The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-06-15

the profits under this proposition will
exceed those under our proposition?
The city knows almost to a certainty
what its profits will be, with the Maui
ry report as basis. 1t Is not posi-
BILE that this reduction proposed by
Mr.. Campfield may not be SO great
as to affect the profits ACQUIRING the
city? Suppose the city accepts Mr..
Campfie;d's proposal. At the end OF
twenty-five years 1t will have paid for
the plant as it now exists, the sum OF
1926, 900 and interest compounded an
nually on it's payment OF $31 900 for
retiring the bonds and common stock,
for the common stock is non-partici-
pating. $31 900 paid each year at SO
compound interest will in twenty-five
years amount to nearly $1,500,000.
The profits derived by the city from
our proposition can be made to earn
money by placing it at interest, or can
be used to take care of improvements,
receiving stock therefor, and which
will be participating. Mr.. Campfield
wants the city to pay $S25, 200 for the
present plant, which. in our PROPOSE
ton is given valuation of 100000.
Can he explain the reasonableness Of
this difference?
1t has been stated that provision
has not been made in our proposition
for expense of operating and that some
limit should be placed on same, or
this company might allow excessive
salaries. Does Mr.. Campfield's propo-
sition provide for this contingency?
His proposition permits the city to
have one representative on board of
five members. What advantage Is
there in this concession, for, will the
city not have simply minority repre-
sentation? Our proposition requires
an equal statement to be issued to the
city and permits an annual inspection
of the books. No representation was
provided, it is true, as We felt the city
would be just as sufficiently CONVEX
cant OF the facts, and in just as good a
position to protest. as II it possessed
a minority, representation on the board
of directors. The matter of limiting
the salary account was carefully con-
sidered but no definite plan could be
worked out, and the difficulty of so
this company is willing to entertain
plan whereby this restriction can be
made.
las to purchase-under Mr.. Camp
fields proposal, the city cannot &C.
quire the plant until the $150,O00 of
preferred stock and the $625.000 OF
bonds are taken up. AS these bonds
are issued for definite periods, this
canno, be done until the expiration
Of the contract period of twenty-five
years. Under our proposition. the
city can purchase the plant at any
time. by taking up the outstanding
capital stock and assuming the bond
ed indebtedness. Some criticism has
been made of our plan of setting aside
definite sums for depreciation, renew
ais and extensions. Isn't this bust
ness proposition? Such funds are re-
quired by the Wisconsin Public Utili-
ty Commission, which commission is
conceded to be one of, if not the best,
in this country. Let us see who bene-
fits by such an. arrangement. 1t is
proposed to set aside a sum equal to
one-half of one per cent. annually to
ments. This means an annual sum OF
$500 on the present valuation. Then
! suppose a new pump is needed. This
fund is then used for that purpose in
stead of drawing on the revenues OF
that year. If the latter were done,
the revenue might not be sufficient to
meet this expense, and an increase of
rates would be necessary perhaps caus-
ing criticism and hardship on the con-
sumers. The same explanation ap-
| plies to the fund for extensions and
Improvements.
1T is simply a plan whereby these
renewals and improvements can be
made without requiring an increase of
rates whenever an unusually large ex-
penditure is necessary. 1t is a gradual
means, instead of a sudden one. OF
meeting these requirements.
I'VE believe these are the main
points at issue, and we have endeavor-
ed, and shall endeavor, to show that
proposal is reasonable one, based on
modern and business principals. yield
ing a fair return to the investors, and
enabling the city gradually to acquire
the plant. This company has not in
tentionally inserted any 'jokers' in
it's proposition, and wishes to meet
and deal with the city fairly and
squarely, and will render under new
contract the same efficient service that
we believe it will be conceded has
been done in the past. We are pleas
ed to know that this matter will re.
ceive thorough and careful considera-
ton, for We are confident that time
will only strengthen our position, and
convince the citizens that our PROPOSE.
ton is just to all parties concerned.
Richmond City Warer Works.
Howard A. Dill, Treas.