The Waxahachie daily light. [volume] (Waxahachie, Tex.) 1894-current, 1903-03-14
CITY ELECTRIC LIGHTING
Tendency to Lower Rates u the
Expense OF Taxpayers.

From February issue Municipal Engineering-l |
A bill before state legislature |
this winter and the reason for intro
dueing 1t presents aalesson to which |
the attention of cities should be |
drawn. 1t seems that small city |
constructed an electric light plant |
some years ago which was quite |
successful for some time. Rates |
for service were considered to be /,
somewhat high and they were
lowered from time to time. 1t is
suggested that the desire for politi
cal favors from some large consum-
ers led to the fixing of rates for such
consumers at specially low figures.
To make a good showing for prompt
collections 20 per cent discount for
prompt payment was made even
from these low rates. The result of
all these bids for popular favor has
been that, while the works have been
operated in such a way as to pay ex
penses, there has been no proper
provision for depreciation and a new
business administration finds a
plant which requires thorough re-
construction, and has some errors
in design, but finds no money with
which to do the work, no credit on
which to raise money, the city's
debt limit being reached, and no
possibility of running the plant long
enough at the higher rates, adj
mitted to be necessary, to replace
the old machinery from the profits
of the business.
In despair at the situation the city
officials have caused the introduce
ton of bill to permit the sale of
the plant to the highest bidder to
whom a franchise for "perating it
can be granted. Unless some public
spirited citizen steps in and carries
the plant for a time until it can be
put on it's feet the city will be put in
the column of failures Of municipal
ownership.
Similar failures have occurred
under private ownership. Bad man
agement or wrecking schemes for
stock jobbing purposes have often
thrown private companies into bank
ruptcy, to be reorganiZed and recon
structed with new capital. This is
perhaps the only instance in munich
pal ownership in which all the con-
tingencies mentioned have occurred
at the same time and have driven
the management to such step.
II is easy now TO see where the
MISTAKES were made, but many
cities are making one or more of
them, though perhaps none of them
are making them all.
The reduction of rates is one of
the greatest temptations under mu-
nicipal management. While it may
be true that some advantages of
municipal ownership make lower
rates possible, it is very easy to for
get or to underestimate the allow
ance which should be made for de-
probation so that rates are placed
SO low that calls must be made on !
the general fund or for a bond issue |
to replace worn out machinery or to |
make extensions. Where the city |
has debt limit which has already |
been reached, this process is likely |
to be fatal, as in the present case.
What should be the proper allow
anee for depreciation and for ex-
tensions is q question worthy the
closest attention of financiers famil-
lar with local conditions, and their
advice should be followed i'm
plIcitly.
If rates are not placed too low, an
apparently large profit on years
when there are no special expendi-
lures tempts the council or the su-
perintendent to lower rates, to re-
NIT the payments for city light or
TO turn the excess into the other
funds of the city. The result is the
same in the end, except that in the
latter cases the general taxpayers
have reaped the benefit in reduction
of taxes, 10 which they are not en-
titled, while in the first the users of
light have received the benefit In
low rates. The dilemma for the
plant is the same In the end.
II the city can borrow the money
for extensions and improvements
and pay the interest, it may, under