The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-05-27
STREET LIGHTING AGAIN.

STREET LIGHTING AGAIN.
The advocates of the Edison lighting
proposition now concede that the aver
| age cost of the city's lights under mu-
nicipaI ownership has been $77 a year
per light, instead of SEQ. as they have
been asserting. Even ST. is excessive,
but those figures make a remarkable
showing in favor of municipal owner
ship. For when the city went into the
business of lighting its own streets the
lowest BID it could get was $3.50 a
light per year. There is some differ
ence between that and even ST. a year.
ment away and still be good many
thousand dollars to the good.
AS years have rolled by modern ma
chinery has lessened the cost of cleo
tricity. Now the city has an offer of
500 lights at SIS year per light on a
ten-year contract. Looks pretty good,
doesn't it?
But hold on. The city has figures
whereby it can build a modern lighting
plant to make these same lights at an
outside cost of $4,000 1t would be
necessary to issue bonds to build the
plant. and interest on these bonds is
counted at five per cent, although they
can undoubtedly be f1oated at four per
cent. The Capital states in an editor
ial favoring the Edison proposition,
that it will cost about SIS, 900 for run
ming expenses and repairs.
How" asks the Capital. 'are these
bonds ever to be paid off?''
Well here is one way: Instead of
paying the Edison company $50 per
year for 500 lights, suppose that money
be applied to operating and paying for
a municipal plant. Five hundred lights
at s55 year would cost $27,5OO
year Applying $4,000 a year to oper-
ating expenses and repairs leaves S12.-
500 a year to pay off bonds and inter-
est. II part of the bonds were paid off
each year the interest on $4,000 would
amount to s16,25O for the whole time.
or $S1,25O interest and principal COM
bined. Paying off $12,50O a year. it
would require just six and a half years
to pay for the entire plant, and for the
other 3 u years that the Edison con-
tract is proposed to run. the city would
be saving $4,000 a year, or a total of
s43,750.
In other words it might throw away
its plant at the end of ten years and
still be $43,75O ahead.
1t is usually figured, however. that
the bonds would run ten years, at 5
per cent interest. before they would
be paid. If this were done the total
interest would amount to $32,25O. The
two propositions. on this basis, would
compare as follows:
EDISON CONTRACT.
500 lights at SIS a year. S27.5OOi
For 10 years $275, 900
MUNICIPAL OWNERSHIP.
Bonds to build plant .$ $4,000
Interest, 10 years at per
Maintenance at $4,000 '7''OO
year ...... ......... 10000
Balance in favor of municipal
ownership S21, 800
This is not including anything for
depreciation but contemplates throw
ing the city plant away at the end OF
ten years. According to Prof. Free
mans figures new plant may be built
for $4,000.
The Capitals idea of combining a
present Indebtedness of $4,000 with
the cost of the new plant is misleading.
That Indebtedness will have to be paid
just the same If the Edison proposition
is accepted as under municipal owner
ship. The saving under municipal
ownership would pay off a large por-
ton of this debt. even If the city's
plant were a total loss at the end of
ten years. How much would the Edi-
son proposition pay off on this in /
debtedness?
These figures are presented so that |
the people may carefully consider the |
The State Journal wishes |
to be entirely fair in the matter and it |
would say that the Capitals estimate
of SIS, 900 a year for maintenance and !
repairs may be too low. 1t certainly /
does not include depreciation. If a |
fund were figured in, |
however, it would mean that the city
would have the equivalent of a $3.50 |
plant on hand at the end of ten years.