Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1910-03-29
COUNCIL HEARS PLAN FOR BUY.
ING LOCAL PUBLIC UTILITIES
BASED ON OFFER.
REPORT REFERRED TO
COUNCIL AS A WHOLE
Mayor Will Arrange a Meeting With
Jones & Hovey to Talk Over Situ-
ation-No Action on Hull Ordinances,
Adjournment Until Wednesday Night
The Mayors Plan.


council Monday night the plan he has
figured out for the city's purchase OF
the Jones & Hovey equity in the Mar
shalltoWn Light, Power and Railway
Company, based on the valuation of the
property as furnished by Jones &
! t1ovey, and the price asked by Jones
& Hovey, 1925, 900.
The members of the council agree
with the mayor in declaring the price
asked entirely too high, but the mayor
stated to the council that all negotia-
tlons from now on, as to price, must
be made by the council, and said that
| the lower the price secured by the
| council, just that much easier would
1t be for the city to swing the deal as
4 the mayor has outlined.
| The Mayors Plan.
| The plan outlined by Mayor In
! gledue to the council is as follows:
/ In outlining this plan 1 am using
/ the valuation of the plants as given
me by Jones & Hovey as a basis for
| figuring. 1 figure that the interest on
| $4,000 the first year at per cent
| is S19,500. 1 estimate the net earnings
! of the plant at $4,000, and in arriving
| at that l am using the figures of both
Darling and Evans, the latter the en-
| gineer who Investigated the physical
! condition Of the plant for Hamilton
Browne.
I'VE are levying a 21a mill tax for
street lighting, and we have installed
163 street lights. We have on file ap-
/ plications for about thirty-five more
! lights, which We are unable to give
/ without installing new machinery in
our own plant, as we are carrying ev-
| cry light that the plant will carry.
! propose TO make a mill levy for street
lighting purposes, and add tilirty-sev-
/ en- more lights to the present arc sys-
tenn.
The additional levy would raise s4,-
! 500 per year, or a combined levy of So
600 for street lighting purposes. Thus
you would see that we would have
200 lights at a cost of s45 per light per
year, which is much less than any con-
tract could be made with a private
company For instance, Waterloo is
paying s6S per light per year for this
same service.
Now the estimated net earnings, 1t o.
gether with mill tax levy, gives me
$4,000 to apply upon the interest and
principal. The interest is $4,000 Aft
er paying the interest I would apply on
the principal, or in reducing the pur-
chase price, the sum of s24,5oO. That
would leave, at the end of the first
year, balance due Jones & Hovey Of
1890, 800
The interest at the end of the sec
lond year would be $4,000. Now to the
estimated earnings of $4,000 l add 10
per cent increased earnings. making
the estimated earnings for the second
year s3S,ao0 Added 10 this the mill
tax for street lighting, have net earn
ings for this year s41,530, thus reduc-
ing my Indebtedness on the plant at
the end of the second year or the be-
ginning of the third, s271,000
AT this point / would recon mend
the issuance of twenty-year Az per
cent bonds for 100000, which l think
could be sold at premium. While
the tax levy mas been raised nomlnally
$4,000 IN these first two years, the in
crease of thirty-seven necessary lights
at S45 per light. or $3.50. can legiti-
mately be deducted from this increased
tax levy, which would leave US with an
increased levy, on account of the pur-
chase of the property, of $3.50.
AT the beginning of the third year
Jones & Hovey may be eliminated en-
tirely from the gas and electric plant
by reason of the issuance of these
bonds, and the taking up OF the bonds
now outstanding against the property
The third year l estimate the earn
ings at $500, with 10 per cent added
making a total Of $40, $50. Now Evans
estimate on the third year for TINS
plant was 5000, a difference of s22,-
$50 in favor OF my estimate. The
cause for difference in the estimates
is that Evans contemplated greater
extension of the gas and electric lines
than has been made by Jones & Hovey
Then added to the s42,350 earnings for
this year is the 5-mil tax for street
lighting, of $4,000, making the total net
earnings for the third year s51,350.
cat this point / would recommend
taking over the street car line for s40,-
900, providing the legislature has by
that time given US law that would
permit this action. Then 1 would have
left from the earnings for that year
s11.350, which I would use in better
ments to the street car line itself.
Now one year of our twenty-yea1
bond issue has passed. Our interest
charge has been decreased by liz per
cent and our earnings increased by 80