction
cost. then adding one years repairs and run
the end of the first year the total expenditure
to that date. Then | subtract from this total
credit Tor the service OF the year. This you
will recognize leaves net investment with
which to begin new years calculation.
In estimating the value of the services we
are to credit the plant, l allow per lamp for
the first three years al the rate previously paid
to the Jenney company under three years
contract, which contract was voided by the
purchase OF the plant, thereafter / used the
rate paid By the city CT Oakland for similar
service, as nearly as can be escertained. do
this rather than take the figures OF any other
city, because il appears self-evident that had
our p ant not been purchased We would have
been buying our light from the Oakland com
pany, and in that case we would have to pay at
least the same rate that the city OF Oakland has
paid. Comparisons might be made with other
cities, but II the rate in such places be either
hlgher or lower than Oakland, the comparison
would not be reasonable one, nor the figures
as likely to be a correct basis, because OF the
varying conditions throughout the State, caus-
Ing higher or lower rates to prevail, and be-
cause OF the recognized probability OF Oakland
rates prevailing here in the event of our fail
ure TO purchase the plant when we did.
This is my reason for using the Oakland
rates, being the only ones that / feel justified
IN adopting tor the reason named. If this is
wrong then my calculation would be varied
accordingly.
In addition to the credit given the plant for
arc-light service I have also added a credit for
the income from the sale OF incandescent lights
during the past year. Again, there has been O
combination OF city departments which caused
some CONFUSION in my investigations. This
combination is probably natural, from an cleo
trlelans standpoint, because the departments
are both electrical, but where each department
must 1urnlsh an entirely independent and dis
tfnct service, standing or falling upon its own
record, IL is just as well to keep those records
separate These remarks refer to the fire
alarm system, the expense of maintaining
Which mas been charged up as a part of the
maintenance OF electric light works.
Upon investigation l ascertain that an equit-
dbiC 5uil " CiidISe 10 the nre alarm system
would be, according to the estimate of we'll
informed persons, the sum of S125 per month,
and that II 1t were run as q distinct depart
ment Gf we had no electric light works and no
electrician to divide his time between the two
departments( the cost would be not less than
$3.50 month.
Fearing, however, to rob the klectric-light
Department OF too much of its expense ac-
count, have charged the fire alarm system
from the date of its establishment with only
$1,000 per annum instead OF 81 500 or SI 900
these estimates WnnlA
tract this sum from the total expense disburse.
ments charged in the books to the Electric
light Works. This gives very cheap fire
alarm system at some expense to the Electric
light Depar tment. However, the en- tire renort
is submitted for your approval. and on points
of this character is subject to change at your
pleasure.
1nterest-In getting the views of taxpayers
on the subject OF charging the electrc-light IN
vestment with interest, found diversity of
opinion prevailing, some preferring not to
charge interest TO municipal investment Of
any kind, while others considered it perfectly
proper to do SO.
have treated the plant as though it was pri-
vate property, having added ) Ger cent each
year as explained above and as exemplified
below, and Will now give you the figures on
this basis.
Kindly remember that in collating the facts
WnlcI present nave been particularly care
lui not TO be governed in any manner by the
opinions or unsupported statements of any
city Official, although it has been necessary to
avail myself Of the assistance OF the CITY Elee.
trielan and the City Clerk in locating certain
DOCKS ana documents and IN formulating the
inventory, and l am pleased to state that
neither OF these officials has endeayored I'm any
way TO influence me in my work, nor have
they been given at any time shadow of q
suggestion as 10 what my report might he 7
commend them Tor their discretion and thank
them for their courtesy in the matter
For the past fifteen months, as EXPLAINED 7
have given the plant credit for The income of the
incandescent lights amounting 10 S3, ,557 n.
Now present summary of the above state
ment which reads as follows:
Purchase and construction. ........... s77,9e7 90
Maintenance. .'........,;.,..,......... 76S76 68
Interest, per cent added each year
on net cost. 1859 OK
Total. ......S17l O2
Cr.-Cost of lights for 100 months on
Oakland rate basis. Observation-Disclosures. l2O953 II
$50479 81
Cr.-Amount paid by S. p r. r. and
interest same from November,
1888 at per cent. 1,266 20
Net cost OF plant to city. S49l 81
Now will give you the loss and gain state