The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1910-07-23
E. G. McMahan and M. ]. o.
Brien Have Plan Whereby
Municipal Plant Could Meet
Bond Indebtedness.
PRESENT SYSTEM NOT
A SATISFACTORY ONE
Surplus Earnings of the Plant
Can Now Be Used Entirely
for Any Improvements or
Upkeep.

A plan by which the Municipal Elec-
trio Light Plant may pay its bonds of
Indebtedness from surplus earnings OF
the plant is being advanced by Z. G..
McMahan, city controller, and NJ j.
O'Brien, president of the sinking fund
commission. The plan is to set aside
certain per cent of the surplus earn
ings of the plant each month, forming
and electric light sinking fund. The
fund would be placed at interest COM
pounding monthly. and sufficient
amount per month set aside to meet
the debt of the plant when it falls due.
Controller McMahan says this plan
is to guard against an administration
spending all the money in the munich
pal light fund for repairs on the plant
which might be unnecessary. An Or
dinance by Mr.. McMahan's plan, would
be passed requiring the amount to be
placed in the sinking fund for the spe-
cial purpose Of paying the indebted
ness of the plant and. of course, no
money could be appropriated from
this fund. Council may at any time ap-
propriate money from the municipal
light fund to make repairs or addi-
tions to the plant and thus the fund is
not protected.
Debt Of the Plant.
The debt of the light plant is S144,-
600, due in 1927. Mr.. McMahan has
not calculated the exact amount ne
cessary per month to meet this debt,
but he believes it would be approxi-
mately $500. The surplus of the plant
is usually over 5000 month, so that
$500 could easily be set aside. The
regular municipal fund brings per
cent interest in q local bank.
In case this plan is not adopted the
bonds will have to be paid off from
the municipal light fund, If there is
enough money or by temporary loans
by the city. The bonds can be renew
ed, but Controller McMahan declares
himself in favor Of receiving 2 per
cent instead Of paying out 4. which the
bonds bear.
The chief objection to the new plan
has been that the plant will have to
be improved with the addition of a
new unit. which will costs between
$4,000 and 10000. within the next
year. Nimrod johnson, superintend-
ent of the plant, wanted the improve
ment this year, but 1t was not made on
account Of the financial condition Of
the city. However Mr.. McMahan
states the fund could easily be estab-
lished and the unit added.
$4,000 10 In Fund.
Twenty thousand dollars is now in
the municipal light plant fund, most Of
this having been placed there since
January. 1910 The plants debt to the
city, $33 900, was paid last year and
the new year started with $1O5O in
the fund.
At the present increase of the fund
no financial trouble would be en-
countered In building the new unit and
establishing fund, according to the
controller. Temporary loans could be
made as the city is practically 500 900
under the bonded limit of indebted
ness.
The plan was at first brought up at
a meeting of the sinking fund commits
sion some time ago and spoken of
with favor. City Attorney A. NJ.
Gardner indorses the plan as good
and safe one. Other city oficials are
pleased with it.