The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1910-01-21

at the end of another ten or fifteen
year contract, we will find that we
are no nearer able to shoulder the
costs of the entire plant than We are
now.
Plan is Suggested.
! 1t would seem that a clause in a
| contract with the Water Works COM
pany reserving to the city the right
TO purchase the entire plant at he
appraisement, if Of no value to the
city under the present laws. IF there
is any way by which the city can be-
come part owner of the plant at this
time and each year hereafter purchase
an additional interest, the city could
/ In few years become the owner of
the entire plant. For the purpose of
making extensions of the present
plant, the city js authorized to be-
come a part stockholder by subscrib-
ing to the capital stock of the COM
pany.
1 If it requires 100000 to make the
necessary extensions, and the capital
| stock of the company is increased
that amount, the city could at this
time subscribe for $4,000 of this
stock and as the work progressed,
could. from time to time. purchase
all the stock issued to make such
necessary extensions. The right of
the city to purchase the stock issued
to make such extensions, could be
| provided for in the contract with the
company. The right to purchase other
stock would have to be arranged with
the stockholders and the stock placed
in the hands of trustees. to be held
and transferred to the city from time
!, to time, as the city was able to make
purchases.
Could Buy in 20 Years.
If the entire plant, after making
proposed extensions, is worth $500, 900
and should be bonded for 100000
| with 100000 capital stock, the city,
| by purchasing only $4,000 of the
stock each year, could become the
owner Of all the stock within twenty
years. The 'going value" of the plant
| by that time would be very valuable
and the city would share in the natur-
al increase.
The valuations used herein are used
for illustrations only and are not as
fsnned- as~being correct
To pay for such stock, the city
could use it's dividends On stock own
ed by it and levy an additional tax
| each year, the rate of such tax levy
depending upon the amount of stock
bought each year by the city.
He Has Another Plan.
Another way in which the city
might eventually become the owner
of the plant, would be to agree at this
time on the value of the plant. and
let the company issue stock, and long
| time bonds representing the present
value, then provide that the earnings
should be used, first to pay the oper-
ating expenses, including interest on
bonds, second to the payment of
semi-annual dividends on the stock of
five percent or whatever amount
should be agreed upon; third, to such
extensions and betterments as may be
ordered by the Board of Public Works,
and the excess to be paid to the city
| of Richmond. or used to purchase
stock in the company for the city
The city reserving the right to pur-
chase all the stock at any time at
par, plus dividends of five percent
,, per annum, or whatever percent was
agreed upon, if such dividends have
not previously been paid. By this
method the city would get the advant-
age of the natural increase in the
value of the plant and would be able
to purchase the entire stock as soon
as the net earnings paid to her, to-
gether with money that might be rails
ed In any other way, equaled the
amount of such stock. There would
have to be a provision in the contract
;; under which the city would have some
rights in the management of the plant
| SO that the expenses would be kept
down within reasonable limit.
Like Indianapolis Plan.
| The plan last mentioned, is some
what in line with the franchise of the
Citizens Gas company of Indianapolis.
which was organized to take over the
properties of the old natural gas COM
panies and furnish artificial gas at
have not undertaken to set out the
details of this plan. but it is possible
that both the question of the new
franchise to the Water Works COM
pany and the new franchise to the
Natural Gas company could be solved
along these lines in a way that would
be fair both to the city and the COM
! panies.
Zimmerman Continues.
If this, or some other plan cannot
be carried out. then l would advise a
short time franchise with some chang
es in the contract.
The comptroller has given me some
| figures and shows that there will not
be enough money at the present rate
of taxes to run the city.
The following are his figures:
Report Of Controller.
| In making the budget for the year
of 1910, the city controller recommend.
ed that the council appropriate S14,75O
for street lighting, which amount is a
fraction more than $500 per lamp
per annum, for 3O7 lamps. We now